UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
Amendment No. 1 to Form 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the Fiscal Year ended June 30, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) of the
SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the transition period from to
Commission File Number 0-4281
ALLIANCE GAMING CORPORATION
(Exact name of registrant as specified in its charter)
NEVADA 88-0104066
(State or other jurisdiction of (I.R.S. Employer
Incorporation or organization) Identification No.)
4380 Boulder Highway
Las Vegas, Nevada 89121
(Address of principal executive offices) (Zip Code)
Registrant's telephone number: (702) 435-4200
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $0.10 par value
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that
the registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
[X] Yes [ ] No
The aggregate market value of the voting stock held by non-affiliates of the
registrant was approximately $29,456,940 as of October 24, 1995.
The number of shares of Common Stock, $0.10 par value, outstanding as of October
24, 1995 according to the records of registrant's registrar and transfer
agent, was 11,654,150.
<PAGE>
GENERAL
Alliance Gaming Corporation (the "Company" or the "Registrant") hereby amends
its Annual Report on Form 10-K for the fiscal year ended June 30, 1995 by
deleting its responses to Items 10, 11, 12 and 13, contained
in its original filing and replacing such sections and Notes with the following:
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The following table sets forth, as of October 24, 1995, the names of, and
certain information with respect to, each of the Company's directors and
executive officers.
<TABLE>
<CAPTION>
Term as
Director
Name Age Position Expires
<S> <C> <S> <C>
Steve Greathouse 44 Chairman of the Board, President 1997
and Chief Executive Officer
Dr. Craig Fields 49 Vice Chairman of the Board 1997
Joel Kirschbaum 44 Director 1996
Alfred H. Wilms 51 Director 1997
David Robbins 36 Director 1995
Shannon L. Bybee 56 Executive Vice President - Government Affairs
Anthony L. DiCesare 33 Executive Vice President - Development 1996
John W. Alderfer 51 Senior Vice President - Finance and Administration,
Chief Financial Officer and Treasurer
David D. Johnson 44 Senior Vice President - Law and Government
Secretary and Corporate Legal Counsel
Robert L. Miodunski 44 Sr. Vice President - Nevada Route Group
Robert L. Saxton 41 Vice President - Casino Group
Robert M. Hester 39 Vice President - Human Resources and Administration
Robert A. Woodson 45 Vice President - Regulatory Compliance
Johnann F. McIlwain 48 Vice President - Marketing
</TABLE>
Steve Greathouse joined the Company as President and Chief Executive Officer in
August 1994 and was elected Chairman of the Board of Directors in March 1995.
Mr. Greathouse, who has held various positions in the gaming industry since
1974, most recently served as the president of Harrah's Casino Hotels Division
of the Promus Companies. In this position, Mr. Greathouse had responsibility
for Harrah's resorts in Las Vegas, Laughlin, Reno, Lake Tahoe and Atlantic
City. From July 1991 to September 1993 Mr. Greathouse served as president and
chief operating officer of Harrah's Southern Nevada, overseeing the operations
of Harrah's Las Vegas and Harrah's Laughlin, then the two largest hotel-casinos
in the Harrah's chain. Mr. Greathouse is an active member and is
currently serving as the Chairman of the Board of the Nevada Resort Association
and is on the Executive Committee of United Way. He has also served as a
member of the Board of Directors of the Las Vegas Convention and
Visitors Authority and on the Executive Committee of the Nevada Development
Authority. Mr. Greathouse is a graduate of the University of Missouri.
Dr. Craig Fields was appointed a director in October 1994. Dr. Fields was
employed by the U.S. Department of Defense Advanced Research Projects Agency
("ARPA") from 1974 to 1990. He joined the Microelectronics and Computer
Technology Corporation ("MCC") in 1990 as President and later Chairman and
CEO. He left MCC in 1994, and serves as Director of two publicly traded
corporations in addition to the Company, Ensco, Inc. and Projectavision, Inc.
Joel Kirschbaum was appointed a director in July 1994. Mr. Kirschbaum is the
sole stockholder, director and officer of Kirkland Investment Corporation
("KIC"), which is the sole general partner in Kirkland-Ft. Worth
Investment Partnership, L.P. ("Kirkland"), and of Gaming Systems Advisors, Inc.,
the sole general partner in Gaming Systems Advisors, L.P. ("GSA"). He has been
engaged in operating the businesses of KIC and Kirkland since January 1991 when
KIC and Kirkland were established, and GSA, Inc. and GSA since June 1993.
