1
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. ___)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
CONCORDE GAMING CORPORATION
------------------------------------------------
(Name of Registrant as Specified in Its Charter)
------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
2
CONCORDE GAMING CORPORATION
3290 LIEN STREET
RAPID CITY, SOUTH DAKOTA 57702
----------------------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD SEPTEMBER 21, 1998
----------------------------------------
TO THE SHAREHOLDERS OF CONCORDE GAMING CORPORATION
NOTICE IS HEREBY GIVEN that the Annual Meeting of the Shareholders
(the "Meeting") of Concorde Gaming Corporation (the "Company") will be held at
the Radisson Hotel, 445 Mt. Rushmore Road, Rapid City, South Dakota, on
September 21, 1998, at 10:00 a.m. local time, for the following purposes:
1. To elect three directors to the Board of Directors.
2. To ratify the Board of Directors' selection of KPMG Peat Marwick
LLP as the Company's independent auditors for the fiscal year
ending September 30, 1998.
3. To consider such other matters as may properly come before the
Meeting and at any and all postponements, continuations or
adjournments thereof.
All holders of record of shares of the Company's $0.01 par value
common stock at the close of business on August 18, 1998 are entitled to notice
of and to vote at the Meeting and at any and all postponements, continuations or
adjournments thereof.
You are cordially invited and urged to attend the Meeting. All
shareholders, whether or not they expect to attend the Meeting in person, are
requested to complete, date and sign the enclosed form of proxy and return it
promptly in the envelope provided for that purpose. Shareholders who attend the
Meeting may revoke a prior proxy and vote their proxy in person as set forth in
the Proxy Statement.
THE ENCLOSED PROXY IS BEING SOLICITED BY THE BOARD OF DIRECTORS OF THE
COMPANY. THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE IN FAVOR OF THE
PROPOSED ITEMS.
By Order of the Board of Directors
/s/ George J. Nelson
George J. Nelson
Secretary
Rapid City, South Dakota
Dated: August 18, 1998
3
CONCORDE GAMING CORPORATION
3290 LIEN STREET
RAPID CITY, SOUTH DAKOTA 57702
----------------------------------------
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD SEPTEMBER 21, 1998
----------------------------------------
INTRODUCTION
This Proxy Statement is furnished in connection with the solicitation
by the Board of Directors (the "Board") of Concorde Gaming Corporation (the
"Company") of proxies to be voted at the Annual Meeting of Shareholders of the
Company to be held at the Radisson Hotel, 445 Mt. Rushmore Road, Rapid City,
South Dakota, on September 21, 1998, at 10:00 a.m. local time, and at any and
all postponements, continuations or adjournments thereof (collectively, the
"Meeting"). This Proxy Statement, the accompanying form of Proxy (the "Proxy")
and the Notice of Annual Meeting will be first mailed or given to the Company's
shareholders on or about August 19, 1998.
All shares of the Company's $0.01 par value common stock (the "Shares")
represented by properly executed Proxies received in time for the Meeting will
be voted at the Meeting in accordance with the instructions marked thereon or
otherwise as provided therein, unless such Proxies have previously been revoked.
Unless instructions to the contrary are marked, or if no instructions are
specified, Shares represented by Proxies will be voted for the proposals set
forth on the Proxy, and in the discretion of the persons named as proxies, on
such other matters as may properly come before the Meeting. Any Proxy may be
revoked at any time prior to the exercise thereof by submitting another Proxy
bearing a later date or by giving written notice of revocation to the Company at
the address indicated above or by voting in person at the Meeting. Any notice of
revocation sent to the Company must include the shareholder's name, and must be
received prior to the Meeting to be effective.
VOTING
Only holders of record of Shares at the close of business on August 18,
1998 (the "Record Date") will be entitled to receive notice of and to vote at
the Meeting. On the Record Date, there were 23,673,126 Shares outstanding, each
of which will be entitled to one vote on each matter properly submitted for vote
to the shareholders at the Meeting. The presence, in person or by Proxy, of
holders of one-third of the Shares entitled to vote at the Meeting constitutes a
quorum for the transaction of business at the Meeting.
