<PAGE>
As filed with the Securities and Exchange Commission on May 21, 1998.
Registration No. 333-
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933
ANCHOR GAMING
(Exact Name of Registrant as Specified in Its Charter)
NEVADA 88-0304253
------------------------------ ----------------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
815 PILOT ROAD, SUITE G
LAS VEGAS, NEVADA 89119
(702) 896-7568
(Address, including Zip Code, and Telephone Number, including Area
Code, of Registrant's Principal Executive Offices)
-----------------------
ANCHOR GAMING
EMPLOYEE STOCK OPTION AGREEMENTS
(Full Title of Plan)
-----------------------
STANLEY E. FULTON COPY TO:
CHAIRMAN OF THE BOARD AND GLEN J. HETTINGER
CHIEF EXECUTIVE OFFICER HUGHES & LUCE, L.L.P.
815 PILOT ROAD, SUITE G 1717 MAIN STREET, SUITE 2800
LAS VEGAS, NEVADA 89119 DALLAS, TEXAS 75201
(702) 896-7568 (214) 939-5500
(Name, Address, and Telephone Number,
including Area Code, of Agent for Service)
-----------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------
PROPOSED PROPOSED
TITLE OF EACH CLASS AMOUNT MAXIMUM MAXIMUM AMOUNT OF
OF SECURITIES TO BE OFFERING PRICE AGGREGATE REGISTRATION
TO BE REGISTERED REGISTERED(1) PER SHARE(2) OFFERING PRICE FEE
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock,
$.01 par value 600,000 $90.4375 $54,262,500 $16,007.44
- -----------------------------------------------------------------------------------------
</TABLE>
(1) Pursuant to Rule 416(c) under the Securities Act of 1933, as amended, this
registration statement also covers an indeterminate additional amount of
shares of Common Stock to be offered or sold pursuant to the antidilution
provisions of the Stock Options.
(2) Estimated solely for the purpose of calculating the registration fee on the
basis of the average of the high and low price paid per share of Common
Stock, as reported on the Nasdaq Stock Market's National Market on May
18, 1998, in accordance with Rule 457(h) promulgated under the Securities
Act of 1933, as amended.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE.
The following documents heretofore filed with the Securities and
Exchange Commission (the "Commission") by Anchor Gaming (the "Registrant")
are incorporated by reference in this Registration Statement:
(a) The Registrant's Annual Report on Form 10-K for the fiscal year
ended June 30, 1997 (the "Annual Report").
(b) The Registrant's Quarterly Report on Form 10-Q for the quarter
ended September 30, 1997 (the "Quarterly Report").
(c) The Registrant's Quarterly Report on Form 10-Q for the quarter
ended December 31, 1997.
(d) The Registrant's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1998.
(e) The Registrant's amendment to its March 31, 1998 Quarterly Report
on Form 10-Q/A as filed with the Commission on May 14, 1998.
(f) The description of the Registrant's common stock, par value $.01
per share (the "Common Stock"), contained in the Registrant's Registration
Statement on Form 8-A, filed with the Commission on December 23, 1993, and as
amended by the Registrant Form 8-A filed with the Commission October 17, 1997.
All documents subsequently filed by the Registrant 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 of the shares of Common Stock offered have been sold or which deregisters
all of such shares then 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 (such documents, and the documents
enumerated above, being hereinafter referred to as "Incorporated Documents").
Any statement contained in an Incorporated Document shall be deemed to
be modified or superseded for purposes of this Registration Statement to the
extent that a statement contained herein or in any other subsequently filed
Incorporated Document modifies or supersedes such statement. Any statement
so modified or superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this Registration Statement.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
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ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 78.751 of the Nevada General Corporation Law permits a corporation
to indemnify any person who was, or is, or is threatened to be made a party in a
completed, pending, or threatened proceeding, whether civil, criminal,
administrative, or investigative (except an action by or in the right of the
corporation), by reason of being or having been an officer, director, employee,
or agent of the corporation or serving in certain capacities at the request of
the corporation. Indemnification may include attorney's fees, judgments, fines
and amounts paid in settlement. The person to be indemnified must have acted in
good faith and in a manner he or she reasonably believed to be in or not opposed
to the best interests of the corporation and, with respect to any criminal
action, such person must have had no reasonable cause to believe his or her
conduct was unlawful.
With respect to actions by or in the right of the corporation,
indemnification may not be made for any claim, issue, or matter as to which such
a person has been finally adjudged by a court of competent jurisdiction to be
liable to the corporation or for amounts paid in settlement to the corporation,
unless and only to the extent that the court in which the action was brought or
other court of competent jurisdiction determines upon application that in view
of all circumstances the person is fairly and reasonably entitled to indemnity
for such expenses as the court deems proper.
Unless indemnification is ordered by a court, the determination must be
made by the stockholders, by a majority vote of a quorum of the board of
directors who were not parties to the action, suit or proceeding, or in certain
circumstances by independent legal counsel in a written opinion. Section 78.751
permits the Articles of Incorporation or Bylaws to provide for payment to an
officer or director of the expenses of defending an action as incurred upon
receipt of an undertaking to repay the amount if it is ultimately determined by
a court of competent jurisdiction that the person is not entitled to
indemnification.
Section 78.751 also provides that to the extent a director, officer,
employee, or agent has been successful on the merits or otherwise in the defense
of any such action, he or she must be indemnified by the corporation against
expenses, including attorneys' fees, actually and reasonably incurred in
connection with the defense.
The Company's Articles of Incorporation and Bylaws contain provisions
requiring it to indemnify its executive officers and directors to the full
extent permitted by the Nevada General Corporation Law.
The Company has entered into indemnity agreements (the "Indemnification
Agreements") with each of its directors and executive officers. Each such
Indemnification Agreement provides for indemnification of directors and
executive officers of the Company to the fullest extent permitted by Nevada Law
and additionally permits advancing attorneys' fees and all other costs,
expenses, obligations, fines and losses, paid or incurred by a director or
executive officer generally in connection
II-2
<PAGE>
with the investigation, defense or other participation in any threatened,
pending or completed action, suit or proceeding or any inquiry or
investigation thereof, whether conducted by or on behalf of the Company or
any other party. If it is later determined that the director or executive
officer is or was not entitled to indemnification under applicable law, the
Company is entitled to reimbursement by the director or executive officer.
The Indemnification Agreements further provide that in the event of a
change in control of Anchor, all matters thereafter arising concerning the
rights of directors and executive officers to indemnity payments and expense
advances, all determinations regarding excludable claims will be made by a
special independent legal counsel engaged by the Company.
To the extent that the Board of Directors or the stockholders of the
Company may in the future wish to limit or repeal the ability of Anchor to
indemnify directors and executive officers, such repeal or limitation may not be
effective as to directors and executive officers who are currently parties to
the Indemnification Agreements, because their rights to full protection are
contractually assured by the Indemnification Agreements. It is anticipated that
similar contracts may be entered into, from time to time, with future directors
and executive officers of Anchor.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
*4.1 Stock Option Agreement of William Adams dated April 2, 1997.
*4.2 Stock Option Agreement of Thomas J. Matthews dated April 2, 1997.
*4.3 Stock Option Agreement of Joseph Murphy dated April 2, 1997.
*5 Opinion of Hughes & Luce, L.L.P
*23.1 Consent of Hughes & Luce, L.L.P. (contained in Exhibit 5).
*23.2 Consent of Deloitte & Touche LLP.
*24 Power of Attorney is found on page II-6 hereof.
----------------------------------
* Filed herewith
ITEM 9. UNDERTAKINGS.
(a) The 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;
II-3
<PAGE>
(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)(1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission 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, each such post-effective amendment shall be deemed to be a new
registration statement 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.
(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) The Registrant hereby undertakes that, for purposes of determining any
liability under the Securities Act, each filing of the Registrant's annual
report pursuant to Section 13(a) or 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 this
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.
(c) Insofar as indemnification by the Registrant for liabilities arising
under the Securities Act may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the provisions described in Item 6, or
otherwise, the Registrant has been advised that in the opinion of the Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for indemnification
by the Registrant 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 Securities
Act and will be governed by the final adjudication of such issue.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, 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 Las Vegas, State of Nevada, on May 21, 1998.
