<PAGE> 1
As filed with the Securities and Exchange Commission on October 22, 1997
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
Registration Statement
Under
The Securities Act of 1933
CROWN GROUP, INC. (FORMERLY CROWN CASINO CORPORATION)
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
Texas 63-0851141
- -------------------------------------------------------------- ---------------------------------------
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification Number)
</TABLE>
4040 North MacArthur Boulevard
Suite 100
Irving, Texas 75038-6424
----------------------------------------
(Address of principal executive offices)
1997 STOCK OPTION PLAN
----------------------------------------
(Full Title of the Plan)
EDWARD R. MCMURPHY
President and Chief Executive Officer
4040 North MacArthur Boulevard
Suite 100
Irving, Texas 75038-6424
(972) 717-3423
- -------------------------------------------------------------------------------
(Name, address and telephone number, including area code, of agent for service)
------------------------------------------------
Copies Requested to:
Terry Ferraro Schwartz, Esq.
Smith, Gambrell & Russell
Suite 3100, Promenade II
1230 Peachtree Street, N.E.
Atlanta, Georgia 30309
(404) 815-3100
------------------------------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
===================================================================================================================================
Title of Proposed Proposed
Securities Amount Maximum Maximum Amount of
to be to be Offering Price Aggregate Registration
Registered Registered Per Share (1) Offering Price (1) Fee
------------- ---------- -------------- ------------------ ------------
<S> <C> <C> <C> <C>
Options and shares 1,000,000 $3.34375 $3,343,750 $1,014
of $.01 par value Shares
and Common Stock
===================================================================================================================================
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) based upon the average of the high and low
prices of Common Stock on the Nasdaq SmallCap Market on October 20,
1997.
<PAGE> 2
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The documents listed below are hereby incorporated by reference into
this Registration Statement, and all documents subsequently filed by the Company
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act
of 1934, prior to the filing of a post-effective amendment which indicates that
all securities offered have been sold or which deregisters all securities 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 such
documents:
(a) the Company's Annual Report on Form 10-K for the year ended
April 30, 1997;
(b) the Company's Quarterly Report on Form 10-Q for the quarter
ended July 31, 1997; and
(c) the description of the Company's Common Stock contained in the
Company's Registration Statement on Form 10, as filed with the
Securities and Exchange Commission, pursuant to the Securities
Exchange Act of 1934, on December 23, 1986.
Item 4. Description of Securities.
No response to this item is required.
Item 5. Interests of Named Experts and Counsel.
No response to this item is required.
Item 6. Indemnification of Directors and Officers.
The Articles of Incorporation of the Company provide for the
elimination of monetary liability of directors of the Company pursuant to
Article 7.06(B) of the Texas Miscellaneous Corporation Laws Act.
The Company's Bylaws provide that to the extent that a director or
officer has been successful in the defense of any proceeding to which he was a
party by virtue of his being a director or officer of the Company, the Company
shall indemnify the director or officer for reasonable expenses incurred
therewith.
In addition, the Company may indemnify a director or officer of the
Company who is or is threatened to be made a named defendant or respondent in a
proceeding because he is or was a director or officer, against liability
incurred in the proceeding if he acted in his official capacity and in a manner
he believed in good faith to be in or not opposed to the best interests of the
Company and, in the case of any criminal proceeding, had no reasonable cause to
believe his conduct was unlawful; except that, in general, no indemnification
shall be made in connection with a proceeding by or in the right of the Company
in which the director or officer was adjudged liable to the Company or in
connection with any other proceeding in which a director or officer is adjudged
liable on the basis that personal benefit was
II-1
<PAGE> 3
improperly received by him. If the person is found liable to the Company on the
basis that personal benefit was improperly received by the person, the Company
may indemnify that person, but such indemnification is limited to reasonable
expenses actually incurred by the person in connection with the proceeding and
shall not be made in respect of any proceeding in which the person shall have
been found liable for willful or intentional misconduct in the performance of
his duty to the Company.
