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 240.14a-11(c) or 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:
<PAGE>
CONCORDE GAMING CORPORATION
3290 Lien Street
Rapid City, South Dakota 57702
------------------------------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To be held June 20, 1997
------------------------------------------------
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 June 20,
1997 at 10:00 a.m. local time, for the following purposes:
1. To elect three directors to the Board of Directors.
2. To approve an amendment to the Company's Amended and Restated
Articles of Incorporation to comply with the requirements of the Colorado
Limited Gaming Act.
3. 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, 1997.
4. 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 May 23, 1997 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
George J. Nelson
Secretary
Rapid City, South Dakota
Dated: May 23, 1997
<PAGE>
CONCORDE GAMING CORPORATION
3290 Lien Street
Rapid City, South Dakota 57702
-----------------------------------
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
To be held June 20, 1997
-----------------------------------
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 the Shareholders of
the Company to be held at the Radisson Hotel, 445 Mt. Rushmore Road, Rapid City,
South Dakota, on June 20, 1997 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 May 23, 1997.
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 May 23, 1997
(the "Record Date") will be entitled to receive notice of and to vote at the
Meeting. On the Record Date, there were 21,929,793 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 16,887,500 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.
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
<PAGE>
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 1998 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 1996 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.
<PAGE>
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.
Principal Occupation or Employment
During the Past Five Years; Other Director
Name and Age Directorships Since
- ------------ ------------------- -----
Brustuen "Bruce" H. Lien(1)(2) Chairman of the Board of 1990
(70) Directors since August 10,
1990. Chief Executive Officer
of the Company from
April 10, 1995 to March 17,
1997. President and Chief
Executive Officer of the
Company from October 16, 1991
through June 5, 1993. Mr.
Lien also serves on the Board
of Directors of Pete Lien &
Sons, Inc.
Jerry L. Baum Chief Executive Officer since 1995
(47) 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
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) Vice President and Secretary 1990
(53) of Diggers Auto Salvage, 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 Stock Option Committee.
Brustuen H. Lien and Deanna B. Lien, are husband and wife. None of the
other directors or officers of the Company bears any family relationship to any
other director or officer.
<PAGE>
Board and Committee Meetings
The Board held eight (8) meetings and acted by unanimous written consent on
seven (7) occasions during the fiscal year ended September 30, 1996 (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.
The Board does not presently have a separate nominating or audit committee.
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" 70 Chairman of the Board of Directors since
H. Lien August 10, 1990. Chief Executive Officer
from April 10, 1995 and 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 47 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.
<PAGE>
David L. Crabb 39 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 35 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.
<PAGE>
EXECUTIVE COMPENSATION
<TABLE>
<CAPTION>
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 $100,000 during the Fiscal
Year ("Named Executive Officers").
Summary Compensation Table
Long-Term All
Annual Compensation Other
Compensation Awards Compensation
------------ ------ ------------
Securities
Name and Principal Underlying
Position Year Salary($) Bonus($) Options (#)
- -------- ---- --------- -------- -------
<S> <C> <C> <C> <C> <C>
Bruce H. Lien(1) ............ 1996 -0- -0- -0- -0-
Chairman of the ........... 1995 -0- -0- -0- -0-
Board ....................... 1994 -0- -0- 2,000,000 -0-
Jerry L. Baum(2) ............ 1996 120,000 -0- 300,000 -0-
President, Chief .......... 1995 111,667 -0- 59,740 -0-
Operating Officer ........... 1994 95,833(3) -0- 140,260 -0-
and Chief
Executive Officer
- ----------
<FN>
(1) Chief Executive Officer from April 1995 to March 1997.
(2) Chief Executive Officer since March 1997. President since June
1995 and Chief Operating Officer since April 1995.
(3) Represents amounts paid to Mr. Baum as Project Director of Bruce
H. Lien Company, a wholly owned subsidiary of the Company. No salary was
paid by the Company to Mr. Baum during 1994.
</FN>
</TABLE>
The foregoing compensation tables do not include certain fringe benefits
made available on a nondiscriminatory basis to all company employees such as
group health insurance, dental insurance, long-term disability insurance,
vacation and sick leave. In addition, some benefits which are made available
only to certain of the Company's officers, such as the use of a Company vehicle,
are not described, as the monetary value of such benefits is believed to be
below 10 percent of each of the Named Executive Officer's annual salary and
bonus.
<PAGE>
Option Grants Table
<TABLE>
<CAPTION>
The following table provides information relating to the grant of stock
options to the CEO and the Named Executive Officer during the Fiscal Year.
