As filed with the Securities and Exchange Commission on June 12, 1997
Registration No. 333-13801
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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POST-EFFECTIVE AMENDMENT NO. 1
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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CENTURY CASINOS, INC.
(Exact name of registrant as specified in its charter)
Delaware 84-1271317
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
26 South Tejon Street, Suite 203
Colorado Springs, Colorado 80903
(719) 473-7770
(Address, including zip code, and telephone
number, including area code, of registrant's
principal executive offices)
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EMPLOYEES' EQUITY INCENTIVE PLAN, AS AMENDED AND RESTATED
(Full title of the plan)
Copies of communications to:
James D. Forbes, President Reid A. Godbolt, Esq.
26 South Tejon Street, Jones & Keller, P.C.
Suite 203 1625 Broadway, Suite 1600
Colorado Springs, Colorado 80903 Denver, Colorado 80202
(719) 473-7770 (303) 573-1600
(Name, address, including zip code, and telephone
number, including area code, of agent for service)
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<TABLE>
<S> <C> <C> <C> <C>
CALCULATION OF REGISTRATION FEE
Title of each class of Amount to Proposed Proposed Amount of
securities to be be registered maximum maximum registration
registered offering price aggregate fee
per share(1) offering price
Common Stock, par value 1,000,000 $1.00 $1,000,000 $333
$0.01 per share
Common Stock, par value 2,269,000 $1.50 $3,403,500 $1,031
$0.01 per share
Common Stock, par 30,000 $1.63 $48,900 $15
value $0.01 per share
Common Stock, par value 4,500 $2.25 $10,125 $3
$0.01 per share
Common Stock, par value 196,500 $1.44 $282,960 $86
$0.01 per share
TOTAL 3,500,000 $4,745,485 $1,468 (2)
========= ========== ======
<FN>
(1) Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457 under the Securities Act of 1933, as amended,
based on the prices at which the options may be exercised.
(2) Of this amount, $1,135 was previously paid. An additional fee of $333 is
being paid with this filing.
</FN>
</TABLE>
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This Post-Effective Amendment No. 1 to the Registration Statement on Form
S-8 is being filed for the purposes of registering an additional one million
shares of common stock which may be issued pursuant to the Registrant's
Employees' Equity Incentive Plan, as Amended and Restated (the "Plan"). The Plan
was amended on November 25, 1996 by increasing the number of shares of common
stock issuable pursuant to the Plan from 2,500,000 shares to 3,500,000 shares.
The contents of the initial filing of the Registration Statement on Form
S-8, file number 333-13801, as filed with the Securities and Exchange Commission
on October 9, 1996, are hereby incorporated by reference, except as revised
herein.
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PROSPECTUS DATED JUNE 12, 1997
CENTURY CASINOS, INC.
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Common Stock, $.01 par value
2,266,833 shares
-------------
This Prospectus relates to the offering of 2,266,833 shares (the "Shares")
of Common Stock, $.01 par value ("Common Stock") of Century Casinos, Inc. (the
"Company") by persons eligible to sell Shares (the "Eligible Stockholders"). See
"Persons Eligible to Sell Shares." The Common Stock to which this Prospectus
relates was or may be issued to the Eligible Stockholders pursuant to the
Century Casinos, Inc. Employees' Equity Incentive Plan, as Amended and Restated
(the "Plan"). Options to purchase 2,407,200 shares have been granted under the
Plan, while options on the remaining 1,092,800 shares set aside under the Plan
have not yet been granted. The Eligible Stockholders may offer to sell the
Common Stock covered by this Prospectus from time to time at prices and upon
terms then obtainable in (i) ordinary brokers' transactions, (ii) block
transactions in accordance with the rules of the Nasdaq SmallCap Market, (iii)
purchases by a broker or dealer as principal and resale by such broker or dealer
for its account pursuant to this Prospectus, or (iv) a combination of any such
methods of sale in each case at market prices. See "Plan of Distribution." The
Eligible Stockholders and any broker-dealers who participate in sales of Common
Stock covered by this Prospectus may be deemed to be statutory underwriters
within the meaning of the Securities Act of 1933, as amended (the "Securities
Act"). Commissions paid or discounts or concessions allowed to any such
broker-dealers by any person, any profits received from reselling the Common
Stock covered by this Prospectus if any such broker-dealers purchase any such
Common Stock as a principal, may be deemed to be underwriting discounts and
commissions under the Securities Act. The Eligible Stockholders or purchasers of
Common Stock will pay all discounts, commissions, and fees incurred in selling
Common Stock covered by this Prospectus, except that the Company will bear all
expenses incident to the registration and qualification of the Shares under the
Securities Act, and state securities laws, on behalf of the Eligible
Stockholders. The Company will receive no proceeds from sales by the Eligible
Stockholders. See "Use of Proceeds."
The Common Stock is traded on the Nasdaq SmallCap Market under the symbol
CNTY. On June 10, 1997, the last reported sale price of the Common Stock on the
Nasdaq SmallCap Market was $.97 per share.
---------------------
THE SECURITIES OFFERED HEREBY ENTAIL CERTAIN RISKS WHICH SHOULD BE CONSIDERED BY
INVESTORS. SEE "RISK FACTORS."
---------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
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TABLE OF CONTENTS
Page
AVAILABLE INFORMATION.........................................................3
INCORPORATION OF CERTAIN DOCUMENTS
BY REFERENCE..................................................................3
THE COMPANY...................................................................4
RISK FACTORS..................................................................5
USE OF PROCEEDS..............................................................10
PERSONS ELIGIBLE TO SELL SHARES..............................................11
PLAN OF DISTRIBUTION.........................................................12
DESCRIPTION OF SECURITIES....................................................12
LEGAL MATTERS................................................................13
EXPERTS ....................................................................13
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AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files periodic reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission" or "SEC"). Such reports
and other information concerning the Company may be inspected and copies may be
obtained at the Commission's Public Reference Section, 450 Fifth Street, N.W.,
Washington, D.C., as well as the following regional offices: 75 Park Place, 14th
Floor, New York, New York and 500 West Madison Street, Suite 1400, Chicago,
Illinois. The Company has filed with the Commission a Registration Statement
under the Securities Act of 1933, as amended (the "Act"), with respect to the
securities offered pursuant to this Prospectus. For further information,
reference is made to the Registration Statement and the exhibits thereto, which
are available for inspection at no fee at the public reference facilities
maintained by the Commission at 450 Fifth Street, N.W., Washington, D.C. Copies
of the foregoing material can also be obtained at prescribed rates from the
Public Reference Section of the Commission. The Company's Common Stock is also
listed on the Nasdaq SmallCap Market, and in accordance therewith, the Company
files periodic reports, proxy statements and other information with the Nasdaq
SmallCap Market. Also, the Commission maintains a worldwide website that
contains such materials of the Company at "http://www.sec.gov."
The Company furnishes to its stockholders annual reports containing
financial statements audited by its independent accountants.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following document previously filed by the Company with the Commission
pursuant to the Exchange Act is incorporated in this Prospectus by reference:
1. Annual Report on Form 10-KSB for the Year Ended December 31, 1996; and
2. Quarterly Report on Form 10-QSB for the Quarter Ended March 31, 1997.
In addition, all documents filed by the Company pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act after the date of this Prospectus and
prior to the termination of this offering shall be deemed to be incorporated by
reference in this Prospectus and to be a part hereof from the date of filing of
such documents (such documents, and the documents enumerated above, being
hereafter referred to as "Incorporated Documents").
Any statement contained in an Incorporated Document shall be deemed to be
modified or superseded for purposes of this Prospectus to the extent that a
statement contained herein or in any other subsequently filed Incorporated
Document modifies or supersedes such statement. Any such statement so modified
or superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
The Company hereby undertakes to provide without charge to each person to
whom a copy of this Prospectus has been delivered, including any beneficial
owner, on the written or oral request of any such person, a copy of any or all
of the Incorporated Documents, other than exhibits to such documents, unless
such exhibits are specifically incorporated by reference therein. Requests shall
be directed to Century Casinos, Inc., 26 South Tejon Street, Suite 203, Colorado
Springs, Colorado 80903, Attention: Norbert Teufelberger, Secretary (telephone
number (719) 473-7770). The information relating to the Company contained in
this Prospectus does not purport to be comprehensive and should be read together
with the information contained in the Incorporated Documents.
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THE COMPANY
Century Casinos, Inc. (the "Company") was formed to acquire equity and
other participation interests in, and to obtain management contracts with
respect to, gaming establishments, with a primary focus on gaming markets in the
United States. The Company, formerly known as Alpine Gaming, Inc. ("Alpine") is
a result of a business combination completed on March 31, 1994, pursuant to
which Century Casinos Management, Inc. ("Century Management") shareholders
acquired approximately 76% of the then issued and outstanding voting stock of
the Company and all officer and board positions of the Company were assumed by
the management team of Century Management. Effective June 7, 1994 the Company
reincorporated in Delaware under the name "Century Casinos, Inc." Because the
Company is the result of the transaction discussed above, the Company's business
has been combined with that of Century Management, and references herein to the
Company refer to the combined entities, unless the context otherwise requires.
The Company operates the Legends Casino and Womack's Saloon & Gaming Parlor
("Womack's") in Cripple Creek, Colorado and operates a small casino on a cruise
ship. The Company has a casino management consulting agreement with a consortium
of Greek firms and Playboy Enterprises, Inc. for a casino to be established on
the island of Rhodes, Greece, and is pursuing other gaming opportunities in
South Africa. The Company also has other potential gaming projects in the United
States and internationally that are in various stages of development.
On July 1, 1996, the Company purchased substantially all of the assets, and
assumed substantially all of the liabilities, of Gold Creek Associates, L.P.
("Gold Creek"), the owner of Womack's. Prior to the acquisition, the Company and
its affiliates were not affiliated with Gold Creek or its affiliates. The total
purchase price was approximately $14.2 million, consisting of a base cash
payment of $5 million plus $425,000 for the amount of working capital as of the
closing date, a promissory note of $5.2 million issued to Gold Creek, the
assumption of existing debt of Gold Creek of approximately $3 million and direct
out-of-pocket costs of approximately $600,000. Additionally, the agreement
provides that on July 1, 1998, the Company will issue 1,060,000 shares of its
common stock, valued at approximately $1.8 million based on the July 1, 1996
trading price, to two principals of Gold Creek who entered into consulting
contracts with the Company at closing. In addition to the financing provided by
Gold Creek, additional funds required to complete the acquisition were raised
through private sales of common stock of the Company, with net proceeds of
$4,470,000 from 4,072,233 shares sold. In connection with sales of common stock
by a placement agent, the Company also issued warrants to such placement agent
to purchase 150,000 shares of the Company's common stock at $2.36 per share. The
warrants have a term of five years. In addition, the Company issued a $500,000
convertible debenture to a private investor. The debenture bears interest at
10.5%, payable quarterly. The holder has the option to convert the outstanding
principal into the Company's common stock at $1.84 per share, subject to a
minimum per conversion transaction of $50,000.