Prior to that time, he worked at Goldman, Sachs & Co. for 13 years, during the
last six of which he was a General Partner. When he established KIC and
Kirkland, Mr. Kirschbaum resigned his general partnership interest in Goldman,
Sachs & Co. and became a limited partner. Mr. Kirschbaum resigned his limited
partnership interest in Goldman, Sachs & Co. in November 1993. Mr. Kirschbaum
is a graduate of Harvard College and has a joint J.D./M.B.A. degree
from Harvard Law School and Harvard Business School.
Alfred H. Wilms has served as a director of the Company since November 1983.
He served as Chief Executive Officer of the Company from December 1984 to July
1994 and as Chairman of the Board of the Company from August 1986 to July 1994.
From 1976 through 1989, Mr. Wilms served as President of Wilms Distributing
Company, Inc. and Wilms Export Company, N.V., a Belgian company engaged in the
distribution of amusement and gaming equipment. From 1971 through 1976, Mr.
Wilms held various positions with Bally Continental, including positions in
research and development, marketing, sales, gaming operation and management,
and, from 1974 through 1979, he served as a director of Bally Manufacturing
Corp. Mr. Wilms is currently President and a director of Aqualandia, the
largest waterpark in Europe; President and a director of Gibsa, a real estate
company located in Spain; and a director of Jardin Parks, a real estate company
located in Spain. Mr. Wilms is a citizen and resident of Belgium.
David Robbins was appointed a director in July 1994. Mr. Robbins is an attorney
with the New York law firm of O'Sullivan, Graev & Karabell, LLP where he has
been practicing since September 1995. Prior to that, he was employed by the
New York law firm of Kramer, Levin, Naftalis, Nessen, Kamin & Frankel, where he
was employed since May 1993. Prior to that time, since September 1984, he was
employed by the New York law firm of Cahill Gordon & Reindel. Mr. Robbins is
a graduate of the Wharton School of the University of Pennsylvania
and New York University Law School.
Mr. Bybee joined the Company in July 1993 as President and Chief Operating
Officer. In July 1994, Mr. Bybee assumed the roles of Executive Vice
President - Government Affairs and Special Advisor to the Board of
Directors. Additionally, Mr. Bybee took a position with the William F. Harrah
College of Hotel Administration and the UNLV International Gaming Institute at
the University of Nevada, Las Vegas. Mr. Bybee also currently serves as a
member of the board of directors of The Claridge Hotel and Casino Corporation,
a position he has held since August 1988. Prior to his association with the
Company, Mr. Bybee had served as Chief Executive Officer of The Claridge Hotel
and Casino Corporation since August 1989. From 1983 to 1987 Mr. Bybee served as
Senior Vice President and from 1978 to 1981 as Vice President of Golden Nugget,
Inc. (now Mirage Resorts, Inc.), which operated the Golden Nugget Casino-Hotel
in Atlantic City and operates the Mirage Casino and the Golden Nugget
Casino-Hotel in Las Vegas, Nevada. From 1981 to 1983, Mr. Bybee served as
President of GNAC Corporation which operated the Golden Nugget Casino-Hotel
in Atlantic City. Prior to joining Golden Nugget, Inc. in 1978,
Mr. Bybee practiced law for over three years in the Las Vegas firm of Hilbrecht,
Jones, Schreck and Bybee. Prior thereto, Mr. Bybee served on the Nevada Gaming
Control Board for four and one-half years commencing in 1971.
Mr. Bybee has served as Chairman of the Gaming Law Committee, General Practice
Section, of the American Bar Association. He is a founder and past President of
the International Association of Gaming Attorneys ("IAGA") and is currently a
director of IAGA. Mr. Bybee was Chairman of the Atlantic City Convention and
Visitors Bureau from 1983 to 1987. He received a Bachelor of Arts degree from
the University of Nevada, Reno in 1966, and obtained his Juris Doctorate in
1969 from the University of Utah College of Law, where he was Managing Editor
of the Utah Law Review.
