<PAGE>
Registration No.
--------
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------------------
SILICON GAMING, INC.
--------------------
(Exact name of registrant as specified in its charter)
California 77-0357939
------------------------------ --------------------------------
(State or other jurisdiction (I.R.S. employer identification no.)
of incorporation or organization)
2800 West Bayshore Road
Palo Alto, CA 94303
-------------------
(Address of principal executive offices) (Zip code)
SILICON GAMING, INC.
AMENDED AND RESTATED 1994 STOCK OPTION PLAN
-------------------------------------------
(Full title of the plan)
Thomas E. Carlson
Vice President and Chief Financial Officer
Silicon Gaming, Inc.
2800 West Bayshore Road
Palo Alto, CA 94303
-------------------------------------------
(Name and address of agent for service)
Telephone number, including area code, of agent for service: (415) 842-9000.
This registration statement, including all exhibits and attachments, contains 22
pages. The Exhibit index may be found on page 7 of the consecutively numbered
pages of the registration statement.
This registration statement shall hereafter become effective in accordance with
Rule 462 promulgated under the Securities Act of 1933, as amended.
1
<PAGE>
- --------------------------------------------------------------------------------
CALCULATION OF REGISTRATION FEE
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Proposed
Proposed maximum
Title of Securities Amount to be maximum offering aggregate offering Amount of
to be registered/1/ registered price per share/2/ price/2/ Registration fee
- --------------------------------------------------------------------------------------------------------
Amended and Restated 1994 Stock
- -------------------------------
Option Plan
- -----------
<S> <C> <C> <C>
Common Stock 190,764 $13.77 $2,626,820.28
Par Value $0.001 320,626 $12.25 $3,927,668.50
TOTALS 511,390 $6,554,488.78 $1,986.21
</TABLE>
- -------------------
/1/ The securities to be registered include options to acquire such Common
Stock.
/2/ Estimated pursuant to Rule 457 solely for purposes of calculating the
registration fee. As to shares subject to outstanding but unexercised options
under the Stock Option Plan, the price is computed on the basis of the weighted
average exercise price. As to the remaining shares under the Stock Option Plan,
the price is based upon the average of the high and low prices of the Common
Stock on August 18, 1997, as reported on the National Association of Securities
Dealers Automated Quotations System.
2
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
--------------------------------------------------
Item 3. Incorporation of Documents by Reference
- ------ ---------------------------------------
Silicon Gaming, Inc. (the "Company") hereby incorporates by reference in
this registration statement the following documents:
(a) The Company's latest annual report on Form 10-K filed pursuant to
Sections 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), containing audited financial statements for the Company's
latest fiscal year ended December 31, 1996, as filed with the Commission.
(b) All other reports filed pursuant to Section 13(a) or 15(d) of the
Exchange Act since the end of the fiscal year covered by the registrant
document referred to in (a) above.
(c) The description of the Company's Common Stock contained in the
Company's Registration Statement on Form 10 filed under the Exchange Act,
including any amendment or report filed for the purpose of updating such
description.
All documents subsequently filed by the Company pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the filing of a post-
effective amendment to this registration statement which indicates that all
securities offered hereby have been sold or which deregisters all securities
remaining unsold, shall be deemed to be incorporated by reference in this
registration statement and to be a part hereof from the date of filing of such
documents.
Item 4. Description of Securities
- ------ -------------------------
The class of securities to be offered is registered under Section 12 of
the Exchange Act.
Item 5. Interests of Named Experts and Counsel
- ------ --------------------------------------
Inapplicable.
Item 6. Indemnification of Directors and Officers
- ------ -----------------------------------------
The Company's Amended and Restated Articles of Incorporation provide
that the liability of the directors for monetary damages shall be eliminated to
the fullest extent permissible under California law. Pursuant to California law,
the Company's directors shall not be liable for monetary damages for breach of
the directors' fiduciary duty of care to the Company and its shareholders.
However, this provision does not eliminate the duty of care, and in appropriate
circumstances, equitable remedies such as injunctive or other forms of non-
monetary relief will remain available under California law.
In addition, each director will continue to be subject to liability for
(i) acts or omissions that involve intentional misconduct or a knowing and
culpable violation of law, (ii) acts or omissions that a director believes to be
contrary to the best interests of the Company or its shareholders or that
involve the
3
<PAGE>
absence of good faith on the part of the director, (iii) any transaction from
which a director derived an improper personal benefit, (iv) acts or omissions
that show a reckless disregard for the director's duty to the Company or its
shareholders in circumstances in which the director was aware, or should have
been aware, in the ordinary course of performing a director's duties, of a risk
of serious injury to the Company or its shareholders, (v) acts or omissions that
constitute an unexcused pattern of inattention that amounts to an abdication of
the director's duty to the Company or its shareholders, (vi) any transaction
that constitutes an illegal distribution or dividend under California law, and
(vii) any transaction involving an unlawful conflict of interest between the
director and the Company under California law. The provision also does not
affect a director's responsibilities under any other law, such as the federal
securities laws or state or federal environmental laws.
Item 7. Exemption From Registration Claimed
- ------ -----------------------------------
Inapplicable.
Item 8. Exhibits
- ------ --------
See Exhibit Index.