Option Grants in Last Fiscal Year
% of Total
Number of Options Exercise
Securities Granted to or Base
Underlying Employees in Price Expiration
Name Options Granted(#) Fiscal Year ($/Sh) Date
------------------ ----------- ------ ----
<S> <C> <C> <C> <C>
Jerry L. Baum 300,000 49% $.40 March 28, 2006
</TABLE>
Aggregated Option Exercise and Fiscal Year-End Option Table
<TABLE>
<CAPTION>
The following table provides information relating to the exercise of stock
options during the Fiscal Year by the CEO and the Named Executive Officer and
Fiscal Year end value of unexercised options.
Aggregate Option Exercises in Last Fiscal Year
and Fiscal Year-End Option Values
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money
Options at Options at
FY-End (#) FY-End ($)(1)
Name Exercisable/Unexercisable Exercisable/Unexercisable
---- ------------------------- -------------------------
<S> <C> <C>
Jerry L. Baum 96,104/403,896 $0/$0
<FN>
_______________
(1) Based on the average of the high and low bid price of the
Shares on September 30, 1996.
</FN>
</TABLE>
Compensation Pursuant to Plans
The Company has adopted the Plan, which was approved by the shareholders,
for the benefit of certain employees, officers and directors of the Company. The
Stock Option Committee of the Board selects the optionees and determines the
terms and conditions of the stock options granted pursuant to the Plan. Options
to purchase 610,000 Shares were granted pursuant to the Plan during the Fiscal
Year. As of September 30, 1996, options to purchase 1,100,000 Shares were
outstanding pursuant to the Plan, 225,612 of which were vested at September 30,
1996.
<PAGE>
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 attending meetings.
Compliance with Section 16(a) of
the Securities Exchange Act of 1934
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
APPROVAL OF AMENDMENT TO THE AMENDED AND RESTATED ARTICLES
OF INCORPORATION OF THE COMPANY TO COMPLY WITH THE REQUIREMENTS
OF THE COLORADO LIMITED GAMING ACT
The Board has approved, subject to shareholder approval, an amendment to
the Company's Amended and Restated Articles of Incorporation to incorporate
provisions which will enable the Company to secure and maintain in good standing
any gaming licenses which may be issued to the Company or its subsidiaries in
the State of Colorado. The amendment is being proposed to facilitate the
Company's strategy of exploring gaming opportunities in Colorado. The text of
the proposed amendment is set forth in Appendix A to this Proxy Statement.
The ownership and operation of gaming devices in Colorado is subject to
extensive regulation under the Colorado Limited Gaming Act and the rules and
regulations promulgated thereunder (collectively, the "Act"). The Act is
enforced by the Colorado Limited Gaming Commission (the "Commission"). The
Commission has broad discretion to issue, renew, suspend and revoke licenses.
The Act imposes certain restrictions on the ownership, transfer and sale of
securities of a licensee. The Act requires that the Company amend its Amended
and Restated Articles of Incorporation to conform to these provisions of the Act
in order for the Company or its subsidiaries to obtain and maintain a license.
Under the Act, a person who owns 5% or more of any class of voting
securities of the Company is required to notify the Commission within ten (10)
days after such person acquires such securities and to provide additional
information to and be subject to a finding of suitability by the Commission.
However, the Act provides for a waiver of the qualification requirements for an
"institutional investor," if such investor is holding the securities for
investment purposes only and if its holdings represent less than 15% of the
<PAGE>
outstanding securities. Such an institutional investor is required to file a
certified statement that the securities were acquired and are held for
investment purposes only and that it has no intention of influencing or
affecting the affairs of the Company. The Act does not require that these
provisions concerning persons who may hold 5% or more of the outstanding voting
securities be included in the Company's Amended and Restated Articles of
Incorporation.
If the Commission finds that a shareholder of the Company is disqualified
or unsuitable, the Commission may require a disqualified holder to sell or
otherwise dispose of the Company's securities held by such disqualified holder.
In the event of disqualification it will be unlawful for such holder to receive
any dividends or exercise any rights conferred upon a holder of the securities.
In determining whether a holder is unsuitable, the Commission will consider the
financial stability, character and business ability of the holder.
The amendment provides that voting securities held by an unsuitable holder
will be subject to redemption by the Company at the lesser of the holder's
original investment in the Company or the current market price of the voting
securities as of the date of the finding of unsuitability, unless such voting
securities are transferred to a suitable person (as determined by the
Commission) within sixty (60) days after the date of the finding of
unsuitability. Current market price for purposes of the Act is defined as the
average of the daily closing prices of the securities for the twenty consecutive
trading days immediately preceding the date of the finding of unsuitability or
the closing price on such date, whichever is higher. The amendment also provides
that a unsuitable holder shall not be entitled to receive any dividends or to
exercise any other right of a shareholder. The amendment also provides that the
Company may not issue any voting securities or interests except in accordance
with the Act and that no voting securities or other voting interests issued by
the Company may be transferred in any manner except in accordance with the Act.
