Form 8-K Description of Common Stock
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15 (d) of the Securities Exchange Act of 1934
Date
of
Report: July 11, 2005
(Date
of
earliest event reported)
CENTURY
CASINOS, INC.
(Exact
Name of Registrant as specified in its charter)
Delaware 0-22290
84-1271317
(State
or
other jurisdiction (Commission (I.R.S.
Employer
of incorporation)
File
Number) Identification
Number)
1263
Lake Plaza Drive
Suite A, Colorado Springs, CO 80906
(Address
of principal executive offices) (Zip
Code)
Registrant's telephone number, including area code: 719-527-8300
Item
8.01. Other Events.
Century
Casinos, Inc. hereby updates its description of common stock as
follows:
Our
authorized capital stock consists of 50,000,000 shares of common stock, par
value $0.01 per share, and 20,000,000 shares of preferred stock, par value
$0.01
per share. A description of the material terms and provisions of our certificate
of incorporation and bylaws affecting the rights of the common stock is set
forth below. The description is intended as a summary and is qualified in its
entirety by reference to our certificate of incorporation and
bylaws.
Holders
of our common stock are entitled to one vote per share in the election of
directors and on all other matters on which stockholders are entitled or
permitted to vote. Holders of common stock are not entitled to cumulative voting
rights. Therefore, holders of a majority of the shares voting for the election
of directors can elect all the directors. Subject to the terms of any
outstanding series of preferred stock, the holders of common stock are entitled
to dividends in amounts and at times as may be declared by our board of
directors out of funds legally available. Upon our liquidation or dissolution,
holders of common stock are entitled to share ratably in all net assets
available for distribution to stockholders after payment of any liquidation
preferences to holders of preferred stock. Holders of common stock have no
conversion or preemptive rights and no redemption rights except as described
under the heading “— Business Combinations with Interested Stockholder;
Redemption Provisions” below.
Our
common stock currently trades on the NASDAQ SmallCap Market under the symbol
“CNTY.” As of December 31, 2004, there were 90 holders of record of our common
stock. We estimate that there are approximately 3,000 beneficial owners of
our
common stock.
Redemption
Provisions
Our
certificate of incorporation provides that our shares of capital stock are
subject to repurchase if in the judgment of our board of directors such
repurchase is necessary to obtain or maintain a license or franchise to conduct
any portion of our business.
We
must
provide such security holders with 30 days’ written notice of our intent to
redeem the securities held by them, subject to certain exceptions. Following
the
expiration of a 30-day notice period, any securities selected for redemption
by
our board of directors cease to entitle the holder thereof to any rights other
than the right to receive the redemption price for such securities. The
redemption price will generally be the average closing price of the securities
to be redeemed for the 45 trading days preceding the redemption
date.
Anti-Takeover
Effects
Provisions
of Delaware law, our certificate of incorporation, our bylaws and our
stockholder rights plan described below could have the effect of delaying,
deferring or preventing a third party from acquiring us, even if the acquisition
would benefit our stockholders. These provisions are intended to enhance the
likelihood of continuity and stability in the composition of our board of
directors and in the policies formulated by our board, and to discourage types
of transactions that may involve our actual or threatened change of control.
These provisions are designed to reduce our vulnerability to an unsolicited
proposal for a takeover that does not contemplate the acquisition of all of
our
outstanding shares, or an unsolicited proposal for the restructuring or sale
of
all or part of us. They may delay, defer or prevent a tender offer or takeover
attempt of our company that a stockholder might consider in his or her best
interest, including those attempts that might result in a premium over the
market price for the shares held by our stockholders. The following summarizes
these provisions.
Business
Combinations with Interested Stockholder; Redemption
Provisions
Our
certificate of incorporation prohibits us from engaging in a “business
combination” with an “interested stockholder” without the approval by
affirmative vote of the holders of at least 80% of our outstanding voting stock,
unless:
• Prior
to
completion of the business combination, a majority (but not fewer than two)
of
the “continuing directors” approve such business combination. “Continuing
directors” means directors other than the relevant interested stockholder or an
affiliate, associate, employee, agent or nominee of such interested stockholder,
or a relative of the foregoing, who were either (i) directors prior to the
time
such interested stockholder became an interested stockholder, or (ii) successors
of such a continuing director who are recommended or elected to succeed such
continuing director by a majority of the continuing directors then on our board;
or
• Stockholders
other than the interested stockholder are entitled to receive consideration
in
such business combination that exceeds certain thresholds set forth in our
certificate of incorporation.
For
purposes of this provision of our certificate of incorporation, a “business
combination” includes mergers, asset sales or other transactions with or
suggested by an interested stockholder, with an “interested stockholder” being
defined as (i) a person who, together with affiliates and associates, owns,
or
within two years prior to the date of determination that the person is an
“interested stockholder,” did own, 5% or more of the corporation’s voting stock,
or (ii) an assignee, in any transaction not involving a public offering during
the preceding two years, of shares of stock held by an interested stockholder.