Item 9. Undertakings
- ------ ------------
(a) Rule 415 Offering
-----------------
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in the
registration statement;
(iii) To include any material information with respect
to the plan of distribution not previously disclosed in the registration
statement or any material change to such information in the registration
statement;
provided, however, that paragraphs (a)(1)(i) and (a)(l)(ii) do not apply if the
- -----------------
registration statement is on Form S-3 or Form S-8, and the information required
to be included in a post-effective amendment by those paragraphs is contained in
periodic reports filed by the registrant pursuant to Section 13 or Section 15(d)
of the Exchange Act that are incorporated by reference in the registration
statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
4
<PAGE>
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) Filing incorporating subsequent Exchange Act documents by reference
-------------------------------------------------------------------
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(h) Request for acceleration of effective date or filing of
-------------------------------------------------------
registration statement on Form S-8
- ----------------------------------
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
SIGNATURE
---------
Pursuant to the requirements of the Securities Act of 1933, as
amended, the registrant certifies that it has reasonable grounds to believe that
it meets all of the requirements for filing on Form S-8 and has duly caused this
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Palo Alto, State of California, on August 20,
1997.
Silicon Gaming, Inc.
By: /s/ Thomas E. Carlson
---------------------------------------------
Thomas E. Carlson
Vice President and Chief Financial Officer
5
<PAGE>
SIGNATURES AND POWER OF ATTORNEY
--------------------------------
The officers and directors of Silicon Gaming, Inc. whose signatures
appear below, hereby constitute and appoint Donald J. Massaro and Thomas E.
Carlson, and each of them, their true and lawful attorneys and agents, with full
power of substitution, each with power to act alone, to sign and execute on
behalf of the undersigned any amendment or amendments to this registration
statement on Form S-8, and each of the undersigned does hereby ratify and
confirm all that each of said attorney and agent, or their or his substitutes,
shall do or cause to be done by virtue hereof. Pursuant to the requirements of
the Securities Act of 1933, as amended, this registration statement has been
signed by the following persons in the capacities indicated on August 20, 1997.
Signature Title
/s/ Donald J. Massaro
- ------------------------------
Donald J. Massaro Chairman of the Board, Chief Executive Officer,
and President (Principal Executive Officer)
/s/ Thomas E. Carlson
- ------------------------------
Thomas E. Carlson Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer)
/s/ Robert M. Fell
- ------------------------------
Robert M. Fell Director
/s/ William Hart
- ------------------------------
William Hart Director
/s/ Kevin R. Harvey
- ------------------------------
Kevin R. Harvey Director
/s/ David S. Morse
- ------------------------------
David S. Morse Director
/s/ Joseph J. Piemont
- ------------------------------
Joseph J. Piemont Director
/s/ Thomas J. Volpe
- ------------------------------
Thomas J. Volpe Director
6
<PAGE>
EXHIBIT INDEX
-------------
Sequentially
Numbered Page
-------------
4.1 Amended and Restated Articles of Incorporation 8
of the Company, as filed with the Secretary of
State of the State of California on August 29,
1996.
4.2 Bylaws of the Company are incorporated by ---
reference to Exhibit 3.2 to the Company's
Registration Statement on Form 10 filed with
the Securities and Exchange Commission on
April 24, 1996, as amended by Form 10-A
Amendment No. 1 filed with the Commission on
June 13, 1996
(No. 0-28294)
4.3 Second Amended and Restated Rights Agreement ---
dated as of March 21, 1996, is incorporated
by reference to Exhibit 10.7 to the Company's
Registration Statement on Form 10 filed with
the Securities and Exchange Commission on
April 24, 1996
(No. 0-28294)
5 Opinion re legality 21
23.1 Consent of Counsel (included in Exhibit 5) ---
23.2 Consent of Deloitte & Touche LLP 22
24 Power of Attorney (included in signature pages
to this registration statement) ---
7
<PAGE>
EXHIBIT 4.1
-----------
AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
SILICON GAMING, INC.
Donald J. Massaro and Thomas E. Carlson certify that:
1. They are the duly elected and acting President and Assistant
Secretary, respectively, of Silicon Gaming, Inc., a California corporation.
2. The Articles of Incorporation of the corporation shall be amended
and restated to read in full as follows:
ARTICLE I
NAME
----
The name of the corporation is Silicon Gaming, Inc.
ARTICLE II
PURPOSES
--------
The purpose of the corporation is to engage in any lawful act or
activity for which a corporation may be organized under the General Corporation
Law of California other than the banking business, the trust company business or
the practice of a profession permitted to be incorporated by the California
Corporations Code.
8
<PAGE>
ARTICLE III
STOCK
-----
1. Authorized Stock. The corporation is authorized to issue two
----------------
classes of shares to be designated respectively "Preferred Stock," par value
$0.001 per share, and "Common Stock," par value $0.001 per share. The total
number of shares of Preferred Stock authorized is 6,884,473. The total number of
shares of Common Stock authorized is 50,000,000. The shares of Preferred Stock
authorized by these Articles of Incorporation may be issued from time to time in
one or more series.
2. Preferred Stock. The first Series of Preferred Stock shall be
---------------
comprised of 1,998,332 shares designated as "Series A1 Preferred Stock." The
second Series of Preferred Stock shall be comprised of 4,386,141 shares
designated as "Series B1 Preferred Stock." The balance of the shares of
authorized Preferred Stock may be divided into such Series as the Board of
Directors may determine. The Board of Directors is authorized to determine and
alter the rights, preferences, privileges and restrictions granted to or imposed
upon any wholly unissued series, and to fix the number of shares of any such
Series of Preferred Stock and the designation of any such Series of Preferred
Stock. The Board of Directors may also, within the limits and restrictions
stated herein or in any resolution or resolutions originally fixing the number
of shares constituting any such series, increase or decrease (but not below the
number of shares of such Series then outstanding) the number of shares of any
such Series subsequent to the issue of shares of that series.
