Document:

Exhibit 10.1

 

FORM OF

INCENTIVE
STOCK OPTION AGREEMENT

USED WITH

DOVER
DOWNS GAMING & ENTERTAINMENT, INC.

2002
STOCK INCENTIVE PLAN, AS AMENDED AND RESTATED

 

OPTION AGREEMENT made as
of the          day of                                   ,
                
between DOVER DOWNS GAMING & ENTERTAINMENT, INC., a Delaware corporation
(hereinafter called “Company”), and                                                   
, an employee of the Company, or one or more of its subsidiaries (hereinafter
called the “Employee”).

 

WHEREAS, the Company
desires to afford the Employee an opportunity to purchase shares of its Common
Stock at the par value of $.10 per share (hereinafter called the “Common Stock”),
pursuant to the terms and provisions of the Company’s 2002 Stock Incentive
Plan, as Amended and Restated (hereinafter called the “Plan”), and as
hereinafter provided.

 

NOW, THEREFORE, in
consideration of the mutual covenants hereinafter set forth and Employee’s
employment by the Company, the parties hereto agree as follows:

 

1.             THE PLAN. 
This Option Agreement is made pursuant to and in accordance with the
terms and provisions of the Plan. 
Anything in this Option Agreement to the contrary notwithstanding, the terms
and provisions of the Plan, all of which are incorporated herein by reference,
shall be controlling in the event of any inconsistency herewith.

 

2.             GRANT OF OPTION. 
The Company hereby irrevocably grants to the Employee the right and
option (hereinafter called the “Option”), to purchase all or any part of an aggregate
of                          
shares of Common Stock (subject to adjustment as provided in Paragraph 8
hereof), on the terms and conditions hereinafter set forth.

 

3.             PURCHASE PRICE. 
The purchase price of the shares of the Common Stock covered by the
Option shall be $                  
per share (the “Option Price”).

 

 

4.             TERM OF OPTION. 
The term of the Option shall be for a period of eight (8) full calendar
years from the date hereof, subject to earlier termination as provided in
Paragraph 7 hereof. The Option may be exercised, from time to time, but not
after the expiration of eight (8) full calendar years from the date of this
Agreement, in accordance with the following vesting schedule:

 

	
  Anniversary

  Date

  of this

  Agreement

  	
   

  	
  Percentage

  of

  Total Grant

  Exercisable

  	
   

  	
  Number

  of

  Shares

  Exercisable

  	
   

  	
  Cumulative

  Number of

  Shares

  Exercisable

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

The Option shall be
exercised by the Employee by giving written notice to the Company specifying
the number of full shares to be purchased. 
The Option price shall be paid in accordance with Paragraph 10 at the
time of exercise and no shares shall be purchased if the Employee is not at the
time of exercise in the employ of the Company, or a subsidiary, except as
provided in Paragraph 7.

 

5.             ADMINISTRATION. 
The Plan shall be administered by the Compensation and Stock Option
Committee of the Board of Directors of the Company, hereinafter referred to as
the “Committee”.  The Committee is
authorized and empowered to administer and interpret the Plan and this Option
Agreement.  Any interpretations of this
Option Agreement or of the Plan made by the Committee shall be final and
binding upon the parties hereto.

 

6.             NON-TRANSFERABILITY.  The Option shall not be assignable nor
transferable except by Will or by the laws of descent and distribution,
provided that this Section may be amended, at the sole and absolute discretion
of the Committee, to permit certain transfers on such terms and conditions as
it deems appropriate.  During the
lifetime of the Employee, the Option shall be exercisable only by the
Employee.  After the death of the
Employee, the Option may be exercised prior to its termination as set forth in
Paragraph 7 hereof, and shall not be subject to execution, attachment or other
process.

 

 

7.                                     TERMINATION.  This Option may not be exercised by the
Employee unless, at the time of the exercise, the Employee is in the employment
of the Company, or a subsidiary, except as follows:

 

(a)           Prior to the expiration of ninety
(90) days from the date of the Employee’s termination of employment other than
by reason of death;

 

(b)           Prior to the expiration of one (1)
year from the date of the Employee’s death if his death occurs not later than
ninety (90) days after the Employee’s termination of employment; and

 

(c)           Prior to the termination of the Plan
pursuant to Section 16 of the Plan.

 

The termination of
employment of an Employee by reason other than death shall not accelerate or
otherwise affect the number of shares with respect to which this Option may be
exercised, and this Option may only be exercised with respect to that number of
shares subject thereto at the date of such termination.  If the Employee’s termination of employment
is by reason of death, then the number of shares with respect to which this Option
may be exercised shall be accelerated such that, any conditions of the Plan or
this Option notwithstanding, all unexercised shares subject to this Option
shall be exercisable as otherwise herein provided.  In such event, the Option may be exercised by
a legatee or legatees of the Employee mentioned in the Employee’s Last Will and
Testament, or by the Employee’s personal representatives or distributees,
provided, notice of exercise of the Option is given to the Company by such
person within one (1) year following the date of Employee’s death.