Articles 2.02 of the Texas Business Corporation Act sets forth the
applicable terms, conditions, and limitations governing the indemnification of
officers, directors and other persons.
Item 7. Exemption from Registration Claimed.
No response to this item is required.
Item 8. Exhibits.
The following exhibits are filed with this Registration Statement.
<TABLE>
<CAPTION>
Exhibit
Number Description of Exhibit
------ ----------------------
<S> <C>
4.1 - Registrant's 1997 Stock Option Plan.
5.1 - Opinion of Smith, Gambrell & Russell.
23.1 - Consent of Coopers & Lybrand L.L.P.
23.2 - Consent of Smith, Gambrell & Russell (contained in their opinion filed as
Exhibit 5.1).
*24.1 - Power of Attorney of Tilman J. Falgout, III.
*24.2 - Power of Attorney of John David Simmons.
*24.3 - Power of Attorney of David J. Douglas.
*24.4 - Power of Attorney of Gerald L. Adams.
*24.5 - Power of Attorney of Gerard M. Jacobs.
*24.6 - Power of Attorney of Robert J. Kehl.
</TABLE>
* Included in the signature page to this Registration Statement.
Item 9. Undertakings.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement to include
any material information with respect to the plan of
II-2
<PAGE> 4
distribution not previously disclosed in the Registration Statement or any
material change to such information in the Registration Statement;
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof;
(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 undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's Annual Report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at the time shall be deemed to be the initial bona fide offering thereof.
(h) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
II-3
<PAGE> 5
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 Irving, State of Texas, on this 1st day of October,
1997.
CROWN CASINO CORPORATION
By: /s/ Edward R. McMurphy
----------------------------------------------------
Edward R. McMurphy
President and Chief Executive Officer
(principal executive officer)
By: /s/ Mark D. Slusser
----------------------------------------------------
Mark D. Slusser
Vice President of Finance, Chief Financial Officer,
Secretary and Treasurer
(principal financial and accounting officer)
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned whose
signature appears below constitutes and appoints Edward R. McMurphy and Mark D.
Slusser, and each of them (with full power of each of them to act alone) as true
and lawful attorneys-in-fact and agents, with full power of substitution for him
and on his behalf, and in his name, place and stead, in any and all capacities
to execute and sign any and all amendments or post-effective amendments to this
Registration Statement, and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents (with full power of
each of them to act alone) full power and authority to do and perform each and
every act and thing requisite or necessary to be done in and about the premises,
as fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents and any of
them or their or his substitute or substitutes, may lawfully do or cause to be
done by virtue hereof, and the Registrant hereby confers like authority on its
behalf.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Edward R. McMurphy President, Chief October 1, 1997
- --------------------------- Executive Officer
Edward R. McMurphy and Director
/s/ Tilman J. Falgout, III Director October 1, 1997
- ---------------------------
Tilman J. Falgout, III
/s/ John David Simmons Director October 1, 1997
- ---------------------------
John David Simmons
/s/ David J. Douglas Director October 1, 1997
- ---------------------------
David J. Douglas
s/ Gerald L. Adams Director October 1, 1997
- ---------------------------
Gerald L. Adams
/s/ Gerard M. Jacobs Director October 1, 1997
- ---------------------------
Gerard M. Jacobs
/s/ Robert J. Kehl Director October 1, 1997
- ---------------------------
Robert J. Kehl
*By:
------------------------------------
Edward R. McMurphy, pursuant to
a power-of-attorney included in the
signature page to this Registration
Statement on Form S-8
</TABLE>
<PAGE> 6
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description of Exhibit
- ------ ----------------------
<S> <C>
4.1 - Registrant's 1997 Stock Option Plan
5.1 - Opinion of Smith, Gambrell & Russell
23.1 - Consent of Coopers & Lybrand LLP
</TABLE>
<PAGE> 1
EXHIBIT 4.1
CROWN GROUP, INC.
