CENTURY CASINOS, INC.
200 - 220 East Bennett Avenue
Cripple Creek, CO 80813
PROXY STATEMENT
Annual Meeting of Stockholders
To Be Held June 15, 2000
IN GENERAL
This proxy statement is furnished in connection with the solicitation
of proxies by the Board of Directors of Century Casinos, Inc. (the "Company"),
to be used at the Annual Meeting of Stockholders (the "Meeting") to be held on
Thursday, June 15, 2000, at the offices of the Millennium Casino in Prague,
Czech Republic, at 6:00 p.m. Central European Time, for the purposes set forth
in the accompanying Notice of Annual Meeting of Stockholders. The enclosed
material was mailed on or about April 27, 2000, to stockholders of the Company.
The shares covered by the enclosed proxy, if received by the Board of
Directors prior to the Meeting, will be voted in favor of the election of the
nominees to the Board of Directors named in this proxy statement and for all the
other proposals set forth in the notice. A proxy may be revoked at any time
before it is exercised by giving written notice to the Secretary of the Company
at the above address or by a subsequently executed proxy. Stockholders may vote
their shares in person if they attend the Meeting, even if they have executed
and returned a proxy. If no instructions are indicated on the proxy, the shares
will be voted in favor of the proposals to be considered at the Meeting.
The matters to be brought before the Meeting are the election of two
Class III directors of the Board of Directors; to consider and act upon a
proposal to ratify the Board of Directors' approval of a First Supplement to
Rights Agreement; and the transaction of such other business as may come before
the Meeting.
Expenses in connection with the solicitation of proxies will be paid by
the Company. Proxies are being solicited by mail, and, in addition, directors,
officers and regular employees of the Company (who will not receive any
additional compensation) may solicit proxies personally, by telephone or by
special correspondence. The Company will reimburse brokerage firms and others
for their expenses in forwarding proxy materials to the beneficial owners of the
Company's common stock.
1
<PAGE>
VOTING SECURITIES
Only stockholders of record at the close of business on April 25, 2000,
will be entitled to vote at the Meeting. On that date, there were issued and
outstanding 14,483,801 shares of the Company's $.01 par value common
stock, the only class of voting securities of the Company. Each share of common
stock is entitled to one vote per share. Cumulative voting in the election of
directors is not permitted.
A majority of the number of the outstanding shares of common stock,
represented either in person or by proxy, will constitute a quorum for the
transaction of business at the Meeting. Of the votes cast at the Meeting, a vote
of the holders of a majority of the common stock present, either in person or by
proxy, is required to elect each director nominee and to adopt the proposals.
In accordance with Delaware law, a stockholder entitled to vote for the
election of directors can withhold authority to vote for certain nominees for
director. Abstentions are counted for purposes of determining a quorum to
conduct business, but are ignored in vote tabulation, thereby increasing the
number of votes necessary to approve any proposal. The inspectors of election
will treat any shares held by brokers or nominees for which they have no
discretionary power to vote on a particular matter and for which they have
received no instructions from the beneficial owners or persons entitled to vote
("broker non-votes") as shares that are present for purposes of determining the
presence of a quorum. However, for purposes of determining the outcome of any
matters as to which the broker has indicated on the Proxy that it does not have
discretionary authority to vote, those shares will be treated as not entitled to
vote with respect to that matter (even though those shares may be entitled to
vote on other matters). Broker non-votes will have no effect on determining the
outcome of the election of directors.
All shares of Common Stock will vote as a single class. Neither the
Company's Certificate of Incorporation nor its Bylaws provide for cumulative
voting rights.
The following table sets forth information as of March 15, 2000,
concerning record common stock ownership by beneficial owners of five percent or
more of the Company's common stock and the officers and directors of the
Company. All of the named persons below, other than Thomas Graf and Lloyd I.
Miller, III, are officers or directors of the Company.
2
<PAGE>
<TABLE>
<CAPTION>
- ------------------------ --------------------------------- --------------------- -----------
Name and Address of Amount and Nature of Percent of
Title of Class Beneficial Owner Beneficial Ownership Class
-------------- ---------------- -------------------- -----
======================== ================================= ===================== =============
<S> <C> <C> <C>
Common Stock, Erwin Haitzmann 1,933,669 (a) 12.3%
$.01 par value 200-220 E. Bennett Ave.