ANCHOR GAMING
By: /s/ Stanley E. Fulton
--------------------------
Name: Stanley E. Fulton
------------------------
Title: Director, Chairman of the Board,
---------------------------------
Chief Executive Officer, and
---------------------------------
Acting Chief Financial Officer
---------------------------------
POWER OF ATTORNEY
We, the undersigned officers and directors of Anchor Gaming, hereby
severally constitute and appoint Michael D. Rumbolz, Thomas J. Matthews and
Geoffrey A. Sage, and each of them, our true and lawful attorneys-in-fact and
agents, with full power of substitution and resubstitution, for each of us in
our name, place and stead, in any and all capacities, to sign Anchor Gaming's
Registration Statement on Form S-8, and any other Registration Statement
relating to the same offering, and any and all amendments thereto (including
post-effective amendments), and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, and hereby grant to such attorneys-in-fact and agents, and each of
them, full power and authority to do and perform each and every act and thing
requisite and necessary to be done, as fully to all intents and purposes as each
of us might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or any of them or his or their substitute or
substitutes may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
<S> <C> <C>
/s/ Stanley E. Fulton Director, Chairman of the Board, May 21, 1998
- ------------------------ Chief Executive Officer, and
Stanley E. Fulton Acting Chief Financial Officer
/s/ Stuart D. Beath Director May 21, 1998
- ------------------------
Stuart D. Beath
/s/ Michael B. Fulton Director May 21, 1998
- ------------------------
Michael B. Fulton
/s/ Elizabeth F. Jones Director May 21, 1998
- ------------------------
Elizabeth F. Jones
</TABLE>
II-5
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
/s/ Michael D. Rumbolz President, Chief Operating Officer, May 21, 1998
- ------------------------ and Director
Michael D. Rumbolz
/s/ Geoffrey A. Sage Corporate Controller May 21, 1998
- ------------------------
Geoffrey A. Sage
/s/ Glen J. Hettinger Director May 21, 1998
- ------------------------
Glen J. Hettinger
</TABLE>
II-6
<PAGE>
EXHIBIT 4.1
STOCK OPTION AGREEMENT
THIS AGREEMENT (this "Agreement"), effective as of April 2, 1997 is made
and entered into by and between Anchor Gaming, a Nevada Company (the "Company"),
and the person whose name is set forth below as the Optionee on the signature
page of this Agreement (the "Optionee")
RECITALS:
A. Optionee has valuable expertise in the gaming industry and the Company
desires to provide an incentive to Optionee to remain with the Company and to
compensate Optionee for his service to the Company;
B. The Company has entered into that certain March 1997 Amendment to
Employment Agreement (the Employment Agreement of such Optionee as so amended is
referred to as the "Employment Agreement") with Optionee which provides for the
grant of an option (the "Option") to purchase shares of Common Stock, $.01 par
value, of the Company (the "Common Stock"), subject to certain conditions;
C. The parties hereto desire to evidence in writing the terms and
conditions of the Option.
NOW, THEREFORE, in consideration of the premises and mutual covenants and
promises set forth herein, and other good and valuable consideration the receipt
and sufficiency of which are mutually acknowledged, the parties agree as
follows:
TERMS:
1. DEFINITIONS. For purposes of this Agreement, the following terms have
the meanings indicated:
CHANGE OF CONTROL has the meaning given in the Employment Agreement.
DISABILITY. Any medically determinable physical or mental impairment that,
in the opinion of the Company's Board of Directors, based upon medical reports
and other evidence satisfactory to the Board of Directors, can reasonably be
expected to prevent the Optionee from performing substantially all of the
Optionee's customary duties of employment for a continuous period of not less
than 12 months.
PARACHUTE PAYMENT means any payment that counsel to the Company determines
is reasonably likely to constitute a "parachute payment" under Section 280G of
the Internal Revenue Code of 1986 as amended.
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<PAGE>
VEST and derivative terms mean that the Optionee has the legally
enforceable right to exercise the Option in the sole discretion of the Optionee.
2. GRANT OF OPTION. The Company hereby grants to the Optionee, upon the
terms and subject to the conditions, limitations and restrictions set forth in
this Agreement, an Option to acquire the number of shares of Common Stock, at
the Purchase Price per share set forth on ATTACHMENT A to this Agreement,
effective as of the date of this Agreement (the "Award Date"). The Optionee
hereby accepts the Option from the Company.
3. VESTING. The shares of Common Stock subject to the Option shall vest
so long as the Employee is an employee of the Company as set forth on ATTACHMENT
A to this Agreement.
4. EXERCISE. In order to exercise the Option with respect to any vested
portion, the Optionee shall provide written notice (the "Exercise Notice") to
the Company at its principal executive office stating the number of shares in
respect of which the option is being exercised. The Exercise Notice must be
signed by the Optionee and must include his complete address and social security
number. If the person exercising the Option is a transferee of the Optionee by
will or under the laws of descent and distribution, the Exercise Notice must be
accompanied by appropriate proof of the right of such transferee to exercise
this Option. At the time of exercise, the Optionee shall pay to the Company the
Purchase Price per share set forth on ATTACHMENT A to this Agreement times the
number of vested shares as to which the Option is being exercised. The Optionee
shall make such payment (i) by certified check or (ii) if the Company so
permits, in its sole discretion, by the delivery of shares of Common Stock
having a Fair Market Value (defined below) on the date immediately preceding the
exercise date equal to the aggregate Purchase Price. If the Option is exercised
in full, the Optionee shall surrender this Agreement to the Company at the
Company's option for cancellation. If the Option is exercised in part, the
Optionee shall surrender this Agreement to the Company, at the Company's option,
so that the Company may make appropriate notation hereon or cancel this
Agreement and issue a new agreement representing the unexercised portion of the
Option. The Option may not be exercised for less than 100 shares at a time or
the remaining shares purchasable under the Option, if less than 100 shares.
"Fair Market Value" shall mean (i) Market or other exchange on which the Common
Stock is traded; or (ii) if there is no reported price information for the
Common Stock, the Fair Market Value as determined in good faith by the Board of
Directors.
If the shares to be purchased are covered by an effective registration
statement under the Securities Act of 1933, as amended (the "Act"), the Option
may be exercised by a broker-dealer acting on behalf of the Optionee if (a) the
broker-dealer has received from the Optionee or the Company a fully and duly
endorsed agreement evidencing such option, together with instructions signed by
the Optionee requesting the Company to deliver the shares of Common Stock
subject to such option to the broker-dealer on behalf of the Optionee and
specifying the account into which such shares should be deposited, (b) adequate
provision has been made with respect to the payment of any withholding taxes due
upon such exercise, and (c) the broker-dealer and the Optionee have otherwise
complied with Section 220.3(e)(4) of Regulation T, 12 CFR Part 220, or any
successor provision.
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<PAGE>
The Option shall be exercisable during the lifetime of the Optionee only by
the Optionee. To the extent exercisable after the Optionee's death, the Option
shall be exercised only by the Optionee's representatives, executors, successors
or beneficiaries.
5. EXPIRATION OF OPTION. The Option shall expire, and shall not be
exercisable with respect to any vested portion as to which the Option has not
been exercised, on the first to occur of: (a) the tenth anniversary of the date
of this Agreement; or (b) one year after any termination of the Optionee's
employment with the Company following a Change of Control or, if shorter, the
remaining term of the Option. The Option shall expire, and not be exercisable,
with respect to any unvested portion, immediately upon the termination of the
Optionee's employment with the Company for any reason, including death.
6. PARACHUTE PAYMENT. Notwithstanding any provision of this Agreement to
the contrary, in no event will the Optionee be allowed to exercise any Option to
the extent that such exercise would result in any payment to or for the benefit
of the Optionee by the Company pursuant to this Agreement being a Parachute
Payment.
7. TAX WITHHOLDING. Any provision of this Agreement to the contrary
notwithstanding, the Company may take such steps as it deems necessary or
desirable for the withholding of any taxes that it is required by law or
regulation of any governmental authority, federal, state or local, domestic or
foreign, to withhold in connection with any of the shares of Common Stock
subject hereto, including requiring the Optionee to pay to the Company the
amount of such withholding tax before the Company issued any shares pursuant to
the exercise of the Option.