In
addition, if an interested stockholder becomes the beneficial owner of more
than
50% of our voting stock as a result of transactions not involving our issuance
of capital stock to such interested stockholder or an affiliate or associate
thereof, stockholders other than the interested stockholder and its affiliates
and associates will have the option to have us redeem their shares of our voting
stock. Such option will not be available if, within ten days after commencement
of a tender offer by an interested stockholder for shares of our common stock,
a
majority of the continuing directors recommend that stockholders accept the
tender offer, or if, within 30 days of our receipt of notice of the interested
stockholder becoming the beneficial owner of more than 50% of our voting stock,
the continuing directors determine that such redemption would not be in our
best
interests. In the event these redemption rights are triggered, certain rights
described below under “—Stockholder Rights Plan” would generally also be
triggered.
The
provisions of our certificate of incorporation relating to business combinations
with an interested stockholder and related redemption rights may only be amended
by an affirmative vote of the holders of 80% of our outstanding voting
stock.
Delaware
Anti-Takeover Statute
Transactions
that are not governed by the business combination provision in our certificate
of incorporation, as described above, are subject to the provisions of Section
203 of the Delaware General Corporation Law. Subject to exceptions, the statute
prohibits a publicly-held Delaware corporation from engaging in a “business
combination” with an “interested stockholder” for a period of three years after
the date of the transaction in which the person became an interested
stockholder, unless:
• Prior
to
such date, our board of directors of the corporation approved either the
business combination or the transaction which resulted in the stockholder
becoming an interested stockholder;
• Upon
consummation of the transaction which resulted in the stockholder becoming
an
interested stockholder, the interested stockholder owned at least 85% of the
voting stock of the corporation outstanding at the time the transaction
commenced, excluding for purposes of determining the number of shares of voting
stock outstanding, those shares owned (1) by persons who are directors and
also
officers and (2) by employee stock plans in which employee participants do
not
have the right to determine confidentially whether shares held subject to the
plan will be tendered in a tender or exchange offer; or
• On
or
after such date, the business combination is approved by our board of directors
and authorized at an annual or special meeting of stockholders and not by
written consent, by the affirmative vote of at least 66 2/3% of the outstanding
voting stock which is not owned by the interested stockholder.
For
purposes of Section 203, a “business combination” includes a merger, asset sale
or other transaction resulting in a financial benefit to the interested
stockholder, with an “interested stockholder” being defined as a person who,
together with affiliates and associates, owns, or within three years prior
to
the date of determination whether the person is an “interested stockholder,” did
own, 15% or more of the corporation’s voting stock.
Stockholder
Rights Plan
We
have
adopted a stockholder rights plan to deter certain coercive takeover tactics
and
enable our board of directors to represent effectively the interests of
stockholders in the event of a takeover attempt of our company. The rights
plan
does not deter negotiated mergers or business combinations that our board of
directors determines to be in the best interests of the Company and its
stockholders. Rather, the purpose of the rights plan is to deter certain
coercive takeover tactics and enable our board of directors to represent
effectively the interests of stockholders in the event of a takeover
attempt.
To
implement the rights plan our board of directors declared and paid a dividend
of
one preferred share purchase right for each share of our common stock
outstanding. Each right entitles the registered holder to purchase from us
one
one-hundredth of a share of our Series A Preferred Stock, par value $.01 per
share at a price of $10.00 per one one-hundredth of a Preferred Share, subject
to adjustment. The description and terms of the rights are set forth in a Rights
Agreement between us and Computershare Trust Company, Inc., f/k/a American
Securities Transfer & Trust, Inc., as Rights Agent.
Initially
and until a Distribution Date (as defined in the Rights Agreement) occurs,
the
rights are attached to all shares of our common stock and no separate rights
certificates are issued. Prior to a Distribution Date, the rights are not
exercisable, transfer automatically with shares of our common stock and are
not
separately transferable.
On
the
“Distribution Date” separate certificates evidencing the rights will be mailed
to holders of record of the our common stock. The Distribution Date is the
earlier to occur of the following four events:
• the
twentieth day after a public announcement that a person or group of affiliated
or associated persons has acquired 20% or more of our outstanding common stock,
thereby becoming an “Acquiring Person” under the Rights Agreement;
• the
twentieth day after a public announcement that a person or group has acquired
15% or more of our outstanding common stock, thereby becoming an Acquiring
Person if our board of directors determines either (i) that such person or
group
intends to take actions which would be detrimental to the long-term interests
of
us or our stockholders, or (ii) that such ownership would be detrimental to
us
in other respects;
• the
twentieth day after the commencement of a tender offer or exchange offer, or
an
announcement of a person’s intent to commence a tender or exchange offer, that
would result in a person or group beneficially owning 20% or more of our
outstanding common stock; or
• the
twentieth day after the filing by any person of a registration statement with
respect to a contemplated exchange offer to acquire beneficial ownership of
20%
or more of our outstanding common stock.
In
the
latter two instances of a Distribution Date, our board of directors may extend
the twenty-day period, but not beyond the time that a person or group becomes
an
Acquiring Person.