Cripple Creek, CO 80813
- ------------------------ --------------------------------- --------------------- -------------
Common Stock, Peter Hoetzinger 1,156,728 (b) 7.6%
$.01 par value 200-220 E. Bennett Ave.
Cripple Creek, CO 80813
- ------------------------ --------------------------------- --------------------- -------------
Common Stock, James D. Forbes 989,264 (c) 6.6%
$.01 par value 200-220 E. Bennett Ave.
Cripple Creek, CO 80813
- ------------------------ --------------------------------- --------------------- -------------
Common Stock, Robert S. Eichberg 50,000 (d) (e)
$.01 par value 1801 California St. Ste 4650
Denver, CO 80202
- ------------------------ --------------------------------- --------------------- -------------
Common Stock, Gottfried Schellmann 89,000 (f) (e)
$.01 par value Lerchengasse 2
2340 Moedling, Austria
- ------------------------ --------------------------------- --------------------- -------------
Common Stock, Larry Hannappel 42,500 (g) (e)
$.01 par value 200-220 E. Bennett Ave.
Cripple Creek, CO 80813
- ------------------------ --------------------------------- --------------------- -------------
Common Stock, All Officers and Directors 4,261,161 24.6%
$.01 par value as a Group (six persons)
- ------------------------ --------------------------------- --------------------- -------------
Common Stock, Thomas Graf 2,582,200 17.8%
$.01 par value Liechtensteinstrasse 54
A-2344 Maria Enzersdorf
Austria
- ------------------------ --------------------------------- --------------------- -------------
Common Stock, Lloyd I. Miller, III 2,219,365 15.3%
$.01 par value 4550 Gordon Drive
Naples, FL 34102
- ------------------------ --------------------------------- --------------------- -------------
- ----------------
3
<PAGE>
<FN>
(a) Includes: (i) an incentive stock option for 130,000 shares exercisable
at $1.50 per share; (ii) an incentive stock option for 183,333 shares
exercisable at $0.75 per share; (iii) a non-statutory stock option for
820,000 shares exercisable at $1.50 per share; and (iv) a non-statutory
stock option for 166,667 shares exercisable at $.75 per share.
(b) Includes: (i) an incentive stock option for 130,000 shares exercisable
at $1.50 per share; (ii) an incentive stock option for 183,333 shares
exercisable at $0.75 per share; (iii) a non-statutory stock option for
413,000 shares exercisable at $1.50 per share; (iv) a non-statutory
stock option for 66,667 shares exercisable at $.75 per share; and (v)
100,000 shares held by Mr. Hoetzinger's spouse.
(c) Includes: (i) an incentive stock option for 130,000 shares exercisable
at $1.50 per share; (ii) an incentive stock option for 160,000 shares
exercisable at $0.75 per share; and (iii) a non-statutory stock option
for 328,000 shares exercisable at $1.50 per share.
(d) Includes: (i) an option for 10,000 shares exercisable at $0.938 per
share; (ii) an option for 10,000 shares exercisable at $0.75 per share;
and (iii) an option for 20,000 shares exercisable beginning February 1,
2001, at 1.00 per share.
(e) Less than 1%.
(f) Includes: (i) an option for 10,000 shares exercisable at $0.938 per
share; (ii) an option for 10,000 shares exercisable at $0.75 per share;
and (iii) an option for 20,000 shares exercisable beginning February 1,
2001, at 1.00 per share.
(g) Includes (1) incentive stock options for 10,000 shares exercisable at
$0.75 per share; (2) incentive stock options for 22,500 shares
exercisable at $1.50 per share, and incentive stock options for 5,000
shares exercisable at $2.25 per share.
</FN>
</TABLE>
4
<PAGE>
INFORMATION CONCERNING DIRECTORS
AND EXECUTIVE OFFICERS
Information regarding the Board of Directors and executive officers of
the Company, as of April 5, 2000, is as follows:
Officer or
Name Age Positions Held Director Since
Erwin Haitzmann 46 Chairman of the Board & March 1994
Chief Executive Officer
Peter Hoetzinger 38 Vice Chairman of the Board March 1994
& President
James D. Forbes 42 Assistant Treasurer & March 1994
Director
Robert S. Eichberg 53 Director January 1997
Gottfried Schellmann 45 Director January 1997
Dr. Dinah Corbaci 45 Director April 2000
Larry Hannappel 47 Chief Accounting Officer October 1999
& Secretary
Erwin Haitzmann holds a Doctorate degree in Social and Economic Sciences
from the University of Linz, Austria (1980), and has 25 years of casino gaming
experience ranging from dealer (commencing in 1975) through various casino
management positions. Mr. Haitzmann has been employed full-time by the Company
since May 1993.