On March 31, 1997, the Company entered into a four-year, $13 million
revolving line of credit facility (the "RCF") with Wells Fargo Bank ("Wells
Fargo"). The initial borrowing drawdown under the RCF of $12.2 million on April
3, 1997, was used to retire approximately $9.2 million of secured debt of the
Company's principal operating subsidiaries in Cripple Creek, which operate as
Womack's. Included in the debt retirement was a $5.2 million promissory note
issued to Gold Creek as well as debt of $2.3 million assumed in the Gold Creek
acquisition. The Company also exercised a purchase option and acquired a portion
of Womack's, previously subject to a long-term operating lease, for $1.85
million. Bank fees and other costs paid at closing were approximately $200,000
and the remaining proceeds are available for general operating purposes. The RCF
is secured by substantially all of the real and personal property of Womack's.
Borrowings bear interest at Wells Fargo's prime rate plus 1%, payable quarterly,
and an annual commitment fee of .5%, payable quarterly, is charged on the unused
portion of the RCF. Quarterly principal repayments of $375,000 are required
beginning July 1, 1997, with a corresponding reduction in borrowing capacity,
and all outstanding principal is due April 2001. Under the RCF, the Company is
required to comply with certain financial covenants, and Womack's is subject to
certain capital expenditure requirements and restrictions on investments.
4
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The Company generally seeks to enter into gaming operations in areas with
attractive demographic attributes, high population density, local tourism and/or
predictable traffic patterns with a long-term objective of maintaining a policy
of geographic diversification of its projects. The Company's primary economic
analysis covers the potential market area surrounding a proposed gaming
location, although it takes into consideration the economic conditions in any
community in which it intends to establish a gaming facility, as many of the new
gaming jurisdictions have approved gaming as a means to revitalize economies of
local areas. Management believes that there are a significant number of gaming
opportunities in the United States, as well as overseas, and the Company will
have opportunities to acquire casino sites that have underperformed financially,
although favorable outcomes to the Company of these opportunities cannot be
assured.
RISK FACTORS
THE SHARES OFFERED HEREBY INVOLVE A HIGH DEGREE OF RISK, SHOULD BE
CONSIDERED SPECULATIVE AND SHOULD NOT BE PURCHASED BY ANYONE WHO CANNOT AFFORD A
COMPLETE LOSS OF THEIR INVESTMENT. PROSPECTIVE INVESTORS SHOULD CAREFULLY
CONSIDER THE FOLLOWING RISK FACTORS WITH RESPECT TO CENTURY. THE HEADINGS ARE
NOT INTENDED TO DESCRIBE FULLY THE RISKS, BUT ARE INTENDED TO ALERT READERS TO
THE GENERAL SUBJECT MATTERS OF THE RISKS DESCRIBED.
Historical Operating Losses
From June 1992 through December 31, 1994, the Company incurred net losses
of approximately $3,784,000. The Company also incurred an operating loss for the
year ended December 31, 1995 of approximately $2,606,000 although net income for
the same period was approximately $612,000 primarily due to a $3,928,000
one-time gain recognized by the Company in consideration for the termination of
its riverboat management agreement for a project in Louisiana. The Company
generated operating income of $295,000 for the year ended December 31, 1996
although the Company incurred a net loss of $1,295,000 for the year mainly due
to interest expense, cost associated with a terminated debt offering, loss on a
note receivable and loss on disposal of equipment. The Company incurred a net
loss for the quarter ended March 31, 1997 of approximately $224,000. Also, in
connection with further expansion, the likelihood of the success of the Company
must be considered in light of the problems, expenses, difficulties,
complications and delays frequently encountered in connection with entry into
untested gaming markets, purchasing and operating gaming establishments that did
not succeed under prior operators and the competitive environment in which the
Company operates or may operate.
Competition
There is intense competition among companies in the gaming industry
generally, and many gaming operators have greater name recognition and financial
and marketing resources than the Company. The Company competes with many
established gaming operators in Cripple Creek, Colorado, and in other Colorado
gaming venues. A number of these operators have greater financial, operational
and personnel resources than the Company. Additional competition is expected to
occur from the expansion or construction of other casino and hotel properties or
the upgrading of other existing facilities in the Cripple Creek area. A new
casino and hotel project at the entrance to Cripple Creek's main gaming
thoroughfare opened in 1996, and it is the largest gaming operation in Cripple
Creek. There can be no assurance that the number of casino and hotel operations
will not exceed market demand or that additional hotel rooms or casino capacity
will not adversely affect the operations of the Company.
The Company faces competition from other gaming operators in obtaining
available gaming licenses. The Company also competes, to some extent, with other
forms of gaming on both a local and national level, including state-sponsored
lotteries and on and off-track wagering, among others.
5
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The ability of the Company to maintain its competitive position will
require the expenditure of sufficient funds for such items as updating slot
machines and video devices to reflect changing technology, periodic refurbishing
of gaming areas and public service areas and replacing obsolete equipment on an
ongoing basis. There can be no assurance that the Company will generate
sufficient internal funds or obtain sufficient external financing on acceptable
terms to fund such expenditures.
Dependence on Cripple Creek Market
The Company's gaming revenues generated from operations in Cripple Creek,
Colorado, comprise most of its total gaming revenues. If there is a downturn in
gaming operations in Cripple Creek, the Company will be more adversely affected
than if it had significant gaming operations in other gaming markets. Although
the Company is seeking to diversify geographically, there can be no assurance
that acceptable opportunities will be identified.
Seasonality of the Cripple Creek Market
Because Cripple Creek, Colorado is a mountain tourist town, its gaming
market is subject to seasonal fluctuations. Typically, gaming revenues are
greater in the summer tourist season and are lower from October through April.
Seasonal fluctuations may be larger depending on inclement weather during the
winter months.
Potential Sales of Shares of Common Stock and the Effect Thereof
In March 1995, the Company completed a private placement of 1,460,000 Units
at $1.50 per Unit, each Unit consisting of one share of common stock and one
warrant to purchase one share of common stock exercisable until December 31,
1999 at an exercise price of $2.50 per share. In addition, in January 1996 the
Company completed a private placement of 1,000,000 shares of common stock at
$1.50 per share. Both of these private placements were conducted under
Regulation S adopted by the Securities and Exchange Commission (the "SEC").
Under Regulation S, the Company offered and sold the securities only outside of
the United States to persons who were neither residents nor citizens of the
United States. The shares in the 1995 private placement have been eligible for
resale in the United States since May 1995. The shares in the January 1996
private placement became eligible for resale in the United States in March 1996.
In addition, in June 1996 the Company completed a private placement under
Regulation S of 2,851,400 shares of its common stock at approximately $1.17 per
share, net of sales commissions. These shares became eligible for resale in the
United States in late July 1996. The subsequent sale of shares of common stock
by investors in these offerings (such shares generally may be freely resold
after a 40-day holding period) into the public market could adversely affect the
price of the common stock.
In addition, the Company has a currently effective registration statement
relating to the potential public offer and resale by current stockholders of up
to 1,952,000 shares of common stock and 1,328,000 warrants to purchase a like
number of shares of common stock at an exercise price of $2.25 per share.
Management estimates that approximately one-third of these securities have been
resold under the registration statement. The public offer and resale of the
remaining securities, as well as the potential for such resale, could adversely
affect the price of the common stock.
Adverse Impact on Net Results Due to Goodwill Amortization and Amortization of
Deferred Debt Issuance Costs
In March 1994, Century Casinos Management, Inc., a Delaware corporation
("Century Management") acquired the Company, formerly known as Alpine Gaming,
Inc. ("Alpine") in a "reverse triangular" merger, pursuant to which the former
stockholders of Century Management received approximately 76% of the outstanding
voting stock of Alpine. Shortly thereafter Alpine reincorporated in Delaware
under the name "Century Casinos, Inc." The acquisition was accounted for by the
purchase method of accounting. The excess of the purchase price over the
estimated fair value of Alpine's assets before the acquisition, approximately,
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$7,700,000 was allocated to goodwill. This goodwill is being amortized over a
ten-year period, which results in an annual non-cash charge to operations of
approximately $770,000 and such charges will not be deductible for income tax
purposes. The acquisition of Womack's resulted in approximately $8,800,000 of
goodwill to be amortized over a fifteen-year period, resulting in an annual
non-cash charge to operations of approximately $587,000. Additionally, in
connection with a bank refinancing completed in March 1997 the Company incurred
debt offering costs of approximately $300,000 which will be amortized to
operations over a four-year period. The amortization of all of these amounts,
although having no effect on future cash flows, will adversely impact the
Company's earnings on a consolidated basis.
Speculative Nature of Potential Gaming Projects
In addition to its operating projects, the Company has a number of
potential gaming projects in various stages of development. In addition to the
capital needs of these potential projects (which may require outside financing),
there are various other risks which could materially adversely affect a proposed
project or eliminate its feasibility altogether. For example, in order to
conduct gaming operations in most jurisdictions, the Company must first obtain
gaming licenses or receive regulatory clearances. To date the Company has
obtained gaming licenses or approval to operate gaming facilities in Colorado,
Louisiana and from the National Indian Gaming Commission. While management
believes that the Company is licensable in any jurisdiction, each licensing
process is unique and requires a significant amount of funds and management
time. The licensing process in any particular jurisdiction can take significant
time as well as significant expense in terms of licensing fees, paying for
background investigation costs, fees of counsel and other associated preparation
costs. Moreover, should the Company proceed with a licensing approval process
with industry partners, such industry partners will be subject to regulatory
review as well. The Company seeks to satisfy itself that industry partners are
licensable, but cannot assure that such partners will, in fact, be licensable.
Additional risks before commencing operations include the time and expense
incurred in unforeseen difficulties in obtaining suitable sites, adequate
liability insurance, liquor licenses, building permits, materials, competent and
able contractors, supplies, employees, gaming devices and related matters. In
addition, certain licenses include competitive situations where, even if the
Company is licensable, other factors such as the economic impact of gaming and
financial and operational capabilities of competitors must be analyzed by
regulatory authorities. These factors make it difficult to predict whether the
Company will be granted gaming licenses in jurisdictions in which it may seek to
operate. All of these risks should be viewed in light of the Company's limited
staff and limited capital.