8. DILUTION. If the number of shares of Common Stock outstanding is
changed by reason of a stock dividend, stock split, recapitalization or
combination of shares, the number of shares of Common Stock then issuable upon
exercise of the Option and the Purchase Price per share will be appropriately
adjusted. In the event of any merger, consolidation, reorganization, or
recapitalization of the Company pursuant to which holders of the Common Stock
receive other securities (a "Reorganization Transaction"), then upon any
subsequent exercise of the Option, the Optionee will be entitled to receive, for
each share of Common Stock issuable upon exercise of the Option prior to such
Reorganization Transaction, the number and kind of securities received in
respect of one share of Common Stock as a result of such Reorganization
Transaction.
9. TRANSFER OF OPTION. The Optionee shall not, directly or indirectly,
sell, transfer, pledge, encumber or hypothecate or reduce his risk with respect
to ("Transfer") any unvested portion of the Option or the rights and privileges
pertaining thereto. In addition, the Optionee shall not, directly or
indirectly, transfer any vested portion of the Option or any shares of Common
Stock acquired upon exercise of the Option other than (i) with the prior written
consent of the Company, (ii) by will or the laws of descent and distribution,
(iii) with respect to shares of Common Stock acquired upon exercise of the
Option, pursuant to an effective registration statement filed under the Act, or
(iv) with respect to shares of Common Stock acquired upon exercise of the
Option, pursuant to an exemption from the registration requirements of the Act.
Any permitted transferee to whom the Optionee shall transfer the Option pursuant
to (i) or (ii) above shall agree to be bound by this Agreement. Neither the
Option nor the underlying shares of Common Stock is liable for or subject to, in
whole or in part, the debts, contracts, liabilities or torts of the Optionee,
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<PAGE>
nor shall they be subject to garnishment, attachment, execution, levy or other
legal or equitable process.
10. CERTAIN LEGAL RESTRICTIONS. The Company shall not be obligated to
sell or issue any shares of Common Stock upon the exercise of the Option or
otherwise unless the issuance and delivery of such shares shall comply with all
relevant provisions of law and other legal requirements including, without
limitation, any applicable federal or state securities laws and the requirements
of any stock exchange upon which shares of the Common Stock may then be listed.
As a condition to the exercise of the Option or the sale by the Company of any
additional shares of Common Stock to the Optionee, the Company may require the
Optionee to make such representations and warranties as may be necessary to
assure the availability of an exemption from the registration requirements of
applicable gaming regulations or federal or state securities laws. The Company
shall not be liable for refusing to sell or issue any shares if the Company
cannot, using commercially reasonable efforts, obtain authority from the
appropriate regulatory bodies reasonably deemed by the Company to be necessary
to lawfully sell or issue such shares. The shares of Common Stock issued upon
the exercise of the Option may not be transferred except in accordance with
applicable federal or state securities laws. At the Company's option, the
certificate evidencing shares of Common Stock issued to the Optionee will bear
appropriate legends restricting transfer under gaming and other applicable law.
Any Common Stock issued pursuant to the exercise of Options granted
pursuant to this Agreement during the Optionee's service as an officer or
director of the Company under Rule 16b-3 shall not be transferred until at least
six months have elapsed from the date of grant of such Option to the date of a
disposition of the Common Stock underlying such Option.
11. MISCELLANEOUS.
(a) The Option is intended to be a non-qualified stock option under
applicable tax laws, and it is not to be characterized or treated as an
incentive stock option under the IRC.
(b) The granting of the Option shall impose no obligation upon the
Optionee to exercise the Option or any part thereof. Nothing contained in this
Agreement shall affect the right of the Company to terminate the Optionee at any
time, with or without Cause, or shall be deemed to create any rights to
employment on the part of the Optionee.
(c) The rights and obligations arising under this Agreement are not
intended to and do not affect the employment relationship that otherwise exists
between the Company and the Optionee, whether such employment relationship is at
will or defined by an employment contract. Moreover, this Agreement is not
intended to and does not amend any existing employment contract between the
Company and the Optionee; to the extent there is a conflict between this
Agreement and such an employment contract, the employment contract shall govern
and take priority.
(d) Neither the Optionee nor any person claiming under or through the
Optionee shall be or shall have any of the rights or privileges of a stockholder
of the Company in respect of any of the shares issuable upon the exercise of the
Option herein unless and until certificates
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<PAGE>
representing such shares shall have been issued and delivered to the Optionee or
such Optionee's agent.
(e) Any notice to be given to the company under the terms of this
Agreement or any deliver of the Option to the Company shall be addressed to the
Company at its principal executive offices, and any notice to be given to the
Optionee shall be addressed to the Optionee at the address set forth beneath his
or her signature hereto, or at such other address for a party as such party may
hereafter designate in writing to the other. Any such notice shall be deemed to
have been duly given if mailed, postage prepaid, addressed as aforesaid.
(f) Subject to the limitations in this Agreement on the
transferability by the Optionee of the Option and any shares of Common Stock,
this Agreement shall be binding upon and inure to the benefit of the
representatives, executors, successors or beneficiaries of the parties hereto.
(g) THE INTERPRETATION, PERFORMANCE AND ENFORCEMENT OF THIS AGREEMENT
SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEVADA AND THE UNITED STATES, AS
APPLICABLE, WITHOUT REFERENCE TO THE CONFLICT OF LAWS PROVISIONS THEREOF.
(h) If any provision of this Agreement is declared or found to be
illegal, unenforceable or void, in whole or in part, then the parties shall be
relieved of all obligations arising under such provision, but only to the extent
that it is illegal, unenforceable or void, it being the intent and agreement of
the parties that this Agreement shall be deemed amended by modifying such
provision to the extent necessary to make it legal and enforceable while
preserving its intent or, if that is not possible, by substituting therefor
another provision that is legal and enforceable and achieves the same
objectives.
(i) All section titles and captions in this Agreement are for
convenience only, shall not be deemed part of this Agreement, and in no way
shall define, limit, extend or describe the scope or intent of any provisions of
this Agreement.
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(j) The parties shall execute all documents, provide all information,
and take or refrain from taking all actions as may be necessary or appropriate
to achieve the purposes of this Agreement.
(k) This Agreement, the Employment Agreement, and such written
agreements that are entered and delivered simultaneously with this Agreement,
constitute the entire agreement among the parties hereto pertaining to the
subject matter hereof and supersedes all prior agreements and understandings
pertaining thereto.
(l) No failure by any party to insist upon the strict performance of
any covenant, duty, agreement or condition of this Agreement or to exercise any
right or remedy consequent upon a breach thereof shall constitute waiver of any
such breach or any other covenant, duty, agreement or condition.
(m) This Agreement may be executed in counterparts, all of which
together shall constitute one agreement binding on all the parties hereto,
notwithstanding that all such parties are not signatories to the original or the
same counterpart.
(n) No supplement, modification or amendment of this Agreement or
waiver of any provision of this Agreement shall be binding unless executed in
writing by all parties to this Agreement. No waiver of any of the provisions of
this Agreement shall be deemed or shall constitute a waiver of any other
provision of this Agreement (regardless of whether similar), nor shall any such
waiver constitute a continuing waiver unless otherwise expressly provided.
(o) In addition to all other rights or remedies available at law or
in equity, the Company shall be entitled to injunctive and other equitable
relief to prevent or enjoin any violation of the provisions of this Agreement.
(p) The Company agrees to use its good faith efforts to qualify this
Agreement under Rule 16b-3 under the Exchange Act; to keep a registration
Statement on Form S-8 effective with respect to the shares of Common Stock
covered by this Agreement, subject to a good faith determination by the Board of
Directors of the Company to suspend such effectiveness at any time and from time
to time; and to qualify the shares of Common Stock covered by this Agreement to
be qualified for trading on the Nasdaq-Registered Trademark- National Market.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
COMPANY
ANCHOR GAMING
By: /s/ Michael D. Rumbolz
Its: President & Chief Operating Officer
OPTIONEE:
By: /s/ Randall Adams
5870 Darby Street
Las Vegas, NV 89102
7
<PAGE>
ATTACHMENT A
1. The Option covers 200,000 shares of Common Stock with a Purchase Price
per share of $31.875.