Anthony L. DiCesare was employed by KIC from April 1991 to July 1994 and joined
Alliance in July 1994. Prior to that time and since he graduated from business
school in 1989, he was employed as an associate at Wasserstein, Perella & Co.,
Inc., where he worked in the Mergers and Acquisitions group. Mr. DiCesare
graduated from Harvard College, with an A.B. degree in economics, in 1985 and
from the Harvard Business School, from which he obtained an M.B.A. degree, in
1989.
John W. Alderfer joined the Company in September 1990 as Vice President, Chief
Financial Officer and Treasurer. Mr. Alderfer was subsequently promoted to
Senior Vice President in December 1993. Prior to joining the Company,
Mr. Alderfer had been the Chief Financial Officer of The Bicycle Club, which is
a Los Angeles-based card casino, since February 1989. From 1971 to 1988 Mr.
Alderfer served in various financial capacities with the Summa Corporation,
the Howard R. Hughes Estate Businesses, which operated numerous gaming
establishments in Las Vegas and Reno. From 1966 to 1971 he was employed as a
certified public accountant by Deloitte & Touche (then known as Haskins &
Sells). Mr. Alderfer received his Bachelor of Science in Business
Administration with an accounting major from Texas Tech University in 1966 and
is a certified public accountant.
David D. Johnson joined the Company as Senior Vice President and General Counsel
in March 1995. Previously, Mr. Johnson developed extensive gaming industry
experience representing a diverse group of casino clients as a Senior Partner
at Schreck, Jones, Bernhard, Woloson & Godfrey, one of Nevada's leading law
firms. Prior to joining Schreck, Jones, et al, Mr. Johnson served as Chief
Deputy Attorney General for the gaming division of the Nevada Attorney General's
office. Mr. Johnson serves as Vice Chairman of the Executive Committee of
the Nevada State Bar's Gaming Law Section and is an officer and founding member
of the Nevada Gaming Attorneys Association. He is also a member of IAGA and
has served as Editor of The Gaming Lawyer, the quarterly newsletter of IAGA
and the Gaming Law Section of the American Bar Association. Mr Johnson holds
a Bachelor of Arts degree in Political Science from the University of Nevada at
Las Vegas and earned his Doctor of Law degree from Creighton University in 1978.
Robert L. Miodunski joined the Company as Senior Vice President - Nevada Route
Group in March 1994. From January 1991 to March 1994, Mr. Miodunski was
President of Mulholland-Harper Company, a sign manufacturing and service
company. From 1984 through 1990, Mr. Miodunski held various positions with
Federal Signal Company, the most recent being Vice President and General Manager
of the Midwest Region of the Sign Group. He received his B.S. in Mechanical
Engineering from the University of Missouri and an M.B.A. from the
University of Dallas.
Robert L. Saxton joined the Company in 1982 as Corporate Controller and was
elected a Vice President in December 1993. Since joining the Company, Mr.
Saxton has held various management positions with the Nevada Route Group and
is currently responsible for casino operations. He also serves as President of
the Company's Louisiana subsidiaries. Mr. Saxton received his B.S. from the
University of Nevada, Las Vegas and is a certified public accountant.
Robert M. Hester joined the Company in October 1993 as Director of Human
Resources and was promoted to Vice President - Human Resources and
Administration in December 1993. From 1989 to 1993, Mr. Hester was
Director of Human Resources for Sam's Town Hotel & Casino in Las Vegas. From
1987 to 1989, he was Director of Human Resources for the Showboat Hotel & Casino
in Las Vegas. Mr. Hester received his B.S. from the
University of Nevada, Las Vegas.
Robert A. Woodson joined the Company in 1988 as Director of Gaming Compliance
and was promoted to Vice President - Regulatory Compliance in September 1993.
Prior to joining the Company, Mr. Woodson was with the Investigation Division of
the State of Nevada Gaming Control Board for 10 years. Mr. Woodson received
his B.S. from California State University, Fullerton.
Johnann F. McIlwain joined the Company in June 1994 as Vice President -
Marketing. From 1991 to 1992, Ms. McIlwain was Vice President of Marketing
for Greenwood, Inc., a Philadelphia-based gaming and entertainment company.