Shareholders should be aware that there is a possibility that a person who
might desire to attempt to acquire control of the Company might be discouraged
from such attempt because of the requirement that it seek the approval of the
Commission to control the Company or a subsidiary of the Company which may be a
licensee. The Act requires the prior approval of the Commission as a condition
precedent to effecting a change in control of the Company by a person who
acquires control of the Company as a result of a transfer of publicly traded
shares.
<PAGE>
Approval of the proposed amendment to the Amended and Restated Articles of
Incorporation of the Company requires the affirmative vote of a majority of the
Shares entitled to notice of and to vote at the Meeting.
THE BOARD RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR" THE APPROVAL OF
PROPOSAL NO. 2.
PROPOSAL NO. 3
RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
On April 2, 1997, the Board approved the selection of KPMG Peat Marwick LLP
as the Company's independent auditors for the year ending September 30, 1997.
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. 3.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
During 1996 and 1995, Mr. Lien, and an affiliated company controlled by Mr.
Lien, loaned money to the Company under various promissory notes. These amounts
loaned varied by month to month and carried an interest rate not in excess of 2%
over the prime rate established by the Company's primary bank. The Company
incurred interest expense relating to these notes of $74,318 and $67,238, for
Fiscal 1996 and Fiscal 1995, respectively. All amounts owed to Mr. Lien were
paid in full by the Company on February 13, 1997 in connection with the
settlement agreement (the "Settlement Agreement") between Bruce H. Lien Company
("BHL") and The Three Affiliated Tribes ("TAT") whereby BHL received
approximately $8.65 million.
Mr. Lien has 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 of a note payable to an unrelated third party,
dated July 1993, for $1,867,130 for gaming equipment placed in service at
the Casino. The balance on the note at September 30, 1996 was $0.
(b) Pledge of assets to secure a note payable to an unrelated third
party, dated July 1993, for $500,000 for working capital for the
construction of the Casino. The balance on the note at September 30, 1996
was $0.
<PAGE>
(c) Personal guarantee and pledge of assets to secure the payment of a
note payable to a bank, dated September 1994, for $1,296,124 for video
lottery machines. The balance on the note at September 30, 1996 was $0.
(d) Personal guarantee of a note payable to an unrelated third party,
dated December 1993, for $2,400,000 for construction of the 4 Bears Casino
and Lodge. The balance on the note at September 30, 1996 was $1,497,892 and
it was paid in full on February 13, 1997 with the proceeds from the
Settlement Agreement.
(e) Personal guarantee 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, 1996 was $10,208 and it was paid in
full on February 13, 1997 with the proceeds from the Settlement Agreement.
(f) Personal guarantee 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, 1996 was $733,334.
(g) Personal guarantee of a short-term revolving note payable to a
bank, dated June 1996, for $500,000. The balance on the note at September
30, 1996 was $500,000 and it was paid in full on February 13, 1997 with the
proceeds from the Settlement Agreement.
(h) Personal guarantee of a conditional credit line to a bank, dated
April 1996, for $100,000. The balance on the note at September 30, 1996 was
$95,000 and it was paid in full on February 13, 1997 with the proceeds from
the Settlement Agreement.
In consideration for such pledges and guarantees, on January 26, 1994 the
Company issued a warrant to Mr. Lien for 2,000,000 Shares 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.
The Company leases approximately 4,500 square feet of office space located
in Rapid City, South Dakota from a company controlled by Mr. Lien under a lease
that expires September 30, 1997. The monthly lease payment, including real
estate taxes and utilities, is $2,862.
The Company also leases an airplane, on an as needed basis, from a company
controlled by Mr. Lien. The Company incurred lease payments to this affiliate of
$43,966 and $43,101 during Fiscal 1996 and Fiscal 1995, respectively.
<PAGE>
PRINCIPAL SHAREHOLDERS
<TABLE>
<CAPTION>
The following table sets forth certain information regarding beneficial
ownership of outstanding Shares as of May 23, 1997 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) the Named Executive Officer; and (iv) all
directors and executive officers as a group.
Shares
Beneficially Percent of
Name Owned(1) Class
---- -------- -----
<S> <C> <C>
Brustuen "Bruce" H. Lien ... 18,487,500(2)(4) 77.3%
3290 Lien Street
Rapid City, SD 57702
Deanna B. Lien ............. 18,487,500(2)(3)(4) 77.3%
3290 Lien Street
Rapid City, SD 57702
Jerry L. Baum ............. 168,052(5) .8%
3290 Lien Street
Rapid City, SD 57702
All executive officers and
directors as a group (5 18,826,473(4)(6) 77.6%
persons)
<FN>
_____________
(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 which are 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 which may be deemed to be beneficially owned
by her husband, Brustuen "Bruce" H. Lien.
(4) This number includes 2,000,000 Shares which may be acquired
pursuant to a currently exercisable warrant.
