SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES AND EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) FEBRUARY 3, 1999
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CROWN GROUP, INC.
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(Exact name of registrant as specified in its charter)
TEXAS 0-14939 63-0851141
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(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
4040 NORTH MACARTHUR BOULEVARD, SUITE 100, IRVING, TEXAS 75038
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(Address of principal executive offices)
Registrant's telephone number, including area code (972) 717-3423
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(Former name or former address, if changed since last report)
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ITEM 5. OTHER INFORMATION.
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The purpose of the filing of this report is to update the description of
the securities of Crown Group, Inc. (the "Company"), which shall be incorporated
by reference into various registration statements on Form S-8 filed by the
Company. The following information constitutes the "Description of Securities"
of Crown Group, Inc. as required by Regulation S-K Item 202:
COMMON STOCK
The Company is authorized to issue up to 50,000,000 shares of Common Stock.
As of February 1, 1999, 9,891,372 shares of Common Stock were issued and
outstanding. Holders of shares of Common Stock are entitled to elect all of the
members of the Board of Directors of the Company, and such holders are entitled
to vote as a class on all matters required or permitted to be submitted to the
stockholders of the Company. Subject to such preferential rights as the Board of
Directors may grant in connection with future issuances of Preferred Stock,
holders of shares of Common Stock are entitled to receive such dividends as the
Board of Directors may declare in its discretion out of funds legally available
therefor. Holders of shares of Common Stock are entitled to share ratably in any
distribution made to holders of Common Stock in the event of a liquidation,
dissolution or winding up of the Company after payment of liabilities and any
liquidation preference on any shares of Preferred Stock then outstanding.
Holders of shares of Common Stock have no cumulative voting or preemptive
rights, nor do they have any conversion, preemptive or other rights to subscribe
for additional shares or other securities. There are no redemption or sinking
fund provisions with respect to such shares. All outstanding shares of Common
Stock are fully paid and nonassessable.
PREFERRED STOCK
The Board of Directors of the Company is authorized, without further action
of the stockholders of the Company, to issue up to 1,000,000 shares of Preferred
Stock in one or more series and to fix the number of shares constituting any
such series and the rights and preferences thereof, including dividend rates,
terms of redemption (including sinking fund provisions), redemption price or
prices, voting rights, conversion rights and liquidation preferences of the
shares constituting such series. The issuance of Preferred Stock by the Board of
Directors could adversely affect the rights of holders of Common Stock. For
example, an issuance of Preferred Stock could result in a class of securities
outstanding with preferences over the Common Stock with respect to dividends and
liquidations, and that could (upon conversion or otherwise) enjoy all of the
rights appurtenant to Common Stock.
The Company has no present plans to issue any shares of the Preferred
Stock.
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REGISTRATION RIGHTS RELATED TO CERTAIN WARRANTS
The Company has outstanding warrants to purchase an aggregate of 364,952
shares of Common Stock which were issued in consideration of services rendered
by certain persons. The Company is required to give notice to each of the
warrant holders of any proposed registration by the Company of shares of Common
Stock pursuant to a registration statement to be filed under the Securities Act
and to permit them, subject to certain restrictions, to register and sell shares
of Common Stock pursuant to such registration statement.
CERTAIN PROVISIONS OF ARTICLES OF INCORPORATION AND BYLAWS
Divestiture. The Articles of Incorporation of the Company empower the Board
of Directors to require the divestiture of shares by any person who beneficially
owns, directly or indirectly, shares of any class of capital stock of the
Company and who is found by a gaming regulatory authority to be unsuitable to
hold the Company's stock.
In addition, the Articles of Incorporation provide that the Company must be
in compliance with the federal Merchant Marine Act of 1936, as amended, and the
federal Shipping Act of 1916, as amended (the "Acts"). The Board of Directors is
empowered to require the divestiture of shares by any stockholder who, by such
person's beneficial ownership of any class of capital stock of the Company,
causes the Company to be in violation of either of these Acts. The Company may
require the divestiture of a sufficient number of shares to bring the Company
into compliance with the Acts.
The procedure for divestiture requires the affected stockholder, within 45
days of notice from the Company, to sell, transfer or otherwise dispose of his
or her shares of Company stock. Following the 45 day period, if the affected
stockholder has failed to comply with the divestiture provisions of the
Articles, then the Company shall, for a period of 60 days, have the right, but
not the obligation, to purchase all or any part of such shares of stock from the
affected stockholder at a price per share equal to the fair market value of such
stock, less 25%.
If a stockholder fails to comply with the divestiture provisions contained
in the Articles of Incorporation, such stockholder, upon the expiration of the
time periods within which to divest such holder's shares in the Company,
including the Company's 60-day period within which it may exercise its right to
purchase such shares, shall forfeit the right to vote or receive dividends on
the shares of Company stock held by such stockholder and shall not be recognized
as a stockholder of the Company for any purpose.
Indemnification. The Bylaws provide that directors and officers of the
Company will be indemnified by the Company to the fullest extent authorized by
Texas law, as it now exists or may in the future be amended, against all
expenses and liabilities reasonably incurred in connection with service for or
on behalf of the Company.
Limitation of Liability. In addition, the Articles of Incorporation
provide that a director shall not be personally liable to the Company or its
stockholders for monetary damages for an act or omission in the director's
capacity as a director, except that such provision shall not eliminate or
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limit the liability of a director for (a) a breach of the director's duty of
loyalty to the Company or its stockholders; (b) an act or omission not in good
faith that constitutes a breach of duty of the director to the Company or an act
or omission that involves intentional misconduct or a knowing violation of the
law; (c) a transaction from which the director received an improper benefit,
whether or not the benefit resulted from an action taken within the scope of the
director's office; or (d) an act or omission for which the liability of a
director is expressly provided by an applicable statute. In appropriate
circumstances, equitable remedies or non-monetary relief, such as an injunction,
will remain available to a stockholder seeking redress from a violation of
fiduciary duty. In addition, the provision applies only to claims against a
director arising out of his or her role as a director and not in any other
capacity (such as an officer or employee of the Company).
Anti-Takeover Provisions of Articles of Incorporation. The Company's
Articles of Incorporation authorize the Board of Directors to issue up to
1,000,000 shares of Preferred Stock from time to time in one or more designated
series or classes. The Board of Directors, without approval of the stockholders,
is authorized to establish the voting, dividend, redemption, conversion,
liquidation and other provisions of a particular series or class of Preferred
Stock. The issuance of Preferred Stock could, among other things, adversely
affect the voting power or other rights of the holders of Common Stock and,
under certain circumstances, make it more difficult for a third party to
acquire, or discourage a third party from acquiring, control of the Company. The
Board of Directors has no present intention to issue any series or class of
Preferred Stock.
TRANSFER AGENT AND REGISTRAR
Securities Transfer Corporation, Dallas, Texas, acts as the Transfer Agent
and Registrar for the Common Stock.
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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 hereunto duly authorized.
CROWN GROUP, INC.
By: /s/ Mark D. Slusser
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Mark D. Slusser
Vice President Finance
Dated: February 3, 1999
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