From 1989 to 1991, she was Director of Marketing Services for Hospitality
Franchise Systems, Inc. in Parsippany, New Jersey. Prior to joining Hospitality
Franchise Systems, Ms. McIlwain served as Director of Advertising for the
Resorts International Casino Hotel and the Trump Taj Mahal Casino Hotel. Ms.
McIlwain received her B.A. from the University of Miami in 1969 and an M.B.A.
from the Florida Atlantic University in 1976.
Stockholders Agreement
On July 14, 1994, as contemplated by the Stockholders Agreement, the Company's
Board of Directors was reconfigured to consist of four persons designated by
KIC and three persons designated by Mr. Wilms. The Stockholders Agreement and
related transactions are more fully described in the Company's Forms 8-K dated
June 25, 1993, September 21, 1993 and July 14, 1994 and in its Information
Statement dated June 29, 1994. On October 20, 1994, the Stockholders Agreement
was amended to reconfigure the Board of Directors to consist of four persons
designated by KIC, one person designated by Mr. Wilms and two new directors
designated by a majority of the Board of Directors. Accordingly, on October 20,
1994 Mr. Greathouse and Dr. Fields were appointed to the Board. As amended,
the Stockholders Agreement also provides that Mr. Wilms may designate two
persons (the "Advisors") who shall be observers of, and advisors to, the Board
of Directors and who will be entitled to attend all of the Company's Board of
Directors' meetings and receive all information furnished to members of the
Board. Mr. Wilms and/or at least one Advisor will be entitled to attend all
meetings of the committees of the Company's and its subsidiaries' Board of
Directors.
Compliance with Section 16(a) of the Exchange Act
Section 16(a) of the Securities and Exchange Act of 1934 requires the Company's
directors and executive officers, and persons who own more than ten percent of
a registered class of the Company's equity securities ("Insiders"), to file with
the Securities and Exchange Commission (the "Commission") initial reports of
ownership and reports of changes in ownership of Common Stock. Insiders are
required by the Commission's regulations to furnish the Company with copies of
all Section 16(a) reports filed by such persons.
To the Company's knowledge, based solely on its review of the copies furnished
to the Company and written representations from certain Insiders that no other
reports were required, during the fiscal year ended June 30, 1995 all Section
16(a) filing requirements applicable to Insiders were met.
<PAGE>
ITEM 11. EXECUTIVE COMPENSATION
The following table sets forth the compensation paid or to be paid by the
Company to the Company's chief executive officer and its four other most highly
compensated executive officers receiving over $100,000 per year
for services rendered in all capacities to the Company during the fiscal year
ended June 30, 1995 (the "Named Executive Officers"):
Summary Compensation Table*
<TABLE>
<CAPTION>
Fiscal Long-term
Year Annual Compensation Compensation
Name and Principal Position Ending Other Annual All Other
June 30, Salary Bonus Compensation Options Compensation
(1)
<S> <C> <C> <C> <C> <C> <C>
Steve Greathouse (2) 1995 $338,462 $1,312,500 - 500,000 $4,638
President, Chairman of the Board and 1994 - - - - -
Chief Executive Officer 1993 - - - - -
Shannon L. Bybee (3) 1995 180,577 - (4) - 13,398
Executive Vice President-Government 1994 271,154 400,000 (4) 315,000 20,588
Affairs 1993 - - - - -
John W. Alderfer 1995 228,756 - (4) 150,000 19,127
Senior Vice President, Treasurer and 1994 222,137 50,000 (4) - 19,622
Chief Financial Officer 1993 164,615 - (4) - 21,066
Robert L. Miodunski 1995 175,000 75,000 (4) - 4,816
Senior Vice President-Nevada Route 1994 47,115 15,000 (4) 85,000 807
Operations 1993 - - - - -
Robert L. Saxton 1995 175,000 35,000 (4) - 5,988
Vice President-Casino Operations 1994 123,077 15,000 (4) 110,000 5,723
1993 106,346 15,000 (4) - 7,283
</TABLE>
_______________
* As used in the tables provided under the caption "Executive Compensation,
" the character "_" is used to represent "zero."