Risks Associated With Expansion
The Company may seek to expand its operations into additional jurisdictions
where casino gaming is permitted or casino gaming is anticipated to be
legalized. The Company's ability to expand to additional locations will depend
upon a number of factors, including, but not limited to: (i) the identification
and availability of suitable locations, and the negotiation of acceptable
purchase, lease, joint venture or other terms; (ii) the securing of required
state and local licenses, permits and approvals, which in some jurisdictions may
be limited in number; (iii) political factors; (iv) the risks typically
associated with any new construction; (v) the availability of adequate financing
on acceptable terms; and (vi) for locations outside the United States, all the
risks of foreign operations, including currency controls, unforeseen local
regulations, political instability and other related risks. Certain
jurisdictions issue licenses or approval for gaming operations by inviting
proposals from all interested parties, which may increase competition for such
licenses or approvals. In addition, certain jurisdictions require new gaming
operations to be in the form of joint ventures with local participants and that
the proposed operator provide evidence of ability to finance construction and
start-up costs. The development of dockside and riverboat casinos may require
approval from the U.S. Army Corps of Engineers and will be subject to
significant Coast Guard regulations governing design and operation. Most of
these factors are beyond the control of the Company. As a result, there can be
no assurance that the Company will be able to expand to additional locations or,
if such expansion occurs, that it will be successful. Further, the Company
anticipates that it will continue to expense certain costs, which were
substantial in 1995 and 1996 and may continue to be substantial in the future,
7
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in connection with the pursuit of expansion opportunities, and may be required
to write off any capitalized costs incurred in connection with these ventures.
To the extent the Company's proposed or future expansion projects are
successfully completed, the Company must manage its growth. In addition, the
Company's ongoing operating strategies and entry into new markets will require
the consideration of new marketing strategies to compete successfully. As a
result, the Company has been and will be required to add and train personnel,
continuously evaluate its management structure, expand its management
information systems and control its operating expenses. If the Company is unable
to manage growth effectively, its operating results could be adversely affected.
Dependence on Key Persons; Control
The future success of the Company is highly dependent upon the efforts of
certain of its executive officers and directors. Loss of any such persons would
likely have an adverse impact on the Company. The Company does not have
employment contracts with any of these persons nor does the Company have any
life insurance on any of the lives of any of its executive officers or
directors. The officers and directors of the Company, who currently control,
either directly or indirectly through proxies, approximately 22.3% of the
Company's common stock (which percentage assumes that all outstanding options of
the Company exercisable within 60 days are exercised in full), will likely
continue to have control over the election of the Board of Directors of the
Company. This control will make it difficult, without the consent of such
persons, for a third party to acquire control of the Company or to replace any
member of the Board of Directors of the Company. As a practical matter, the
directors of the Company have veto power over significant corporate transactions
of the Company.
Trading Market
Presently, the Company's common stock trades in the NASDAQ SmallCap Market
under the trading symbol "CNTY." This market is an automated quotation market,
and is characterized by small issuers and a lack of significant or orderly
trading volumes. These factors could lead to volatility and thin trading of the
Company's common stock. The Company's long-term goal is to list its common stock
on the NASDAQ National Market, although this result cannot be assured because
the Company presently does not meet several of the required criteria. The
Company's common stock also began trading on the Berlin Stock Exchange in early
1996.
No Dividends
Management intends to use earnings of the Company to finance the growth of
its business. Accordingly, while payment of dividends by the Company rests
within the discretion of the Board of Directors, no dividends have been declared
or paid by the Company, and it does not presently intend to pay dividends. There
can be no assurance that dividends will ever be paid.
Risk of Closure Due to Mechanical Failure and Severe Weather
The operations of the Company are subject to risks, including closures due
to casualty, mechanical failure, extended or extraordinary maintenance or severe
weather conditions. Mechanical failures which could result in the temporary loss
of service of all or portions of a gaming facility include loss of electrical
power for lighting, heating through the loss of generators, transformers, HVAC
equipment or the like. In addition, severe weather could result in road closures
and reduce the number of persons traveling to Cripple Creek, Colorado, which
would have a material adverse effect on the operating results of the Company. It
is unlikely that the Company will be able to obtain business interruption
coverage for casualties resulting from severe weather and there can be no
assurance that the Company will be able to obtain casualty insurance coverage at
affordable rates for casualties resulting from severe weather.
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Anti-Takeover Measures
Effective June 7, 1994, the Company changed its corporate structure
significantly. These changes included (i) reincorporation in Delaware under the
name "Century Casinos, Inc.," (ii) increasing the authorized capitalization from
10,000,000 shares of common stock to 50,000,000 shares of common stock and
20,000,000 shares of preferred stock, (iii) inclusion of a fair price business
combination provision in its Certificate of Incorporation requiring approval by
holders of 80% of the outstanding shares of voting stock of certain business
combinations and other transactions, (iv) allowing stockholders to require the
Company to redeem their shares in the event 50% of the Company's voting stock is
purchased by an interested stockholder, and (v) allowing the Company to redeem
the shares of any stockholder if, in the judgment of the Board of Directors, any
license or proposed license would be jeopardized by such person's stock
ownership of the Company. These proposals, when viewed in the aggregate, will
likely have a significant anti-takeover effect with respect to persons
attempting to purchase the Company or combine the Company in a transaction with
another entity without the approval of the Board of Directors, and could thereby
adversely affect the prices of the Company's securities.
Governmental Regulation
The ownership and operation of casino gaming facilities are subject to
extensive state and local regulations. Such regulations generally afford
significant discretion to regulatory authorities in making licensing and
suitability determinations. The Company is subject to extensive governmental
regulation in the states of Colorado, Missouri and Nevada. In the event the
Company expands its operations into other jurisdictions it will be subject to
additional regulation, which will create further administrative burdens on the
Company.
Risk of Increases in Gaming Taxes
Management believes that the prospect of significant tax revenue is one of
the primary reasons that many jurisdictions in the United States have legalized
gaming. As a result, gaming operators are typically subject to significant taxes
and fees in addition to corporate income taxes, where applicable, and such taxes
and fees are subject to increase at any time. Any material increase in these
taxes or fees could adversely affect the Company. The Company pays and expects
that it will pay substantial taxes and fees in Colorado and expects to pay
substantial taxes and fees in any other jurisdiction in which the Company
conducts gaming operations.
Application of Environmental Regulations
The Company is subject to a variety of federal, state and local
environmental laws and regulations. While management believes that the Company
is presently in material compliance with all environmental laws and regulations,
failure to comply with such laws could result in the imposition of severe
penalties or restrictions on operations by government agencies or courts that
could adversely affect operations. In addition, although management is not aware
of any environmental contamination at its properties, it has not conducted
environmental audits of all such properties. The Company does not have insurance
to cover environmental liabilities, if any.
Insurance Considerations
The Company maintains a general liability and fire insurance at levels
deemed reasonable by management; however, the Company cannot be certain that
such insurance can be obtained on reasonable terms or in sufficient amounts in
the future to cover significant liabilities which could be incurred through
operations, accidents and losses outside the ordinary course of business.
9
<PAGE>
USE OF PROCEEDS
Since this Prospectus relates to the offering of shares by the Eligible
Stockholders, the Company will not receive any of the proceeds from the sale of
the securities offered hereby.
10
<PAGE>
PERSONS ELIGIBLE TO SELL SHARES
Certain stockholders whose shares of Common Stock are covered by this
Prospectus ("Eligible Stockholders") are listed below. The Company has set aside
3,500,000 shares of Common Stock for issuance under the Plan. Options to
purchase 2,266,833 shares have been granted to the Eligible Stockholders.
The following table sets forth (a) the name and the nature of any position,
office or other material relationship with the Company within the past three
years of the Eligible Stockholders and (b) the number of shares owned or which
may be purchased by the Eligible Stockholders, the number of shares being
offered for sale by the Eligible Stockholders and the number of shares to be
owned by the Eligible Stockholders after the offering of the shares, assuming
the sale of all shares offered by the Eligible Stockholders.
<TABLE>
<S> <C> <C> <C> <C> <C>
Beneficial Beneficial
Ownership Number of Ownership After
Before Offering Securities Offering (a)
Name and Position (Number) (%) Offered (Number) (%)
- ----------------- -------- --- ------- -------- ---
Erwin Haitzmann, Chairman 1,627,338(b) 9.7% 950,000 677,338 4.0%
of the Board
Peter Hoetzinger, Vice 985,456(c) 6.0% 543,000 442,456 2.7%
Chairman of the Board
and Assistant Secretary
James D. Forbes, President, 829,828(d) 5.1% 458,000 371,828 2.3%
Assistant Treasurer and
Director
Norbert Teufelberger, 553,832(e) 3.4% 273,000 280,832 1.7%
Secretary and Director
Brad Dobski, Chief 62,833(f) (g) 42,833 20,000 (g)
Accounting Officer
- --------------------
<FN>
(a) Assumes the sale of all shares offered hereby by all Eligible Stockholders.
(b) Includes: (i) an incentive stock option for 130,000 shares exercisable at
$1.50 per share; (ii) a nonstatutory stock option for 820,000 shares
exercisable at $1.50 per share; and (iii) a warrant for 13,669 shares
exercisable at $2.25 per share.
(c) Includes: (i) an incentive stock option for 130,000 shares exercisable at
$1.50 per share; (ii) a nonstatutory stock option for 413,000 shares
exercisable at $1.50 per share; and (iii) a warrant for 8,728 shares
exercisable at $2.25 per share.
(d) Includes: (i) an incentive stock option for 130,000 shares exercisable at
$1.50 per share; (ii) a nonstatutory stock option for 328,000 shares
exercisable at $1.50 per share; and (iii) a warrant for 13,064 shares
exercisable at $2.25 per share.
(e) Includes: (i) an incentive stock option for 130,000 shares exercisable at
$1.50 per share; (ii) a nonstatutory stock option for 143,000 shares
exercisable at $1.50 per share; and (iii) a warrant for 5,416 shares
exercisable at $2.25 per share.
11
<PAGE>
(f) Includes incentive stock options for 4,500 shares exercisable at $2.25 per
share and 38,333 shares exercisable at $1.50 per share, and is less than 1%
of the Common Stock.
(g) Less than 1%.
</FN>
</TABLE>
PLAN OF DISTRIBUTION
The shares offered hereby on behalf of the Eligible Stockholders are to be
sold from time to time by means of (i) ordinary brokers' transactions, (ii)
block transactions in accordance with the rules of the Nasdaq SmallCap Market,
(iii) purchases by a broker or dealer as principal and resales by such broker or
dealer for its account pursuant to this Prospectus, or (iv) a combination of any
such methods of sale in each case at market prices. In connection therewith,
distributors' or sellers' commissions may be paid or allowed which will not
exceed those customary in the types of transactions involved. Commissions may
also be received from purchasers for whom brokers or dealers act as agents. Such
brokers or dealers and any other participating brokers or dealers may be deemed
to be "underwriters" within the meaning of the Act in connection with such
sales.
DESCRIPTION OF SECURITIES
Securities
The Company's Certificate of Incorporation authorizes the issuance of up to
50,000,000 shares of Common Stock. Each record holder of common shares is
entitled to one vote for each share held on all matters properly submitted to
the stockholders for their vote. Holders of outstanding common shares are
entitled to those dividends declared by the Board of Directors out of legally
available funds, and, in the event of liquidation, dissolution or winding up of
the affairs of the Company, holders are entitled to receive ratably the net
assets of the Company available to the stockholders. Holders of outstanding
common shares have no preemptive, conversion, or redemptive rights. All of the
issued and outstanding common shares are, and all unissued securities when
offered and sold shall be, duly authorized, validly issued, fully paid and
nonassessable. To the extent that additional common shares of the Company are
issued, the relative interest of then existing stockholders may be diluted.