The relative rights, preferences, restrictions and other matters
relating to the Series A1 Preferred Stock and the Series B1 Preferred Stock
("Nonvoting Preferred") are as follows:
(a) Dividends.
---------
(1) The holders of outstanding Nonvoting Preferred shall be
entitled to receive in any fiscal year, when, as and if declared by the Board of
Directors, out of any assets at the time legally available therefor, non-
cumulative dividends in cash at the rate of $0.075 per share of Series A1
Preferred Stock or $0.114 per share of Series B1 Preferred Stock, as adjusted
for any consolidations, combinations, stock distributions, stock dividends,
stock splits or similar events (collectively a "Recapitalization Event"), per
annum. In addition, the holders of any Series of Nonvoting Preferred shall be
entitled to receive dividends if and only if all holders of Series A1 and Series
B1 Preferred Stock receive dividends pro rata based on the dividend price per
share of each such respective Series as set forth in this Section 2(a).
Dividends may be declared and paid upon Common Stock in any fiscal year of the
corporation only if cash dividends in the total amount of $0.075 per share, and
$0.114 per share (each as adjusted for any Recapitalization Event) shall have
been paid or declared and set apart upon all shares of Series A1 Preferred Stock
and Series B1 Preferred Stock, respectively, during that fiscal year, and no
cash dividends shall be paid on any share of Common Stock unless a cash dividend
(including the amount of any dividends paid pursuant to the above provisions of
this Section (a)(1)) is paid with respect to all outstanding shares of Nonvoting
Preferred in an amount for each such share of
9
<PAGE>
Nonvoting Preferred equal to or greater than the aggregate amount of such cash
dividends for all shares of Common Stock into which each such share of Nonvoting
Preferred could then be converted. The right to dividends on Nonvoting Preferred
shall not be cumulative and no right shall accrue to holders of Preferred Stock
by reason of the fact that distributions on said shares are not declared in any
prior year, nor shall any undeclared or unpaid distribution bear or accrue
interest.
(2) Each holder of shares of Nonvoting Preferred shall be deemed
to have consented, for purposes of sections 502, 503 and 506 of the General
Corporation Law of the State of California, to distributions made by the
corporation in connection with the repurchase of shares of Common Stock issued
to or held by employees, directors or consultants upon termination of their
employment or services pursuant to agreements providing for such repurchase.
(b) Preference on Liquidation.
-------------------------
(1) In the event of any voluntary or involuntary liquidation,
dissolution or winding up of the corporation, the assets and funds of the
corporation available for distribution to shareholders shall be distributed as
follows:
(i) First, the holders of shares of Nonvoting Preferred then
outstanding shall be entitled to receive, out of the assets of the corporation
available for distribution to its shareholders, before any payment shall be made
in respect of the corporation's Common Stock an amount equal to $0.75 per share
of Series A1 Preferred Stock (the "Original Series A1 Issue Price") and $1.14
per share of Series B1 Preferred Stock (the "Original Series B1 Issue Price")
(each as adjusted for any Recapitalization Event), plus all declared or accrued
and unpaid dividends thereon to the date fixed for such distribution. If upon
liquidation, dissolution or winding up of the corporation, the assets of the
corporation available for distribution to its shareholders shall be insufficient
to pay the holders of the Nonvoting Preferred the full amounts to which they
respectively shall be entitled, the holders of the Nonvoting Preferred shall
share ratably in any distribution of assets according to the respective amounts
which would be payable in respect of the shares held by them upon such
distribution if all amounts payable on or with respect to said shares were paid
in full.
(ii) After setting apart or paying in full the preferential
amounts due the holders of Nonvoting Preferred, subject to the preference
amounts payable with respect to any other outstanding Series of Preferred Stock,
the remaining assets of the corporation available for distribution to its
shareholders, if any, shall be distributed ratably to the holders of Common
Stock.
The merger or consolidation of the corporation into or with another
corporation in which the shareholders of this corporation shall own less than
50% of the voting securities of the surviving corporation or the sale, transfer
or other disposition (but not including a transfer or disposition by pledge or
mortgage to a bona fide lender) of all or substantially all of the assets of
10
<PAGE>
the corporation shall be deemed to be a liquidation, dissolution or winding up
of the corporation as those terms are used in this Section 2(b).
(2) In the event of any voluntary or involuntary liquidation,
dissolution or winding up of the corporation, the corporation shall, within ten
(10) days after the date the Board of Directors approves such action, or twenty
(20) days prior to any shareholders' meeting called to approve such action, or
twenty (20) days after the commencement of any involuntary proceeding, whichever
is earlier, give each holder of shares of Nonvoting Preferred written notice of
the proposed action. Such written notice shall describe the material terms and
conditions of such proposed action, including a description of the stock, cash
and property to be received by the holders of shares of Nonvoting Preferred upon
consummation of the proposed action and the date of delivery thereof. If any
material change in the facts set forth in the initial notice shall occur, the
corporation shall promptly give written notice to each holder of shares of
Nonvoting Preferred of such material change.