(FORMERLY CROWN CASINO CORPORATION)
1997 STOCK OPTION PLAN
EFFECTIVE AS OF JULY 9, 1997
1. PURPOSE
The primary purpose of the Crown Group, Inc. Stock Option Plan (the
"Plan") is to encourage and enable eligible directors, officers and key
employees of Crown Group, Inc. (formerly Crown Casino Corporation) (the
"Company") and its subsidiaries to acquire proprietary interests in the Company
through the ownership of Common Stock of the Company. The Company believes that
directors, officers and key employees who participate in the Plan will have a
closer identification with the Company by virtue of their ability as
shareholders to participate in the Company's growth and earnings. The Plan also
is designed to provide motivation for participating directors, officers and key
employees to remain in the employ of and to give greater effort on behalf of the
Company. It is the intention of the Company that the Plan provide for the award
of "incentive stock options" qualified under Section 422 of the Internal Revenue
Code of 1986, as amended (the "Code") and the regulations promulgated
thereunder, as well as the award of non-qualified stock options. Accordingly,
the provisions of the Plan related to incentive stock options shall be construed
so as to extend and limit participation in a manner consistent with the
requirements of Section 422 of the Code.
2. DEFINITIONS
The following words or terms shall have the following meanings:
(a) "Agreement" shall mean a stock option agreement between the Company
and an Eligible Employee, Eligible Participant or Non-Employee Director pursuant
to the terms of this Plan.
(b) "Board of Directors" shall mean the Board of Directors of the
Company or the Executive Committee of such Board.
(c) "Committee" shall mean the committee appointed by the Board of
Directors to administer the Plan, if any, as set forth in Section 5 of the Plan.
(d) "Company" shall mean Crown Group, Inc., a Texas corporation.
(e) "Eligible Employee(s)" shall mean key employees regularly employed
by the Company or a Subsidiary (including officers, whether or not they are
directors) as the Board of Directors or the Committee shall select from time to
time.
(f) "Eligible Participant(s)" shall mean directors, officers, key
employees of the Company and its Subsidiaries, consultants, advisors and other
persons who may not otherwise be eligible to receive Qualified Incentive Options
pursuant to Section 8 of the Plan.
(g) "Market Price" shall mean the last trade/closing price of the
Company's Common Stock on the date in question, as quoted by the National
Association of Securities Dealers, Inc. SmallCap Market System (or other
over-the-counter nationally recognized quotation service). If the Company's
Common Stock is not traded on the Nasdaq SmallCap Market but is registered on a
national securities
<PAGE> 2
exchange or on the Nasdaq National Market System, "Market Price" shall mean the
closing sales price of the Company's Common Stock on such national securities
exchange or National Market System. If the Company's shares of Common Stock are
not traded on a national securities exchange or through any other nationally
recognized quotation service, then "Market Price" shall mean the fair market
value of the Company's Common Stock as determined by the Board of Directors or
the Committee, acting in good faith, under any method consistent with the Code,
or Treasury Regulations thereunder, as the Board of Directors or the Committee
shall in its discretion select and apply at the time of the grant of the option
concerned. Subject to the foregoing, the Board of Directors or the Committee, in
fixing the market price, shall have full authority and discretion and be fully
protected in doing so.
(h) For purposes of Section 10 herein, "Non-Employee Director(s)" shall
mean a director of the Company who is not a regular salaried employee of the
Company or one of its Subsidiaries.
(i) "Optionee" shall mean an Eligible Employee, Eligible Participant or
Non-Employee Director having a right to purchase Common Stock under an
Agreement.
(j) "Option(s)" shall mean the right or rights granted to Eligible
Employees, Eligible Participants or Non-Employee Directors to purchase Common
Stock under the Plan.
(k) "Option Value Per Share" shall mean, with respect to one share of
Common Stock purchasable pursuant to an Option, the excess of (i) the Market
Price of one share of Common Stock issuable upon exercise thereof, as determined
with respect to the date notice of exercise is given by an Optionee, over (ii)
the purchase price per share with respect to the Option.
(l) "Plan" shall mean this Crown Group, Inc. 1997 Stock Option Plan.