2. Expiration Date: July 1, 2007 unless provided otherwise in the
Agreement.
3. Vesting Schedule:
(a) 75,000 shares will Vest in accordance with the terms of the Agreement
as set forth below:
<TABLE>
<CAPTION>
VESTING DATE NUMBER OF SHARES VESTING
<S> <C>
March 31, 1999 6,250
June 30, 1999 6,250
September 31, 1999 6,250
December 31, 1999 6,250
March 31, 2000 6,250
June 30, 2000 6,250
September 31, 2000 6,250
December 31, 2000 6,250
March 31, 2001 6,250
June 30, 2001 6,250
September 31, 2001 6,250
December 31, 2001 6,250
</TABLE>
(b) An additional 125,000 shares of Common Stock will vest in
accordance with the terms of the Agreement as set forth below. At the end
of each calendar year beginning with 1997, the Board of Directors of the
Company will determine in a manner consistent with generally accepted
accounting principles consistently applied the earnings per share of the
Company for the previous 12-month period. The Board of Directors of the
Company will then determine the percentage growth in the Company's earnings
per from the previous calendar year in a manner consistent with generally
accepted accounting principles consistently applied. The number of
shares of Common Stock set forth below will vest as of December 31 for the
year for which the growth in earnings per share indicated below occurs:
<PAGE>
<TABLE>
<CAPTION>
CALENDAR YEAR GROWTH IN EARNINGS PER SHARE OVER TOTAL SHARES VESTING
PREVIOUS CALENDAR YEAR
<S> <C> <C>
1997 At least 10% but less than 12% 5,000
At least 12% but less than 14 % 10,000
At least 14% % but less than 16% 15,000
At least 16% but less than 18% 20,000
More than 18% 25,000
1998 At least 10% but less than 12% 5,000
At least 12% but less than 14% 10,000
At least 14% but less than 16% 15,000
At least 16% but less than 18% 20,000
More than 18% 25,000
1999 At least 10% but less than 12% 5,000
At least 12% but less than 14% 10,000
At least 14% but less than 16% 15,000
At least 16% but less than 18% 20,000
More than 18% 25,000
2000 At least 10% but less than 12% 5,000
At least 12% but less than 14% 10,000
At least 14% but less than 16% 15,000
At least 16% but less than 18% 20,000
More than 18% 25,000
2001 At least 10% but less than 12% 5,000
At least 12% but less than 14% 10,000
At least 14% but less than 16% 15,000
At least 16% but less than 18% 20,000
More than 18% 25,000
</TABLE>
4. Notwithstanding the foregoing, all of the shares of Common Stock
as to which vesting has not occurred in accordance with the foregoing
provisions of this ATTACHMENT A will vest on June 30, 2005 if and only
if the Optionee has been an employee of the Company for the entire
period from the date of this Option until June 30, 2005. Without
limiting the foregoing, if the Optionee has ceased to be an employee
of the Company at any time during such period for any reason,
including, without limitation, for termination with or without cause,
by death or disability, or voluntary or involuntary, such vesting will
not occur.
<PAGE>
EXHIBIT 4.2
STOCK OPTION AGREEMENT
THIS AGREEMENT (this "Agreement"), effective as of April 2, 1997 is made
and entered into by and between Anchor Gaming, a Nevada Company (the "Company"),
and the person whose name is set forth below as the Optionee on the signature
page of this Agreement (the "Optionee")
RECITALS:
A. Optionee has valuable expertise in the gaming industry and the Company
desires to provide an incentive to Optionee to remain with the Company and to
compensate Optionee for his service to the Company;
B. The Company has entered into that certain March 1997 Amendment to
Employment Agreement (the Employment Agreement of such Optionee as so amended is
referred to as the "Employment Agreement") with Optionee which provides for the
grant of an option (the "Option") to purchase shares of Common Stock, $.01 par
value, of the Company (the "Common Stock"), subject to certain conditions;
C. The parties hereto desire to evidence in writing the terms and
conditions of the Option.
NOW, THEREFORE, in consideration of the premises and mutual covenants and
promises set forth herein, and other good and valuable consideration the receipt
and sufficiency of which are mutually acknowledged, the parties agree as
follows:
TERMS:
1. DEFINITIONS. For purposes of this Agreement, the following terms have
the meanings indicated:
CHANGE OF CONTROL has the meaning given in the Employment Agreement.
DISABILITY. Any medically determinable physical or mental impairment that,
in the opinion of the Company's Board of Directors, based upon medical reports
and other evidence satisfactory to the Board of Directors, can reasonably be
expected to prevent the Optionee from performing substantially all of the
Optionee's customary duties of employment for a continuous period of not less
than 12 months.
PARACHUTE PAYMENT means any payment that counsel to the Company determines
is reasonably likely to constitute a "parachute payment" under Section 280G of
the Internal Revenue Code of 1986 as amended.
1
<PAGE>
VEST and derivative terms mean that the Optionee has the legally
enforceable right to exercise the Option in the sole discretion of the Optionee.
2. GRANT OF OPTION. The Company hereby grants to the Optionee, upon the
terms and subject to the conditions, limitations and restrictions set forth in
this Agreement, an Option to acquire the number of shares of Common Stock, at
the Purchase Price per share set forth on ATTACHMENT A to this Agreement,
effective as of the date of this Agreement (the "Award Date"). The Optionee
hereby accepts the Option from the Company.
3. VESTING. The shares of Common Stock subject to the Option shall vest
so long as the Employee is an employee of the Company as set forth on ATTACHMENT
A to this Agreement.
4. EXERCISE. In order to exercise the Option with respect to any vested
portion, the Optionee shall provide written notice (the "Exercise Notice") to
the Company at its principal executive office stating the number of shares in
respect of which the option is being exercised. The Exercise Notice must be
signed by the Optionee and must include his complete address and social security
number. If the person exercising the Option is a transferee of the Optionee by
will or under the laws of descent and distribution, the Exercise Notice must be
accompanied by appropriate proof of the right of such transferee to exercise
this Option. At the time of exercise, the Optionee shall pay to the Company the
Purchase Price per share set forth on ATTACHMENT A to this Agreement times the
number of vested shares as to which the Option is being exercised. The Optionee
shall make such payment (i) by certified check or (ii) if the Company so
permits, in its sole discretion, by the delivery of shares of Common Stock
having a Fair Market Value (defined below) on the date immediately preceding the
exercise date equal to the aggregate Purchase Price. If the Option is exercised
in full, the Optionee shall surrender this Agreement to the Company at the
Company's option for cancellation. If the Option is exercised in part, the
Optionee shall surrender this Agreement to the Company, at the Company's option,
so that the Company may make appropriate notation hereon or cancel this
Agreement and issue a new agreement representing the unexercised portion of the
Option. The Option may not be exercised for less than 100 shares at a time or
the remaining shares purchasable under the Option, if less than 100 shares.
"Fair Market Value" shall mean (i) Market or other exchange on which the Common
Stock is traded; or (ii) if there is no reported price information for the
Common Stock, the Fair Market Value as determined in good faith by the Board of
Directors.
If the shares to be purchased are covered by an effective registration
statement under the Securities Act of 1933, as amended (the "Act"), the Option
may be exercised by a broker-dealer acting on behalf of the Optionee if (a) the
broker-dealer has received from the Optionee or the Company a fully and duly
endorsed agreement evidencing such option, together with instructions signed by
the Optionee requesting the Company to deliver the shares of Common Stock
subject to such option to the broker-dealer on behalf of the Optionee and
specifying the account into which such shares should be deposited, (b) adequate
provision has been made with respect to the payment of any withholding taxes due
upon such exercise, and (c) the broker-dealer and the Optionee have otherwise
complied with Section 220.3(e)(4) of Regulation T, 12 CFR Part 220, or any
successor provision.