THE COMPANY, ITS DIRECTORS AND OFFICERS (AND THEIR AFFILIATES) HELD
VOTING POWER, AS OF THE RECORD DATE, WITH RESPECT TO AN AGGREGATE OF 16,890,667
SHARES. THE COMPANY, ITS DIRECTORS AND OFFICERS HAVE STATED THAT THEY INTEND TO
VOTE THESE SHARES IN FAVOR OF ALL OF THE PROPOSALS DESCRIBED HEREIN; THEREFORE
ALL OF THE PROPOSALS WILL BE APPROVED.
4
Votes cast by proxy will be tabulated by an automated system
administered by the Company's transfer agent. Votes cast by proxy or in person
at the Meeting will be counted by the persons appointed by the Company to act as
election inspectors for the Meeting. Abstentions and broker non-votes are each
included in the determination of the number of Shares present and voting. Each
is tabulated separately. Abstentions are counted in tabulations of the votes
cast on proposals presented to shareholders whereas broker non-votes are not
counted for purposes of determining whether a proposal has been approved.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
The current bylaws of the Company (the "Bylaws") provide that the
number of directors of the Company shall not be less than three nor more than
nine. As provided in the Bylaws, the Board has currently set the total number of
directors at three.
The Board has nominated Mr. Brustuen "Bruce" H. Lien, Mrs. Deanna B.
Lien and Mr. Jerry L. Baum for election as directors to serve for a term
expiring at the 1999 Annual Meeting of Shareholders and until their successors
are elected and qualified. Each of the director nominees are presently serving
as directors of the Company, and were elected at the Company's 1997 Annual
Meeting of Shareholders. Each of the nominees has consented to be a nominee and
to serve as a director if re-elected and it is intended that the Shares
represented by properly executed Proxies will be voted for the election of the
nominees except where authority to so vote is withheld. The Board has no reason
to believe that any of the nominees will be unable to serve as directors or
become unavailable for any reason. If, at the time of the Meeting, any of the
nominees shall become unavailable for any reason, the persons entitled to vote
the Proxy will vote for such substituted nominee or nominees, if any, as such
persons shall determine in his or her discretion. The affirmative vote of a
plurality of the Shares present or represented and entitled to vote at the
Meeting is necessary to elect each director nominee.
THE BOARD RECOMMENDS A VOTE "FOR" THE PROPOSAL TO ELECT MR. BRUSTUEN
"BRUCE" H. LIEN, MRS. DEANNA B. LIEN AND MR. JERRY L. BAUM AS DIRECTORS OF THE
COMPANY.
Information is set forth below regarding the nominees, including the
name and age of each director nominee, his or her principal occupation and
business experience during the past five years, and the commencement of his or
her term as a director of the Company.
2
5
Principal Occupation or Employment During
the Past Five Years; Other Director
Name and Age Directorships Since
- ------------ ----------------------------------------- --------
Brustuen "Bruce" H. Chairman of the Board of Directors since August 10, 1990
Lien(1)(2)(3) 1990. Chief Executive Officer of the Company from
(71) April 10, 1995 to March 17, 1997. President and Chief
Executive Officer of the Company from October 16, 1991
through June 5, 1993. Chairman of the Board of
Directors of Pete Lien & Sons, Inc. since 1970.
Jerry L. Baum(2) Chief Executive Officer since March 17, 1997, 1995
(49) President since June 1995 and Chief Operating Officer
since April 1995. From October 1, 1993 to February
1995, Mr. Baum served as Project Director for Bruce H.
Lien Company where he was the director of the 4 Bears
Casino & Lodge. From March to October 1993, Mr. Baum
was manager of operations at the Royal River Casino, a
Class III Indian gaming casino owned by the Frandreau
Santee Tribe. Prior to 1991, Mr. Baum was Director of
Criminal Investigation for the State of South Dakota.