(1) "All Other Compensation" includes (i) contributions made by the Company to
the Company's Profit Sharing 401(k) Plan in the amounts of $0, $924,
$1,744, $0 and $202, for 1995 on behalf of Mr. Greathouse, Mr. Bybee,
Mr. Alderfer, Mr. Miodunski and Mr. Saxton, respectively, payments of $0,
$3,252, $0 and $2,071 for 1994 for Mr. Bybee, Mr. Alderfer, Mr. Miodunski
and Mr. Saxton, respectively, and $2,472 and $1,850 for 1993 on behalf
of Mr. Alderfer and Mr. Saxton, respectively and (ii) payments made by
the Company in the amounts of $4,638, 12,474, $17,383, $4,816 and $5,786
for 1995 on behalf of Mr. Greathouse, Mr. Bybee, Mr. Alderfer, Mr.
Miodunski and Mr. Saxton, respectively, payments of $20,588, 16,371,
$807 and $3,652 for 1994 for Mr. Bybee, Mr. Alderfer, Mr. Miodunski and
Mr. Saxton, respectively, and $18,594 and $5,433 for 1993 on behalf of
Mr. Alderfer and Mr. Saxton, respectively, in connection with their
health, life and disability insurance.
(2) Mr. Greathouse joined the Company as President and Chief Executive Officer
in August 1994 and assumed the position of Chairman of the Board of
Directors in March 1995.
(3) Mr. Bybee joined the Company in July 1993 as President and Chief Operating
Officer. On July 15, 1994, he assumed the role of Executive Vice
President_Government Affairs.
(4) The aggregate amount of such compensation to be reported herein is less
than the lesser of either $50,000 or 10 percent of the total annual salary
and bonus reported for the named executive officer.
(5) The cash bonus attributable to fiscal 1994 was paid in the first quarter
of fiscal 1995.
(6) The cash bonus attributable to fiscal 1995 was paid in the first quarter
of fiscal 1996.
<PAGE>
Option/SAR Grants in Last Fiscal Year
The following table relates to options granted during the fiscal year ended
June 30, 1995:
<TABLE>
<CAPTION>
Potential Realizable
Value at
Individual Grants Assumed Annual Rates
% of Total of Stock
Granted Price Appreciation for
Options to Employees in Exercise Expiration Option Terms
Name Granted Fiscal Year Price Date 5% 10%
<S> <C> <C> <C> <C> <C> <C>
Steve Greathouse 250,000 11.12% $5.750 7/25/04 $905,000 $2,290,000
83,333 (1) 3.71% 1.500 _ _ 1,279,995
83,333 (1) 3.71% 1.500 _ _ 1,279,995
83,334 (1) 3.71% 1.500 _ _ 1,280,010
Shannon L. Bybee _ _ _ _ _ _
John W. Alderfer 150,000 6.67% 5.875 2/22/03 554,250 1,404,750
Robert L. Miodunski _ _ _ _ _ _
Robert L. Saxton _ _ _ _ _ _
</TABLE>
(1) Grant of warrants to purchase up to 250,000 shares of Common Stock which
vest one year after the grant date and in three equal tranches when the
market price of the Common Stock reaches $11, $13 and $15 per share,
respectively.
Aggregated Option/SAR Exercises in Last Fiscal Year and FY-End Option/SAR Values
The following table relates to options exercised during the fiscal year ended
June 30, 1995 and options outstanding at June 30, 1995:
<TABLE>
<CAPTION>
Number of Unexercised Value of Unexercised
Options at In-the-Money Options at
Shares June 30, 1995 June 30, 1995
Acquired on Value Exercisable Unexercisable Exercisable Unexercisable
Name Exercise Realized
<S> <C> <C> <C> <C> <C> <C>
Steve Greathouse _ _ _ 500,000 _ $3,031,250
Shannon L. Bybee _ _ 105,000 210,000 _ _
John W. Alderfer _ _ 87,000 150,000 $527,438 909,375
Robert L.Miodunski _ _ 17,000 68,000 _ _
Robert L. Saxton 6,000 34,050 46,000 92,000 145,500 24,250
</TABLE>
Director's Compensation
Directors of the Company who are also employees are not separately compensated
for their services as directors. Fee arrangements with other Directors of the
Company are presently as follows: (i) Mr. Kirschbaum, $250,000 per year for all
services as a Director and member of the Nominating Committee; (ii) Dr. Fields,
$250,000 per year for all services as Vice Chairman of the Board and Chairman of
the Executive Committee; (iii) Mr. Wilms, $150,000 per year for all services as
a Director and member of various committees; and (iv) Mr. Robbins, $35,000 per
year for all services as a Director and member of various committees. Directors
are also reimbursed for their reasonable out-of-pocket expenses incurred on
Company business. From time to time in the past, directors have also been
provided with stock options.