 

8.                                     CHANGE
IN CAPITALIZATION.  If there are any
changes in the capitalization of the Company affecting in any manner the number
or kind of outstanding shares of Common Stock of the Company, whether such
changes have been occasioned by declaration of stock dividend, stock split-ups,
reclassifications or recapitalizations of such stock, or because the Company
has merged or consolidated with some other corporation (and provided this
Option does not thereby become terminated pursuant to Section 9 hereof), or for
any other reason whatsoever, then the number and kind of shares then subject to
this Option and the price to be paid therefore shall be proportionately
adjusted

 

 

by the Committee to whatever extent the Committee determines that any
such change equitably requires an adjustment. 
In no case shall the Company be required to sell a fractional share of
Common Stock, and the total adjustment as set forth above shall be limited
accordingly.

 

9.             MERGERS OR CONSOLIDATIONS.  If the Company at any time should elect to
dissolve, undergo a reorganization or split-up of its stock or merge or
consolidate with any other corporation and the Company is not the surviving
corporation, then (unless in the case of a reorganization, stock split-up,
merger or consolidation, one or more of the surviving corporations assumes the
options under the Plan or issues substitute options in place thereof) each
Employee holding outstanding options not yet exercised shall be notified of his
right to exercise such options to the extent then exercisable prior to such
dissolution, reorganization, stock split-ups, merger or consolidation.  The Committee may, in its sole and absolute
discretion and on such terms and conditions as it deems appropriate, authorize
the exercise of such options with respect to all shares covered thereby.  Any option shall thereupon be deemed
terminated, and simultaneously  the Plan
itself shall be deemed terminated.

 

10.           METHOD OF EXERCISING THE OPTION.  The Employee may exercise this Option by
written notice to the Company, substantially in the form attached as Exhibit A
hereto.  Such notice shall state the
Employee’s intention to exercise the Option and the number of shares in respect
to which it is being exercised and shall be signed by the Employee or a legatee
or personal representative of the Employee. 
Such notice shall be accompanied by payment of the full amount of the
Option Price and instructions shall be given as to the manner in which the
stock certificates shall be registered, i.e., in the name of an Employee or in
the name of the Employee and a close relative jointly, with the right of
survivorship, or in the name of the Employee’s legatee or personal
representative.  The Option Price shall
be payable (a) in cash or its equivalent, (b) by tendering previously acquired
shares of Common Stock having an aggregate Fair Market Value (as defined in the
Plan) on the last trading day prior to the date of exercise equal to the total
Option Price (provided that the shares of Common Stock which

 

 

are tendered must have been held by the Employee for at least twelve
(12) months prior to their tender to satisfy the Option Price), or (c) by a
combination of any of the foregoing.

 

11.           REQUIREMENTS OF LAW.  If any law, regulation of the Securities and
Exchange Commission, or any regulation of any other commission or agency having
jurisdiction shall require the Company or the Employee to take any action with
respect to the shares of Common Stock acquired by the exercise of this Option,
then the date upon which the Company shall deliver or cause to be delivered the
certificate or certificates for the shares of Common Stock shall be postponed
until full compliance has been made with all such requirements or law or
regulation.  Further, at or before the
time of the delivery of the shares with respect to which exercise of this
Option has been made, the Employee shall deliver to the Company a written
statement that the Employee intends to hold the shares, so acquired on exercise
of this Option, for investment and not with a view to resale or other
distribution thereof to the public. 
Further, in the event the Company shall determine that, in compliance
with the Securities Act of 1933 or other applicable statute or regulation, it
is necessary to register any of the shares of Common Stock with respect to
which an exercise of this Option has been made, or to qualify any such shares
for exemption for any of the requirements of the Securities Act of 1933 or
other applicable statute or regulations, then the Company shall take such
action at its own expense, but not until such action has been completed shall
the Option shares be delivered to the Employee.

 

12.           NO EFFECT ON EMPLOYMENT.  Nothing herein shall be construed to limit or
restrict the right of the Company or any of its subsidiaries to terminate an
Employee’s employment at any time, with or without cause, or to increase or
decrease the compensation of the Employee from the rate in existence at the
time this Option is granted.

 

13.           RESTRICTION ON RESALE.  Whether or not the shares of Common Stock
acquired upon exercise of an Option have been registered under the Securities
Act of 1933, Employee may not

 

 

sell, transfer, assign, gift, pledge or otherwise dispose of such
shares for a one (1) year period commencing on the date of acquisition of such
shares.