Peter Hoetzinger received a Masters degree from the University of Linz,
Austria, in 1986. He thereafter was employed in several managerial positions in
the gaming industry with Austrian casino companies. Mr. Hoetzinger has been
employed full-time by the Company since May 1993.
James D. Forbes, from 1979 to 1993, was employed in several positions in
the gaming industry with British and Austrian casino companies. Mr. Forbes has
been employed full-time by the Company since February 1993.
Robert S. Eichberg graduated from Bradley University in 1968 with a B.S.
Degree in Accounting and is a Certified Public Accountant. He was employed by
the public accounting firm of Deloitte & Touche, LLP from 1974 to 1994, ending
his tenure there as Tax Partner. From 1994 to 1996 her served as Tax Partner for
the public accounting firm Price Bednar, before joining the public accounting
firm of Causey, Demgen & Moore, Inc. in September of 1996, where he has been
employed since, as shareholder and President.
5
<PAGE>
Gottfried Schellmann graduated from University of Vienna with a law degree
and is a certified tax advisor in Austria. After having worked for several
firms, including KPMG Germany as tax and accounting manager, he formed
Schellmann & Partner in 1993, where he has been employed since, which
specializes in tax and accounting work for provinces and municipalities in
Austria.
He is a member of the International Bar Association. He is also one of the main
co-authors, together with certain officers of the Austrian Ministry of Finance,
of the Austrian corporate tax code.
Larry Hannappel holds a B.S. Degree in Accounting from National College,
Rapid City, South Dakota (1976) and is a Certified Public Accountant. From 1976
to 1979, he was employed by the public accounting firm of Hamma & Nelson. From
1979 to 1994, he served in various financial management capacities in
manufacturing and gaming. Mr. Hannappel has been employed full-time by the
Company since 1994. He became Chief Accounting Officer in October 1999, and was
appointed as Secretary of the Company in March, 2000.
Dinah Corbaci holds a Doctorate degree in Law from the University of
Salzburg, Austria (1981). She joined IBM Austria in 1984, where she served as
Account Manager for large government customers. Since 1995, she has shifted her
focus to e-business for large IBM mainframe customers, including the leading
Austrian Internet service provider and has been working in the area of
e-commerce since.
There are no family relationships between or among the Company's executive
officers and directors.
Certain Information Regarding the Board of Directors
During 1999, on several occasions during the year, the members of the Board
of Directors executed unanimous written consents in lieu of meetings, in
accordance with Delaware law. The Audit Committee of the Board of Directors
(consisting of Messrs. Eichberg and Schellmann), which assesses the Company's
system of internal controls and assists in considering the recommendations and
performance of the Company's independent accountants, have held one meeting
since the date of the last annual meeting in December 1999. The Board of
Directors does not have separate Compensation or Nominating Committees.
Executive Compensation
The table below sets forth executive compensation during 1997, 1998 and
1999 to the Chairman of the Board and Chief Executive Officer of the Company,
Erwin Haitzmann, and to all other executive officers who received greater than
$100,000 in compensation in 1997, 1998 and 1999.