(3) The corporation shall not consummate any voluntary or
involuntary liquidation, dissolution or winding up of the corporation before the
expiration of thirty (30) days after the mailing of the initial written notice
or ten (10) days after the mailing of any subsequent written notice, whichever
is later; provided that any such 30 day or 10 day period may be shortened upon
the written consent of the holders of a majority of the outstanding shares of
Nonvoting Preferred.
(4) In the event of any voluntary or involuntary liquidation,
dissolution or winding up of the corporation which will involve the distribution
of assets other than cash, the corporation shall promptly engage competent
independent appraisers to determine the value of the assets to be distributed to
the holders of shares of Preferred Stock and the holders of shares of Common
Stock (it being understood that with respect to the valuation of securities, the
corporation shall engage such appraiser as shall be approved by the holders of a
majority of shares of the corporation's outstanding Preferred Stock). The
corporation shall, upon receipt of such appraiser's valuation, give prompt
written notice to each holder of shares of Preferred Stock of the appraiser's
valuation.
(c) Redemption.
----------
(1) At any time on or after February 28, 2002, this corporation
shall, upon receipt of the written request (the "Redemption Request") of the
holders of at least a majority of the shares of Nonvoting Preferred then
outstanding taken together as a series, redeem for cash out of any funds legally
available therefor ratably from holders thereof, on each of the relevant
Redemption Dates, that number of shares of Nonvoting Preferred equal to one-
third of the number of shares of each of the Series A1 Preferred Stock and the
Series B1 Preferred Stock outstanding on the first Redemption Date. Redemptions
of each share of (i) Series A1 Preferred Stock or (ii) Series B1 Preferred Stock
pursuant to this Section 2(c) shall be made at the Original Series A1 Issue
Price or the Original Series B1 Issue Price, respectively (as adjusted for any
Recapitalization Event), plus an amount equal to the amount of all declared but
unpaid dividends as of the relevant Redemption Date payable in accordance with
Section 2(a) above on each such
11
<PAGE>
share to be redeemed. This corporation need not establish any sinking fund for
redemption of the Nonvoting Preferred. The total amount to be paid with respect
to each share of Nonvoting Preferred is hereinafter referred to as the
"Redemption Price."
(2) The Redemption Request shall set forth the requested date of
the redemption, which date in no event shall be fewer than twenty (20) days nor
more than sixty (60) days after the date of the Redemption Request, or such
later date as the holders of at least a majority of the then outstanding shares
of Nonvoting Preferred agree to in writing. Such date and the first and second
anniversaries thereof are referred to herein collectively as the "Redemption
Dates" and individually as a "Redemption Date." Within ten (10) days of the
Redemption Request for a Series of Nonvoting Preferred, this corporation shall
give written notice by mail, postage prepaid, to each holder of record (at the
close of business on the business day next preceding the day on which notice is
deposited in the mail) of the shares of Nonvoting Preferred to be redeemed, at
the address last shown on the records of this corporation for such holder or
given by the holder to this corporation for the purpose of notice, or if no such
address appears or is given, at the place where the principal executive office
of this corporation is located, notifying such holder of the redemption to be
effected, specifying the number of shares to be redeemed from such holder, the
applicable Redemption Date, the applicable Redemption Price, the place at which
payment may be obtained and the date on which such holder's Conversion Rights
(as set forth in Section 2(e)) as to such shares terminate and calling upon such
holder to surrender to this corporation, in the manner and at the place
designated, his certificate or certificates representing the shares to be
redeemed (the "Redemption Notice"). Except as provided in Section 2(c)(4) below,
on or after such Redemption Date, each holder of shares of Nonvoting Preferred
to be redeemed shall surrender to this corporation the certificate or
certificates representing such shares, in the manner and at the place designated
in the Redemption Notice, and thereupon the applicable Redemption Price of such
shares shall be payable to the order of the person whose name appears on such
certificate or certificates as the owner thereof and each surrendered
certificate shall be canceled. In the event fewer than all the shares
represented by any such certificate are redeemed, a new certificate shall be
issued representing the unredeemed shares.
(3) From and after the applicable Redemption Date, unless there
shall have been a default in payment of the applicable Redemption Price, all
dividends on the shares of Nonvoting Preferred designated for redemption in the
Redemption Notice shall cease to accrue, all rights of the holders of such
shares as holders of Nonvoting Preferred (except the right to receive the
Redemption Price without interest upon surrender of their certificate or
certificates) shall cease with respect to such shares, and such shares shall not
thereafter be transferred on the books of this corporation or be deemed to be
outstanding for any purpose whatsoever. If the funds of the corporation legally
available for redemption of Nonvoting Preferred on any Redemption Date are
insufficient to redeem the total number of shares of Nonvoting Preferred to be
redeemed on such date, those funds which are legally available will be used
to redeem the maximum possible number of such shares ratably among the holders
of such shares to be redeemed, based on the aggregate Redemption Price payable
to each holder. The shares of Nonvoting Preferred not redeemed shall remain
outstanding and entitled to all the rights and preferences provided herein. At
any time thereafter when additional funds of the corporation are legally
available for the redemption of Nonvoting Preferred, such funds will immediately
be used
12
<PAGE>
to redeem the balance of the shares which the corporation has become
obligated to redeem on any Redemption Date but which it has not redeemed.