2
<PAGE>
The Option shall be exercisable during the lifetime of the Optionee only by
the Optionee. To the extent exercisable after the Optionee's death, the Option
shall be exercised only by the Optionee's representatives, executors, successors
or beneficiaries.
5. EXPIRATION OF OPTION. The Option shall expire, and shall not be
exercisable with respect to any vested portion as to which the Option has not
been exercised, on the first to occur of: (a) the tenth anniversary of the date
of this Agreement; or (b) one year after any termination of the Optionee's
employment with the Company following a Change of Control or, if shorter, the
remaining term of the Option. The Option shall expire, and not be exercisable,
with respect to any unvested portion, immediately upon the termination of the
Optionee's employment with the Company for any reason, including death.
6. PARACHUTE PAYMENT. Notwithstanding any provision of this Agreement to
the contrary, in no event will the Optionee be allowed to exercise any Option to
the extent that such exercise would result in any payment to or for the benefit
of the Optionee by the Company pursuant to this Agreement being a Parachute
Payment.
7. TAX WITHHOLDING. Any provision of this Agreement to the contrary
notwithstanding, the Company may take such steps as it deems necessary or
desirable for the withholding of any taxes that it is required by law or
regulation of any governmental authority, federal, state or local, domestic or
foreign, to withhold in connection with any of the shares of Common Stock
subject hereto, including requiring the Optionee to pay to the Company the
amount of such withholding tax before the Company issued any shares pursuant to
the exercise of the Option.
8. DILUTION. If the number of shares of Common Stock outstanding is
changed by reason of a stock dividend, stock split, recapitalization or
combination of shares, the number of shares of Common Stock then issuable upon
exercise of the Option and the Purchase Price per share will be appropriately
adjusted. In the event of any merger, consolidation, reorganization, or
recapitalization of the Company pursuant to which holders of the Common Stock
receive other securities (a "Reorganization Transaction"), then upon any
subsequent exercise of the Option, the Optionee will be entitled to receive, for
each share of Common Stock issuable upon exercise of the Option prior to such
Reorganization Transaction, the number and kind of securities received in
respect of one share of Common Stock as a result of such Reorganization
Transaction.
9. TRANSFER OF OPTION. The Optionee shall not, directly or indirectly,
sell, transfer, pledge, encumber or hypothecate or reduce his risk with respect
to ("Transfer") any unvested portion of the Option or the rights and privileges
pertaining thereto. In addition, the Optionee shall not, directly or
indirectly, transfer any vested portion of the Option or any shares of Common
Stock acquired upon exercise of the Option other than (i) with the prior written
consent of the Company, (ii) by will or the laws of descent and distribution,
(iii) with respect to shares of Common Stock acquired upon exercise of the
Option, pursuant to an effective registration statement filed under the Act, or
(iv) with respect to shares of Common Stock acquired upon exercise of the
Option, pursuant to an exemption from the registration requirements of the Act.
Any permitted transferee to whom the Optionee shall transfer the Option pursuant
to (i) or (ii) above shall agree to be bound by this Agreement. Neither the
Option nor the underlying shares of Common Stock is liable for or subject to, in
whole or in part, the debts, contracts, liabilities or torts of the Optionee,
3
<PAGE>
nor shall they be subject to garnishment, attachment, execution, levy or other
legal or equitable process.
10. CERTAIN LEGAL RESTRICTIONS. The Company shall not be obligated to
sell or issue any shares of Common Stock upon the exercise of the Option or
otherwise unless the issuance and delivery of such shares shall comply with all
relevant provisions of law and other legal requirements including, without
limitation, any applicable federal or state securities laws and the requirements
of any stock exchange upon which shares of the Common Stock may then be listed.
As a condition to the exercise of the Option or the sale by the Company of any
additional shares of Common Stock to the Optionee, the Company may require the
Optionee to make such representations and warranties as may be necessary to
assure the availability of an exemption from the registration requirements of
applicable gaming regulations or federal or state securities laws. The Company
shall not be liable for refusing to sell or issue any shares if the Company
cannot, using commercially reasonable efforts, obtain authority from the
appropriate regulatory bodies reasonably deemed by the Company to be necessary
to lawfully sell or issue such shares. The shares of Common Stock issued upon
the exercise of the Option may not be transferred except in accordance with
applicable federal or state securities laws. At the Company's option, the
certificate evidencing shares of Common Stock issued to the Optionee will bear
appropriate legends restricting transfer under gaming and other applicable law.
Any Common Stock issued pursuant to the exercise of Options granted
pursuant to this Agreement during the Optionee's service as an officer or
director of the Company under Rule 16b-3 shall not be transferred until at least
six months have elapsed from the date of grant of such Option to the date of a
disposition of the Common Stock underlying such Option.
11. MISCELLANEOUS.
(a) The Option is intended to be a non-qualified stock option under
applicable tax laws, and it is not to be characterized or treated as an
incentive stock option under the IRC.
(b) The granting of the Option shall impose no obligation upon the
Optionee to exercise the Option or any part thereof. Nothing contained in this
Agreement shall affect the right of the Company to terminate the Optionee at any
time, with or without Cause, or shall be deemed to create any rights to
employment on the part of the Optionee.
(c) The rights and obligations arising under this Agreement are not
intended to and do not affect the employment relationship that otherwise exists
between the Company and the Optionee, whether such employment relationship is at
will or defined by an employment contract. Moreover, this Agreement is not
intended to and does not amend any existing employment contract between the
Company and the Optionee; to the extent there is a conflict between this
Agreement and such an employment contract, the employment contract shall govern
and take priority.
(d) Neither the Optionee nor any person claiming under or through the
Optionee shall be or shall have any of the rights or privileges of a stockholder
of the Company in respect of any of the shares issuable upon the exercise of the
Option herein unless and until certificates
4
<PAGE>
representing such shares shall have been issued and delivered to the Optionee or
such Optionee's agent.
(e) Any notice to be given to the company under the terms of this
Agreement or any deliver of the Option to the Company shall be addressed to the
Company at its principal executive offices, and any notice to be given to the
Optionee shall be addressed to the Optionee at the address set forth beneath his
or her signature hereto, or at such other address for a party as such party may
hereafter designate in writing to the other. Any such notice shall be deemed to
have been duly given if mailed, postage prepaid, addressed as aforesaid.
(f) Subject to the limitations in this Agreement on the
transferability by the Optionee of the Option and any shares of Common Stock,
this Agreement shall be binding upon and inure to the benefit of the
representatives, executors, successors or beneficiaries of the parties hereto.
(g) THE INTERPRETATION, PERFORMANCE AND ENFORCEMENT OF THIS AGREEMENT
SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEVADA AND THE UNITED STATES, AS
APPLICABLE, WITHOUT REFERENCE TO THE CONFLICT OF LAWS PROVISIONS THEREOF.
(h) If any provision of this Agreement is declared or found to be
illegal, unenforceable or void, in whole or in part, then the parties shall be
relieved of all obligations arising under such provision, but only to the extent
that it is illegal, unenforceable or void, it being the intent and agreement of
the parties that this Agreement shall be deemed amended by modifying such
provision to the extent necessary to make it legal and enforceable while
preserving its intent or, if that is not possible, by substituting therefor
another provision that is legal and enforceable and achieves the same
objectives.
(i) All section titles and captions in this Agreement are for
convenience only, shall not be deemed part of this Agreement, and in no way
shall define, limit, extend or describe the scope or intent of any provisions of
this Agreement.
5
<PAGE>
(j) The parties shall execute all documents, provide all information,
and take or refrain from taking all actions as may be necessary or appropriate
to achieve the purposes of this Agreement.
(k) This Agreement, the Employment Agreement, and such written
agreements that are entered and delivered simultaneously with this Agreement,
constitute the entire agreement among the parties hereto pertaining to the
subject matter hereof and supersedes all prior agreements and understandings
pertaining thereto.
(l) No failure by any party to insist upon the strict performance of
any covenant, duty, agreement or condition of this Agreement or to exercise any
right or remedy consequent upon a breach thereof shall constitute waiver of any
such breach or any other covenant, duty, agreement or condition.