Company's Option to Repurchase Securities
Article Fifteenth of the Certificate of Incorporation of the Company
provides that the Company may not issue any voting securities or other voting
interests except in accordance with the provisions of the Colorado Limited
Gaming Act and the regulations adopted thereunder or any other gaming law or the
regulations adopted thereunder.
If the Colorado Limited Gaming Control Commission or any other state gaming
authority at any time determines that a holder of voting securities of the
Company is unsuitable to hold such securities, then the Company may within 60
days after the finding of unsuitability purchase the voting securities at the
lesser of (i) the cash equivalent of such person's investment in the Company, or
(ii) the current market price as of the date of the finding of unsuitability,
unless such voting securities are transferred to a suitable person within 60
days after the finding of unsuitability. Unsuitability includes prior
convictions of various crimes, association with organized crime, drunk driving
convictions, failure to pay taxes and other indicia of lack of moral character
and financial integrity.
In addition, shares of Common Stock of the Company are subject to
redemption by the Company if in the judgment of the Board of Directors such
action would be necessary to obtain a license or franchise or to prevent the
loss or secure the reinstatement of any license or franchise of the Company from
any governmental agency, and the license or franchise is conditioned upon some
or all of the holders of the stock of the Company possessing prescribed
12
<PAGE>
qualifications. The terms and conditions of the redemption are as follows:
The redemption price of the securities to be redeemed will be equal to the
fair market value (as defined) of the shares. The redemption price may be paid
in cash, redemption securities (as defined) or any combination thereof. At least
30 days' written notice of the redemption date must be given to the
record holders of the shares selected to be redeemed.
The term "fair market value" means the average closing price for the 45
most recent days on which shares of stock traded preceding the date on which
notice of a redemption is given. A "redemption security" means any debt or
equity security of the Company having such terms and conditions as are approved
by the Board of Directors.
LEGAL MATTERS
The legality of the common stock offered hereby is being passed upon by
Jones & Keller, P.C., Denver, Colorado.
EXPERTS
The consolidated financial statements incorporated in this Prospectus by
reference from the Company's Annual Report on Form 10-KSB for the Year Ended
December 31, 1996 have been audited by Deloitte & Touche LLP, independent
auditors, as stated in their report, which is incorporated herein by reference,
and have been so incorporated in reliance upon the report of such firm given
upon their authority as experts in accounting and auditing.
13
<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 authorized this Post-Effective Amendment
No. 1 to the Registration Statement to be signed on its behalf by the
undersigned in the City of Colorado Springs, State of Colorado, on June 11,
1997.
CENTURY CASINOS, INC.
By /s/ James D. Forbes
.......................
James D. Forbes, President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints James D. Forbes and Norbert Teufelberger, his
true and lawful attorneys-in-fact and agents, with full power of substitution
and resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all post-effective amendments to this Registration
Statement on Form S-8, and to file the same, with all exhibits thereto, and
other documentation in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agent full power and
authority to do and perform each and every act and thing requisite and 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 agent, or his 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 was signed by the following persons in the capacities and
on the dates indicated.
Signature Title Date
/s/ Erwin Haitzmann Chairman of the Board June 11, 1997
......................
Erwin Haitzmann
/s/ Peter Hoetzinger Vice Chairman of the Board June 11, 1997
......................
Peter Hoetzinger
/s/ James D. Forbes President and Director June 11, 1997
......................
James D. Forbes
/s/ Norbert Teufelberger
...................... Director June 11, 1997
Norbert Teufelberger
/s/ Brad Dobski
...................... Vice President-Finance and
Brad Dobski Chief Accounting Officer June 11, 1997
<PAGE>
INDEX TO EXHIBITS
Exhibit Description
4.1 Certificate of Incorporation filed as Exhibit 3.1 to the Form 10-KSB
for the Fiscal Year Ended December 31, 1995 and incorporated herein by
reference.
4.2 Bylaws filed as Exhibit 3.2 to the Form 10-KSB for the Fiscal Year
Ended December 31, 1995 and incorporated herein by reference.
4.3 Century Casinos, Inc. Employees' Equity Incentive Plan, as Amended and
Restated. Filed herewith.
5.1 Opinion of Jones & Keller, P.C. Filed herewith.
23.1 Consent of Jones & Keller, P.C. (included in their opinion filed as
Exhibit 5.1).
23.2 Consent of Deloitte & Touche LLP. Filed herewith.
- --------------
<PAGE>
EXHIBIT 4.3
CENTURY CASINOS, INC. EMPLOYEES'
EQUITY INCENTIVE PLAN, AS RESTATED
AND AMENDED
<PAGE>
CENTURY CASINOS, INC.
EMPLOYEES' EQUITY INCENTIVE PLAN, AS AMENDED AND RESTATED
SECTION 1
INTRODUCTION
1.1 Establishment. Century Casinos, Inc., a Colorado corporation
(hereinafter referred to, together with its Affiliated Corporations (as defined
in section 2.1(a) as the "Company" except where the context otherwise requires),
hereby establishes the Century Casinos, Inc. Employees' Equity Incentive Plan
(the "Plan") for certain key employees of the Company.
1.2 Purposes. The purpose of the Plan is to provide the key management
employees selected for participation in the Plan with added incentives to
continue in the long-term service of the Company and to create in such employees
a more direct interest in the future success of the Company by relating
incentive compensation to increases in shareholder value, so that the income of
the key management employees is more closely aligned with the income of the
Company's stockholders. The Plan is also designed to attract key employees and
to retain and motivate participating employees by providing an opportunity for
investment in the Company.
SECTION 2
DEFINITIONS
2.1 Definitions. The following terms shall have the meanings set forth
below:
(a) "Affiliated Corporation" means any corporation or other entity
(including, but not limited to, a partnership) which is affiliated with Century
Casinos, Inc. through stock ownership or otherwise and is treated as a common
employer under the provisions of Code Sections 414(b) and (c).
(b) "Award" means a grant made under this Plan in the form of Stock,
Options, Restricted Stock, Stock Appreciation Rights, Performance Shares or
Performance Units.
(c) "Board" means the Board of Directors of the Company.
(d) "Code" means the Internal Revenue Code of 1986, as it may be amended
from time to time.
(e) "Effective Date" means the effective date of the Plan, which is April
29, 1994.
(f) "Eligible Employees" means full-time key employees (including, without
limitation, officers and directors who also are employees and consultants of the
Company) of the Company or any Affiliated Corporation or any division thereof,
whose judgment, initiative and efforts are, or will be, important to the
successful conduct of its business.
(g) "Fair Market Value" means the officially quoted closing price of the
Stock on the NASDAQ National Market System on a particular date. If there are no
Stock transactions on such date, the Fair Market Value shall be determined as of
the immediately preceding date on which there were Stock transactions. If no
such prices are reported on the NASDAQ National Market System, then Fair Market
Value shall mean the average of the high and low sale prices of the Stock (or if
no sales prices are reported, the average so reported, as reported by NASDAQ or
a quotation system of general circulation to brokers and dealers). If the Stock
is not publicly traded, the Fair Market Value of the Stock on any date shall be
determined in good faith by the Incentive Plan Committee after such consultation
with outside legal, accounting and other experts as the Incentive Plan Committee
may deem advisable, and the Incentive Plan Committee shall maintain a written
record of its method of determining such value.
4.3-1
<PAGE>
(h) "Incentive Plan Committee" means a committee consisting of at least two
disinterested members of the Board who are empowered hereunder to take actions
in the administration of the Plan. If there are no disinterested members of the
Board, the entire Board shall pass upon questions relating to any option or
optionee, with the optionee or proposed optionee abstaining from voting on
matters relating to an option in which he has an interest. The Incentive Plan
Committee shall be so constituted at all times as to permit the Plan to comply
with Rule 16b-3 or any successor rule promulgated under the Securities Exchange
Act of 1934 (the "1934 Act"). Members of the Incentive Plan Committee shall be
appointed from time to time by the Board, shall serve at the discretion of the
Board, and may resign at any time upon written notice to the Board.
(i) "Incentive Stock Option" means any Option designated as such as granted
in accordance with the requirements of Code Section 422.
(j) "Non-Statutory Option" means any Option other than an Incentive Stock
Option.
(k) "Option" means a right to purchase Stock at a stated price for a
specified period of time.
(l) "Option Price" means the price at which shares of Stock subject to an
Option may be purchased, determined in accordance with section 7.2(b).
(m) "Participants" means an Eligible Employee of the Company designated by
the Incentive Plan Committee during the term of the Plan to receive one or more
Awards under the Plan.
(n) "Performance Cycle" means the period of time as specified by the
Incentive Plan Committee over which Performance Shares or Performance Units are
to be earned.
(o) "Performance Shares" means an Award made pursuant to Section 9 which
entitles a Participant to receive Shares, their cash equivalent, or a
combination thereof based on the achievement of performance targets during a
Performance Cycle.
(p) "Performance Units" means an Award made pursuant to Section 9 which
entitles a Participant to receive cash, Stock or a combination thereof based on
the achievement of performance targets during a Performance Cycle.
(q) "Plan Year" means each 12-month period beginning January 1 and ending
the following December 31, except that for the first year of the Plan it shall
begin on the Effective Date and extend to the first December 31 following the
Effective Date.
(r) "Restricted Stock" means Stock granted under Section 8 that is subject
to the restrictions imposed pursuant to said Section.
(s) "Share" means a share of Stock.
(t) "Stock" means the common stock, $.01 par value, of the Company or any
other class of common stock that the common stock shall convert into.
(u) "Stock Appreciation Right" or "SAR" is a right to receive, without
payment to the Company, a number of shares of Stock, cash or any combination
thereof, the amount of which is determined pursuant to the formula set forth in
Section 10.4.
2.2 Gender and Number. Except where otherwise indicated by the context, the
masculine gender also shall include the feminine gender, and the definition of
any term herein in the singular also shall include the plural.
4.3-2
<PAGE>
SECTION 3
PLAN ADMINISTRATION
The Plan shall be administered by the Incentive Plan Committee, in
accordance with the provisions of the Plan. The Incentive Plan Committee shall,
in its sole discretion, select Participants from among the Eligible Employees to
whom Awards will be granted, the form of each Award, the amount of each Award
and any other terms and conditions of each Award as the Incentive Plan Committee
may deem necessary or desirable and consistent with the terms of the Plan. The
Incentive Plan Committee shall determine the form or forms of the agreements
with Participants, which shall evidence the particular provisions, terms,
conditions, rights and duties of the Company and the Participants with respect
to Awards granted pursuant to the Plan which provisions need not be identical
except as may be provided herein. The Incentive Plan Committee may from time to
time adopt such rules and regulations for carrying out the purposes of the Plan
as it may deem proper and in the best interests of the Company. The Incentive
Plan Committee may correct any defect, supply any omission or reconcile any
inconsistency in the Plan or in any agreement entered into hereunder in the
manner and to the extent it shall deem expedient and it shall be the sole and
final judgment of such expediency. No member of the Incentive Plan Committee
shall be liable for any action or determination made in good faith, and all
members of the Incentive Plan Committee shall, in addition to their rights as
directors, be fully protected by the Company with respect to any such action,
determination or interpretation. The determinations, interpretations, and other
actions of the Incentive Plan Committee pursuant to the provisions of the Plan
shall be binding and conclusive for all purposes and on all persons.