(4) Three (3) days prior to the applicable Redemption Date, this
corporation shall deposit the applicable Redemption Price of all the Nonvoting
Preferred designated for redemption in the Redemption Notice, and not yet
redeemed or converted, with a bank or trust company having aggregate capital and
surplus in excess of $100,000,000 as a trust fund for the benefit of the
respective holders of the shares designated for redemption and not yet redeemed.
Simultaneously, this corporation shall deposit irrevocable instructions and
authority to such bank or trust company to publish the notice of redemption
thereof (or to complete such publication if theretofore commenced) and to pay,
on and after the date fixed for redemption or prior thereto, the Redemption
Price of each of the Series A1 and Series B1 Preferred Stock to the holders
thereof upon surrender of their certificates. Any moneys deposited by this
corporation pursuant to this Section 2(c)(4) for the redemption of shares which
are thereafter converted into shares of Common Stock pursuant to Section 2(e)
below no later than the close of business on the Redemption Date shall be
returned to this corporation forthwith upon such conversion. The balance of any
moneys deposited by this corporation pursuant to this Section 2(c)(4) remaining
unclaimed at the expiration of two years following the Redemption Date shall
thereafter be returned to this corporation, provided that the shareholder to
which such monies would be payable hereunder shall be entitled, upon proof of
its ownership of the redeemed shares of Nonvoting Preferred and payment of any
bond requested by this corporation, to receive such monies but without interest
from the Redemption Date.
(d) Voting. Except as otherwise required by law, the holders of shares
------
of Nonvoting Preferred shall not have voting rights with respect to such shares.
(e) Conversion Rights. The holders of Nonvoting Preferred shall have
-----------------
conversion rights as follows:
(1) Each share of Nonvoting Preferred shall be convertible,
without obtaining any additional consideration from the holder thereof, at the
option of the holder thereof at any time during the Conversion Period following
at least seventy-five (75) days' prior written notice to the corporation, into
fully paid and nonassessable shares of Common Stock of the corporation.
(2) The number of shares of Common Stock into which each share of
(i) Series A1 Preferred Stock or (ii) Series B1 Preferred Stock may be converted
shall be equal to the quotient determined by dividing the Original Series A1
Issue Price or the Original Series B1 Issue Price, respectively, by the
Conversion Price (determined as hereinafter provided) for such Series in effect
at the time of the conversion. The Conversion Price per share at which shares of
Common Stock shall be issuable upon conversion of any shares of (i) Series A1
Preferred Stock or (ii) Series B1 Preferred Stock shall initially be the
Original Series A1 Issue Price or the Original Series B1 Issue Price
respectively, subject to adjustment as provided in Section 2(f) below. Upon
conversion of a share of Nonvoting Preferred to Common Stock, all declared or
accrued but
13
<PAGE>
unpaid dividends on each such share of Nonvoting Preferred so converted shall be
paid to the holder thereof in cash.
(3) The holder of any shares of Nonvoting Preferred may exercise
the conversion rights during the Conversion Period as to such shares or any part
thereof by delivering to the corporation during regular business hours, at the
office of any transfer agent of the corporation for the Nonvoting Preferred, or
at the principal office of the corporation or at such other place as may be
designated by the corporation, the certificate or certificates for the shares to
be converted, duly endorsed for transfer to the corporation (if required by it),
accompanied or preceded by written notice stating that the holder elects to
convert such shares into shares of Common Stock. Conversion shall be deemed to
have been effected on the date when such delivery is made or, if later, the date
that is 61 days following delivery of any notice required under Section 2(e)(1)
above, and such date is referred to herein as the "Conversion Date." As promptly
as practicable thereafter the corporation shall issue and deliver to or upon the
written order of such holder, at such office or other place designated by the
corporation, a certificate or certificates for the number of full shares of
Common Stock, to which such holder is entitled ("Conversion Stock") and a check
for cash with respect to any fractional interest in a share of Common Stock as
provided in Section 2(e)(4) below. The holder shall be deemed to have become a
shareholder of record of Conversion Stock on the applicable Conversion Date
unless the transfer books of the corporation are closed on the date, in which
event it shall be deemed to have become a shareholder of record on the next
succeeding date on which the transfer books are open, but the Conversion Price
shall be that in effect on the Conversion Date. Upon conversion of only a
portion of the number of shares of Nonvoting Preferred represented by a
certificate surrendered for conversion, the corporation shall issue and deliver
to or upon the written order of the holder of the certificate so surrendered for
conversion, at the expense of the corporation, a new certificate covering the
number of shares of Nonvoting Preferred representing the unconverted portion of
the certificate so surrendered.
(4) No fractional shares of Common Stock or scrip shall be issued
upon conversion of shares of Nonvoting Preferred. If more than one share of
Nonvoting Preferred shall be surrendered for conversion at any one time by the
same holder, the number of full shares of Common Stock issuable upon conversion
thereof shall be computed on the basis of the aggregate number of shares of
Nonvoting Preferred so surrendered. Instead of any fractional shares of Common
Stock which would otherwise be issuable upon conversion of any shares of
Nonvoting Preferred, the corporation shall pay a cash adjustment in respect of
such fractional interest equal to the fair market value of such fractional
interest as determined by the corporation's Board of Directors.
(5) The corporation shall pay any and all issue and other taxes
that may be payable in respect of any issue or delivery of shares of Common
Stock on conversion of Nonvoting Preferred pursuant hereto. The corporation
shall not, however, be required to pay any tax which may be payable in respect
of any transfer involved in the issue and delivery of shares of Common Stock in
a name other than that in which the Nonvoting Preferred so converted was
registered, and no such issue or delivery shall be made unless and until the
person requesting such
14
<PAGE>
issue has paid to the corporation the amount of any such tax, or has
established, to the satisfaction of the corporation, that such tax has been
paid.