(m) This Agreement may be executed in counterparts, all of which
together shall constitute one agreement binding on all the parties hereto,
notwithstanding that all such parties are not signatories to the original or the
same counterpart.
(n) No supplement, modification or amendment of this Agreement or
waiver of any provision of this Agreement shall be binding unless executed in
writing by all parties to this Agreement. No waiver of any of the provisions of
this Agreement shall be deemed or shall constitute a waiver of any other
provision of this Agreement (regardless of whether similar), nor shall any such
waiver constitute a continuing waiver unless otherwise expressly provided.
(o) In addition to all other rights or remedies available at law or
in equity, the Company shall be entitled to injunctive and other equitable
relief to prevent or enjoin any violation of the provisions of this Agreement.
(p) The Company agrees to use its good faith efforts to qualify this
Agreement under Rule 16b-3 under the Exchange Act; to keep a registration
Statement on Form S-8 effective with respect to the shares of Common Stock
covered by this Agreement, subject to a good faith determination by the Board of
Directors of the Company to suspend such effectiveness at any time and from time
to time; and to qualify the shares of Common Stock covered by this Agreement to
be qualified for trading on the Nasdaq-Registered Trademark- National Market.
6
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
COMPANY
ANCHOR GAMING
By: /s/ Michael D. Rumbolz
Its: President & Chief Operating Officer
OPTIONEE:
By: /s/ Thomas J. Matthews
8401 Eagle Eye Avenue
Las Vegas, NV 89128
7
<PAGE>
ATTACHMENT A
1. The Option covers 200,000 shares of Common Stock with a Purchase Price
per share of $31.875.
2. Expiration Date: July 1, 2007 unless provided otherwise in the
Agreement.
3. Vesting Schedule:
(a) 75,000 shares will Vest in accordance with the terms of the Agreement
as set forth below:
<TABLE>
<CAPTION>
VESTING DATE NUMBER OF SHARES VESTING
<S> <C>
March 31, 1999 6,250
June 30, 1999 6,250
September 31, 1999 6,250
December 31, 1999 6,250
March 31, 2000 6,250
June 30, 2000 6,250
September 31, 2000 6,250
December 31, 2000 6,250
March 31, 2001 6,250
June 30, 2001 6,250
September 31, 2001 6,250
December 31, 2001 6,250
</TABLE>
(b) An additional 125,000 shares of Common Stock will vest in
accordance with the terms of the Agreement as set forth below. At the end
of each calendar year beginning with 1997, the Board of Directors of the
Company will determine in a manner consistent with generally accepted
accounting principles consistently applied the earnings per share of the
Company for the previous 12-month period. The Board of Directors of the
Company will then determine the percentage growth in the Company's earnings
per from the previous calendar year in a manner consistent with generally
accepted accounting principles consistently applied. The number of
shares of Common Stock set forth below will vest as of December 31 for the
year for which the growth in earnings per share indicated below occurs:
<PAGE>
<TABLE>
<CAPTION>
CALENDAR YEAR GROWTH IN EARNINGS PER SHARE TOTAL SHARES VESTING
OVER PREVIOUS CALENDAR YEAR
<S> <C> <C>
1997 At least 10% but less than 12% 5,000
At least 12% but less than 14 % 10,000
At least 14% % but less than 16% 15,000
At least 16% but less than 18% 20,000
More than 18% 25,000
1998 At least 10% but less than 12% 5,000
At least 12% but less than 14% 10,000
At least 14% but less than 16% 15,000
At least 16% but less than 18% 20,000
More than 18% 25,000
1999 At least 10% but less than 12% 5,000
At least 12% but less than 14% 10,000
At least 14% but less than 16% 15,000
At least 16% but less than 18% 20,000
More than 18% 25,000
2000 At least 10% but less than 12% 5,000
At least 12% but less than 14% 10,000
At least 14% but less than 16% 15,000
At least 16% but less than 18% 20,000
More than 18% 25,000
2001 At least 10% but less than 12% 5,000
At least 12% but less than 14% 10,000
At least 14% but less than 16% 15,000
At least 16% but less than 18% 20,000
More than 18% 25,000
</TABLE>
4. Notwithstanding the foregoing, all of the shares of Common Stock
as to which vesting has not occurred in accordance with the foregoing
provisions of this ATTACHMENT A will vest on June 30, 2005 if and only
if the Optionee has been an employee of the Company for the entire
period from the date of this Option until June 30, 2005. Without
limiting the foregoing, if the Optionee has ceased to be an employee
of the Company at any time during such period for any reason,
including, without limitation, for termination with or without cause,
by death or disability, or voluntary or involuntary, such vesting will
not occur.
<PAGE>
EXHIBIT 4.3
STOCK OPTION AGREEMENT
THIS AGREEMENT (this "Agreement"), effective as of April 2, 1997 is made
and entered into by and between Anchor Gaming, a Nevada Company (the "Company"),
and the person whose name is set forth below as the Optionee on the signature
page of this Agreement (the "Optionee")
RECITALS:
A. Optionee has valuable expertise in the gaming industry and the Company
desires to provide an incentive to Optionee to remain with the Company and to
compensate Optionee for his service to the Company;
B. The Company has entered into that certain March 1997 Amendment to
Employment Agreement (the Employment Agreement of such Optionee as so amended is
referred to as the "Employment Agreement") with Optionee which provides for the
grant of an option (the "Option") to purchase shares of Common Stock, $.01 par
value, of the Company (the "Common Stock"), subject to certain conditions;
C. The parties hereto desire to evidence in writing the terms and
conditions of the Option.
NOW, THEREFORE, in consideration of the premises and mutual covenants and
promises set forth herein, and other good and valuable consideration the receipt
and sufficiency of which are mutually acknowledged, the parties agree as
follows:
TERMS:
1. DEFINITIONS. For purposes of this Agreement, the following terms have
the meanings indicated:
CHANGE OF CONTROL has the meaning given in the Employment Agreement.
DISABILITY. Any medically determinable physical or mental impairment that,
in the opinion of the Company's Board of Directors, based upon medical reports
and other evidence satisfactory to the Board of Directors, can reasonably be
expected to prevent the Optionee from performing substantially all of the
Optionee's customary duties of employment for a continuous period of not less
than 12 months.
PARACHUTE PAYMENT means any payment that counsel to the Company determines
is reasonably likely to constitute a "parachute payment" under Section 280G of
the Internal Revenue Code of 1986 as amended.
1
<PAGE>
VEST and derivative terms mean that the Optionee has the legally
enforceable right to exercise the Option in the sole discretion of the Optionee.
2. GRANT OF OPTION. The Company hereby grants to the Optionee, upon the
terms and subject to the conditions, limitations and restrictions set forth in
this Agreement, an Option to acquire the number of shares of Common Stock, at
the Purchase Price per share set forth on ATTACHMENT A to this Agreement,
effective as of the date of this Agreement (the "Award Date"). The Optionee
hereby accepts the Option from the Company.
3. VESTING. The shares of Common Stock subject to the Option shall vest
so long as the Employee is an employee of the Company as set forth on ATTACHMENT
A to this Agreement.
4. EXERCISE. In order to exercise the Option with respect to any vested
portion, the Optionee shall provide written notice (the "Exercise Notice") to
the Company at its principal executive office stating the number of shares in
respect of which the option is being exercised. The Exercise Notice must be
signed by the Optionee and must include his complete address and social security
number. If the person exercising the Option is a transferee of the Optionee by
will or under the laws of descent and distribution, the Exercise Notice must be
accompanied by appropriate proof of the right of such transferee to exercise
this Option. At the time of exercise, the Optionee shall pay to the Company the
Purchase Price per share set forth on ATTACHMENT A to this Agreement times the
number of vested shares as to which the Option is being exercised. The Optionee
shall make such payment (i) by certified check or (ii) if the Company so
permits, in its sole discretion, by the delivery of shares of Common Stock
having a Fair Market Value (defined below) on the date immediately preceding the
exercise date equal to the aggregate Purchase Price. If the Option is exercised
in full, the Optionee shall surrender this Agreement to the Company at the
Company's option for cancellation. If the Option is exercised in part, the
Optionee shall surrender this Agreement to the Company, at the Company's option,
so that the Company may make appropriate notation hereon or cancel this
Agreement and issue a new agreement representing the unexercised portion of the
Option. The Option may not be exercised for less than 100 shares at a time or
the remaining shares purchasable under the Option, if less than 100 shares.