 

IN WITNESS WHEREOF, the
Company has caused this Option Agreement to be duly executed by an authorized
officer, and the Employee has hereunto set hand and seal, all as of the day and
year first above written.

 

	
   

  	
  Dover Downs Gaming
  & Entertainment, Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Employee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SS #Exhibit 10.2

 

FORM OF

RESTRICTED STOCK GRANT AGREEMENT

USED WITH

DOVER
DOWNS GAMING & ENTERTAINMENT, INC.

2002
STOCK INCENTIVE PLAN, AS AMENDED AND RESTATED

 

RESTRICTED STOCK GRANT AGREEMENT made as of the              
day of                        ,
             
(the “Grant Date”) between DOVER DOWNS GAMING & ENTERTAINMENT, INC., a
Delaware corporation (hereinafter called “Company”), and                                    ,
an employee of the Company, or one or more of its subsidiaries (hereinafter
called the “Employee”).

 

WHEREAS, the Company
desires to grant to the Employee shares of its Common Stock, par value $0.10
per share (hereinafter called the “Common Stock”), subject to certain continued
employment and vesting criteria, pursuant to the terms and provisions of the
Company’s 2002 Stock Incentive Plan, as Amended and Restated, (hereinafter
called the “Plan”), as hereinafter provided.

 

NOW, THEREFORE, in
consideration of the mutual covenants hereinafter set forth and Employee’s
employment by the Company, the parties hereto agree as follows:

 

1.             THE PLAN. 
This Agreement is made pursuant to and in accordance with the terms and
provisions of the Plan.  Anything in this
Agreement to the contrary notwithstanding, the terms and provisions of the
Plan, all of which are incorporated herein by reference, shall be controlling
in the event of any inconsistency herewith.

 

2.             ADMINISTRATION. 
The Plan shall be administered by the Compensation and Stock Incentive
Committee of the Board of Directors of the Company, hereinafter referred to as
the “Committee”.  The Committee is
authorized and empowered to administer and interpret the Plan and this
Agreement.  Any interpretations of this
Agreement or of the Plan made by the Committee shall be final and binding upon
the parties hereto.

 

 

3.             GRANT OF RESTRICTED STOCK.  Effective as of the Grant Date, the Company
hereby irrevocably grants to the Employee                 
shares of Common Stock, which shares are subject to satisfaction of the vesting
requirements and the terms and conditions hereinafter set forth (such shares of
Common Stock being hereinafter referred to in the aggregate as the “Restricted
Stock”).

 

4.             VESTING AND CONTINUED EMPLOYMENT.  All Restricted Stock shall vest in accordance
with the following vesting schedule, but only if, through such date, Employee
shall have been in the continuous employ of the Company or a subsidiary
thereof, in a position of equivalent or greater responsibility as on the Grant
Date:

 

	
  Anniversary

  Date

  of this

  Agreement

  	
   

  	
  Percentage

  of

  Total Grant

  Fully Vested

  	
   

  	
  Number

  of

  Shares

  Fully Vested

  	
   

  	
  Cumulative

  Number of

  Shares

  Fully Vested

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

Unless otherwise
determined by the Committee (or pursuant to procedures established by the
Committee) at or after the Grant Date, if an Employee’s employment terminates
for any reason other than death or retirement on or after age 65, as in the
case of voluntary resignation of employment, all Restricted Stock which has not
yet vested shall be immediately forfeited.

 

Unless otherwise determined by the Committee at or
after the Grant Date, if an Employee’s employment terminates by reason of
death, a pro rata portion of the restrictions pertaining to continued
employment on any Restricted Stock will lapse, based on the number of full months
the Employee was employed during the restriction period divided by the total
number of months in the restriction period.

 

Unless otherwise
determined by the Committee at or after the Grant Date, if an Employee’s
employment terminates by reason of retirement on or after age 65, all of the
restrictions pertaining to continued employment on any Restricted Stock will
lapse.

 

2

 

5.             ESCROW; DIVIDENDS AND VOTING RIGHTS.  Prior to the completion of the vesting
schedule referenced in Section 4, all shares of Restricted Stock shall be held
in escrow by the Company for the benefit of the Employee.  During such period, prior to any forfeiture
of the shares, the Employee shall receive all cash dividends declared with
respect to the shares and shall have the right to exercise all voting rights
with respect to the shares.  At the
discretion of the Company, any share certificates so held in escrow shall be
inscribed with a legend referencing the transfer restrictions contained in this
Agreement and any other applicable transfer restrictions.  Any share certificates issued pursuant to a
stock split or as dividends with respect to the Restricted Stock held in escrow
shall also be held in escrow on the same terms as the Restricted Stock and
shall be released at the same time as, and subject to the same risk of
forfeiture as, the shares with respect to which they were issued.  Any issued Restricted Stock which the
Employee does not forfeit pursuant to Section 4 shall be transferred to the
Employee free of any forfeiture conditions under the Plan or this Agreement as
soon as practicable after the service vesting condition under Section 4 has
been satisfied or no longer applies.