(5) This number represents Shares which may be acquired pursuant to
currently exercisable stock options.
(6) This number includes 334,806 Shares which may be acquired pursuant
to currently exercisable stock options.
</FN>
</TABLE>
<PAGE>
Except as stated herein, there are no arrangements known to the Company
which may result in a change in control of the Company, and each shareholder has
sole voting and investment power with respect to Shares included in the above
table.
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 Annual Report of the Company for 1996 is being mailed to Shareholders
along with this Proxy Statement. The Company will, upon written request and
without charge, provide to any person solicited hereunder a copy of the
Company's Annual Report on Form 10-KSB for the year ended September 30, 1996, as
filed with the Securities and Exchange Commission. Requests should be addressed
to the Corporate Secretary, 3290 Lien Street, Rapid City, South Dakota 57702.
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 1998 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
December 1, 1997. Such proposal should be sent to the Corporate Secretary of the
Company at 3290 Lien Street, Rapid City, South Dakota 57702.
<PAGE>
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
George J. Nelson
Secretary
Rapid City, South Dakota
May 23, 1997
<PAGE>
APPENDIX A
The following provision shall be added as a new ARTICLE XIII as follows:
These Articles shall be generally subject to the provisions of the Limited
Gaming of Act of 1991, C.R.S. 12-47.1-101, et seq., as amended (the "Limited
Gaming Act") and the rules and regulations (the "Rules") of the Colorado Limited
Gaming Commission (the "Commission") promulgated thereunder. Specifically, and
in accordance with the Rules, the Corporation shall not issue any voting
securities or other voting interests except in accordance with the provisions of
the Limited Gaming Act and the regulations promulgated thereunder. The issuance
of any voting securities or other voting interests in violation thereof shall be
void and such voting securities or other voting interests shall be deemed not to
be issued and outstanding until (a) the Corporation shall cease to be subject to
the jurisdiction of the Commission, or (b) the Commission shall, by affirmative
action, validate said issuance or waive any defect in issuance.
No voting securities or other voting interests issued by the Corporation
and no interest, claim or charge therein or thereto shall be transferred in any
manner whatsoever except in accordance with the provisions of the Limited Gaming
Act and the regulations promulgated thereunder. Any transfer in violation
thereof shall be void until (a) the Corporation shall cease to be subject to the
jurisdiction of the Commission, or (b) the Commission shall, by affirmative
action, validate said transfer or waive any defect in said transfer.
If the Commission or any other similar gaming license regulatory authority
at any time determines that a holder of voting securities or other voting
interests of this Corporation is unsuitable to hold such securities or other
voting interests, then the issuer of such voting securities or other voting
interests may, within sixty (60) days after the finding of unsuitability,
purchase such voting securities or other voting interests of such unsuitable
person at the lesser of (i) the cash equivalent of such person's investment in
the Corporation, or (ii) the current market price as of the date of the finding
of unsuitability unless such voting securities or other voting interests are
transferred to a suitable person (as determined by the Commission or other
gaming license regulatory authority, as the case may be) within sixty (60) days
after the finding of unsuitability. Until such voting securities or other voting
interests are owned by persons found by the Commission (or other gaming license
regulatory authority, as the case may be) to be suitable to own them, (a) the
Corporation shall not be required or permitted to pay any dividend or interest
with regard to the voting securities or other voting interests, (b) the holder
of such voting securities or other voting interests shall not be entitled to
vote on any matter as the holder of the voting securities or other voting
interests, and such voting securities or other voting interests shall not for
any purposes be included in the voting securities or other voting interests of
the Corporation entitled to vote, and (c) the Corporation shall not pay any
remuneration in any form to the holder of the voting securities or other voting
interests except in exchange for such voting securities or other voting
interests as provided in this Article XIII.
<PAGE>
PROXY CONCORDE GAMING CORPORATION PROXY
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 at the
Radisson Hotel, 445 Mt. Rushmore Road, Rapid City, South Dakota on June 20, 1997
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:
FOR WITHHOLD AUTHORITY
Jerry L. Baum ___ ___
Brustuen "Bruce" H. Lien ___ ___
Deanna B. Lien ___ ___
2. Proposal to approve an amendment to the Company's Amended and Restated
Articles of Incorporation.
FOR ___ AGAINST ___ ABSTAIN ___
3. Proposal for ratification of selection of KPMG Peat Marwick LLP as the
Company's independent auditors for the fiscal year ending September 30, 1997.
FOR ___ AGAINST ___ ABSTAIN ___
4. 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.
The undersigned hereby acknowledges receipt of the Notice of Annual Meeting
of Shareholders, dated May 23, 1997 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 ___________________________ , 1997
________________________________________
Signature
________________________________________
Signature if held jointly
Pease mark boxes /X/ in ink. Sign, date and return this Proxy Card promptly
using the enclosed