"Fair Market Value" shall mean (i) Market or other exchange on which the Common
Stock is traded; or (ii) if there is no reported price information for the
Common Stock, the Fair Market Value as determined in good faith by the Board of
Directors.
If the shares to be purchased are covered by an effective registration
statement under the Securities Act of 1933, as amended (the "Act"), the Option
may be exercised by a broker-dealer acting on behalf of the Optionee if (a) the
broker-dealer has received from the Optionee or the Company a fully and duly
endorsed agreement evidencing such option, together with instructions signed by
the Optionee requesting the Company to deliver the shares of Common Stock
subject to such option to the broker-dealer on behalf of the Optionee and
specifying the account into which such shares should be deposited, (b) adequate
provision has been made with respect to the payment of any withholding taxes due
upon such exercise, and (c) the broker-dealer and the Optionee have otherwise
complied with Section 220.3(e)(4) of Regulation T, 12 CFR Part 220, or any
successor provision.
2
<PAGE>
The Option shall be exercisable during the lifetime of the Optionee only by
the Optionee. To the extent exercisable after the Optionee's death, the Option
shall be exercised only by the Optionee's representatives, executors, successors
or beneficiaries.
5. EXPIRATION OF OPTION. The Option shall expire, and shall not be
exercisable with respect to any vested portion as to which the Option has not
been exercised, on the first to occur of: (a) the tenth anniversary of the date
of this Agreement; or (b) one year after any termination of the Optionee's
employment with the Company following a Change of Control or, if shorter, the
remaining term of the Option. The Option shall expire, and not be exercisable,
with respect to any unvested portion, immediately upon the termination of the
Optionee's employment with the Company for any reason, including death.
6. PARACHUTE PAYMENT. Notwithstanding any provision of this Agreement to
the contrary, in no event will the Optionee be allowed to exercise any Option to
the extent that such exercise would result in any payment to or for the benefit
of the Optionee by the Company pursuant to this Agreement being a Parachute
Payment.
7. TAX WITHHOLDING. Any provision of this Agreement to the contrary
notwithstanding, the Company may take such steps as it deems necessary or
desirable for the withholding of any taxes that it is required by law or
regulation of any governmental authority, federal, state or local, domestic or
foreign, to withhold in connection with any of the shares of Common Stock
subject hereto, including requiring the Optionee to pay to the Company the
amount of such withholding tax before the Company issued any shares pursuant to
the exercise of the Option.
8. DILUTION. If the number of shares of Common Stock outstanding is
changed by reason of a stock dividend, stock split, recapitalization or
combination of shares, the number of shares of Common Stock then issuable upon
exercise of the Option and the Purchase Price per share will be appropriately
adjusted. In the event of any merger, consolidation, reorganization, or
recapitalization of the Company pursuant to which holders of the Common Stock
receive other securities (a "Reorganization Transaction"), then upon any
subsequent exercise of the Option, the Optionee will be entitled to receive, for
each share of Common Stock issuable upon exercise of the Option prior to such
Reorganization Transaction, the number and kind of securities received in
respect of one share of Common Stock as a result of such Reorganization
Transaction.
9. TRANSFER OF OPTION. The Optionee shall not, directly or indirectly,
sell, transfer, pledge, encumber or hypothecate or reduce his risk with respect
to ("Transfer") any unvested portion of the Option or the rights and privileges
pertaining thereto. In addition, the Optionee shall not, directly or
indirectly, transfer any vested portion of the Option or any shares of Common
Stock acquired upon exercise of the Option other than (i) with the prior written
consent of the Company, (ii) by will or the laws of descent and distribution,
(iii) with respect to shares of Common Stock acquired upon exercise of the
Option, pursuant to an effective registration statement filed under the Act, or
(iv) with respect to shares of Common Stock acquired upon exercise of the
Option, pursuant to an exemption from the registration requirements of the Act.
Any permitted transferee to whom the Optionee shall transfer the Option pursuant
to (i) or (ii) above shall agree to be bound by this Agreement. Neither the
Option nor the underlying shares of Common Stock is liable for or subject to, in
whole or in part, the debts, contracts, liabilities or torts of the Optionee,
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<PAGE>
nor shall they be subject to garnishment, attachment, execution, levy or other
legal or equitable process.
10. CERTAIN LEGAL RESTRICTIONS. The Company shall not be obligated to
sell or issue any shares of Common Stock upon the exercise of the Option or
otherwise unless the issuance and delivery of such shares shall comply with all
relevant provisions of law and other legal requirements including, without
limitation, any applicable federal or state securities laws and the requirements
of any stock exchange upon which shares of the Common Stock may then be listed.
As a condition to the exercise of the Option or the sale by the Company of any
additional shares of Common Stock to the Optionee, the Company may require the
Optionee to make such representations and warranties as may be necessary to
assure the availability of an exemption from the registration requirements of
applicable gaming regulations or federal or state securities laws. The Company
shall not be liable for refusing to sell or issue any shares if the Company
cannot, using commercially reasonable efforts, obtain authority from the
appropriate regulatory bodies reasonably deemed by the Company to be necessary
to lawfully sell or issue such shares. The shares of Common Stock issued upon
the exercise of the Option may not be transferred except in accordance with
applicable federal or state securities laws. At the Company's option, the
certificate evidencing shares of Common Stock issued to the Optionee will bear
appropriate legends restricting transfer under gaming and other applicable law.
Any Common Stock issued pursuant to the exercise of Options granted
pursuant to this Agreement during the Optionee's service as an officer or
director of the Company under Rule 16b-3 shall not be transferred until at least
six months have elapsed from the date of grant of such Option to the date of a
disposition of the Common Stock underlying such Option.
11. MISCELLANEOUS.
(a) The Option is intended to be a non-qualified stock option under
applicable tax laws, and it is not to be characterized or treated as an
incentive stock option under the IRC.
(b) The granting of the Option shall impose no obligation upon the
Optionee to exercise the Option or any part thereof. Nothing contained in this
Agreement shall affect the right of the Company to terminate the Optionee at any
time, with or without Cause, or shall be deemed to create any rights to
employment on the part of the Optionee.
(c) The rights and obligations arising under this Agreement are not
intended to and do not affect the employment relationship that otherwise exists
between the Company and the Optionee, whether such employment relationship is at
will or defined by an employment contract. Moreover, this Agreement is not
intended to and does not amend any existing employment contract between the
Company and the Optionee; to the extent there is a conflict between this
Agreement and such an employment contract, the employment contract shall govern
and take priority.
(d) Neither the Optionee nor any person claiming under or through the
Optionee shall be or shall have any of the rights or privileges of a stockholder
of the Company in respect of any of the shares issuable upon the exercise of the
Option herein unless and until certificates
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<PAGE>
representing such shares shall have been issued and delivered to the Optionee or
such Optionee's agent.
(e) Any notice to be given to the company under the terms of this
Agreement or any deliver of the Option to the Company shall be addressed to the
Company at its principal executive offices, and any notice to be given to the
Optionee shall be addressed to the Optionee at the address set forth beneath his
or her signature hereto, or at such other address for a party as such party may
hereafter designate in writing to the other. Any such notice shall be deemed to
have been duly given if mailed, postage prepaid, addressed as aforesaid.
(f) Subject to the limitations in this Agreement on the
transferability by the Optionee of the Option and any shares of Common Stock,
this Agreement shall be binding upon and inure to the benefit of the
representatives, executors, successors or beneficiaries of the parties hereto.
(g) THE INTERPRETATION, PERFORMANCE AND ENFORCEMENT OF THIS AGREEMENT
SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEVADA AND THE UNITED STATES, AS
APPLICABLE, WITHOUT REFERENCE TO THE CONFLICT OF LAWS PROVISIONS THEREOF.