Deanna B. Lien(1)(2)(3) Vice President and Secretary of Diggers Auto Salvage, 1990
(54) Inc. since 1986. Vice President and Treasurer of the
Company from August 10, 1990 to June 29, 1993.
- ---------------
(1) Member of the Compensation Committee.
(2) Member of the Executive Committee.
(3) Member of the Stock Option Committee.
3
6
At each Annual Meeting of Shareholders, each director is elected to
hold office for a one year term expiring at the next succeeding annual meeting
or until their successor is duly elected and qualified. Two of the directors,
Brustuen "Bruce" H. Lien and Deanna B. Lien are husband and wife. None of the
other directors or officers of the Company has any family relationship to any
other director or officer.
BOARD AND COMMITTEE MEETINGS
The Board acted by unanimous written consent on seven (7) occasions and
no Board meetings were held during the fiscal year ended September 30, 1997 (the
"Fiscal Year"). No director attended fewer than 75% of the aggregate of (i) the
total number of meetings of the Board and (ii) the total number of meetings held
by all committees of the Board on which he or she served during the Fiscal Year.
STOCK OPTION COMMITTEE. The Board has a Stock Option Committee and
during the Fiscal Year its members were Mr. Lien and Mrs. Lien. The Stock Option
Committee administers and interprets the Company's 1992 Performance Stock Option
Plan (the "Plan") and has authority to determine which persons shall be granted
options under the Plan and the terms and conditions of the stock option grants.
The Stock Option Committee met once during the Fiscal Year.
COMPENSATION COMMITTEE. The Board has a Compensation Committee and
during the Fiscal Year its members were Mr. Lien and Mrs. Lien. The Compensation
Committee performs the following duties: (i) considering and making
recommendations to the Board and the officers of the Company with respect to the
overall compensation policies of the Company; (ii) approving the compensation
payable to all officers of the Company; (iii) reviewing proposed compensation of
executives; and (iv) advising the Board as and when appropriate with respect to
all of the foregoing. The Compensation Committee did not meet during the Fiscal
Year.
EXECUTIVE COMMITTEE. The Board has an Executive Committee and during
the Fiscal Year its members were Mr. Lien, Mr. Baum and Mrs. Lien. The Executive
Committee has the authority to conduct the business and affairs of the Company,
except where action of the entire Board is specified by statute. The Executive
Committee did not meet during the Fiscal Year.
The Board does not presently have a separate nominating or audit
committee, the functions of which are performed by the Board as a whole.
4
7
EXECUTIVE OFFICERS
Information is set forth below regarding the executive officers of the
Company, including the name and age of each executive officer, his principal
occupation and business experience during the last five years and the date each
first became an executive officer of the Company.
Principal Occupation or Employment
Name Age During the Past Five Years
- ---- --- ----------------------------------
Brustuen "Bruce" H. Lien 71 Chairman of the Board of Directors since
August 10, 1990. Chief Executive Officer
from April 10, 1995 to March 17, 1997.
President and Chief Executive Officer of
the Company from October 16, 1991 through
June 5, 1993. Chairman of the Board of
Directors of Pete Lien & Sons, Inc. since
1970.
Jerry L. Baum 49 Chief Executive Officer since March 17,
1997, President since June 1995 and Chief
Operating Officer since April 1995. From
October 1, 1993 to February 1995, Mr. Baum
served as Project Director for Bruce H.
Lien Company where he was director of the
4 Bears Casino & Lodge. From March to
October 1993, Mr. Baum was manager of
operations at the Royal River Casino, a
Class III Indian gaming casino owned by
the Frandreau Santee Tribe. Prior to 1991,
Mr. Baum was Director of Criminal
Investigation for the State of South
Dakota.
David L. Crabb 40 Chief Financial Officer, Principal
Accounting Officer since May 1993 and
Treasurer since August 1993. Certified
Public Accountant for Northwestern
Engineering Company and Hills Materials
Company from March 1986 through May 1993.