(m) "Shares," "Stock," or "Common Stock" shall mean shares of the $.01
par value common stock of the Company.
(n) "Subsidiary" or "Subsidiaries" shall mean any corporation(s), if
the Company owns or controls, directly or indirectly, more than a majority of
the voting stock of such corporation(s).
(o) "Ten Percent Owner" shall mean an individual who, at the time an
Option is granted, owns directly or indirectly more than ten percent (10%) of
the total combined voting power of all classes of stock of the Company or a
Subsidiary.
3. EFFECTIVE DATE
The effective date of the Plan (the "Effective Date") shall be the date
the Plan is adopted by the Board of Directors or the date the Plan is approved
by the shareholders of the Company, whichever is earlier. The Plan must be
approved by the affirmative vote of not less than a majority of the shares
present and voting at a meeting at which a quorum is present, which shareholder
vote must be taken within twelve (12) months after the date the Plan is adopted
by the Board of Directors. Such shareholder vote shall not alter the Effective
Date of the Plan. In the event shareholder approval of the adoption of the Plan
is not obtained within the aforesaid twelve (12) month period, then any Options
granted in the intervening period shall be void.
2
<PAGE> 3
4. SHARES RESERVED FOR PLAN
The shares of the Company's Common Stock to be sold to Eligible
Employees, Eligible Participants and Non-Employee Directors under the Plan may
at the election of the Board of Directors be either treasury shares or Shares
originally issued for such purpose. The maximum number of Shares which shall be
reserved and made available for sale under the Plan shall be one million
(1,000,000); provided, however, that such Shares shall be subject to the
adjustments provided in Section 8(h). Any Shares subject to an Option which for
any reason expires or is terminated unexercised may again be subject to an
Option under the Plan.
5. ADMINISTRATION OF THE PLAN
The Plan shall be administered by the Board of Directors or the
Committee. The Committee shall be comprised of not less than two (2) members
appointed by the Board of Directors of the Company from among its members, each
of whom qualifies as a "Non-Employee Director" as such term is defined in Rule
16b-3 under the Securities Exchange Act of 1934, as amended (the "Exchange
Act").
Within the limitations described herein, the Board of Directors of the
Company or the Committee shall administer the Plan, select the Eligible
Employees and Eligible Participants to whom Options will be granted, determine
the number of shares to be optioned to each Eligible Employee and Eligible
Participant and interpret, construe and implement the provisions of the Plan.
The Board of Directors or the Committee shall also determine the price to be
paid for the Shares upon exercise of each Option, the period within which each
Option may be exercised, and the terms and conditions of each Option granted
pursuant to the Plan. The Board of Directors and Committee members shall be
reimbursed for out-of-pocket expenses reasonably incurred in the administration
of the Plan.
If the Plan is administered by the Board of Directors, a majority of
the members of the Board of Directors shall constitute a quorum, and the act of
a majority of the members of the Board of Directors present at any meeting at
which a quorum is present, or acts approved in writing by all members of the
Board of Directors shall be the acts of the Board of Directors. If the Plan is
administered by the Committee, a majority of the members of the Committee shall
constitute a quorum, and the acts of a majority of the members present at any
meeting at which a quorum is present, or acts approved in writing by all of the
members of the Committee shall be the acts of the Committee.
6. ELIGIBILITY
Options granted pursuant to Section 8 shall be granted only to Eligible
Employees. Options granted pursuant to Section 9 may be granted to Eligible
Employees and to Eligible Participants. Options granted pursuant to Section 10
shall be granted only to Non-Employee Directors.
7. DURATION OF THE PLAN
The Plan shall remain in effect until all Shares subject to or which
may become subject to the Plan shall have been purchased pursuant to Options
granted under the Plan; provided that Options under the Plan must be granted
within ten (10) years from the Effective Date. The Plan shall expire on the
tenth anniversary of the Effective Date.
3
<PAGE> 4
8. QUALIFIED INCENTIVE OPTIONS
It is intended that Options granted under this Section 8 shall be
qualified incentive stock options under the provisions of Section 422 of the
Code and the regulations thereunder or corresponding provisions of subsequent
revenue laws and regulations in effect at the time such Options are granted.