6
<PAGE>
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
- ------------------------------------------------------------------------------------------------------------------------------
AWARDS PAYOUTS
- ------------------------------------------------------------------------------------------------------------------------------
SECURITIES ALL
OTHER UNDER- OTHER
ANNUAL RESTRICTED LYING LTIP COM-
COMPEN- STOCK OPTIONS / PAY- PENSA-
NAME & SALARY BONUS SATION (a) AWARDS SARS OUTS TION (b)
PRINCIPAL POSITION YEAR ($) ($) ($) ($) (#) ($) ($)
============================= ====== ======== ======= ======= ============== =========== ====== ===========
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Erwin ....................... 1999 157,519 295,000 59,228 -- -- -- --
Haitzmann,
Chairman of the Board ....... 1998 150,000 200,000 59,700 -- -- -- --
and Chief Executive
Officer ..................... 1997 130,671 54,632 1,715 -- -- -- --
- ----------------------------- ------ ------- ------- ------- -------------- ----------- ------- -------
- ----------------------------- ------ ------- ------- ------- -------------- ----------- ------- -------
Peter Hoetzinger, ........... 1999 157,519 295,000 57,812 -- -- -- --
Vice Chairman of the
Board and President ......... 1998 150,000 200,000 15,402 -- -- -- --
1997 130,671 54,329 926 -- -- -- --
- ----------------------------- ------ ------- ------- ------- -------------- ----------- ------- -------
- ----------------------------- ------ ------- ------- ------- -------------- ----------- ------- -------
James D. Forbes, ............ 1999 167,479 118,000 56,342 -- -- -- 2,250
Assistant Treasurer and
Director .................... 1998 150,000 30,000 41,487 -- -- -- 1,724
1997 132,580 47,175 6,377 -- -- -- --
- ----------------------------- ------ ------- ------- ------- -------------- ----------- ------- -------
Norbert Teufelberger (c) .... 1999 210,710(d) -- 2,244 -- -- 164,735 (e 1,626
1998 150,000 140,000 7,859 -- -- -- 1,486
1997 130,671 38,317 3,934 -- -- -- --
- ----------------------------- ------ ------- ------- ------- -------------- ----------- ------- -------
- ------------
<FN>
(a) Amounts for 1999 and 1998, respectively, include reimbursement for
estimated income taxes, associated with perquisites, of $28,725 and $26,721
for Mr. Haitzmann; $28,039 and $6,565 for Mr. Hoetzinger; $12,959 and
$11,151 for Mr. Forbes; none and $837 for Mr. Teufelberger.
(b) Consists solely of Company's matching contributions to the 401(k) Savings
and Retirement Plan.
(c) Mr. Teufelberger resigned from the Company effective September 30, 1999.
Prior to his resignation, he served as the Company's Chief Financial
Officer and Secretary and as a Director.
(d) Includes advances forgiven totaling $38,178 and furniture with fair value
of $5,631 transferred to Mr. Teufelberger upon his resignation.
(e) On October 15, 1999, Mr. Teufelberger and the Company entered into a Waiver
and Release and Consulting Agreement, which provides for a non-competition
arrangement covering 18 months for consideration of twelve monthly payments
of $14,000, a total of $168,000 during 2000. In March 2000, after making
two monthly payments of $14,000 each, the Company exercised its early
payment option and satisfied its remaining obligation to Mr. Teufelberger
with a lump sum payment of $136,735.
</FN>
</TABLE>
7
<PAGE>
STOCK OPTION GRANTS IN LAST FISCAL YEAR
The table below sets forth information concerning grants of stock options during
1999 to purchase shares of common stock of the Company to any of the named
executive officers.
<TABLE>
<CAPTION>
- -------------------------- -------------------- ---------------------- ---------------------- ----------------------
NUMBER OF
SECURITIES % OF TOTAL
UNDERLYING OPTIONS GRANTED TO
OPTIONS EMPLOYEES IN 1999 EXERCISE PRICE EXPIRATION
NAME GRANTED ($/SHARE) DATE
========================== ==================== ====================== ====================== ======================
<S> <C> <C> <C> <C>
Erwin Haitzmann
Chairman of the Board
and Chief Executive
Officer
Incentive Stock Option 133,333 16.5 $0.75 2009
Statutory Stock
Option 166,667 20.6 $0.75 2009
- -------------------------- -------------------- ---------------------- ---------------------- ----------------------
Peter Hoetzinger,
Vice Chairman of the
Board and President
Incentive Stock Option 133,333 16.5 $0.75 2009
Statutory Stock
Option 66,667 8.2 $0.75 2009
8
<PAGE>
- -------------------------- -------------------- ---------------------- ---------------------- ----------------------
James D. Forbes,
Assistant Treasurer
and Director
Incentive Stock Option 110,000 13.6 $0.75 2009
- -------------------------- -------------------- ---------------------- ---------------------- ----------------------
Norbert Teufelberger (a)
Incentive Stock Option 133,333 16.5 $0.75 2009
Non-statutory Option 41,667 5.2 $0.75 2009
- -------------------------------------------------------------------------------------------------------------------
<FN>
(a) Mr. Teufelberger resigned from the Company effective September 30, 1999. Prior to his resignation, he
served as the Company's Chief Financial Officer and Secretary, and a Director. All of his options expired
unexercised upon his resignation.