 

6.             NON-TRANSFERABILITY.  No Restricted Stock granted pursuant to this
Agreement shall be assignable or transferable, and such Restricted Stock shall
not be subject to execution, attachment or other process, until that date on
which the Restricted Stock vests pursuant to Section 4.  Any attempt by the Employee to alienate,
assign, pledge, hypothecate or otherwise dispose of the Employee’s interest in
this Agreement or any Restricted Stock prior to its becoming fully vested shall
be ineffective and shall permit the Company to terminate this Agreement and cause
the forfeiture of any unvested shares.  
The Company may, at its discretion, place a legend to such effect on the
certificates representing the shares of Restricted Stock and issue appropriate
stop transfer instructions to the Company’s transfer agent.

 

7.             CHANGE IN CAPITALIZATION.  If there are any changes in the
capitalization of the Company affecting in any manner the number or kind of
outstanding shares of Common Stock of the Company, whether such changes have
been occasioned by declaration of stock dividend, stock split-ups,

 

3

 

reclassifications or recapitalizations of such stock, or because the
Company has merged or consolidated with some other corporation, or for any
other reason whatsoever, then the number of shares then subject to this
Agreement shall be proportionately adjusted by the Committee as required by the
Plan or to whatever extent the Committee determines that any such change
equitably requires an adjustment.  In no
case shall the Company be required to issue a fractional share of Common Stock,
and the total adjustment as set forth above shall be limited accordingly.  The Committee need not treat other holders of
Restricted Stock in the same manner as the Employee is treated.

 

8.             REQUIREMENTS OF LAW.  If any law, regulation of the Securities and
Exchange Commission, or any regulation of any other commission or agency having
jurisdiction shall require the Company or the Employee to take any action with
respect to the shares of Restricted Stock covered by this Agreement, then the
date upon which the Company shall deliver or cause to be delivered the
certificate or certificates for the shares of Restricted Stock shall be
postponed until full compliance has been made with all such requirements or law
or regulation.  Further, at or before the
time of the delivery of any shares of Restricted Stock, the Employee shall, if
requested by the Company, deliver to the Company a written statement that the
Employee intends to hold the shares, so acquired for investment and not with a
view to resale or other distribution thereof to the public.  Further, in the event the Company shall
determine that, in compliance with the Securities Act of 1933 or other
applicable statute or regulation, it is necessary to register any of the shares
of Restricted Stock, or to qualify any such shares for exemption for any of the
requirements of the Securities Act of 1933 or other applicable statute or
regulations, then the Company shall take such action at its own expense, but not
until such action has been completed shall the shares be issued in the name of
the Employee.

 

9.             WITHHOLDING. 
The Company shall have the power and the right to deduct or withhold, or
require an Employee to remit to the Company, an amount (including any shares of
Common Stock withheld as provided herein) sufficient to satisfy Federal, state
and local taxes (including the Employee’s FICA obligation) required by law to
be withheld with respect to a grant of

 

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Restricted Stock.  With the
Company’s consent, the Employee shall be able to elect that such tax
withholding requirements be satisfied, in whole or in part, (1) by tendering
shares of Common Stock held by the Employee at least twelve (12) months prior to
their tender or (2)  through a reduction
in the number of shares of Restricted Stock issued or transferred to the
Employee.  Any such election shall be
irrevocable, made in writing and signed by the Employee.  The Company reserves the right to reduce the
number of shares of Restricted Stock issued or transferred to the Employee in
order to satisfy such minimum applicable tax withholding requirements.

 

10.           NO EFFECT ON EMPLOYMENT.  Nothing herein shall be construed to limit or
restrict the right of the Company or any of its subsidiaries to terminate an
Employee’s employment at any time, with or without cause, or to increase or
decrease the compensation of the Employee from the rate in existence at the
time of the Grant Date.

 

11.           GOVERNING LAW.  This Agreement and all awards made and
actions taken hereunder shall be governed by and construed in accordance with
the laws of the State of Delaware and the parties agree to the exclusive
jurisdiction of state and federal courts in Delaware with respect to any disputes
arising under this Agreement or the Plan.

 

IN WITNESS WHEREOF, the
Company has caused this Option Agreement to be duly executed by an authorized
officer, and the Employee has hereunto set hand and seal, all as of the day and
year first above written.

 

	
   

  	
  Dover Downs Gaming
  & Entertainment, Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Employee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SS#:

  	
   

  

 

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