Canterbury Park Holding Corp 8-K, filed Oct 2, 2020
Canterbury Park Holding Corp (CPHC)
About this 8-K
Canterbury Park Holding Corp filed this 8-K on October 2, 2020, reporting on events of September 30, 2020.
Items reported
- Item 1.01: Entered into a material agreement
- Item 5.02: Director or officer change, or executive pay
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of report (Date of earliest event reported): September 30, 2020
Canterbury Park Holding Corporation
(Exact name of registrant as specified in its charter)
Minnesota
(State or Other Jurisdiction of Incorporation)
001-37858 | 47-5349765 |
(Commission File Number) | (IRS Employer Identification No.) |
| |
1100 Canterbury Road, Shakopee, Minnesota | 55379 |
(Address of Principal Executive Offices) | (Zip Code) |
(952) 445-7223
(Registrant’s telephone number, including area code)
Securities registered pursuant Section 12(b) of the Act:
Title of Each Class | Trading Symbol | Name of each exchange on which registered |
Common Stock Common stock, $.01 par value | CPHC | Nasdaq |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 1.01 Entry Into a Material Definitive Agreement.
On September 30, 2020, (i) Canterbury Park Entertainment, LLC, (the “Borrower”), a Minnesota limited liability company and subsidiary of Canterbury Park Holding Corporation, a Minnesota corporation (the “Company”); (ii) the Company as Guarantor; (iii) Canterbury Park Concessions, Inc. a Minnesota corporation and subsidiary of the Company; and (iv) and Bremer Bank, National Association (“Bremer Bank”) entered into the Fourth Amendment Agreement (“Fourth Amendment”) to the General Credit and Security Agreement dated as of November 14, 2016, as amended (“Credit Agreement”), which established an $8.0 million credit facility from Bremer Bank to the Borrower.
The Fourth Amendment extended the maturity date of the Credit Agreement to December 31, 2020 and decreased the maximum borrowing under the line of credit to $6.0 million. Except as expressly amended in the Fourth Amendment, the Credit Agreement and the documents associated therewith, remain in full force and effect in accordance with their original terms.
The foregoing description of the material terms of the Fourth Amendment is not complete and is qualified in its entirety by reference to the full text of the Fourth Amendment thereof, a copy of which is incorporated by reference as an exhibit to this Current Report on Form 8-K and is incorporated herein by reference.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On October 1, 2020, the Board of Directors of the Company elected Mark Chronister to the Company’s Board of Directors to fill an existing vacancy. Following the election of Mr. Chronister, the Board of Directors is comprised of six directors. Also, on October 1, 2020, Mr. Chronister was appointed to the Company’s Audit Committee to serve with directors Carin J. Offerman (Chair), Maureen H. Bausch, and John S. Himle.
Mr. Chronister, age 69, retired in 2007 as an audit partner in the Minneapolis office of PricewaterhouseCoopers, LLP (PwC) after 34 years at the firm. From 2007 to current, Mr. Chronister has been focused on board and community service. Currently, Mr. Chronister is an Advisory Board member of RiskClimate LLC, a start-up creating enterprise risk management software for higher education, the Finance and Development Council Chair and Community Council member for the Pax Christi Catholic Community, a Board member, past Treasurer and Audit and Finance Committee Chair for the Science Museum of Minnesota, and an Advisory Board member for the Hendrickson Institute of Ethical Leadership, St. Mary’s University of Minnesota.
Mr. Chronister is an “independent director” under the Nasdaq Listing Rules. Mr. Chronister also meets the criteria for independence set forth in Rule 10A-3(b)(1) under the Securities Exchange Act of 1934, as amended, and is an “audit committee financial expert” as defined in Item 407(d)(5) of Regulation S-K promulgated under the Securities Exchange Act of 1934, as amended. Mr. Chronister does not have any direct or indirect material interest in any transaction required to be disclosed pursuant to Item 404(a) of Regulation S-K promulgated under the Securities Exchange Act of 1934, as amended.
On October 2, 2020, the Company announced the election of Mr. Chronister by the press release attached hereto as Exhibit 99.1.
Item 9.01. Financial Statements and Exhibits.