</FN>
</TABLE>
9
<PAGE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR END OPTION
VALUES
The following table sets forth the aggregate options held by certain
executive officers of the Company. No options were exercised by the specified
officers in 1999.
<TABLE>
<CAPTION>
- ------------------- --------------- -------------- --------------------------------- ---------------------------------
VALUE OF UNEXERCISED
SHARES NUMBER OF SECURITIES UNDERLYING IN-THE-MONEY OPTIONS AT
ACQUIRED ON VALUE OPTIONS AT DECEMBER 31, 1999 DECEMBER 31, 1999
NAME EXERCISE REALIZED EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
=================== ============= ============== ================================= =================================
<S> <C> <C> <C> <C>
Erwin Haitzmann,
Chairman of the - - 1,000,000 / 300,000 $11,750 / 70,500 (a)
Board and Chief
Executive Officer
- ------------------- ------------- -------------- --------------------------------- ---------------------------------
Peter Hoetzinger,
Vice Chairman of - - 593,000 / 200,000 $11,750 / 47,000 (a)
the Board and
President
- ------------------- ------------- -------------- --------------------------------- ---------------------------------
James D. Forbes,
Assistant
Treasurer and - - 508,000 / 110,000 $11,750 / 25,850 (a)
Director
- -----------------
<FN>
(a) Based on the closing bid price ($.99) of the Company's Common Stock on the
Nasdaq Stock Market on December 31, 1999.
</FN>
</TABLE>
Directors who are full-time employees receive no compensation for their
services as directors. With the exception of Messrs. Eichberg and Schellmann,
all of the Company's directors are full-time employees.
Messrs. Eichberg and Schellmann, the outside directors of the Company,
are being compensated for their services as follows. In 1998, upon joining the
Board of Directors, both outside directors received options to purchase 10,000
shares of the Company's common stock. The options have a five-year term and are
exercisable at $0.938 per share. In 1999, both outside directors received
options to purchase an additional 10,000 shares of the Company's stock, which
have a five-year term and are
10
<PAGE>
exercisable at $.75 per share. In February, 2000, both outside directors
(Messrs. Eichberg and Schellmann) received options to purchase an additional
20,000 shares of the Company's stock; these options have a five-year term and
are exercisable beginning February, 2001, at $1.00 per share. The outside
directors receive $1,000 per Board or committee meeting attended and the Company
will pay for reasonable expenses incurred in conjunction with those meetings. In
addition, the outside directors receive $1,000 per gaming application filed with
gaming regulators to compensate them for their time spent.
COMPLIANCE WITH SECTION 16(a) OF
THE SECURITIES EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors and executive officers, and persons who beneficially own
more than 10% of its outstanding common stock, to file with the Securities and
Exchange Commission (the "SEC") initial reports of ownership and reports of
changes in ownership of common stock and other equity securities of the Company.
Officers and greater than 10% stockholders are required by SEC regulation to
furnish the Company with copies of all Section 16(a) reports they file.
To the Company's knowledge (based solely on review of the copies of
such reports furnished to the Company and representations that no other reports
were required, during the fiscal year ended December 31, 1999), all Section
16(a) filing requirements applicable to its officers, directors and greater than
10% stockholders were complied with in a timely manner.
STOCK PRICE PERFORMANCE
This information is incorporated by reference from Part II, Item 5, in
the Company's Annual Report on Form 10KSB for the year ended December 31, 1999.
TRANSACTIONS WITH MANAGEMENT
On February 23, 1998, each of Messrs. Haitzmann, Hoetzinger, Forbes and
Teufelberger, directors and officers of the Company, purchased a 2% equity
interest in Century Casinos Africa (Pty.) Limited ("CCA"), a subsidiary of the
Registrant, at a cost of approximately $500 each. The shares were received
pursuant to CCA's 1998 Share Incentive Plan, which was approved by Company's
Board of Directors in early 1998. The amount paid was substantially in excess of
CCA's book value per share at that time. In connection with Mr. Teufelberger's
resignation from the Company, his equity interest has been returned to the
Company.