(6) The corporation shall at all times reserve and keep available,
out of its authorized but unissued Common Stock, solely for the purpose of
effecting the conversion of the Nonvoting Preferred, the full number of shares
of Common Stock deliverable upon the conversion of all Nonvoting Preferred from
time to time outstanding. The corporation shall from time to time (subject to
obtaining necessary board and shareholder approval), in accordance with the laws
of the State of California, increase the authorized amount of its Common Stock
if at any time the authorized number of shares of its Common Stock remaining
unissued shall not be sufficient to permit the conversion of all of the shares
of Nonvoting Preferred at the time outstanding.
(7) If any shares of Common Stock or Nonvoting Preferred require
registration or listing with, or approval of, any governmental authority, stock
exchange or other regulatory body under any federal or state law or regulation
or otherwise, before such shares may be validly issued or delivered upon
conversion, the corporation will in good faith and as expeditiously as possible
endeavor to secure such registration, listing or approval, as the case may be.
(8) All shares of Common Stock of Nonvoting Preferred will upon
issuance by the corporation be validly issued, fully paid and non-assessable and
free from all taxes, liens and charges with respect to the issuance thereof.
(9) In case:
(i) the corporation shall take a record of the holders of its
capital stock for the purpose of entitling them to receive a dividend, or any
other distribution, payable otherwise than in cash or to subscribe for or
purchase any shares of stock of any class or to receive any other rights; or
(ii) of any capital reorganization of the corporation,
reclassification of the capital stock of the corporation (other than a
subdivision or combination of its outstanding shares of common stock),
consolidation or merger of the corporation with or into another corporation or
conveyance of all or substantially all of the assets of the corporation to
another corporation; or
(iii) of the voluntary or involuntary dissolution, liquidation
or winding up of the corporation; then, and in any such case, the corporation
shall cause to be mailed to the transfer agent for the Nonvoting Preferred, and
to the holders of record of the outstanding Nonvoting Preferred at the address
of record of such shareholder as set forth on the corporation's books, at least
thirty (30) days prior to the date hereinafter specified, a notice stating the
material terms of the proposed transaction and the date on which (x) a record is
to be taken for the purpose of such dividend, distribution or rights, or (y)
such reclassification, reorganization, consolidation, merger, conveyance,
dissolution, liquidation or winding up is to
15
<PAGE>
take place and the date, if any is to be fixed, as of which holders of capital
stock of record shall be entitled to exchange their shares of capital stock for
securities or other property deliverable upon such reclassification,
reorganization, consolidation, merger, conveyance, dissolution, liquidation or
winding up.
(f) Adjustment of Conversion Price. The Conversion Price for any
------------------------------
Series of Nonvoting Preferred from time to time in effect shall be subject to
adjustment from time to time as follows:
(1) In case the corporation shall at any time subdivide the
outstanding shares of Common Stock, or shall issue a stock dividend on its
outstanding Common Stock, the Conversion Price in effect immediately prior to
such subdivision or the issuance of such dividend shall be proportionately
decreased, and in case the corporation shall at any time combine the outstanding
shares of Common Stock, the Conversion Price in effect immediately prior to such
combination shall be proportionately increased, effective at the close of
business on the date of such subdivision, dividend or combination, as the case
may be.
(2) Upon the issuance by the corporation of Equity Securities (as
defined below) at a consideration per share less than the Conversion Price of
such Series of Nonvoting Preferred in effect immediately prior to the time of
such issue or sale other than an issuance of stock or securities pursuant to
Section 2(f)(1) above or the issuance of shares of Common Stock upon conversion
of any shares of Nonvoting Preferred, then forthwith upon such issue or sale,
such Conversion Price shall be reduced to a price (calculated to the nearest
hundredth of a cent) determined by dividing:
(i) an amount equal to the sum of (x) the number of shares of
Common Stock outstanding immediately prior to such issue or sale multiplied by
the Conversion Price in effect immediately prior to such adjustment, (y) the
number of shares of Common Stock issuable upon conversion or exchange of any
obligations or of any securities of the corporation outstanding immediately
prior to such issue or sale multiplied by the Conversion Price in effect
immediately prior to such adjustment, and (z) an amount equal to the aggregate
"consideration actually received" by the corporation upon such issue or sale; by
(ii) the sum of the number of shares of Common Stock outstanding
immediately after such issue or sale and the number of shares of Common Stock
issuable upon conversion or exchange of any obligations or of any securities of
the corporation outstanding immediately after such issue or sale.
For purposes of this Section 2(f)(2), the following provisions shall be
applicable:
(A) The term "Equity Securities" as used in this Section (f)(2)
shall mean any shares of Common Stock, or any obligation, any share of stock or
other security of the corporation convertible into or exchangeable for Common
Stock, except for shares of Common Stock or options to purchase Common Stock in
the aggregate (as adjusted for stock splits, stock dividends, etc.) issued or
granted to officers, directors, employees or consultants of
16
<PAGE>
the corporation and its subsidiaries either pursuant to any stock plan
unanimously approved by the corporation's Board of Directors or as otherwise
unanimously approved by the corporation's Board of Directors.