(h) If any provision of this Agreement is declared or found to be
illegal, unenforceable or void, in whole or in part, then the parties shall be
relieved of all obligations arising under such provision, but only to the extent
that it is illegal, unenforceable or void, it being the intent and agreement of
the parties that this Agreement shall be deemed amended by modifying such
provision to the extent necessary to make it legal and enforceable while
preserving its intent or, if that is not possible, by substituting therefor
another provision that is legal and enforceable and achieves the same
objectives.
(i) All section titles and captions in this Agreement are for
convenience only, shall not be deemed part of this Agreement, and in no way
shall define, limit, extend or describe the scope or intent of any provisions of
this Agreement.
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(j) The parties shall execute all documents, provide all information,
and take or refrain from taking all actions as may be necessary or appropriate
to achieve the purposes of this Agreement.
(k) This Agreement, the Employment Agreement, and such written
agreements that are entered and delivered simultaneously with this Agreement,
constitute the entire agreement among the parties hereto pertaining to the
subject matter hereof and supersedes all prior agreements and understandings
pertaining thereto.
(l) No failure by any party to insist upon the strict performance of
any covenant, duty, agreement or condition of this Agreement or to exercise any
right or remedy consequent upon a breach thereof shall constitute waiver of any
such breach or any other covenant, duty, agreement or condition.
(m) This Agreement may be executed in counterparts, all of which
together shall constitute one agreement binding on all the parties hereto,
notwithstanding that all such parties are not signatories to the original or the
same counterpart.
(n) No supplement, modification or amendment of this Agreement or
waiver of any provision of this Agreement shall be binding unless executed in
writing by all parties to this Agreement. No waiver of any of the provisions of
this Agreement shall be deemed or shall constitute a waiver of any other
provision of this Agreement (regardless of whether similar), nor shall any such
waiver constitute a continuing waiver unless otherwise expressly provided.
(o) In addition to all other rights or remedies available at law or
in equity, the Company shall be entitled to injunctive and other equitable
relief to prevent or enjoin any violation of the provisions of this Agreement.
(p) The Company agrees to use its good faith efforts to qualify this
Agreement under Rule 16b-3 under the Exchange Act; to keep a registration
Statement on Form S-8 effective with respect to the shares of Common Stock
covered by this Agreement, subject to a good faith determination by the Board of
Directors of the Company to suspend such effectiveness at any time and from time
to time; and to qualify the shares of Common Stock covered by this Agreement to
be qualified for trading on the Nasdaq-Registered Trademark- National Market.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
COMPANY
ANCHOR GAMING
By: /s/ Michael D. Rumbolz
Its: President & Chief Operating Officer
OPTIONEE:
By: /s/ Joseph Murphy
2336 Stone Glenn
Las Vegas, NV 89134
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<PAGE>
ATTACHMENT A
1. The Option covers 200,000 shares of Common Stock with a Purchase Price
per share of $31.875.
2. Expiration Date: July 1, 2007 unless provided otherwise in the
Agreement.
3. Vesting Schedule:
(a) 75,000 shares will Vest in accordance with the terms of the Agreement
as set forth below:
<TABLE>
<CAPTION>
VESTING DATE NUMBER OF SHARES VESTING
<S> <C>
March 31, 1999 6,250
June 30, 1999 6,250
September 31, 1999 6,250
December 31, 1999 6,250
March 31, 2000 6,250
June 30, 2000 6,250
September 31, 2000 6,250
December 31, 2000 6,250
March 31, 2001 6,250
June 30, 2001 6,250
September 31, 2001 6,250
December 31, 2001 6,250
</TABLE>
(b) An additional 125,000 shares of Common Stock will vest in
accordance with the terms of the Agreement as set forth below. At the end
of each calendar year beginning with 1997, the Board of Directors of the
Company will determine in a manner consistent with generally accepted
accounting principles consistently applied the earnings per share of the
Company for the previous 12-month period. The Board of Directors of the
Company will then determine the percentage growth in the Company's earnings
per from the previous calendar year in a manner consistent with generally
accepted accounting principles consistently applied. The number of
shares of Common Stock set forth below will vest as of December 31 for the
year for which the growth in earnings per share indicated below occurs:
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<PAGE>
<TABLE>
<CAPTION>
CALENDAR YEAR GROWTH IN EARNINGS PER SHARE OVER TOTAL SHARES VESTING
PREVIOUS CALENDAR YEAR
<S> <C> <C>
1997 At least 10% but less than 12% 5,000
At least 12% but less than 14 % 10,000
At least 14% % but less than 16% 15,000
At least 16% but less than 18% 20,000
More than 18% 25,000
1998 At least 10% but less than 12% 5,000
At least 12% but less than 14% 10,000
At least 14% but less than 16% 15,000
At least 16% but less than 18% 20,000
More than 18% 25,000
1999 At least 10% but less than 12% 5,000
At least 12% but less than 14% 10,000
At least 14% but less than 16% 15,000
At least 16% but less than 18% 20,000
More than 18% 25,000
2000 At least 10% but less than 12% 5,000
At least 12% but less than 14% 10,000
At least 14% but less than 16% 15,000
At least 16% but less than 18% 20,000
More than 18% 25,000
2001 At least 10% but less than 12% 5,000
At least 12% but less than 14% 10,000
At least 14% but less than 16% 15,000
At least 16% but less than 18% 20,000
More than 18% 25,000
</TABLE>
4. Notwithstanding the foregoing, all of the shares of Common Stock
as to which vesting has not occurred in accordance with the foregoing
provisions of this ATTACHMENT A will vest on June 30, 2005 if and only
if the Optionee has been an employee of the Company for the entire
period from the date of this Option until June 30, 2005. Without
limiting the foregoing, if the Optionee has ceased to be an employee
of the Company at any time during such period for any reason,
including, without limitation, for termination with or without cause,
by death or disability, or voluntary or involuntary, such vesting will
not occur.
<PAGE>
EXHIBIT 5
[Hughes & Luce, L.L.P. Letterhead]
May 21, 1998
Anchor Gaming
817 Pilot Road, Suite G
Las Vegas, Nevada 89119
Ladies and Gentlemen:
Re: Registration Statement on Form S-8 for the Employee Stock Option
Agreements (the "Agreements")
Ladies and Gentlemen:
We render this opinion as counsel to Anchor Gaming, a Nevada corporation
(the "Company"), in connection with the registration under the Securities Act of
1933, as amended, of 600,000 shares (the "Shares") of the Company's common
stock, $.01 par value per share, issuable under the Agreements. The Shares are
being registered pursuant to a registration statement on Form S-8 to be filed
with the Securities and Exchange Commission on or about May 21, 1998 (the
"Registration Statement").
In connection with this opinion, we have examined such documents and
records of the Company and such statutes, regulations and other instruments and
certificates as we have deemed necessary or advisable for the purposes of this
opinion. We have assumed that all signatures on all documents presented to us
are genuine, that all documents submitted to us as originals are accurate and
complete and that all documents submitted to us as copies are true and correct
copies of the originals thereof. We have also relied upon such certificates of
corporate agents and officers of the Company and such other certifications with
respect to the accuracy of material factual matters contained therein which were
not independently established.
Based on the foregoing, we are of the opinion that the Shares will be, if
and when issued and paid for pursuant to the Agreements, validly issued, fully
paid and nonassessable, assuming the Company maintains an adequate number of
authorized but unissued shares of common stock available for such issuance, and
further assuming that the consideration received by the Company for the Shares
exceeds the par value thereof.
We consent to the use of this opinion as an exhibit to the Registration
Statement. In giving this consent, we do not admit that we are included in this
category of persons whose consent is required under Section 7 of the Securities
Act of 1933, as amended, or the rules and regulations of the Securities and
Exchange Commission promulgated thereunder.
Very truly yours,
/s/ Hughes & Luce, L.L.P.
---------------------
<PAGE>
EXHIBIT 23.2
[LETTERHEAD]
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement
of Anchor Gaming on Form S-8 of our report dated August 1, 1997, appearing in
the Annual Report on Form 10-K of Anchor Gaming for the year ended June 30,
1997.
/s/ Deloitte & Touche LLP
DELOITTE & TOUCHE, LLP
Las Vegas, Nevada
May 20, 1998