Such Options shall be evidenced by stock option agreements in such form and not
inconsistent with this Plan as the Committee or the Board of Directors shall
approve from time to time, which Agreements shall contain in substance the
following terms and conditions:
(a) Price. The purchase price for shares purchased upon exercise will
be equal to 100% of the Market Price on the day the Option is granted; provided
that the purchase price of stock deliverable upon the exercise of a qualified
incentive stock option granted to a Ten Percent Owner under this Section 8 shall
be not less than one hundred ten percent (110%) of the Market Price on the day
the Option is granted, as determined by the Board of Directors or the Committee,
but in no case less than the par value of such stock.
(b) Number of Shares. The Agreement shall specify the number of Shares
which the Optionee may purchase under such Option, as determined by the Board of
Directors or the Committee.
(c) Exercise of Options. The shares subject to the Option may be
purchased in whole or in part by the Optionee in accordance with the terms of
the Agreement from time to time after shareholder approval of the Plan, as
determined by the Board of Directors or the Committee, but in no event later
than ten (10) years from the date of grant of the Option. Notwithstanding the
foregoing, Shares subject to an Option granted to a Ten Percent Owner under this
Section 8 may be purchased from time to time but in no event later than five (5)
years from the date of grant of the Option.
(d) Medium and Time of Payment. Stock purchased pursuant to an
Agreement shall be paid for in full at the time of purchase. Payment of the
purchase price shall be in cash or, in lieu of payment of all or part of the
purchase price in cash, the Optionee may surrender to the Company either (i)
that portion of the Option having an aggregate Option Value Per Share equal to
the portion of the aggregate purchase price which will not be paid in cash, or
(ii) shares of the Common Stock of the Company valued at the Market Price on the
date of exercise of the Option in accordance with the terms of the Agreement.
Upon receipt of payment, the Company shall, without transfer or issue tax,
deliver to the Optionee (or other person entitled to exercise the Option) a
certificate or certificates for such Shares.
(e) Rights as a Shareholder. An Optionee shall have no rights as a
shareholder with respect to any Shares covered by an Option until the date of
issuance of the stock certificate to the Optionee for such Shares. Except as
otherwise expressly provided in the Plan, no adjustments shall be made for
dividends (ordinary or extraordinary, whether in cash, securities or other
property) or distributions or other rights for which the record date is prior to
the date such stock certificate is issued.
(f) Nonassignability of Option. No Option shall be assignable or
transferable by the Optionee except by will or by the laws of descent and
distribution. During the lifetime of the Optionee, the Option shall be
exercisable only by him or her.
4
<PAGE> 5
(g) Effect of Termination of Employment or Death. In the event that an
Optionee during his or her lifetime ceases to be an employee of the Company or
of any Subsidiary of the Company for any reason (including retirement) other
than death or permanent and total disability, any Option or unexercised portion
thereof which was otherwise exercisable on the date of termination of employment
shall expire unless exercised within a period of three (3) months from the date
on which the Optionee ceased to be an employee, but in no event after the term
provided in the Optionee's Agreement. In the event that an Optionee ceases to be
an employee of the Company or of any Subsidiary of the Company for any reason
(including retirement) other than death or permanent and total disability prior
to the time that an Option or portion thereof becomes exercisable, such Option
or portion thereof which is not then exercisable shall terminate and be null and
void. Whether authorized leave of absence for military or government service
shall constitute termination of employment for the purpose of this Plan shall be
determined by the Board of Directors or the Committee, which determination shall
be final and conclusive.