SECTION 4
STOCK SUBJECT TO THE PLAN
4.1 Number of Shares. Initially, subject to approval by the shareholders of
the Company to increase the authorized capital of the Company, three million
five hundred thousand Shares are authorized for issuance under the Plan in
accordance with the provisions of the Plan and subject to such restrictions or
other provisions as the Incentive Plan Committee may deem necessary from time to
time. The Shares may be divided among the various Plan components as the
Incentive Plan Committee shall determine. Any portion of the Shares added on
each succeeding anniversary of the Effective Date which are unused during the
Plan Year beginning on such anniversary date shall be carried forward and be
available for grant and issuance in subsequent Plan Years. Shares which may be
issued upon the exercise of Options shall be applied to reduce the maximum
number of Shares remaining available for use under the Plan. The Company shall
at all times during the term of the Plan and while any Options are outstanding
retain as authorized and unissued Stock, or as treasury stock, at least the
number of Shares from time to time required under the provisions of the Plan, or
otherwise assure itself of its ability to perform its obligations hereunder.
4.2 Unused and Forfeited Stock. Any Shares that are subject to an Award
under this Plan which are not used because the terms and conditions of the Award
are not met, including any Shares that are subject to an Option which expires or
is terminated for any reason, any Shares which are used for full or partial
payment of the purchase price of Shares with respect to which an Option is
exercised, and any Shares retained by the Company pursuant to Section 16.2 shall
automatically become available for use under the Plan.
4.3 Adjustment for Stock Split, Stock Dividend, Etc. If the Company shall
at any time increase or decrease the number of its outstanding Shares of Stock
or change in any way the rights and privileges of such Shares by means of the
payment of a stock dividend or any other distribution upon such Shares payable
in Stock, or through a stock split, subdivision, consolidation, combination,
reclassification or recapitalization involving the Stock, then in relation to
the Stock that is affected by one or more of the above events, the numbers,
rights and privileges of the following shall be increased, decreased or changed
in like manner as if they had been issued and outstanding, fully paid and
nonassessable at the time of such occurrence: (i) the shares of Stock as to
which Awards may be granted under the Plan; and (ii) the Shares of Stock then
4.3-3
<PAGE>
included in each outstanding Option, Stock Appreciation Right, Performance Share
or Performance Unit granted hereunder.
4.4 Other Changes in Stock. In the event there shall be any change, other
than as specified in Section 4.3, in the number or kind of outstanding shares of
Stock or of any stock or other securities into which the Stock shall be changed
or for which it shall have been exchanged, and if the Incentive Plan Committee
shall in its discretion determine that such change equitably requires an
adjustment in the number or kind of Shares subject to outstanding Awards or
which have been reserved for issuance pursuant to the Plan but are not then
subject to an Award, then such adjustments shall be made by the Incentive Plan
Committee and shall be effective for all purposes of the Plan and on each
outstanding Award that involves the particular type of stock for which a change
was effected.
4.5 General Adjustment Rules. If any adjustment or substitution provided
for in this Section 4 shall result in the creation of a fractional Share under
any Award, the Company shall, in lieu of selling or otherwise issuing such
fractional Share, pay to the Participant a cash sum in an amount equal to the
product of such fraction multiplied by the Fair Market Value of a Share on the
date the fractional Share would otherwise have been issued. In the case of any
such substitution or adjustment affecting an Option, the total Option Price for
the shares of Stock then subject to an Option shall remain unchanged but the
Option Price per share under each such Option shall be equitably adjusted by the
Incentive Plan Committee to reflect the greater or lesser number of shares of
Stock or other securities into which the Stock subject to the Option may have
been changed.
4.6 Determination by Incentive Plan Committee, Etc. Adjustments under this
Section 4 shall be made by the Incentive Plan Committee, whose determinations
with regard thereto shall be final and binding upon all parties thereto.
SECTION 5
REORGANIZATION OR LIQUIDATION
In the event that the Company is merged or consolidated with another
corporation (other than a merger or consolidation in which the Company or a
subsidiary is the continuing corporation and which does not result in any
reclassification or change of outstanding Shares), or if all or substantially
all of the assets or more than 50% of the outstanding voting stock of the
Company is acquired by any other corporation, business entity or person (other
than a sale or conveyance in which the Company continues as a holding company of
an entity or entities that conduct the business or businesses formerly conducted
by the Company), or in case of a reorganization (other than a reorganization
under the United States Bankruptcy Code) or liquidation of the Company, and if
the provisions of Section 11 do not apply, the Incentive Plan Committee, or the
board of directors of any corporation assuming the obligations of the Company,
shall have the power and discretion to prescribe the terms and conditions for
the exercise of, or modification of, any outstanding Awards granted hereunder.
By way of illustration, and not by way of limitation, the Incentive Plan
Committee may provide for the complete or partial acceleration of the dates of
exercise of the Options, or may provide that such Options will be exchanged or
converted into options to acquire securities of the surviving or acquiring
corporation, or may provide for a payment or distribution in respect of
outstanding Options (or the portion thereof that is currently exercisable) in
cancellation thereof. The Incentive Plan Committee may remove restrictions on
Restricted Stock and may modify the performance requirements for any other
Awards. The Incentive Plan Committee may provide that Stock or other Awards
granted hereunder must be exercised in connection with the closing of such
transaction, and that if not so exercised such Awards will expire. Any such
determinations by the Incentive Plan Committee may be made generally with
respect to all Participants, or may be made on a case-by-case basis with respect
to particular Participants. The provisions of this Section 5 shall not apply to
any transaction undertaken for the purpose of reincorporating the Company under
the laws of another jurisdiction, if such transaction does not materially affect
the beneficial ownership of the Company's capital stock.
4.3-4
<PAGE>
SECTION 6
PARTICIPATION
Participants in the Plan shall be those Eligible Employees who, in the
judgment of the Incentive Plan Committee, are performing, or during the term of
their incentive arrangement will perform, important services in the management,
operation and development of the Company, and who significantly contribute, or
are expected to significantly contribute, to the achievement of long-term
corporate economic objectives; provided, however, that only officers and
employees of Century Casinos, Inc. shall be eligible to receive Awards pursuant
to Section 9 hereof. Participants may be granted from time to time one or more
Awards; provided, however, that the grant of each such Award shall be separately
approved by the Incentive Plan Committee, and receipt of one such Award shall
not result in automatic receipt of any other Award and written notice shall be
given to such person, specifying the terms, conditions, rights and duties
related thereto. Each Participant shall enter into an agreement with the
Company, in such form as the Incentive Plan Committee shall determine and which
is consistent with the provisions of the Plan, specifying such terms,
conditions, rights and duties. Awards shall be deemed to be granted as of the
date specified in the grant resolution of the Incentive Plan Committee, which
date shall be the date of any related agreement with the Participants. In the
event of any inconsistency between the provisions of the Plan and any such
agreement entered into hereunder, the provisions of the Plan shall govern.
SECTION 7
STOCK OPTIONS
7.1 Grant of Options. Coincident with the following designation for
participation in the Plan, a Participant may be granted one or more Options. The
Incentive Plan Committee in its sole discretion shall designate whether an
Option is to be considered an Incentive Stock Option or a Non-Statutory Option.
The Incentive Plan Committee may grant both an Incentive Stock Option and a
Non-Statutory Option to the same Participant at the same time or at different
times. Incentive Stock Options and Non-Statutory Options, whether granted at the
same or different times, shall be deemed to have been awarded in separate
grants, shall be clearly identified, and in no event shall the exercise of one
Option affect the right to exercise any other Option or affect the number of
Shares for which any other Option may be exercised. Notwithstanding the above, a
consultant of the Company who is not an employee of the Company will not be
eligible to receive Incentive Stock Options.
7.2 Option Agreements. Each Option granted under the Plan shall be
evidenced by a written stock option agreement which shall be entered into by the
Company and the Participant to whom the Option is granted (the "Option Holder"),
and which shall contain the following terms and conditions, as well as such
other terms and conditions not inconsistent therewith, as the Incentive Plan
Committee may consider appropriate in each case.
(a) Number of Shares. Each stock option agreement shall state that it
covers a specified number of Shares, as determined by the Incentive Plan
Committee. Notwithstanding any other provision of the Plan, the aggregate Fair
Market Value of the Shares with respect to which Incentive Stock Options are
exercisable for the first time by an Option Holder in any calendar year, under
the Plan or otherwise, shall not exceed $100,000. For this purpose, the Fair
Market Value of the Shares shall be determined as of the time an Option is
granted.
(b) Price. The price at which each Share covered by an Option may be
purchased shall be determined in each case by the Incentive Plan Committee and
set forth in the stock option agreement, but in no event shall the Option Price
for each Share covered by an Incentive Stock Option be less than the Fair Market
Value of the Stock on the date the Option is granted; provided that the Option
Price for each Share covered by a Non-Statutory Option may be granted at any
price less than Fair Market Value, in the sole discretion of the Incentive Plan
Committee. In addition, the Option Price for each Share covered by an Incentive
Stock Option granted an Eligible Employee who then owns stock possessing more
than 10% of the total combined voting power of all classes of stock of the
Company or any parent or subsidiary corporation of the Company must be at least
4.3-5
<PAGE>
110% of the Fair Market Value of the Stock subject to the Incentive Stock Option
on the date the Option is granted.
(c) Duration of Options. Each stock option agreement shall state the period
of time, determined by the Incentive Plan Committee, within which the Option may
be exercised by the Option Holder (the "Option Period"). The Option Period must
expire, in all cases, not more than ten years from the date an Option is
granted; provided, however, that the Option Period of an Incentive Stock Option
granted to an Eligible Employee who then owns stock possessing more than 10% of
the total combined voting power of all classes of stock of the Company or any
parent or subsidiary corporation of the Company must expire not more than five
years from the date such an Option is granted. Each stock option agreement shall
also state the periods of time, if any, as determined by the Incentive Plan
Committee, when incremental portions of each Option shall vest.
(d) Vesting of Options. Subject to adjustment as provided in Sections 5 and
11 of the Plan, or as shall be determined by the Incentive Plan Committee, and
except as set forth in Section 7.4, each Option granted under the Plan shall be
vested as to thirty-three and one-third percent (33-1/3%) of the number of
Shares subject to such Option upon the date the Option is granted. Such Option
shall vest in an additional thirty-three and one-third percent (33-1/3%) of the
original number of Shares subject to such Option upon the first anniversary of
the date the Option is granted and shall vest in the final thirty-three and
one-third percent (33-1/3%) of the original number of Shares subject to such
Option upon the second anniversary of the date the Option is granted. No Option
shall be exercisable with respect to the number of Shares that is not vested.