Cash compensation arrangements with Advisors are presently as follows: (i) Dr.
Scheinman, an aggregate of $140,000 per year for all services as an Advisor
and a consultant; and (ii) Mr. Sosin, $45,000 per year. In addition, Dr.
Scheinman holds currently exercisable options to purchase an aggregate of 36,111
shares of Common Stock at a weighted average exercise price of $6.46 per share
and Mr. Sosin holds currently exercisable options to purchase an aggregate of
45,000 shares of Common Stock at a weighted average exercise price of $4.54 per
share. See "Certain Transactions."
Employment and Severance Arrangements
The Company has agreed to employ Mr. Greathouse for a term of three years at a
base salary of $400,000, plus a bonus to be determined by the Board of
Directors. In addition, Mr. Greathouse received (i) 250,000 shares of Common
Stock, (ii) warrants to purchase 250,000 shares of Common Stock on terms
substantially similar to the warrants issued to GSA in September 1993
("Incentive Warrants"), which Incentive Warrants became exercisable
in August 1995, and (iii) options to purchase 250,000 shares of Common Stock at
$5.75 per share pursuant to the Company's 1991 Stock Option Plan ("Employee
Options"), which Employee Options will vest ratably over a three-year period.
The terms of the Incentive Options may be changed, and the exercisability of the
Incentive Warrants and the Employee Options may be accelerated, under certain
circumstances. The arrangement with Mr. Greathouse will entitle him to receive
coverage under Company welfare plans and the reimbursement of certain expenses.
The Company is party to an Amended Executive Severance Agreement with Shannon L.
Bybee (the "Severance Agreement"). The Severance Agreement provides, among
other things, that Mr. Bybee is entitled to be retained by the Company for a
three-year period from the time of Mr. Greathouse's election as President in
August 1994 for an annual fee of $150,000 per year. In addition, Mr. Bybee
received options to purchase 315,000 shares of Common Stock at an exercise
price of $7.625 per share, vesting annually over a three-year period
commencing July 26, 1994 with an expiration date of July 26, 2003. Mr. Bybee
currently holds the positions of Executive Vice President - Government Affairs
and Special Advisor to the Board of Directors.
The Company is party to an Employment Agreement, dated February 23, 1993, with
Mr. Alderfer. Such Employment Agreement generally provides for the
preservation of Mr. Alderfer's employment for a period of three
years following certain changes in control of the Company. During each year in
this three-year period, Mr. Alderfer, unless he is terminated by the Company
"for cause" (as defined), or resigns for other than "good reason"
(as defined,) will be entitled to receive (i) an annual salary not less than his
then current annual salary, (ii) a bonus no less than the lesser of (a) the
bonus, if any, specified for him in the Company's incentive compensation program
for fiscal 1995 or (b) the average of the bonuses paid to him for the three
immediately preceding years and (iii) continuation of benefits under any
employee benefit plan or bonus plan which the Company provides for its
employees. In addition, Mr. Alderfer's Employment Agreement provides that in
the event he is terminated by the Company other than "for cause" or resigns
from the Company for "good reason," all options to purchase Common
Stock held by him will immediately vest. In May 1994, Mr. Alderfer's Employment
Agreement was amended to provide for a specified additional bonus and for the
calculation of future year increases in base compensation.
The Company is party to an Employment Agreement with Mr. Miodunski which
generally provides for a base salary of $175,000 per year, participation in
the Company's compensation programs for corporate officers, receipt of 85,000
stock options under the 1991 Plan to vest over a five year period, and severance
benefits of one years' base salary if Mr. Miodunski is terminated prior to
March 1998 without cause.