At April 21, 1999, the Company had an unsecured note payable April 1, 2004,
in the principal amount of $380,000 to Thomas Graf, a founding stockholder of
the Company.
11
<PAGE>
There have been no transactions with management, except as otherwise
disclosed herein, since the date of the Company's last annual meeting on
December 19, 1999, and the transactions disclosed in the Proxy Statement for
that meeting.
NO RELATIONSHIP WITH MR. TEUFELBERGER
The Company has been instructed by The Colorado Division of Gaming to
sever, and has severed, all ties with Mr. Teufelberger, effective March 21,
2000, and to have no further involvement with Mr. Teufelberger in any way from
that date forward. Further, the Colorado Division of Gaming has demanded that
Mr. Teufelberger surrenders his casino license and that he must complete an
affidavit of surrender. The Colorado Division of Gaming has also asked the
Company to disclose to it Mr. Teufelberger's shareholdings in the Company and to
monitor this number going forward. In following these instructions, the Company
has severed all ties with Mr. Teufelberger and has paid him all outstanding
payments (at a discounted rate) under a previously executed Waiver and Release
and Consulting Agreement, dated October 15, 1999.
PROPOSAL 1
ELECTION OF DIRECTORS
In the 1994 annual meeting, the stockholders approved a proposal to divide
the Board into three classes of directors as nearly equal in number as possible.
Presently, the Board consists of six directors comprising the following: (i) two
Class I directors, Mr. Eichberg and Dr. Dinah Corbaci, who has been appointed by
the Board of Directors to fill the vacancy created by the resignation of Mr.
Teufelberger. The term of both Class I directors will expire at the 2001 Annual
Meeting of Stockholders; (ii) two Class II directors, Messrs. Hoetzinger and
Forbes, whose terms will expire at the 2002 Annual Meeting; and (iii) two Class
III directors, Messrs. Haitzmann and Schellmann, who are standing for
re-election at this Annual Meeting. Each director who is elected at an Annual
Meeting will be elected for a three-year term expiring at the third Annual
Meeting of Stockholders after such director's election. Accordingly, under most
circumstances, directors of one Class only are elected at each year's Annual
Meeting of Stockholders. If elected, all nominees are expected to serve until
the expiration of their respective terms and until their successors are duly
elected and qualified.
12
<PAGE>
At the 2000 Annual Meeting, two Class III directors will be elected.
The proxies named on the enclosed proxy intend to vote for the election of the
nominees for Class III directors, Erwin Haitzmann and Gottfried Schellmann.
Proxies cannot be voted for a greater number of directors than the number
nominated.
Erwin Haitzmann, a nominee for a Class III director, is presently a
member of the Board of Directors, having served continuously as a director since
March 1994. He has indicated a willingness to serve; however, in the event he
should become unable to serve as a director, the proxy will be voted in
accordance with the best judgment of the persons acting under the proxy.
Gottfried Schellmann, a nominee for a Class III director, is presently
a member of the Board of Directors and a member of the Audit Committee, having
served continuously as a director since January 1997. He has indicated a
willingness to serve; however, in the event he should become unable to serve as
a director, the proxy will be voted in accordance with the best judgment of the
persons acting under the proxy.
The information concerning Messrs. Haitzmann and Schellmann, the
nominees for the Class III directors, is set forth above under "Information
Concerning Directors and Executive Officers."
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ABOVE NOMINEES.
INDEPENDENT ACCOUNTANTS
Deloitte & Touche, LLP ("Deloitte & Touche") was the Company's independent
public accounting firm for the fiscal year ending December 31, 1999. The Audit
Committee recommended, and the Board of Directors has selected, the accounting
firm of Grant Thornton LLP ("Grant Thornton") to be the Company's independent
accountants for the fiscal year ending December 31, 2000, subject to Grant
Thornton's normal client acceptance procedure. The primary reason for this
change of accounting firms is for purposes of convenience to the Company. Grant
Thornton is located in Colorado Springs, Colorado, nearer (by 70 miles) to the
Company's principal office in Cripple Creek, Colorado than Deloitte & Touche,
whose nearest office is located in Denver, Colorado. There were no disagreements
between the Company and Deloitte & Touche of the type which would require
disclosure under Item 304 of Regulation S-B. A representative of Grant Thornton
is expected to be present at the Annual Meeting via telephone and/or webcast, to
make a statement and/or to respond to appropriate questions.