In the event that an Optionee during his or her lifetime ceases to be
an employee of the Company or any Subsidiary of the Company by reason of death
or permanent and total disability, any Option or unexercised portion thereof
which was otherwise exercisable on the date such Optionee ceased employment
shall expire unless exercised within a period of one (1) year from the date on
which the Optionee ceased to be an employee, but in no event after the term
provided in the Optionee's Agreement. In the event that an Optionee during his
or her lifetime ceases to be an employee of the Company or any Subsidiary of the
Company by reason of death or permanent and total disability, any Option or
portion thereof which was not exercisable on the date such Optionee ceased
employment shall become immediately exercisable for a period of one (1) year
from the date on which the Optionee ceased to be an employee, but in no event
shall the exercise period extend past the term provided in the Optionee's
Agreement.
"Permanent and total disability" as used in this Plan shall be as
defined in Section 22(e)(3) of the Code.
In the event of the death of an Optionee, the Option shall be
exercisable by his or her personal representatives, heirs or legatees, as
provided herein.
(h) Recapitalization. In the event that dividends are payable in Common
Stock of the Company or in the event there are splits, subdivisions or
combinations of shares of Common Stock of the Company, the number of Shares
available under the Plan shall be increased or decreased proportionately, as the
case may be, and the number and Option exercise price of Shares deliverable upon
the exercise thereafter of any Option theretofore granted shall be increased or
decreased proportionately, as the case may be, as determined to be proper and
appropriate by the Board of Directors or the Committee.
(i) Reorganization. In case the Company is merged or consolidated with
another corporation and the Company is not the surviving corporation, or in case
the property or stock of the Company is acquired by another corporation, or in
case of a separation, reorganization, recapitalization or liquidation of the
Company, the Board of Directors of the Company, or the Board of Directors of any
corporation assuming the obligations of the Company hereunder, shall either (i)
make appropriate provision for the protection of any outstanding Options by the
substitution on an equitable basis of appropriate stock of the Company, or of
the merged, consolidated or otherwise reorganized corporation which will be
issuable in respect to the shares of Common Stock of the Company, provided only
that the excess of the aggregate fair market value of the Shares subject to
option immediately after such substitution over the purchase price thereof is
not more than the excess
5
<PAGE> 6
of the aggregate fair market value of the Shares subject to option immediately
before such substitution over the purchase price thereof, or (ii) upon written
notice to the Optionee provide that the Option (including, in the discretion of
the Board of Directors, any portion of such Option which is not then
exercisable) must be exercised within sixty (60) days of the date of such notice
or it will be terminated. If any adjustment under this Section 8(i) would create
a fractional share of Stock or a right to acquire a fractional share, such shall
be disregarded and the number of shares of Stock available under the Plan and
the number of Shares covered under any Options previously granted pursuant to
the Plan shall be the next lower number of shares of Stock, rounding all
fractions downward. An adjustment made under this Section 8(i) by the Board of
Directors shall be conclusive and binding on all affected persons.
Except as otherwise expressly provided in this Plan, the Optionee shall
have no rights by reason of any subdivision or consolidation of shares of stock
of any class, or the payment of any stock dividend or any other increase or
decrease in the number of shares of stock of any class, or by reason of any
dissolution, liquidation, merger, or consolidation or spin-off of assets or
stock of another corporation; and any issue by the Company of shares of stock of
any class, or securities convertible into shares of stock of any class, shall
not affect, and no adjustment by reason thereof shall be made with respect to,
the number or prices of shares of Common Stock subject to an Option.
The grant of an Option pursuant to the Plan shall not affect in any way
the right or power of the Company to make adjustments, reclassifications,
reorganizations or changes of its capital or business structure or to merge or
to consolidate or to dissolve, liquidate or sell, or transfer all or any part of
its business or assets.
(j) Annual Limitation. The aggregate fair market value (determined at
the time the Option is granted) of the shares with respect to which incentive
stock options are exercisable for the first time by an Optionee during any
calendar year (under all incentive stock option plans of the Company and its
Subsidiaries) shall not exceed $100,000. Any excess over such amount shall be
deemed to be related to and part of a non-qualified stock option granted
pursuant to Section 9.