(B) In the case of an issue or sale for cash of shares of
Common Stock, the "consideration actually received" by the corporation therefor
shall be deemed to be the amount of cash received, before deducting therefrom
any commissions or expenses paid by the corporation.
(C) In case of the issuance (otherwise than upon conversion or
exchange of obligations or shares of stock of the corporation) of additional
shares of Common Stock for a consideration other than cash or a consideration
partly other than cash, the amount of the consideration other than cash received
by the corporation for such shares shall be deemed to be the value of such
consideration as determined in good faith by the Board of Directors.
(D) In case of the issuance by the corporation in any manner of
any rights to subscribe for or to purchase shares of Common Stock, or any
options for the purchase of shares of Common Stock or stock convertible into
Common Stock, all shares of Common Stock or stock convertible into Common Stock
to which the holders of such rights or options shall be entitled to subscribe
for or purchase pursuant to such rights or options shall be deemed "outstanding"
as of the date of the offering of such rights or the granting of such options,
as the case may be, and the minimum aggregate consideration named in such rights
or options for the shares of Common Stock or stock convertible into Common Stock
covered thereby, plus the consideration, if any, received by the corporation for
such rights or options, shall be deemed to be the "consideration actually
received" by the corporation (as of the date of the offering of such rights or
the granting of such options, as the case may be) for the issuance of such
shares.
(E) In case of the issuance or issuances by the corporation in
any manner of any obligations or of any shares of stock of the corporation that
shall be convertible into or exchangeable for Common Stock, all shares of Common
Stock issuable upon the conversion or exchange of such obligations or shares
shall be deemed issued as of the date such obligations or shares are issued, and
the amount of the "consideration actually received" by the corporation for such
additional shares of Common Stock shall be deemed to be the total of (x) the
amount of consideration received by the corporation upon the issuance of such
obligations or shares, as the case may be, plus (y) the minimum aggregate
consideration, if any, other than such obligations or shares, receivable by the
corporation upon such conversion or exchange, except in adjustment of dividends.
(F) The amount of the "consideration actually received" by the
corporation upon the issuance of any rights or options referred to in subsection
(D) above or upon the issuance of any obligations or shares which are
convertible or exchangeable as described in subsection (E) above, and the amount
of the consideration, if any, other than such obligations or shares so
convertible or exchangeable, receivable by the corporation upon the exercise,
conversion or exchange thereof shall be determined in the same manner provided
in subsections (B) and (C) above with respect to the consideration received by
the corporation in
17
<PAGE>
case of the issuance of additional shares of Common Stock; provided, however,
that if such obligations or shares of stock so convertible or exchangeable are
issued in payment or satisfaction of any dividend upon any stock of the
corporation other than Common Stock, the amount of the "consideration actually
received" by the corporation upon the original issuance of such obligations or
shares or stock so convertible or exchangeable shall be deemed to be the value
of such obligations or shares of stock, as of the date of the adoption of the
resolution declaring such dividend, as determined by the Board of Directors at
or as of that date. On the expiration of any rights or options referred to in
subsection (C), or the termination of any right of conversion or exchange
referred to in subsection (D), or any change in the number of shares of Common
Stock deliverable upon exercise of such options or rights or upon conversion of
or exchange of such convertible or exchangeable securities, the Conversion Price
then in effect shall forthwith be readjusted to such Conversion Price as would
have obtained had the adjustments made upon the issuance of such option, right
or convertible or exchangeable securities been made upon the basis of the
delivery of only the number of shares of Common Stock actually delivered or to
be delivered upon the exercise of such rights or options or upon the conversion
or exchange of such securities.
(G) In the event this corporation shall declare a distribution
payable in securities of other persons, evidences of indebtedness issued by this
corporation or other persons or options or rights not referred to in this
Section 2(f)(2), then, in each such case, the holders of the Nonvoting Preferred
shall be entitled to the distributions provided for in Section 2(a) above, and
no adjustment to the Conversion Price provided for in this Section 2(f) shall be
applicable.
(3) Subject to the right of the corporation to amend these Articles
upon obtaining necessary approvals required by these Articles and applicable
law, this corporation will not, by amendment of its Articles or through any
reorganization, transfer of assets, consolidation, merger, dissolution, issue or
sale of securities or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms to be observed or performed
hereunder by this corporation, but will at all times in good faith assist in the
carrying out of all the provisions of this Section 2(f) and in the taking of all
such action as may be necessary or appropriate in order to protect the
conversion rights of the holders of Nonvoting Preferred against impairment.
(4) Upon the occurrence of each adjustment or readjustment of any
Conversion Price pursuant to this Section 2(f), this corporation at its expense
shall promptly compute such adjustment or readjustment in accordance with the
terms hereof, and shall prepare and furnish to each holder of Nonvoting
Preferred affected thereby a certificate setting forth such adjustment or
readjustment and showing in detail the facts upon which such adjustment or
readjustment is based. This corporation shall, upon the written request at any
time of any holder of any series of Nonvoting Preferred, furnish or cause to be
furnished to such holder a like certificate setting forth (A) such adjustment or
readjustment, (B) the Conversion Price of such series at the time in effect, and
(C) the number of shares of Common Stock and the amount, if any, of other
property which at the time would be received upon the conversion of his shares.