13
<PAGE>
PROPOSAL 2
RATIFICATION OF FIRST SUPPLEMENT TO RIGHTS AGREEMENT
On April 5, 2000, the Board of Directors of the Company unanimously
approved and recommended to submit to the Company's stockholders for
ratification a First Supplement to the Company's Rights Agreement. The Rights
Agreement was initially approved by the Board of Directors on April 29, 1999.
The Rights Agreement was initially adopted to protect the Company and
its shareholders against takeover by a party who might be "adverse" to the
stockholders' interest. The Rights Agreement provides that after (1)
accumulation by a person or entity ("Acquiring Person") of 20% or more of the
Company's outstanding stock; and (2) determination by the Board of Directors
that such Acquiring Person is an "Adverse Person" (as defined in the Agreement),
the Company will issue further stock, to dilute the shares of the adverse party.
Pursuant to the express provisions of Section 26 of the Rights
Agreement, it may be amended or supplemented at any time prior to the
"Distribution Date." The "Distribution Date" is defined in the Agreement as 20
days after (i) the Company publicly announces that an Acquiring Person has
acquired 20% beneficial ownership of the outstanding stock, (ii) a tender offer
by an Acquiring Person, or (iii) an exchange offer by an Acquiring Person. None
of these three triggering dates have yet occurred, so the Board has adopted a
First Supplement to Rights Agreement (a copy of which is attached hereto as
Exhibit A).
The purpose of this First Supplement to Rights Agreement is to
expressly allow additional accumulation of the Company's shares by a "friendly
group" (defined in the First Supplement as a Company employee benefit plan, or
Company directors who are directly elected by the shareholders, and/or officers
duly appointed by those elected directors) without an automatic triggering or
implementation of the rights plan. The intent of this modification is to insure
that an inadvertent "triggering" of the rights plan (resulting in shareholder
dilution), will not occur if there is accumulation of the Company's stock by a
person or group not deemed to be "adverse" to the Company's interests.
Therefore, the First Supplement to the Rights Agreement, as adopted by the Board
of Directors, expands definition of "Exempt Person" to include such a group, and
therefore to exempt such accumulation from the "triggering" (dilution)
provisions.
The First Supplement to Rights Agreement, as adopted by the Board of
Directors, and proposed for ratification by the Shareholders, is set forth in
its entirety at Exhibit A. The modified language is contained at 1(iv) of the
First Supplement, and is underlined.
THE BOARD OF DIRECTORS RECOMMENDS SHAREHOLDER RATIFI-CATION OF THE
BOARD'S ADOPTION OF THE FIRST SUPPLEMENT TO RIGHTS AGREEMENT, IN THE FORM
ATTACHED AT EXHIBIT A.
14
<PAGE>
EXHIBIT A
FIRST SUPPLEMENT TO RIGHTS AGREEMENT
This First Supplement to Rights Agreement, dated as of April 5, 2000, is
made between Century Casinos, Inc., a Delaware corporation (the "Company"), and
American Securities Transfer & Trust, Inc., a Colorado corporation, as Rights
Agent (the "Rights Agent"),
WITNESSETH
1. On April 29, 2000, the Company adopted a written Rights Agreement (the
"Rights Agreement").
2. Section 26 of the Rights Agreement provides that the Company may amend or
supplement the Rights Agreement, "Prior to the Distribution Date (as defined
therein") (including, without limitation, the date on which the Distribution
Date shall occur, the definition of Acquiring Person, the time during which the
Rights may be redeemed or any provision of the Certificate of Designation)
without the approval of any holders of certificates representing shares of
Common Stock.
3. The parties now desire to supplement the Agreement, pursuant to the
provisions of Section 26.