George J. Nelson 36 Vice President and Corporate Counsel since
September 1993 and Secretary since
September 1995. General Manager of First
Gold, Inc. from March 1, 1990 to August
31, 1993.
Officers serve at the discretion of the Board and are elected at the
first meeting of the Board after each Annual Meeting of Shareholders.
5
8
EXECUTIVE COMPENSATION
The following table sets forth information concerning compensation paid
by the Company to the Chief Executive Officer ("CEO") and any other executive
officer whose total annual salary and bonus exceeded $100,000 during the Fiscal
Year ("Named Executive Officers").
SUMMARY COMPENSATION TABLE
LONG-TERM ALL OTHER
ANNUAL COMPENSATION COMPENSATION
COMPENSATION AWARDS ($)
------------------------- ------------ -------------
SECURITIES
UNDERLYING
NAME AND OPTIONS
PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) (#)
- ------------------ ---- ---------- --------- -----------
Bruce H. Lien(1) 1997 -0- -0- -0- -0-
Chairman of the Board 1996 -0- -0- -0- -0-
1995 -0- -0- -0- -0-
Jerry L. Baum(2) 1997 120,000 -0- 400,000 -0-
Chief Executive Officer 1996 120,000 -0- 300,000 -0-
1995 111,667 -0- 59,740 -0-
- ---------------
(1) Chief Executive Officer from April 1995 through March 1997.
(2) Chief Executive Officer since March 1997 and President since June 1995.
The foregoing compensation tables do not include certain fringe
benefits made available on a nondiscriminatory basis to all Company employees
such as group health insurance, dental insurance, long-term disability
insurance, vacation and sick leave. In addition, some benefits which are made
available only to certain of the Company's officers, such as the use of a
Company vehicle, are not described, as the monetary value of such benefits is
believed to be below 10 percent of each of the Named Executive Officer's annual
salary and bonus.
6
9
OPTION GRANTS TABLE
The following table provides information relating to the grant of stock
options to the CEO and the Named Executive Officers during the Fiscal Year.
OPTION GRANTS IN LAST FISCAL YEAR
(INDIVIDUAL GRANTS)
% of Total
Number of Securities Options Granted
Underlying Options to Employees in Exercise or Base
Name Granted (#) Fiscal Year Price ($/Share) Expiration Date
---- -------------------- --------------- ---------------- ---------------
Jerry L. Baum 400,000 50% $0.15 January 31, 2007
AGGREGATED OPTION EXERCISE AND FISCAL YEAR-END OPTION TABLE
The following table provides information relating to the exercise of
stock options during the Fiscal Year by the CEO and the Named Executive Officers
and Fiscal Year end value of unexercised options.
AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL
YEAR-END OPTION VALUES
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money
Options at Options at
FY-End (#) FY-End ($)(1)
Name Exercisable/Unexercisable Exercisable/Unexercisable
---- ------------------------- -------------------------
Jerry L. Baum 276,104/623,896 $0/$0
- ----------
(1) Based on the bid price of the Common Stock on September 30, 1997.
COMPENSATION PURSUANT TO PLANS
The Company has adopted a Performance Stock Option Plan (the "Plan"),
approved by the Shareholders, for the benefit of certain employees, officers and
directors of the Company. The Stock Option Committee of the Board of Directors
selects the optionees and determines the terms and conditions of the stock
options granted pursuant to the Plan. Options to purchase 800,000 shares of
Common Stock were granted pursuant to the Plan during Fiscal 1997. In addition,
options for the
7
10
purchase of 314,030 shares, issued in fiscal year 1994, were cancelled and
reissued in January 1997. As of September 30, 1997, options to purchase
1,860,000 shares of Common Stock were outstanding pursuant to the Plan, 593,612
of which were vested at September 30, 1997.
COMPENSATION OF DIRECTORS
The Company does not compensate its directors for their services as
directors or pursuant to any other arrangements. The Company reimburses its
directors for expenses incurred related to their services as directors.