(k) General Restriction. Each Option shall be subject to the
requirement that if at any time the Board of Directors shall determine, in its
reasonable discretion, that the listing, registration or qualification of the
Shares subject to such Option upon any securities exchange or under any state or
federal law, or the consent or approval of any government regulatory body, is
necessary or desirable as a condition of, or in connection with, the granting of
such Option or the issue or purchase of Shares thereunder, such Option may not
be exercised in whole or in part unless such listing, registration,
qualification, consent or approval shall have been effected or obtained free of
any conditions not acceptable to the Board of Directors. Alternatively, such
Options shall be issued and exercisable only upon such terms and conditions and
with such restrictions as shall be necessary or appropriate to effect exemption
from such listing, registration, or other qualification requirement.
9. NON-QUALIFIED OPTIONS
The Board of Directors or the Committee may grant to Eligible Employees
or Eligible Participants Options under the Plan which are not qualified
incentive stock options under the provisions of Section 422 of the Code. Such
non-qualified options shall be evidenced by Agreements in such form and not
inconsistent with this Plan as the Board of Directors or the Committee shall
approve from time to time, which Agreements shall contain in substance the same
terms and conditions as set forth in Section 8 hereof with respect to qualified
incentive stock options; provided, however, that:
6
<PAGE> 7
(i) the limitations set forth in Sections 8(a) and 8(c) with
respect to Ten Percent Owners shall not be applicable to non-qualified options
granted to any Ten Percent Owner;
(ii) the limitations set forth in Section 8(g) with respect to
termination of employment or death shall not be applicable to non-qualified
option grants, and any such limitations shall be determined on a case by case
basis by the Board of Directors or the Committee at the time of the
non-qualified option grant;
(iii) the limitation set forth in Section 8(j) with respect to
the annual limitation of incentive stock options shall not be applicable to
non-qualified option grants; and
(iv) non-qualified options may be granted at a purchase price
equal to not less than 75% of the Market Price on the day the Option is granted.
10. OPTIONS TO NON-EMPLOYEE DIRECTORS
This Section 10 of the Plan provides the following annual Option grants
to Non-Employee Directors:
(a) On July 9, 1997, each then Non-Employee Director of the Company
shall be granted an Option to purchase 5,000 shares of Common Stock at an option
exercise or purchase price equal to 100% of the Market Price of such Stock on
the date of grant. On the first business day of July of each year thereafter
during the term of this Plan, each then Non-Employee Director of the Company
shall be granted, without the necessity of action by the Board of Directors or
the Committee, an Option to purchase 2,500 shares of Common Stock at an option
exercise or purchase price equal to 100% of the Market Price of such Stock on
the date of grant.
(b) Options granted under this Section 10 shall be exercisable
commencing on the date of grant or, with respect to any Option granted prior to
stockholder approval of this Plan, upon the date of such stockholder approval,
and thereafter until the earlier to occur of the following: the close of
business on (i) the date which is the tenth anniversary of the date of grant;
(ii) the date which is the 90th day following the date upon which such
Non-Employee Director ceases to be a director of the Company for any reason
other than death or permanent and total disability; or (iii) the date which is
the first anniversary of the date on which such Non-Employee Director ceases to
be a director of the Company as a result of death or permanent and total
disability.
(c) In all other respects, Options granted to Non-Employee Directors
hereunder shall contain in substance the same terms and conditions as set forth
in Section 9 hereof with respect to non-qualified options. Non-Employee
Directors shall also be eligible to receive Options under Section 9 of the Plan.
11. AMENDMENT OF THE PLAN
The Plan may at any time or from time to time be terminated, modified
or amended by the affirmative vote of not less than a majority of the shares
present and voting thereon by the Company's shareholders at a meeting of the
shareholders at which a quorum is present. The Board of Directors may at any
time and from time to time modify or amend the Plan in any respect, except that
without shareholder approval the Board of Directors may not (1) increase the
maximum number of Shares for which Options may be granted under the Plan (other
than increases due to changes in capitalization as referred to in Section 8(h)
hereof), or (2) change the class of persons eligible for qualified incentive
7
<PAGE> 8
options. The termination or any modification or amendment of the Plan shall not,
without the written consent of an Optionee, affect his or her rights under an
Option or right previously granted to him or her. With the written consent of
the Optionee affected, the Board of Directors or the Committee may amend
outstanding option agreements in a manner not inconsistent with the Plan.