NOW, THEREFORE, the parties hereby agree as follows:
1. The definition of "Exempt Person" under "Section 1. "Certain
Definitions" is hereby amended to read in its entirety as follows (amended
portions are underlined):
"Exempt Person" shall include (i) the Company, (ii) any
Subsidiary (as hereinafter defined) of the Company, (iii) any
employee benefit plan of the Company or any of its Subsidiaries,
or any entity holding shares of Common Stock which was organized,
appointed or established by the Company or any Subsidiary of the
Company for or pursuant to the terms of any such plan, or (iv)
any Person (as defined herein), who meets the following
requirements:
(a) such Person (or Persons) is (are) individuals or
entities made up solely of directors of the Company, duly
elected by the Shareholders, or officers of the Company duly
appointed by such elected directors;
(b) such Person (or Persons) is (are) determined not to be
an "Adverse Person," as defined herein.
15
<PAGE>
2. The "Provided Further" clause under Section 3(a) is hereby amended by
adding the following (amended portions are underlined):
(i) immediately following (3), after the words "the Board of Directors
shall approve..", a new subparagraph (y) to read as follows:
(y) if following the occurrence of the Stock Acquisition
Date and prior to the Distribution Date, the Board of
Directors, in exercise of its reasonable business
judgment shall determine to cancel or hold the
Distribution Date in abeyance;
(ii) the existing subparagraph (y) shall be renumbered as
subparagraph (2).
(iii) a new final paragraph to read as follows:
Notwithstanding the foregoing, if a cancellation or an
--------------------------------------------------------------
abeyance of the Distribution Date, pursuant to the provisions of the "Provided
- --------------------------------------------------------------------------------
Further" clause above Section 3(a), (x), (y) or (z) has occurred, the
- --------------------------------------------------------------------------------
Distribution Date shall be reinstated, at any time, if the Board of Directors in
- --------------------------------------------------------------------------------
the exercise of its reasonable business judgment, determines that the requisite
- --------------------------------------------------------------------------------
conditions to trigger the Stock Acquisition Date, without cancellation or
- --------------------------------------------------------------------------------
further abeyance of the Distribution Date, again exist. In that event, all of
- --------------------------------------------------------------------------------
the applicable procedures set forth in Section 3 shall be deemed to continue in
- --------------------------------------------------------------------------------
full force and effect.
- ----------------------
3. All other provisions of the existing Rights Agreement are hereby
ratified, confirmed and approved, and shall remain unchanged, in full force and
effect, and shall thereafter proceed as set forth therein.
IN WITNESS WHEREOF, the parties hereto have caused this First
Supplement to Rights Agreement to be duly executed, all as of the date and year
first above written.
Attest: CENTURY CASINOS, INC.
________________________________ By:_______________________________
Secretary Erwin Haitzmann, Chairman
Attest: AMERICAN SECURITIES TRANSFER
& TRUST, INC., as Rights Agent
_______________________________ By:_____________________________
16
<PAGE>
PROXY CENTURY CASINOS, INC. PROXY
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
The undersigned stockholder of Century Casinos, Inc. acknowledges receipt of the
Notice of Annual Meeting of Stockholders, to be held on Thursday, June 15, 2000,
at Casino Millennium in Prague, Czech Republic, at 6:00 p.m. Central European
Time, and hereby appoints Erwin Haitzmann or Peter Hoetzinger, or either of
them, each with the power of substitution, as attorneys and proxies to vote all
the shares of the undersigned at said Annual Meeting and at all adjournments
thereof, hereby ratifying and confirming all that said attorneys and proxies may
do or cause to be done by virtue hereof. The above-named attorneys and proxies
are instructed to vote all of the undersigned's shares as follows:
(1) To elect two Class II directors to the Board of Directors:
Gottfried Schellmann [ ] FOR [ ] AGAINST [ ] ABSTAIN
Erwin Haitzmann [ ] FOR [ ] AGAINST [ ] ABSTAIN
(2) A proposal to ratify the Board of Directors' approval of a First
Supplement to Rights Agreement:
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(3) In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
(Continued and to be signed on reverse side)
- --------------------------------------------------------------------------------
(Continued from other side)
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED HEREIN BY THE
UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR
THE NOMINEES IN PROPOSAL 1 AND FOR PROPOSALS 2 AND 3.
Dated this ______ day of ____________, 2000.
Signature___________________________________
Signature___________________________________
Please sign your name exactly as it appears on your stock
certificate. If shares are held jointly, each holder should sign.
Executors, trustees, and other fiduciaries should so indicate
when signing.
Please sign, date and return this proxy immediately.
Note: Securities dealers, please state the number of Shares voted
by this proxy.
-----------------------