SECTION 16(a) BENEFICIAL OWNERSHIP
REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 and the rules
thereunder require the Company's officers and directors, and persons who own
more than ten percent of a registered class of the Company's equity securities,
to file reports of ownership and changes in ownership with the Securities and
Exchange Commission and to furnish the Company with copies.
Based on its review of the copies of the Section 16(a) forms received
by it, or written representations from certain reporting persons, the Company
believes that, during the last fiscal year, all Section 16(a) filing
requirements applicable to its officers, directors and greater than ten-percent
beneficial owners were complied with, except that Mr. Baum, Mr. Crabb and Mr.
Nelson each reported one transaction late on a Form 5.
PROPOSAL NO. 2
RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
On August 14, 1998, the Board approved the selection of KPMG Peat
Marwick LLP as the Company's independent auditors for the year ending September
30, 1998. Representatives of KPMG Peat Marwick LLP will not be present at the
Meeting.
Although it is not required to do so, the Board is submitting its
selection of the Company's independent auditors for ratification at the Meeting,
in order to ascertain the views of the shareholders regarding such selection. An
affirmative vote of the majority of votes cast at the Meeting is necessary to
ratify the selection of KPMG Peat Marwick LLP. Whether the proposal is approved
or defeated, the Board may reconsider its selection.
THE BOARD RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" PROPOSAL NO. 2.
8
11
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
1. During 1997 and 1996, Mr. Lien and BHL Capital Corporation ("BHL
Capital"), a company controlled by Mr. Lien, loaned money to the Company under
various promissory notes. The amounts loaned varied by month to month and
carried an interest rate ranging from prime rate plus 2% to an 18% fixed rate.
The Company incurred interest expense relating to these notes payable of $27,699
and $74,318, for Fiscal 1997 and Fiscal 1996, respectively.
2. From November 1997 through March 1998, the Company borrowed
$1,440,000 from Mr. Lien and BHL Capital under various promissory notes that are
due on demand and bear interest at 18%.
3. In March 1998, the Company borrowed an additional $500,000 from Mr.
Lien to repay a bank term note that was due in June 1998 and for working
capital. This loan is evidenced by a promissory note which requires monthly
payments of $8,500 plus accrued interest at 12% per annum, with the balance due
on March 5, 1999. In connection with this loan, the Company pledged all of the
assets of Golden Gates Casino to a third party lender of Mr. Lien, as
consideration for the third party lender's loan of $500,000 to Mr. Lien, who
then loaned such amount to the Company.
4. In consideration for the Project Line of Credit (defined below) and
the Working Capital Line of Credit (defined below), as well as the personal
guarantees of Mr. Lien under the Line of Credit (defined below), on April 20,
1998, the Company entered into an option agreement (the "Option Agreement") with
Mr. Lien, under which the Company granted Mr. Lien an option (the "Option") to
purchase all or a portion of the Company's interest in Bayfront Ventures, a
joint venture formed for the purpose of constructing, owning, operating and
managing an offshore gaming vessel (the "Vessel") from dockage at Bayfront Park
in Miami, Florida. The Option may be exercised by Mr. Lien at any time on or
prior to April 20, 1999 ("Option Expiration Date"). The exercise price shall be
equal to the total Capital Contribution (defined below) made by the Company to
Bayfront Ventures up to the exercise date, plus certain costs incurred by the
Company in connection with Bayfront Ventures, and financing costs incurred by
the Company on all obligations related to Bayfront Ventures, less any advances
made under the Project Line of Credit, each as of the date of exercise. In
addition, Mr. Lien shall be required to assume all of the Company's obligations
related to Bayfront Ventures.