(e) Termination of Employment, Death, Disability, Etc. Except as otherwise
determined by the Incentive Plan Committee, each stock option agreement shall
provide as follows with respect to the exercise of the Option upon termination
of the employment or the death of the Option Holder:
(i) If the employment of the Option Holder is terminated within the
Option Period for cause, as determined by the Company, the Option shall
thereafter be void for all purposes. As used in this section 7.2(e),
"cause" shall mean a gross violation, as determined by the Company, of the
Company's established policies and procedures. The effect of this section
7.2(e)(i) shall be limited to determining the consequences of a
termination, and nothing in this section 7.2(e)(i) shall restrict or
otherwise interfere with the Company's discretion with respect to the
termination of any employee.
(ii) If the Option Holder dies, or if the Option Holder becomes
disabled (within the meaning of Section 22(e) of the Internal Revenue
Code), during the Option Period while still employed, or within the
three-month period referred to in (iii) below, the Option may be exercised
by those entitled to do so under the Option Holder's will or by the laws of
descent and distribution within twelve months following the Option Holder's
death or disability, but not thereafter. In any such case, the Option may
be exercised only as to the Shares as to which the Option had become
exercisable on or before the date of the Option Holder's death or
disability.
(iii) If the employment of the Option Holder by the Company is
terminated (which for this purpose means that the Option Holder is no
longer employed by the Company or by an Affiliated Corporation) within the
Option Period for any reason other than cause, disability, or the Option
Holder's death, the Option may be exercised by the Option Holder within
three months following the date of such termination (provided that such
exercise must occur within the Option Period), but not thereafter. In any
such case, the Option may be exercised only as to the Shares as to which
the Option had become exercisable on or before the date of termination of
employment.
(f) Transferability. Each stock option agreement shall provide that the
Option granted therein is not transferable by the Option Holder except by will
or pursuant to the laws of descent and distribution, and that such Option is
exercisable during the Option Holder's lifetime only by him or her, or in the
event of disability or incapacity, by his or her guardian or legal
representative.
4.3-6
<PAGE>
(g) Exercise, Payments, Etc.
(i) Each stock option agreement shall provide that the method for
exercising the Option granted therein shall be by delivery to the Corporate
Secretary of the Company of written notice specifying the number of Shares
with respect to which such Option is exercised and payment of the Option
Price. Such notice shall be in a form satisfactory to the Incentive Plan
Committee and shall specify the particular Option (or portion thereof)
which is being exercised and the number of Shares with respect to which the
Option is being exercised. The exercise of the Option shall be deemed
effective upon receipt of such notice by the Corporate Secretary and
payment to the Company. The purchase of such Stock shall take place at the
principal offices of the Company upon delivery of such notice, at which
time the purchase price of the Stock shall be paid in full by any of the
methods or any combination of the methods set forth in (ii) below. A
properly executed certificate or certificates representing the Stock shall
be issued by the Company and delivered to the Option Holder. If
certificates representing Stock are used to pay all or part of the Option
Price, separate certificates for the same number of shares of Stock shall
be issued by the Company and delivered to the Option Holder representing
each certificate used to pay the Option Price, and an additional
certificate shall be issued by the Company and delivered to the Option
Holder representing the additional shares, in excess of the Option Price,
to which the Option Holder is entitled as a result of the exercise of the
Option.
(ii) The exercise price shall be paid by any of the following methods
or any combination of the following methods:
(A) in cash;
(B) by cashier's check payable to the order of the Company;
(C) by delivery to the Company of certificates representing the
number of Shares then owned by the Option Holder, the Fair Market
Value of which equals the purchase price of the Stock purchased
pursuant to the Option, properly endorsed for transfer to the Company;
provided however, that Shares used for this purpose must have been
held by the Option Holder for such minimum period of time as may be
established from time to time by the Incentive Plan Committee but in
no case shall the redeemed shares have been held for a period less
than six months; for purposes of this Plan, the Fair Market Value of
any Shares delivered in payment of the purchase price upon exercise of
the Option shall be the Fair Market Value as of the exercise date; the
exercise date shall be the day of the delivery of the certificates for
the Stock used as payment of the Option Price;
(D) by delivery to the Company of a properly executed notice of
exercise together with irrevocable instructions to a broker to deliver
to the Company promptly the amount of the proceeds of the sale of all
or a portion of the Stock or of a loan from the broker to the Option
Holder necessary to pay the exercise price; or
(E) by instructing the Company to withhold from the shares of
Stock issuable upon exercise of the stock option shares of Stock in
payment of all or any part of the option price, which shares shall be
valued for this purpose at the Fair Market Value or in such other
manner as may be authorized from time to time by the Incentive Plan
Committee.
(iii) In the discretion of the Incentive Plan Committee, the Company
may guarantee a third-party loan obtained by a Participant to pay part or
all of the Option Price of the Shares provided that such loan or the
Company's guaranty is secured by the Shares.
(h) Date of Grant. An Option shall be considered as having been granted on
the date specified in the grant resolution of the Incentive Plan Committee.
4.3-7
<PAGE>
(i) Withholding.
(i) Non-Statutory Options. Each stock option agreement covering
Non-Statutory Options shall provide that, upon exercise of the Option, the
Option Holder shall make appropriate arrangements with the Company to
provide for the amount of additional withholding required by applicable
federal and state income tax laws, including payment of such taxes through
delivery of Stock or by withholding Stock to be issued under the Option, as
provided in Section 16.
(ii) Incentive Options. In the event that a Participant makes a
disposition (as defined in Section 424(c) of the Internal Revenue Code) of
any Stock acquired pursuant to the exercise of an Incentive Stock Option
prior to the expiration of two years from the date on which the Incentive
Stock Option was granted or prior to the expiration of one year from the
date on which the Option was exercised, the Participant shall send written
notice to the Company at its principal office (Attention: Corporate
Secretary) of the date of such disposition, the number of shares disposed
of, the amount of proceeds received from such disposition, the number of
shares disposed of, and any other information relating to such disposition
as the Company may reasonably request. The Participant shall, in the event
of such a disposition, make appropriate arrangements with the Company to
provide for the amount of additional withholding, if any, required by
applicable federal and state income tax laws.
(j) Adjustment of Options. Subject to the limitations contained in Sections
7 and 15, the Incentive Plan Committee may make any adjustment in the Option
Price, the number of shares subject to, or the terms of, an outstanding Option
and a subsequent granting of an Option by amendment or by substitution of any
outstanding Option. Such amendment, substitution, or re-grant may result in
terms and conditions (including Option Price, number of shares covered, vesting
schedule or exercise period) that differ from the terms and conditions of the
original Option. The Incentive Plan Committee may not, however, adversely affect
the rights of any Participant to previously granted Options without the consent
of such Participant. If such notice is affected by amendment, the effective date
of such amendment shall be the date of the original grant.
7.3 Stockholder Privileges. Prior to the exercise of the Option and the
transfer of Shares to the Option Holder, an Option Holder shall have no rights
as a stockholder with respect to any Shares subject to any Option granted to
such person under this Plan, and until the Option Holder becomes the holder of
record of such Stock, no adjustments shall be made for dividends or other
distributions or other rights as to which there is a record date preceding the
date such Option Holder becomes the holder of record of such Stock, except as
provided in Section 4.
7.4 Formula Awards. Subject to surrender of all outstanding options granted
under the Plan by the individuals identified below, the following options are
granted to such persons:
Grantee Number of Shares Exercise Price
Erwin Haitzmann 130,000 incentive stock options 1.50
820,000 non-statutory stock options 1.50
Peter Hoetzinger 130,000 incentive stock options 1.50
413,000 non-statutory stock options 1.50
James D. Forbes 130,000 incentive stock options 1.50
328,000 non-statutory stock options 1.50
Norbert Teufelberger 130,000 incentive stock options 1.50
143,000 non-statutory stock options 1.50
4.3-8
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Brad Dobski 15,000 incentive stock options 1.50
4,500 incentive stock options 2.25
All of the above options shall have an exercise term of 10 years, subject
to earlier termination as provided in the Plan. All of the above incentive stock
options have been granted at an exercise price of 100% Fair Market Value of the
Stock the date of grant.
Mr. Dobski's incentive stock options priced at $2.25 per share shall vest
immediately; his incentive stock options priced at $1.50 per share shall vest
one-third on the date of grant, an additional one-third one year from the date
of grant and an additional one-third two years from the date of grant. All of
the other above incentive stock options shall vest one-half on the date of grant
and an additional one-half one year from the date of grant, and non-statutory
options shall vest as of the date of grant. The non-statutory options shall be
exercisable in part or in whole.
SECTION 8
RESTRICTED STOCK AWARDS
8.1 Awards Granted by Incentive Plan Committee. Coincident with or
following designation for participation in the Plan, a Participant may be
granted one or more Restricted Stock Awards consisting of Shares. The number of
Shares granted as a Restricted Stock Award shall be determined by the Incentive
Plan Committee.
8.2 Restrictions. A Participant's right to retain a Restricted Stock Award
granted to him under Section 8.1 shall be subject to such restrictions,
including but not limited to his continuous employment by the Company for a
restriction period specified by the Incentive Plan Committee, or the attainment
of specified performance goals and objectives, as may be established by the
Incentive Plan Committee with respect to such award. The Incentive Plan
Committee, in its sole discretion, may require different periods of employment
or different performance goals and objectives with respect to different
Participants, to different Restricted Stock Awards or to separate, designated
portions of the Shares constituting a Restricted Stock Award.
8.3 Privileges of a Stockholder; Transferability. A Participant shall have
all voting, dividend, liquidation and other rights with respect to Stock in
accordance with its terms received by him as a Restricted Stock Award under this
Section 8 upon his becoming the holder of record of such Stock; provided,
however, that the Participant's right to sell, encumber or otherwise transfer
such Stock shall be subject to the limitations of Section 12.2 hereof.
8.4 Enforcement of Restrictions. The Incentive Plan Committee, in its sole
discretion, may require one or more of the following methods of enforcing the
restrictions referred to in Sections 8.2 and 8.3:
(a) Placing a legend on the stock certificates referring to the
restrictions; or
(b) Requiring the Participant to keep the stock certificates, duly
endorsed, in the custody of the Company while the restrictions remain in effect.
8.5 Termination of Employment, Death, Disability, Etc. In the event of the
death or disability (within the meaning of Code Section 22(e)) of a Participant,
all employment period and other restrictions applicable to Restricted Stock
Awards then held by him shall lapse, and such awards shall become fully
nonforfeitable. Subject to Sections 5 and 11, in the event of a Participant's
termination of employment for any other reason, any Restricted Stock Awards as
to which the employment period or other restrictions have not been satisfied
shall be forfeited.