(d.) Exhibits
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| CANTERBURY PARK HOLDING CORPORATION | |
| | |
Dated: October 2, 2020 | By: | /s/ Randall D. Sampson |
| | Randall D. Sampson |
| | President and Chief Executive Officer |
FOURTH AMENDMENT AGREEMENT
THIS FOURTH AMENDMENT AGREEMENT (this “Amendment”) is made as of the 30th day of September, 2020, by and among CANTERBURY PARK ENTERTAINMENT LLC, a Minnesota limited liability company (the “Borrower”), Canterbury Park Holding Corporation, a Minnesota corporation (the “Guarantor”), Canterbury Park Concessions, Inc., a Minnesota corporation (“Canterbury Concessions”), and BREMER BANK, NATIONAL ASSOCIATION, a national banking association (the “Lender”).
W I T N E S S E T H:
WHEREAS, the Borrower and the Lender are parties to that certain General Credit and Security Agreement dated as of November 14, 2016, as amended by that certain Amendment Agreement dated as of September 30, 2017, as further amended by that certain Second Amendment Agreement dated as of September 30, 2018, and as further amended by that certain Third Amendment Agreement dated as of September 30, 2019 (collectively, the “Credit Agreement”), which sets forth the terms and conditions of a revolving line of credit to the Borrower in the maximum principal amount of Eight Million and 00/100 Dollars ($8,000,000.00) (the “Loan”); and
WHEREAS, the obligation of the Borrower to repay the Loan is evidenced by that certain Amended and Restated Revolving Credit Note dated as of September 30, 2018 (the “Existing Note”), executed by the Borrower and payable to the Lender in the original principal amount of $8,000,000.00; and
WHEREAS, the Existing Note is secured by, among other things, that certain Third Party Security Agreement dated as of November 14, 2016 (the “Security Agreement”), executed by Canterbury Concessions, as debtor, in favor of the Lender, as secured party; and
WHEREAS, the Existing Note has been guaranteed by the Guarantor pursuant to that certain Corporate Guaranty dated as of November 14, 2016 (the “Guaranty”), executed by the Guarantor in favor of the Lender; and
WHEREAS, as of the date hereof, there is outstanding under the Existing Note the principal amount of $0.00; and
WHEREAS, the Borrower has requested that the Lender extend the Maturity Date of the Loan from September 30, 2020 to December 31, 2020; and
WHEREAS, the Lender has agreed to the foregoing, subject to the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the foregoing recitals and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:
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IN WITNESS WHEREOF, the parties hereto have made and entered into this Amendment as of the day and year first above written.
[SIGNATURE PAGE FOLLOWS]
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[SIGNATURE PAGE TO FOURTH AMENDMENT AGREEMENT]
BORROWER:
CANTERBURY PARK ENTERTAINMENT LLC
By: /s/ Randall D. Sampson
Name: Randall D. Sampson
Its: President and CEO
GUARANTOR:
CANTERBURY PARK HOLDING CORPORATION, a Minnesota corporation
By: /s/ Randall D. Sampson
Name: Randall D. Sampson
Its: President and CEO
CANTERBURY CONCESSIONS:
CANTERBURY PARK CONCESSIONS INC.
By: /s/ Randall D. Sampson
Name: Randall D. Sampson
Its: President and CEO
LENDER:
BREMER BANK, NATIONAL ASSOCIATION
By: /s/ Laura Helmueller
Name: Laura Helmueller
Its: Senior Vice President
S-1
EXHIBIT A
SECOND AMENDED AND RESTATED revolving credit note
$6,000,000.00 | Eagan, Minnesota September 30, 2020 |
FOR VALUE RECEIVED, the undersigned, CANTERBURY PARK ENTERTAINMENT LLC, a Minnesota limited liability company (the “Borrower”), promises to pay to the order of BREMER BANK, NATIONAL ASSOCIATION, a national banking association (the “Lender”), on the Revolving Credit Termination Date, the principal sum of Six Million and No/100ths Dollars ($6,000,000.00) or, if less, the then aggregate unpaid principal amount of the Advances as may be borrowed by the Borrower under the Credit Agreement (as defined herein) and are outstanding on the Revolving Credit Termination Date. All Advances and all payments of principal shall be recorded by the Lender in its records which records shall be conclusive evidence of the subject matter thereof, absent manifest error.