5. In April 1998, BHL Capital agreed to provide the Company with a line
of credit in the amount of $3,000,000 (the "Project Line of Credit"), which may
be used to fund the Company's capital contribution (the "Capital Contribution")
to Bayfront Ventures. Advances under the Project Line of Credit will bear
interest at a rate of 18% per annum, which interest shall accrue until the
earlier of the date the Option is exercised or the Option Expiration Date (the
"Payment Start Date"), and principal and interest shall be payable over three
years beginning on the Payment Start Date. As of June 30, 1998, the Company had
borrowed $835,000 under the Project Line of Credit.
6. In April 1998, Mr. Lien signed a commitment letter whereby he agreed
to provide additional working capital to the Company in an amount not to exceed
$500,000 (the "Working Capital Line of Credit"), the terms of which will be
negotiated in the event advances are made under the Working Capital Line of
Credit.
9
12
7. Mr. Lien, and/or Mrs. Lien, as indicated below, have pledged assets
and/or personally guaranteed loans in order for the Company to obtain financing
which otherwise may not have been available to the Company, as follows:
(a) Personal guarantee, by Mr. Lien, of a note payable to an
unrelated third party, dated December 1993, for $2,400,000 for
construction of the 4 Bears Casino & Lodge. The balance on the note at
September 30, 1997 was $0.
(b) Personal guarantee, by Mr. Lien, of a note payable to a
bank, dated January 1994, for $66,589 for acquisition of stock in Bayou
Gaming, Inc. The balance on the note at September 30, 1997 was $0.
(c) Personal guarantee, by Mr. Lien, of a note payable to a
bank, dated June 1996, for $800,000 for video lottery machines. The
balance on the note at September 30, 1997 was $466,667.
(d) Personal guarantee, by Mr. Lien, of a short-term revolving
note payable to a bank, dated June 1996, for $500,000. The balance on
the note at September 30, 1997 was $0.
(e) Personal guarantee, by Mr. Lien, of a conditional credit
line to a bank, dated April 1996, for $100,000. The balance on the note
at September 30, 1997 was $0.
(f) Personal guarantee, by Mr. Lien, of a letter of credit
dated November 7, 1997 for $900,000, related to the Use Agreement.
(g) Personal guarantee, by Mr. Lien and Mrs. Lien, of a line
of credit entered into in March 1998 equal to the lesser of $5.0
million or 70% of the lesser of the cost of the Vessel or its estimated
fair market value (the "Line of Credit")
(h) Mr. Lien and Mrs. Lien agreed to provide a personal
guarantee of a commitment for permanent financing (the "Permanent
Financing") of the Vessel entered into in March of 1998, equal to the
lesser of $5,200,000 or 70% of the lesser of the cost of the Vessel or
its estimated fair market value at the time of delivery.
8. In December 1997, the Company sold a promissory note, payable to the
Company by a unaffiliated third-party, to BHL Capital for $110,000. The sales
price of the promissory note (the "Note") was approximately $8,000 less than the
remaining principal balance. The sales price for the sale of the Note was
determined on an arms length basis.
9. In consideration for the guarantees made by Mr. Lien in 1993 and
1994, on January 26, 1994 the Company issued a warrant to Mr. Lien for 2,000,000
shares of Common Stock at an exercise price of $1.00 per share. This warrant
expires in January 2004. In addition, the Company entered into an
indemnification agreement with Mr. Lien whereby the Company has agreed to
indemnify him from all losses, claims, damages and expenses relating to any
guarantees and/or pledges of collateral made by Mr. Lien on behalf of the
Company.
10
13
10. The Company leases approximately 4,500 square feet of office space
located in Rapid City, South Dakota from BHL Capital under a lease that expires
September 30, 1998. The monthly lease payment, including real estate taxes and
utilities, is $2,597.
11. The Company also leases an airplane, on an "as needed" basis, from
BHL Capital. The Company incurred lease payments of $26,678 and $43,966 during
Fiscal 1997 and Fiscal 1996, respectively.
12. In November 1997, the Company entered into an agreement to pay BHL
Capital $10,625 per month as compensation for BHL Capital's agreement to allow
the Company to use certain real property owned by BHL Capital as collateral to
secure a letter of credit obtained by the Company with a third-party lender.