The Company is party to an Employment Agreement with Ms. McIlwain which
generally provides for a two-year term from June 1, 1994 at a base salary of
$130,000 per year, participation in the Company's compensation programs for
corporate officers, receipt of 60,000 stock options under the 1991 Plan to vest
over a five-year period, and severance benefits of one years' base salary if
Ms. McIlwain is terminated without cause.
Compensation Committee Interlocks and Insider Participation
During the year ended June 30, 1995, the Compensation Committee of the Board of
Directors of the Company met one time. The Compensation Committee is currently
comprised of Mr. Wilms and Mr. Robbins. During such fiscal year, the entire
Board of Directors generally participated in deliberations concerning the
compensation of the Company's executive officers. Mr. Wilms served as the
Company's Chief Executive Officer from December 1984 to July 1994. Dr.
Scheinman served as the Company's Chief Operating Officer from January
1988 to September 1990 and as President of the Company from December 1988 to
September 1990. Other than current positions disclosed in the previous tables,
no other member of the Company's Board of Directors was an officer or employee
of the Company or any subsidiary during the fiscal year ended June 30, 1995 or
is a former officer of the Company or any subsidiary.
Since July 1, 1994, certain directors have been involved in certain transactions
in which the Company was a party and in which the amount involved exceeded
$60,000. See "Certain Transactions."
<PAGE>
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information as of October 13, 1995 with
respect to the beneficial ownership of the Company's Common Stock, which
constitutes the Company's only outstanding class of voting securities, by
(i) each person who, to the knowledge of the Company, beneficially owned more
than 5% of the Common Stock, (ii) each director of the Company, (iii) the
Named Executive Officers and (iv) all executive officers and directors of the
Company as a group:
<TABLE>
<CAPTION>
Amount of
Name of Beneficial Owner Beneficial Ownership Percent of Class(1)
<S> <C> <C>
Alfred H. Wilms 7,034,082 (2) 46.9%
Joel Kirschbaum
Kirkland Investment Corporation
Kirkland-Ft. Worth
Investment Partners, L.P.
9 West 57th Street
47th Floor
New York, New York 10019 1,333,333 (3) 10.3%
Gaming Systems Advisors, L.P.
9 West 57th Street
47th Floor
New York, New York 10019 _ (4) _
Steve Greathouse 332,500 (5) 2.5%
Anthony L. DiCesare _ (6) _
Dr. Craig Fields 125,000 (7) *
David Robbins _ _
Shannon L. Bybee 210,000 (8) *
John W. Alderfer 162,000 (9) *
David D. Johnson _ _
Robert L. Miodunski 17,000(10) *
All executive officers and directors
as a group (14 persons) 9,294,615(11) 59.3%
</TABLE>
_______________________
* Less than 1%.
(1) Excludes the effect of (a) the issuance of (i) 2,750,000 Investment
Warrants to Kirkland in connection with the Kirkland Investment and
(ii) 1,250,000 Incentive Warrants to GSA pursuant to the GSA Advisory
Agreement, (b) the issuance, or potential future issuance, to the
initial purchasers of the Convertible Debentures of warrants to
purchase up to 1,030,000 shares of Common Stock (of which 780,000 had
been issued as of the date of this table), (c) 8,500,000 shares of
Common Stock issuable upon the conversion of Convertible Debentures or
(d) shares covered by employee stock options other than those deemed
beneficially owned by executive officers and directors. All percentage
calculations assume that the 1,333,333 outstanding shares of Non-Voting
Junior Convertible Special Stock (the "Special Stock"), all of
which are held of record by KFW, have been converted into a like number
of shares of Common Stock.
(2) Includes 2,000,000 shares represented by the warrants issued to Mr.
Wilms. Mr. Wilms' mailing address is 4380 Boulder Highway, Las Vegas,
Nevada 89121. See "Certain Transactions."
(3) Based upon information contained in a Schedule 13D provided to the
Company by such persons (except as to percent of class) which indicated
that each of them held sole voting and disposition over all such
shares. Consists of 1,333,333 shares of Special Stock, each of which is
immediately convertible into one share of Common Stock. Of such shares,
certain amounts have been or may be sold or distributed to L.H. Friend,
Weinress & Frankson, Inc., Mr. DiCesare and, possibly, certain other
persons, as set forth in the Schedule 13D provided to the Company by
Joel Kirschbaum, KIC, KFW and GSA.