Without employee consent, the Board of Directors may at any time and from time
to time modify or amend outstanding option agreements in such respects as it
shall deem necessary in order that incentive options granted hereunder shall
comply with the appropriate provisions of the Code and regulations thereunder
which are in effect from time to time respecting "Qualified Incentive Options."
The Company's Board of Directors may also suspend the granting of Options
pursuant to the Plan at any time and may terminate the Plan at any time;
provided, however, no such suspension or termination shall modify or amend any
Option granted before such suspension or termination unless (1) the affected
participant consents in writing to such modification or amendment or (2) there
is a dissolution or liquidation of the Company.
12. BINDING EFFECT
All decisions of the Board of Directors or the Committee involving the
implementation, administration or operation of the Plan or any offering under
the Plan shall be binding on the Company and on all persons eligible or who
become eligible to participate in the Plan.
13. APPLICATION OF FUNDS
The proceeds received by the Company from the sale of Common Stock
pursuant to Options exercised hereunder will be used for general corporate
purposes.
8
<PAGE> 1
EXHIBIT 5.1
October 21, 1997
Board of Directors
Crown Group, Inc.
4040 North MacArthur Boulevard
Suite 100
Irving, Texas 75038
RE: Crown Group, Inc.
Registration Statement on Form S-8
1,000,000 Shares of $0.01 par value Common Stock
1997 Stock Option Plan
------------------------------------------------
Gentlemen:
We have acted as counsel for Crown Group, Inc. (the "Company") in
connection with the registration of 1,000,000 shares of its $0.01 par value
Common Stock (the "Shares") reserved to the Company's 1997 Stock Option Plan
(the "Plan"), pursuant to a Registration Statement on Form S-8 (the
"Registration Statement") to be filed with the Securities and Exchange
Commission pursuant to the Securities Act of 1933, as amended, covering the
Shares.
In connection therewith, we have examined the following:
(1) The Articles of Incorporation of the Company, as amended,
certified by the Department of State of the State of Texas;
(2) The Bylaws of the Company, as amended, certified as complete
and correct by the Secretary of the Company;
(3) The minute book of the Company, certified as correct and
complete by the Secretary of the Company;
(4) Certificate of Good Standing with respect to the Company,
issued by the Department of State of the State of Texas; and
(5) The Registration Statement, including all exhibits thereto.
<PAGE> 2
Board of Directors
October 21, 1997
Page Two
Based upon such examination and upon examination of such other
instruments and records as we have deemed necessary, we are of the opinion that:
(A) The Company has been duly incorporated under the laws of the
State of Texas and is validly existing and in good standing
under the laws of that state.
(B) The Shares covered by the Registration Statement have been
legally authorized and when issued in accordance with the
terms described in said Registration Statement, will be
validly issued, fully paid and nonassessable.
We consent to the filing of this opinion as an exhibit to the
aforementioned Registration Statement on Form S-8 and to the reference to this
firm under the caption "Legal Matters" in the Prospectus. In giving this
consent, we do not thereby admit that we come within the category of persons
whose consent is required under Section 7 of the Securities Act of 1933, or the
rules and regulations of the Securities and Exchange Commission thereunder.
Sincerely,
SMITH, GAMBRELL & RUSSELL
/s/ Terry Ferraro Schwartz
--------------------------
Terry Ferraro Schwartz
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the Registration Statement of
Crown Group, Inc. (formerly Crown Casino Corporation, "the Company") on Form S-8
of our report, dated July 11, 1997, on our audits of the consolidated financial
statements of the Company as of April 30, 1997 and 1996, and for the three years
in the period ended April 30, 1997, which report is included in the Company's
Annual Report on Form 10-K. We also consent to the reference to our firm under
the caption "Experts."
Dallas, Texas COOPERS & LYBRAND L.L.P.
October 20, 1997