4.3-9
<PAGE>
SECTION 9
PERFORMANCE SHARES AND PERFORMANCE UNITS
9.1 Awards Granted by Incentive Plan Committee. Coincident with or
following designation for participation in the Plan, a Participant may be
granted Performance Shares or Performance Units.
9.2 Amount of Award. The Incentive Plan Committee shall establish a maximum
amount of a Participant's Award, which amount shall be denominated in Shares in
the case of Performance Shares or in dollars in the case of Performance Units.
9.3 Communication of Award. Written notice of the maximum amount of a
Participant's Award and the Performance Cycle determined by the Incentive Plan
Committee shall be given to a Participant as soon as practicable after approval
of the Award by the Incentive Plan Committee.
9.4 Amount of Award Payable. The Incentive Plan Committee shall establish
maximum and minimum performance targets to be achieved during the applicable
Performance Cycle. Performance targets established by the Incentive Plan
Committee shall relate to corporate, group, unit or individual performance and
may be established in terms of earnings, growth in earnings, ratios of earnings
to equity or assets, or such other measures or standards determined by the
Incentive Plan Committee. Multiple performance targets may be used and the
components of multiple performance targets may be given the same or different
weighing in determining the amount of an Award earned, and may relate to
absolute performance or relative performance measured against other groups,
units, individuals or entities. Achievement of the maximum performance target
shall entitle the Participant to payment (subject to Section 9.6) at the full or
minimum amount specified with respect to the Award; provided, however, that
notwithstanding any other provisions of this Plan, in the case of an Award of
Performance Shares, the Incentive Plan Committee, in its discretion, may
establish an upper limit on the amount payable (whether in cash or Stock) as a
result of the achievement of the maximum performance target. The Incentive Plan
Committee also may establish that a portion of a full or maximum amount of a
Participant's Award will be paid (subject to Section 9.6) for performance which
exceeds the minimum performance target but falls below the maximum performance
target applicable to such Award.
9.5 Adjustments. At any time prior to payment of a Performance Share or
Performance Unit Award, the Incentive Plan Committee may adjust previously
established performance targets or other terms and conditions to reflect events
such as changes in laws, regulations, or accounting practice, or mergers,
acquisition or divestitures.
9.6 Payments of Awards. Following the conclusion of each Performance Cycle,
the Incentive Plan Committee shall determine the extent to which performance
targets have been attained, the satisfaction of any other terms and conditions
with respect to an Award relating to such Performance Cycle. The Incentive Plan
Committee shall determine what, if any, payment is due with respect to an Award
and whether such payment shall be made in cash, Stock, or some combination
thereof. Payment shall be made in a lump sum or installments, as determined by
the Incentive Plan Committee, commencing as promptly as practicable following
the end of the applicable Performance Cycle, subject to such terms and
conditions and in such form as may be prescribed by the Incentive Plan
Committee.
9.7 Termination of Employment. If a Participant ceases to be an Employee
before the end of a Performance Cycle by reason of his death or permanent
disability, the Performance Cycle for such Participant for the purpose of
determining the amount of the Award payable shall end at the end of the calendar
quarter immediately preceding the date on which such Participant ceased to be an
Employee. The amount of an Award payable to a Participant to whom the precedent
sentence is applicable shall be paid at the end of the Performance Cycle and
shall be that fraction of the Award computed pursuant to the preceding sentence
the numerator of which is the number of full calendar quarters during the
Performance Cycle during which said Participant was an Employee and the
denominator of which is the number of full calendar quarters in the Performance
Cycle. Upon any other termination of employment of a Participant during a
4.3-10
<PAGE>
Performance Cycle, participation in the Plan shall cease and all outstanding
Awards of Performance Shares or Performance Units to such Participant shall be
canceled.
SECTION 10
STOCK APPRECIATION RIGHTS
10.1 SAR's and Number. "Stock Appreciation Right" or "SAR" is a right to
receive, without payment to the Company, a number of shares of Stock, cash or
any combination thereof, the amount of which is determined pursuant to the
formula set forth in Section 10.4. A SAR may be granted (a) with respect to any
stock option granted under this Plan, either concurrently with the grant of such
stock option or at such later time as determined by the Incentive Plan Committee
(as to all or any portion of the shares of Stock subject to the stock option),
or (b) alone, without reference to any related stock option. Each SAR granted to
any participant shall relate to such number of shares of Stock as shall be
determined by the Incentive Plan Committee, subject to adjustment as provided in
Sections 4, 5 and 11 of this Plan. In the case of a SAR granted with respect to
a stock option, the number of shares of Stock to which the SAR pertains shall be
reduced in the same proportion that the holder of the option exercises the
related stock option.
10.2 Duration. The term of each SAR shall be determined by the Incentive
Plan Committee but shall not exceed ten years and one day from the date of grant
but shall be subject to earlier termination as provided in Section 7.2(e) as if
the SAR was an incentive stock option. Unless otherwise provided by the
Incentive Plan Committee, each SAR shall become exercisable at such time or
times, to such extent and upon such conditions as the stock option, if any, to
which it relates is exercisable. The Incentive Plan Committee may in its
discretion accelerate the exercisability of any SAR.
10.3 Exercise. A SAR may be exercised, in whole or in part, by giving
written notice to the Company, specifying the number of SAR's which the holder
wishes to exercise. Upon receipt of such written notice, the Company shall,
within 90 days thereafter, deliver to the exercising holder certificates for the
shares of Stock or cash or both, as determined by the Incentive Plan Committee,
to which the holder is entitled pursuant to Section 10.4.
10.4 Payment. Subject to the right of the Incentive Plan Committee to
deliver cash in lieu of shares of Stock (which, as it pertains to officers and
directors of the Company, shall comply with all requirements of the 1934 Act),
the number of shares of Stock which shall be issuable upon the exercise of a SAR
shall be determined by dividing:
(a) the number of shares of Stock as to which the SAR is exercised
multiplied by the amount of the appreciation in such shares (for this purpose,
the "appreciation" shall be the amount by which the Fair Market Value of the
shares of Stock subject to the SAR on the exercise date exceeds (1) in the case
of a SAR related to a stock option, the purchase price of the shares of Stock
under the stock option or (2) in the case of a SAR granted alone, without
reference to a related stock option, an amount which shall be determined by the
Incentive Plan Committee at the time of grant, subject to adjustment under this
Plan); by
(b) the Fair Market Value of a share of Stock on the exercise date.
In lieu of issuing shares of Stock upon the exercise of a SAR, the
Incentive Plan Committee may elect to pay the holder of the SAR cash equal to
the Fair Market Value on the exercise date of any or all of the shares which
would otherwise be issuable. No fractional shares of Stock shall be issued upon
the exercise of a SAR; instead, the holder of the SAR shall be entitled to
receive a cash adjustment equal to the same fraction of the Fair Market Value of
a share of Stock on the exercise date or to purchase the portion necessary to
make a whole share at its Fair Market Value on the date of exercise.
4.3-11
<PAGE>
SECTION 11
CHANGE IN CONTROL
11.1 Options, Restricted Stock. In the event
of a change in control of the
Company, as defined in Section 11.3, then the Incentive Plan Committee shall
accelerate the exercise date of any outstanding Options or make all such Options
fully vested and exercisable and, in its sole discretion, without obtaining
stockholder approval, to the extent permitted in Section 15, may take any or all
of the following actions: (a) grant a cash bonus award to any Option Holder in
an amount necessary to pay the Option Price of all or any portion of the Options
then held by such Option Holder; (b) pay cash to any or all Option Holders in
exchange for the cancellation of their outstanding Options in an amount equal to
the difference between the Option Price of such Options and the greater of the
tender offer price for the underlying Stock or the Fair Market Value of the
Stock on the date of the cancellation of the Options; (c) make any other
adjustments or amendments to the outstanding Options; and (d) eliminate all
restrictions with respect to Restricted Stock and deliver Shares free of
restrictive legends to any Participant.
11.2 Performance Shares and Performance Units. Under the circumstances
described in Section 11.1, the Incentive Plan Committee, in its sole discretion
and without obtaining stockholder approval to the extent permitted in Section
15, may provide for payment of outstanding Performance Shares and Performance
Units at the maximum award level or any percentage thereof.
11.3 Definition. For purposes of the Plan, a "change in control" shall be
deemed to have occurred if (a) any "person" or "group" (within the meaning of
Sections 13(d) and 14(d)(2) of the 1934 Act), other than a trustee or other
fiduciary holding securities under an employee benefit plan of the Company is or
becomes the "beneficial owner" (as defined in Rule 13d-3 under the 1934 Act),
directly or indirectly, of more than 33- 1/3% of the then outstanding voting
stock of the Company; or (b) at any time during any period of three consecutive
years (not including any period prior to the Effective Date), individuals who at
the beginning of such period constitute the Board (and any new director whose
election by the Board or whose nomination for election by the Company's
stockholders was approved by a vote of at least two-thirds of the directors then
still in office who either were directors at the beginning of such period or
whose election or nomination for election was previously so approved) cease for
any reason to constitute a majority thereof; or (c) the stockholders of the
Company approve a merger or consolidation of the Company with any other
corporation, other than a merger or consolidation which would result in the
voting securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity) at least 80% of the combined
voting power of the voting securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation, or the stockholders
approve a plan of complete liquidation of the Company or an agreement for the
sale or disposition by the Company of all or substantially all of the Company's
assets.
SECTION 12
RIGHTS OF EMPLOYEES; PARTICIPANTS
12.1 Employment. Nothing contained in the Plan or in any Award granted
under the Plan shall confer upon any Participant any right with respect to the
continuation of his or her employment by the Company, or interfere in any way
with the right of the Company, subject to the terms of any separate employment
agreement to the contrary, at any time to terminate such employment or to
increase or decrease the compensation of the Participant from the rate in
existence at the time of the grant of an Award. Whether an authorized leave of
absence, or absence in military or government service, shall constitute a
termination of employment shall be determined by the Incentive Plan Committee at
the time.
12.2 Nontransferability. No right or interest of any Participant in an
Award granted pursuant to the Plan shall be assignable or transferable during
the lifetime of the Participant, either voluntarily or involuntarily, or be
subjected to any lien, directly or indirectly, by operation of law, or
otherwise, including execution, levy, garnishment, attachment, pledge or
bankruptcy. In the event of a Participant's death, a Participant's rights and
interests in Options shall, to the extent provided in Section 7, be transferable
by testamentary will or the laws of descent and distribution, and payment of any
amounts due under the Plan shall be made to, and exercise of any Options
4.3-12
<PAGE>
may be made by, the Participant's legal representative, heirs or legatees. If,
in the opinion of the Incentive Plan Committee, a person entitled to payments or
to exercise rights with respect to the Plan is disabled from caring for his
affairs because of mental condition, physical condition or age, payment due such
person may be made to, and such rights shall be exercised by, such person's
guardian, conservator or other legal personal representative upon furnishing the
Incentive Plan Committee with evidence satisfactory to the Incentive Plan
Committee of such status.