The Borrower further promises to pay to the order of the Lender interest on each Advance from time to time outstanding from the date hereof until paid in full at a fluctuating annual rate equal to the greater of: (a) the Prime Rate, or (b) 3.0%; provided, however, that, notwithstanding anything to the contrary contained herein, upon the occurrence and during the continuance of any Event of Default, the rate of interest hereunder shall be 2.0% per annum above the current rate of interest. Interest shall be due and payable on the first day of each calendar month, commencing on October 1, 2020, and at maturity. Interest payment after maturity shall be payable on demand. Each change in the fluctuating interest rate shall take effect simultaneously with the corresponding change in the Prime Rate.
All payments of principal and interest under this Note shall be made in lawful money of the United States of America in immediately available funds to the Lender at the Lender’s office at 1995 Rahncliff Court, Eagan, Minnesota 55122, or at such other place as may be designated by the Lender to the Borrower in writing.
This Note is the Amended and Restated Revolving Credit Note referred to in, and evidences indebtedness incurred under that certain General Credit and Security Agreement dated as of November 14, 2016 (herein, as it may be amended, modified or supplemented from time to time, called the “Credit Agreement”; capitalized terms not otherwise defined herein being used herein as therein defined) between the Borrower and the Lender, to which Credit Agreement reference is made for a statement of the terms and provisions thereof, including those under which the Borrower is permitted and required to make prepayments and repayments of principal of such indebtedness and under which such indebtedness may be declared to be immediately due and payable.
All parties hereof, whether as makers, endorsers or otherwise, severally waive presentment, demand, protest and notice of dishonor in connection with this Note.
This Note is made under and governed by the internal laws of the State of Minnesota.
A-1
This Note constitutes an amendment and restatement of that certain Amended and Restated Revolving Credit Note dated September 30, 2018 (the “Existing Note”), executed by the Borrower and payable to the Lender in the original principal amount of $8,000,000.00 and is given in replacement of, but not in payment for, the Existing Note. This Note is not a novation of any indebtedness of the Borrower to the Lender.
[SIGNATURE PAGE FOLLOWS]
A-2
[SIGNATURE PAGE TO SECOND AMENDED AND RESTATED REVOLVING CREDIT NOTE]
CANTERBURY PARK ENTERTAINMENT LLC
By:
Name: Randall D. Sampson
Its: President and CEO
A-3
MARK CHRONISTER ELECTED TO Canterbury Park’S BOARD OF DIRECTORS
Proven Finance Executive Brings Forty Years of Experience to Board
Shakopee, MN – October 2, 2020 – Canterbury Park Holding Corporation (NASDAQ: CPHC) (“Canterbury Park” or the “Company”) announced today that Mark Chronister has been elected to the Company’s Board of Directors, effective October 1, 2020. The election of Mr. Chronister to Canterbury Park’s Board of Directors increases the size of the Board to six members, five of whom are considered independent directors under NASDAQ rules. Mr. Chronister will serve on the Board’s Audit Committee and is an “audit committee financial expert”, as that term is defined under the rules of the Securities and Exchange Commission.
Mark Chronister brings forty years of high level accounting and board leadership experience to Canterbury Park’s Board of Directors. He retired in 2007 as an audit partner in the Minneapolis office of PricewaterhouseCoopers, LLP (PwC) after 34 years at the firm. He was Market Managing Partner of the Twin Cities office for eight years, including two years as a Cluster Managing Partner for Coopers & Lybrand, responsible for five Midwestern offices. During that time, he oversaw the merger of Price Waterhouse and Coopers & Lybrand in Minneapolis and, at various times, had responsibility for the office’s Assurance practice, Risk Management Services, the Consumer, Industrial Products and Services industry practice. He also served as Business Development Partner focused on developing and deepening relationships with non-audit service companies. Throughout his career, Mr. Chronister served a broad range of large, medium and emerging companies including clients such as the Federal Reserve Bank of Minneapolis, Midland National Life Insurance Company, Worker’s Compensation Reinsurance Association, ELCA Board of Pensions, Ecolab, Prime Therapeutics, the University of Minnesota, Creighton University, University of St. Thomas, Bethel University, Carleton College and William Mitchell College of Law.
Randy Sampson, Executive Chairman of the Board, President, and Chief Executive Officer of Canterbury Park, commented on Mr. Chronister’s appointment, “We are delighted to welcome Mark Chronister to Canterbury Park. His financial expertise and exemplary record of board service make him an ideal addition to the Company’s Board of Directors. In addition, Mark’s track record of board governance expertise highlights our ongoing commitment to this important discipline. We look forward to benefitting from his counsel and deep understanding of the Minneapolis/St. Paul business community as we grow our business by executing on initiatives that will help us regain the pre-pandemic momentum we were generating in our Card Casino and pari-mutuel operations, while we also continue our efforts to unlock shareholder value through the monetization of the excess acreage around Canterbury Park for the development of Canterbury Commons.”