Acquisitions
by us, any of our subsidiaries or any of our employee benefit plans will not
result in the acquiring entity becoming an Acquiring Person.
After
the
Distribution Date, the rights will be tradable separately from our common stock.
After the Distribution Date and after our right to redeem the rights (as
described below) has expired, the rights will be exercisable in two different
ways depending on the circumstances as set forth below.
Because
of the nature of the dividend, liquidation and voting rights of the Series
A
Preferred Stock, the value of one one-hundredth interest in a share of such
preferred stock should approximate the value of one share of our common stock.
For convenience, the discussion relating to the rights to purchase our common
stock and the Acquiring Person’s stock, each immediately below, is expressed in
terms of the exercise of a right to purchase shares of our common
stock.
If
a
person or group becomes an Acquiring Person and our redemption right has
expired, each holder of a Right (except those held by the Acquiring Person
and
its affiliates and associates) will have the right to purchase, upon exercise,
shares of our common stock having a value equal to two times the exercise price
of the right. In other words, the rights holders other than the Acquiring Person
may purchase shares of our common stock at a 50% discount.
For
example, at the exercise price of $10.00 per right, each right not owned by
an
Acquiring Person would entitle its holder to purchase $20.00 worth of our common
stock for $10.00. Assuming a value of $8.00 per share of common stock at such
time, the holder of each valid right would be entitled to purchase 2.5 shares
of
our common stock for $10.00.
Alternatively,
if, in a transaction not approved by our board of directors, we are acquired
in
a merger or other business combination or 50% or more of our assets or earning
power are sold after a person or group has become an Acquiring Person, and
our
redemption right has expired, proper provision will be made so that each holder
of a right will thereafter have the right to purchase, upon exercise, that
number of shares of common stock of the acquiring company as have a market
value
of two times the exercise price of the right. In other words, a rights holder
may purchase the acquiring company’s common stock at a 50%
discount.
At
any
time after any person or group becomes an Acquiring Person and before the
Acquiring Person acquires 50% or more of our outstanding common stock, our
board
of directors may exchange the rights (other than rights owned by the Acquiring
Person which will have become void), in whole or in part, for shares of our
common stock for consideration per right consisting of one-half of the
securities that otherwise would be issuable.
We
may
redeem the rights, in whole but not in part, at a price of $.001 per right
at
any time up to and including the twentieth day after the time a person or group
has become an Acquiring Person. Immediately upon redemption, the right to
exercise will terminate and the only right of holders will be to receive the
redemption price.
The
rights expire on April 29, 2009 unless the expiration date is extended by
amendment or unless the rights are earlier redeemed or exchanged by us as
described above. Prior to a Distribution Date, the terms of the rights may
be
amended by our board of directors in its discretion without the consent of
the
rights holders. After a Distribution Date, our board of directors may, subject
to certain limitations, amend the Rights Agreement to clarify or resolve any
ambiguity, defect or inconsistency, to shorten or lengthen any time period
under
the Rights Agreement or to make other changes that do not adversely affect
the
interests of the rights holders (excluding the interests of Acquiring
Persons).
Classified
Board of Directors
Our
board
of directors is divided into three classes of directors as nearly equal in
number as possible. Presently, our board of directors consists of five
directors. Each director who is elected at an annual meeting of stockholders
is
elected for a three-year term expiring at the third annual meeting of
stockholders after such director’s election. Accordingly, under most
circumstances, directors of one class only are elected at each year’s annual
meeting of stockholders. If elected, all nominees are expected to serve until
the expiration of their respective terms and until their successors are duly
elected and qualified.
Removal
of Directors
Our
certificate of incorporation provides that directors may only be removed from
office without cause by an affirmative vote of the holders of 80% of our
outstanding voting stock, and may only be removed with cause by an affirmative
vote of the holders of a majority of our outstanding voting stock. Only our
board of directors is authorized to fill vacant directorships or change the
size
of our board. The provisions of our certificate of incorporation relating to
removal of directors, the size of our board, filling vacancies on the board
and
related matters may only be amended by an affirmative vote of the holders of
80%
of our outstanding voting stock.
Stockholder
Action; Special Meetings of Stockholders
Our
certificate of incorporation eliminates the ability of stockholders to act
by
written consent. Our certificate of incorporation and bylaws provide that
special meetings of our stockholders may be called only by a majority of our
board of directors, or by the Chairman or Vice Chairman of the board or by
our
President.
Authorized
But Unissued Shares
Our
authorized but unissued shares of common stock and preferred stock are generally
available for our board to issue without stockholder approval. We may use these
additional shares for a variety of corporate purposes, including future
offerings to raise additional capital, corporate acquisitions and employee
benefit plans. The existence of our authorized but unissued shares of common
stock and preferred stock could render more difficult or discourage an attempt
to obtain control of our company by means of a proxy contest, tender offer,
merger or other transaction.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant
has
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.
Century
Casinos, Inc.
(Registrant)
Date:
July 11, 2005 By:
/s/ Larry Hannappel
Larry
Hannappel, Senior Vice President, Secretary and Treasurer