PRINCIPAL SHAREHOLDERS
The following table sets forth certain information regarding beneficial
ownership of outstanding Shares as of the Record Date, by (i) each person who is
known by the Company to own beneficially 5% or more of the outstanding Shares;
(ii) the Company's directors; (iii) all Named Executive Officers; and (iv) all
directors and executive officers as a group.
Shares
Beneficially Percent of
Name Owned(1) Class
---- ------------ ----------
Brustuen "Bruce" H. Lien...................... 18,487,500(2)(4) 72.0%
3290 Lien Street
Rapid City, SD 57702
Deanna B. Lien(2)............................. 18,487,500(3)(4) 72.0%
3290 Lien Street
Rapid City, SD 57702
University of Wyoming Foundation.............. 1,900,000 8.0%
P. O. Box 3963
Laramie, WY 82071
Jerry L. Baum................................. 348,052(5) 1.4%
3290 Lien Street
Rapid City, SD 57702
All executive officers and directors as a
group (5 persons)............................. 19,141,473(4)(6) 72.7%
11
14
- ---------------
(1) Shares are considered beneficially owned, for purposes of this table, only
if held by the person indicated, or if such person, directly or indirectly,
through any contract, arrangement, understanding, relationship or otherwise has
or shares the power to vote, to direct the voting of and/or to dispose of or to
direct the disposition of, such securities, or if the person has the right to
acquire the beneficial ownership within sixty days, unless otherwise indicated.
(2) This number includes the Shares beneficially owned, or which may be deemed
to be beneficially owned, by Brustuen "Bruce" H. Lien. For purposes of this
table, the same Shares may be deemed to be beneficially owned by Mr. Lien's
wife, Deanna B. Lien.
(3) For purposes of this table, Deanna B. Lien is deemed to be the beneficial
owner of the Shares that may be deemed to be beneficially owned by her husband,
Brustuen "Bruce" H. Lien.
(4) This number includes 2,000,000 Shares that may be acquired pursuant to a
currently exercisable warrant.
(5) This number represents Shares that may be acquired pursuant to currently
exercisable stock options.
(6) This number includes 650,806 Shares that may be acquired pursuant to
currently exercisable stock options.
12
15
SOLICITATION OF PROXIES
This solicitation is being made by mail on behalf of the Board, but may
also be made without remuneration by officers or employees of the Company by
telephone, telegraph, facsimile transmission or personal interview. The expense
of the preparation, printing and mailing of the enclosed form of Proxy, Notice
of Annual Meeting and this Proxy Statement will be borne by the Company. The
Company will reimburse banks and brokers who hold Shares in their name or
custody, or in the name of nominees for others, for their out-of-pocket expenses
incurred in forwarding copies of the Proxy materials to those persons for whom
they hold such Shares. To obtain the necessary representation of shareholders at
the Meeting, supplementary solicitations may be made by mail, telephone or
interview by officers of the Company or selected securities dealers. It is
anticipated that the cost of such supplementary solicitations, if any, will not
be material.
ANNUAL REPORT
The Company's Annual Report on Form 10-KSB for the year ended September
30, 1997, including financial statements and financial statement schedules, as
filed with the Securities and Exchange Commission is being mailed to
Shareholders along with this Proxy Statement.
OTHER MATTERS
The Company is not aware of any business to be presented for
consideration at the Meeting, other than that specified in the Notice of Annual
Meeting. If any other matters are properly presented at the Meeting, it is the
intention of the persons named in the enclosed Proxy to vote in accordance with
their best judgment.
SHAREHOLDER PROPOSALS
Any Shareholder who intends to submit a proposal at the 1999 Annual
Meeting of Shareholders and who wishes to have the proposal considered for
inclusion in the proxy statement and form of proxy for that meeting must, in
addition to complying with the applicable laws and regulations governing
submission of such proposals, deliver the proposal to the Company for
consideration no later than April 21, 1999. Such proposal should be sent to the
Corporate Secretary of the Company at 3290 Lien Street, Rapid City, South Dakota
57702.