Mr. Chronister has also been frequently selected as board chair by organizations focused on achieving high levels of corporate governance. He has served as board chair for the University of Nebraska Foundation (UNF), the Alzheimer’s Association – Minnesota/North Dakota, St. Catherine University (the largest women’s university in North America), Prodeo Academy (a charter school), The Minneapolis Foundation, the Academy of Holy Angels High School, the Minneapolis Downtown Council, Junior Achievement of the Upper Midwest, St. Bonaventure Catholic Church Parish Council and in various board capacities for KIPP Minnesota/Stand Academy (a charter school), the Minnesota Business Partnership, the Minnesota Chamber of Commerce and the Minnesota Private College Council. In 2018, he was inducted into the University of Nebraska – Lincoln (UNL) School of Accountancy Hall of Fame. He graduated with a BS in Accounting from the University of Nebraska – Lincoln.
For Mr. Chronister’s headshot, use this link: https://canterburypark.egnyte.com/dl/F8Xhc2urUp
About Canterbury Park
Canterbury Park Holding Corporation (Nasdaq: CPHC) owns and operates Canterbury Park Racetrack and Card Casino in Shakopee, Minnesota, the only thoroughbred and quarter horse racing facility in the State. The Company generally offers live racing from May to September. The Card Casino hosts card games 24 hours a day, seven days a week, dealing both poker and table games. The Company also conducts year-round wagering on simulcast horse racing and hosts a variety of other entertainment and special events at its Shakopee facility. The Company is redeveloping 140 acres of underutilized land surrounding the Racetrack in a project known as Canterbury Commons™. The Company is pursuing several mixed-use development opportunities for this land, directly and through joint ventures. For more information about the Company, please visit www.canterburypark.com.
Cautionary Statement
From time to time, in reports filed with the Securities and Exchange Commission, in press releases, and in other communications to shareholders or the investing public, we may make forward-looking statements concerning possible or anticipated future financial performance, business activities or plans. These statements are typically preceded by the words “believes,” “expects,” “anticipates,” “intends” or similar expressions. For these forward-looking statements, we claim the protection of the safe harbor for forward-looking statements contained in federal securities laws. Shareholders and the investing public should understand that these forward-looking statements are subject to risks and uncertainties which could affect our actual results and cause actual results to differ materially from those indicated in the forward-looking statements. We report these risks and uncertainties in our most recent Annual report on Form 10-K Report to the SEC, as well as our subsequently filed Quarterly Reports on Form 10-Q. They include, but are not limited to: any effect that the COVID-19 coronavirus pandemic and resulting precautionary measures may have on us as an entertainment venue or on the economy generally, including the fact that we temporarily suspended all card casino, simulcast, and special events operations at Canterbury Park from March 16, 2020 through June 9, 2020, that since June 9, 2020 we have been open and operating on a much more limited basis to comply with state law and health protocols, and that we expect to operate a 53-day live race meet in 2020; material fluctuations in attendance at the Racetrack; material changes in the level of wagering by patrons; any decline in interest in the unbanked card games offered in the Card Casino; competition from other venues offering unbanked card games or other forms of wagering; competition from other sports and entertainment options; increases in compensation and employee benefit costs; increases in the percentage of revenues allocated for purse fund payments; higher than expected expense related to new marketing initiatives; the impact of wagering products and technologies introduced by competitors; the general health of the gaming sector; legislative and regulatory decisions and changes; our ability to successfully develop our real estate, including our reliance
on our current and future development partners; temporary disruptions or changes in access to our facilities caused by ongoing infrastructure improvements; and other factors that are beyond our ability to control or predict.
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Investor Contacts:
Randy DehmerRichard Land, Jim Leahy
Vice President and Chief Financial OfficerJCIR
Canterbury Park Holding Corporation212-835-8500 or cphc@jcir.com
952-233-4828 or investorrelations@canterburypark.com
Media Contact:
Jeff Maday
Media Relations Manager
Canterbury Park Holding Corporation
952-292-7524 or jmaday@canterburypark.com