18
<PAGE>
(g) Status of Converted or Redeemed Stock. In the event any
-------------------------------------
shares of Nonvoting Preferred shall be redeemed or converted pursuant to Section
2(c) or Section 2(e) above or otherwise acquired by the corporation, the shares
so converted or redeemed or acquired shall be canceled and shall not be issuable
by the corporation, and the Articles of Incorporation of this corporation shall
be appropriately amended to effect the corresponding reduction in the
corporation's authorized capital stock.
3. Elimination of Cumulative Voting. On and after the first date on
--------------------------------
which the Corporation becomes a "listed corporation" as defined in Section 301.5
of the California Corporations Code, no shareholder shall be entitled to
cumulate votes in the election of directors.
ARTICLE IV
DIRECTORS' LIABILITY AND INDEMNIFICATION OF AGENTS
--------------------------------------------------
The liability of the directors of the corporation for monetary damage
shall be eliminated to the fullest extent permissible under California law.
The corporation is authorized to provide indemnification of agents (as
defined in Section 317 of the California Corporations Code) through bylaw
provisions, agreements with agents, vote of shareholders or disinterested
directors, or otherwise, in excess of that otherwise permitted by Section 317 of
the California Corporations Code, subject only to the limits set forth in
Section 204 of the California Corporations Code with respect to actions for
breach of duty to the corporation or its shareholders.
Any amendment, repeal or modification of the foregoing provisions of
this Article IV by the shareholders of this corporation shall not adversely
affect any right or protection of an agent of this corporation existing at the
time of such amendment, repeal or modification.
3. The foregoing Amended and Restated Articles of Incorporation have
been duly approved by the Board of Directors of the Corporation.
4. The foregoing Amended and Restated Articles of Incorporation have
been duly approved by the required vote of the shareholders of this Corporation
in accordance with Sections 902 and 903 of the California General Corporation
Law. The total number of outstanding shares of this corporation entitled to vote
with respect to the foregoing Amended and Restated Articles was 4,388,183 shares
of Common Stock, 1,001,665 shares of Series A Preferred Stock, 1,998,332 shares
of Series A1 Preferred Stock, 1,148,859 shares of Series B Preferred Stock,
4,386,141 shares of Series B1 Preferred Stock and 3,142,000 shares of Series C
Preferred Stock.
19
<PAGE>
The number of shares voting in favor of the amendment equaled or exceeded the
vote required, such required vote being more than 50% of the total number of
outstanding shares of Common Stock and more than 50% of the total number of
outstanding shares of Series A, Series A1, Series B, Series B1 and Series C
Preferred Stock voting together as a single class. Subsequent to the shareholder
vote, all outstanding shares of Series A Preferred Stock, Series B Preferred
Stock and Series C Preferred Stock were converted into Common Stock and no
shares of these series remain outstanding.
The undersigned have executed these Amended and Restated Articles of
Incorporation on August 23, 1996.
/s/ Donald J. Massaro
-------------------------------------
Donald J. Massaro, President
/s/ Thomas E. Carlson
-------------------------------------
Thomas E. Carlson, Assistant Secretary
Each of the undersigned declares under penalty of perjury under the laws
of the State of California that he has read the foregoing Amended and Restated
Articles of Incorporation and knows the contents thereof and that the same is
true of his own knowledge.
Executed at Palo Alto, California, on August 23, 1996.
/s/ Donald J. Massaro
-------------------------------------
Donald J. Massaro
/s/ Thomas E. Carlson
-------------------------------------
Thomas E. Carlson
20
<PAGE>
[Letterhead of GRAY CARY WARE & FREIDENRICH,
A Professional Corporation]
Attorneys at Law EXHIBIT 5
400 Hamilton Avenue
Palo Alto, CA 94301-1825
Tel (415) 328-6561
Fax (415) 327-3699
Our File No.
1191059-901000
August 20, 1997
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Ladies and Gentlemen:
As legal counsel for Silicon Gaming, Inc., a California corporation (the
"Company"), we are rendering this opinion in connection with the registration
under the Securities Act of 1933, as amended, of up to 511,390 shares of the
Common Stock, $0.001 par value, of the Company which may be issued pursuant to
the exercise of options granted under the Amended and Restated 1994 Stock Option
Plan (the "Plan").
We have examined all instruments, documents and records which we deemed
relevant and necessary for the basis of our opinion hereinafter expressed. In
such examination, we have assumed the genuineness of all signatures and the
authenticity of all documents submitted to us as originals and the conformity to
the originals of all documents submitted to us as copies. We are admitted to
practice only in the State of California and we express no opinion concerning
any law other than the law of the State of California and the federal law of the
United States.
Based on such examination, we are of the opinion that the 511,390 shares
of Common Stock which may be issued upon exercise of options granted under the
Plan are duly authorized shares of the Company's Common Stock, and, when issued
against receipt of the consideration therefor in accordance with the provisions
of the Plan, will be validly issued, fully paid and nonassessable. We hereby
consent to the filing of this opinion as an Exhibit to the Registration
Statement referred to above and the use of our name wherever it appears in said
Registration Statement.
Respectfully submitted,
/s/ Gray Cary Ware & Freidenrich
-----------------------------------
GRAY CARY WARE & FREIDENRICH
A Professional Corporation
21
<PAGE>
EXHIBIT 23.2
------------
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
Silicon Gaming, Inc. on Form S-8 of our report dated January 17, 1997,
incorporated by reference in the Annual Report on Form 10-K405 of Silicon
Gaming, Inc. for the year ended December 31, 1996.
/s/ Deloitte & Touche LLP
- ------------------------------
San Jose, California
August 19, 1997
22
