X0202 4 2004-10-22 1 0000921438 PDS GAMING CORP PDSG 0001217592 CLEARY PETER D 6171 MCLEOD DRIVE LAS VEGAS NV 89120 1 1 0 0 President & CFO Common Stock 2004-10-22 4 U 0 18207.3 2.75 D 0 D Right to Buy (Common Stock) 2.50 2004-10-22 4 D 0 50000 0.11 D 2005-09-07 Common Stock 50000 0 D Right to Buy (Common Stock) 1.63 2004-10-22 4 D 0 4000 0.98 D 2005-11-01 Common Stock 4000 0 D Right to Buy (Common Stock) 9.13 2004-10-22 4 D 0 15000 0 D 2008-05-14 Common Stock 15000 0 D Right to Buy (Common Stock) 4.37 2004-10-22 4 D 0 50000 0 D 2009-06-30 Common Stock 50000 0 D Right to Buy (Common Stock) 4.37 2004-10-22 4 D 0 25000 0 D 2009-06-30 Common Stock 25000 0 D Right to Buy (Common Stock) 3.78 2004-10-22 4 D 0 10000 0 D 2009-02-28 Common Stock 10000 0 D Pursuant to the Agreement and Plan of Merger dated as of April 14, 2004, PDS Gaming Corporation (the "Company") consummated a merger with PDS Acquisition Sub, LLC effective as of October 22, 2004 (5:00 pm CDST) (the "Effective Time") and became a wholly-owned subsidiary of PDS Holding Co., Inc. As of the Effective Time, each outstanding share of the Company's common stock represented the right to receive: (i) a cash payment of $1.25 per share upon the consummation of the merger; and (ii) a nontransferable deferred cash payment right to receive $0.50 per share on each of the first three anniversaries of the closing of the merger, in each case without interest and less withholding taxes, if any (where such amounts may be prepaid subject to a net present value discount). As a result, Mr. Cleary is entitled to receive a total cash payment of $50,070.08 for his shares. Fully vested. Pursuant to the Agreement and Plan of Merger dated as of April 14, 2004, immediately prior to the Effective Time, each option to purchase shares of common stock, whether or not then exercisable or vested, became fully exercisable and vested. At the Effective Time, each option was cancelled, where, as consideration for the cancellation, holders of options are entitled to receive an amount equal to the product of: (i) the excess, if any, of $2.61 over the relevant exercise price; and (ii) the number of shares subject to the option (net of taxes, if any). As a result, Mr. Cleary is entitled to receive $5,500 and $3,920, respectively, for his options. Fully vested. Granted 05-14-1998; Exercisable in increments of one-fifth (3,000) beginning on 05-14-1999. Granted 06-30-1999; Exercisable in increments of one-fifth (10,000) beginning on 06-30-2000. Granted 06-30-1999; Exercisable in increments of one-fifth (5,000) beginning on 06-30-2000. Granted 02-28-2002; Exercisable in increments of one-fifth (2,000) beginning on 02-28-2003. /s/ Peter D. Cleary 2004-10-22