SECTION 13
GENERAL RESTRICTIONS
13.1 Investment Representations. The Company may require any person to whom
an Option or other Award is granted, as a condition of exercising such Option or
receiving Stock under the Award, to give written assurances in substance and
form satisfactory to the Company and its counsel to the effect that such person
is acquiring the Stock subject to the Option or the Award for his own account
for investment and not with an present intention of selling or otherwise
distributing the same, and to such other effects as the Company deems necessary
or appropriate in order to comply with federal and applicable state securities
laws. Legends evidencing such restrictions may be placed on the certificates
evidencing the Stock.
13.2 Compliance with Securities Laws. Each Award shall be subject to the
requirement that, if at any time the Company shall determine that the listing,
registration or qualification of the Shares subject to such Award upon any
securities exchange or under any state or federal law, or the consent or
approval of any governmental or regulatory body, is necessary as a condition of,
or in connection with, the issuance or purchase of Shares thereunder, such Award
may not be accepted or exercised in whole or in part unless such listing,
registration, qualification, consent or approval shall have been effected or
obtained on conditions acceptable to the Incentive Plan Committee. Nothing
herein shall be deemed to require the Company to apply for or to obtain such
listing, registration or qualification.
13.3 Stock Restriction Agreement. The Incentive Plan Committee may provide
that shares of Stock issuable upon the exercise of an Option shall, under
certain conditions, be subject to restrictions whereby the Company has a right
of first refusal with respect to such shares or a right or obligation to
repurchase all or a portion of such shares, which restrictions may survive a
Participant's term of employment with the Company. The acceleration of time or
times at which an Option becomes exercisable may be conditioned upon the
Participant's agreement to such restrictions.
SECTION 14
OTHER EMPLOYEE BENEFITS
The amount of any compensation deemed to be received by a Participant as a
result of the exercise of an Option or the grant or vesting of any other Award
shall not constitute "earnings" with respect to which any other employee
benefits of such employee are determined, including without limitation, benefits
under any pension, profit sharing, life insurance or salary continuation plan.
SECTION 15
PLAN AMENDMENT, MODIFICATION AND TERMINATION
The Board may at any time terminate, and from time to time may amend or
modify, the Plan; provided, however, that no amendment or modification may
become effective without approval of the amendment or modification by the
stockholders if stockholder approval is required to enable the Plan to satisfy
any applicable statutory or regulatory requirements, or if the Company on the
advice of counsel, determines that stockholder approval is otherwise necessary
or desirable; and provided further that the Plan may not be amended more than
once every six months, other than to comport with changes in the Code, the
Employee Retirement Income Securities Act, or the rules thereunder.
4.3-13
<PAGE>
No amendment, modification or termination of the Plan shall in any manner
adversely affect any Awards theretofore granted under the Plan, without the
consent of the Participant holding such Awards.
SECTION 16
WITHHOLDING
16.1 Withholding Requirements. The Company's obligations to deliver Shares
upon the exercise of an Option, or upon the vesting of any other Award, shall be
subject to the Participant's satisfaction of all applicable federal, state and
local income and other tax withholding requirements.
16.2 Withholding With Stock. At the time the Incentive Plan Committee
grants an Award, the Committee, in its sole discretion, may grant the
Participant an election to pay all such amounts of tax withholding, or any part
thereof, by electing to transfer to the Company, or to have the Com withhold
from Shares otherwise issuable to the Participant, Shares having a value equal
to the amount required to be withheld or such lesser amount as may be elected by
the Participant. All elections shall be subject to the approval or disapproval
of the Incentive Plan Committee. The value of Shares to be withheld shall be
based on the Fair Market Value of the Stock on the date that the amount of tax
to be withheld is to be determined (the "Tax Date"). Any such elections by
Participants to have Shares withheld for this purpose will be subject to the
following restrictions:
(a) All elections must be made prior to the Tax Date.
(b) All elections shall be irrevocable.
(c) If the Participant is an officer or director of the Company within the
meaning of Section 16 of the 1934 Act ("Section 16"), the Participant must
satisfy the requirements of such Section 16 and any applicable rules thereunder
with respect to the use of Stock to satisfy such tax withholding obligations.
SECTION 17
BROKERAGE ARRANGEMENTS
The Incentive Plan Committee, in its discretion, may enter into
arrangements with one or more banks, brokers or other financial institutions to
facilitate the disposition of shares acquired upon exercise of Stock Options,
including, without limitation, arrangements for the simultaneous exercise of
Stock Options and sale of the Shares acquired upon such exercise.
SECTION 18
NONEXCLUSIVITY OF THE PLAN
Neither the adoption of the Plan by the Board nor the submission of the
Plan to stockholders of the Company for approval shall be construed as creating
any limitations on the power or authority of the Board to adopt such other or
additional incentive or other compensation arrangements of whatever nature as
the Board may deem necessary or desirable or preclude or limit the continuation
of any other plan, practice or arrangement for the payment of compensation or
fringe benefits to employees generally, or to any class or group of employees,
which the Company or any Affiliated Corporation now has lawfully put into
effect, including, without limitation, any retirement, pension, savings and
stock purchase plan, insurance, death and disability benefits and executive
short-term incentive plans.
SECTION 19
REQUIREMENTS OF LAW
19.1 Requirements of Law. The issuance of stock and the payment of cash
pursuant to the Plan shall be subject to all applicable laws, rules and
regulations.
4.3-14
<PAGE>
19.2 Federal Securities Law Requirements. If a Participant is an officer or
director of the Company, within the meaning of Section 16 of the 1934 Act,
Awards granted hereunder shall be subject to all conditions required under Rule
16b-3, or any successor rule promulgated under the 1934 Act, to qualify the
Award for any exception from the provisions of Section 16(b) of the 1934 Act
available under that Rule. Such conditions are hereby incorporated herein by
reference and shall be set forth in the agreement with the Participant which
describes the Award. The Plan is subject to shareholder approval of the Plan
pursuant to Rule 16b-3 at the next annual meeting of shareholders of the Company
following the date hereof.
19.3 Governing Law. The Plan and all agreements hereunder shall be
construed in accordance with and governed by the laws of the State of Colorado.
SECTION 20
DURATION OF THE PLAN
The Plan shall terminate at such time as may be determined by the Board of
Directors, and no Award shall be granted after such termination. If not sooner
terminated under the preceding sentence, the Plan shall fully cease and expire
at midnight on April 29, 2004. Awards outstanding at the time of the Plan
termination may continue to be exercised or earned in accordance with their
terms.
Dated: November 25, 1996
4.3-15
<PAGE>
EXHIBITS 5.1 AND 23.1
OPINION AND CONSENT OF
JONES & KELLER, P.C.
REGARDING LEGALITY OF SECURITIES
<PAGE>
JONES & KELLER, P.C.
1625 Broadway, Suite 1600
Denver, Colorado
Telephone: (303) 573-1600
Facsimile: (303) 573-0769
June 11, 1997
Century Casinos, Inc.
26 South Tejon Street, Suite 203
Denver, Colorado 80903
Gentlemen:
We have acted as counsel for Century Casinos, Inc. (the "Company") in
connection with the Post- Effective Amendment No. 1 to the Registration
Statement on Form S-8, filed by the Company under the Securities Act of 1933
with the Securities and Exchange Commission. The Registration Statement relates
to the proposed public offer and sale of up to 3,500,000 shares of Common Stock,
$.01 par value (the "Shares"), pursuant to the Company's Employees' Equity
Incentive Plan (the "Plan"). The aforementioned Post-Effective Amendment No. 1
to the Registration Statement on Form S-8 and exhibits thereto filed with the
Securities and Exchange Commission under such Act are referred to herein as the
"Registration Statement."
This letter is governed by, and shall be interpreted in accordance with,
the Legal Opinion Accord (the "Accord") of the ABA Section of Business Law
(1991). As a consequence, it is subject to a number of qualifications,
exceptions, definitions, limitations on coverage and other limitations, all as
more particularly described in the Accord, and this letter should be read in
conjunction therewith.
We have examined the Certificate of Incorporation, as amended, of the
Company as filed with the Delaware Secretary of State, the Bylaws of the
Company, and the minutes of meetings and records of proceedings of the Board of
Directors of the Company, the applicable laws of the State of Delaware, and a
copy of the Registration Statement. In making the foregoing examinations, we
have assumed the genuineness of all signatures and the authenticity of all
documents submitted to us as originals, and the conformity to original documents
of all documents submitted to us as certified or photostatic copies. As to
various questions of fact material to this opinion, and as to the content and
form of the Certificate of Incorporation, the Bylaws, minutes, records,
resolutions and other documents or writings of the Company, we have relied, to
the extent we deem reasonably appropriate, upon representations or certificates
of officers or directors of the Company and upon documents, records and
instruments furnished to us by the Company, without independent check or
verification of their accuracy.
Based upon our examination, consideration of, and reliance on the documents
and other matters described above, we are of the opinion that the Shares issued
in accordance with the terms of the Plan, and in accordance with the terms of,
and upon expiration of all restrictions and performance of all requirements
contained in specific awards granted pursuant to the Plan, when issued, will be
duly and validly issued, fully paid and nonassessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to references to our firm included in or made a part
of the Registration Statement.
Very truly yours,
/s/ Jones & Keller, P.C.
........................
JONES & KELLER, P.C.
<PAGE>
EXHIBIT 23.2
CONSENT OF DELOITTE & TOUCHE LLP
<PAGE>
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Post-Effective Amendment
No. 1 to Registration Statement No. 333-13801 of Century Casinos, Inc. on Form
S-8 of our report dated February 28, 1997, appearing in the Annual Report on
Form 10-KSB of Century Casinos, Inc. for the year ended December 31, 1996, and
to the reference to us under the heading "Experts" in the Prospectus, which is
part of such Registration Statement.
/s/ Deloitte & Touche LLP
......................
DELOITTE & TOUCHE LLP
Denver, Colorado
June 11, 1997
<PAGE>
JONES & KELLER, P.C.
1625 Broadway, Suite 1600
Denver, Colorado 80202
Telephone: (303) 573-1600
Facsimile: (303) 573-0769
June 12, 1997
VIA EDGAR
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Century Casinos, Inc. (the "Company") Post-Effective Amendment No. 1 to the
Registration Statement on Form S-8
Ladies and Gentlemen:
On behalf of the Company, enclosed for filing is a Post-Effective Amendment
No. 1 to the Registration Statement on Form S-8, with exhibits. The additional
filing fee of $333 has previously been wired.
Please do not hesitate to contact the undersigned should you have any
questions regarding the enclosed.
Very truly yours,
/s/ Reid A. Godbolt
......................
Reid A. Godbolt
Enclosures
c(w/enc.): Century Casinos, Inc., Attn: James D. Forbes, President (2 copies)
Deloitte & Touche LLP, Attn: Timothy McKeever, Partner (2 copies)
National Association of Securities Dealers, Inc. (3 copies)
The Nasdaq Stock Market (3 copies)