Any Shareholder proposal submitted with respect to the Company's 1999
Annual Meeting of Shareholders, which proposal is submitted outside the
requirements of Rule 14a-8 under the Securities Exchange Act of 1934, as
amended, will be considered untimely filed for purposes of Rule 14a-4 and 14a-5
if notice thereof is received by the Company after July 5, 1999.
13
16
NOTICE TO BANKS, BROKER-DEALERS AND
VOTING TRUSTEES AND THEIR NOMINEES
Please advise the Company whether other persons are the beneficial
owners of the Shares for which proxies are being solicited from you, and, if so,
the number of copies of this Proxy Statement and other soliciting materials you
wish to receive in order to supply copies to the beneficial owners of the
Shares.
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. THEREFORE,
SHAREHOLDERS, WHETHER OR NOT THEY EXPECT TO ATTEND THE MEETING IN PERSON, ARE
REQUESTED TO COMPLETE, DATE AND SIGN THE ENCLOSED FORM OF PROXY AND RETURN IT
PROMPTLY IN THE ENVELOPE PROVIDED FOR THAT PURPOSE. SHAREHOLDERS WHO ATTEND THE
MEETING MAY REVOKE A PRIOR PROXY AND VOTE THEIR PROXY IN PERSON AS SET FORTH IN
THIS PROXY STATEMENT.
By Order of the Board of Directors
/s/ George J. Nelson
George J. Nelson
Secretary
Rapid City, South Dakota
August 18, 1998
14
17
PROXY
CONCORDE GAMING CORPORATION
THIS PROXY IS SOLICITED ON BEHALF OF
THE BOARD OF DIRECTORS OF
CONCORDE GAMING CORPORATION
The undersigned hereby appoints George J. Nelson and David L. Crabb,
and each of them, as proxies for the undersigned, each with full power of
appointment and substitution, and hereby authorizes them to represent and to
vote, as designated below, all shares of the $0.01 par value common stock of
Concorde Gaming Corporation (the "Company") which the undersigned is entitled to
vote at the Annual Meeting of Shareholders of the Company to be held on
September 21, 1998, at the Radisson Hotel, 445 Mt. Rushmore Road, Rapid City,
South Dakota at 10:00 a.m. local time, or at any and all postponements,
continuations or adjournments thereof.
This proxy when properly executed will be voted in the manner directed
herein by the undersigned shareholder. IF NO DIRECTION IS MADE, THIS PROXY WILL
BE VOTED FOR THE ELECTION OF THE NOMINEES TO THE BOARD OF DIRECTORS OF THE
COMPANY AND FOR EACH OF THE OTHER ITEMS SET FORTH ON THE PROXY.
1. Proposal to elect the following nominees to the Board of Directors:
WITHHOLD
FOR AUTHORITY
Jerry L. Baum [ ] [ ]
Brustuen "Bruce" H. Lien [ ] [ ]
Deanna B. Lien [ ] [ ]
2. Proposal for ratification of selection of KPMG Peat Marwick LLP as the
Company's independent auditors for the fiscal year ending September 30,
1998.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
3. In the discretion of such proxies, upon such other business as may properly
come before the Meeting or at any and all postponements, continuations or
adjournments thereof.
18
The undersigned hereby acknowledges receipt of the Notice of Annual Meeting of
Shareholders, dated August 18, 1998 and the Proxy Statement furnished therewith.
Please sign exactly as your name appears hereon. When shares are held by joint
tenants, both should sign. Executors, administrators, trustees and other
fiduciaries, and persons signing on behalf of corporations or partnerships,
should so indicate.
Dated , 1998
----------------------------
-----------------------------------------
Authorized Signature
-----------------------------------------
Title
-----------------------------------------
Authorized Signature
-----------------------------------------
Title
Please mark boxes [X] in ink. Sign, date and return this Proxy Card promptly
using the enclosed envelope.