(4) Based upon information contained in a Schedule 13D provided to the
Company by such person jointly with Joel Kirschbaum, KIC and KFW.
(5) See "Executive Compensation - Employment and Severance Arrangements."
(6) Based upon information contained in a Schedule 13D provided to the
Company by Joel Kirschbaum, KIC, KFW and GSA. As set forth in such
Schedule 13D, Mr. DiCesare has certain rights to receive a portion
of the securities that KIC would be entitled to receive upon dissolution
of KFW and that GSA, Inc. would be entitled to receive upon dissolution
of GSA.
(footnotes continue on following page)
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(7) Includes 125,000 shares subject to options that are currently
exercisable or will become exercisable within 60 days.
(8) Includes 210,000 shares subject to options that are currently
exercisable or will become exercisable within 60 days.
(9) Includes 162,000 shares subject to options that are currently
exercisable or will become exercisable within 60 days.
(10) Includes 17,000 shares subject to options that are currently
exercisable or will become exercisable within 60 days.
(11) Includes (i) 2,676,200 shares subject to options and warrants that
are currently exercisable or will become exercisable within 60 days
and (ii) 1,333,333 shares of Special Stock convertible on a
share-for-share basis for shares of Common Stock.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In March 1992, Mr. Wilms committed to provide a $6.5 million five-year,
unsecured, subordinated loan (the "VSI Loan") to the Company's majority
controlled subsidiary, Video Services, Inc. ("VSI"). As consideration
for this commitment, the Company issued to Mr. Wilms five-year warrants to
purchase 200,000 shares of Common Stock at $2.50 per share and agreed to issue
an additional warrant to purchase 1,800,000 shares of Common Stock
at a purchase price of $2.50 per share upon funding of the full amount of such
loan. Mr. Wilms was entitled to one demand and unlimited piggyback registration
rights for the Common Stock underlying the warrants. The exercise price of
the warrants (the "Wilms Warrants") was determined based on an analysis of, and
fairness opinion with respect to, the transaction and on the price range of
the Common Stock during a period prior to announcement of the Company's
expansion into Louisiana. The last reported sale price of the Common Stock on
the NASDAQ National Market System on March 2, 1992 (the date the Company
announced its expansion into Louisiana), March 24, 1992 (the date of the
fairness opinion referred to above) and March 27, 1992 (the date Mr. Wilms
committed to provide the $6.5 million loan to VSI), was $6.375, $8.625 and
$8.125 per share, respectively. The VSI loan, as amended, requires quarterly
interest and principal payments with an interest rate equal to 200 basis points
above the London InterBank Offered Rate, adjusted quarterly. The VSI Loan is
currently held by N.V. Continental Trust Company ("CTC"), a Belgian corporation
owned by Mr. Wilms and members of his family.
The amended VSI Loan matures on September 1, 1998 and provides for quarterly
principal payments beginning September 1, 1993, rising from approximately
$280,000 to $360,000 over its term. CTC has funded the full $6.5 million
original principal amount of the amended VSI Loan and the Company has issued to
Mr. Wilms the warrant to purchase 1.8 million shares of Common Stock. Pursuant
to the amended VSI Loan, the maturity date of the VSI loan was extended one
year and the terms of the Wilms Warrants were also amended to extend their
exercise period to September 1, 1998 and to provide for a "cashless" exercise of
the Wilms Warrants under certain circumstances. In a cashless exercise, Mr.
Wilms would receive the number of shares of Common Stock of the Company equal
to that for which a Wilms Warrant is then being exercised less that number of
shares having a fair market value equal to the exercise price for those shares
covered by such exercise. In addition, Mr. Wilms will be permitted to surrender
all or part of CTC's note evidencing the amended VSI Loan in payment of the cash
exercise price of the Wilms Warrants. Mr. Wilms' one demand and unlimited
piggyback registration rights with respect to the shares deliverable under the
Wilms Warrants were modified to conform them procedurally with those
in the Stockholders Agreement. No change was made in the interest rate
applicable to the amended VSI Loan (from VSI Loan) or in the number of shares
or the exercise price of the Wilms Warrants. The Company agreed to pay
Mr. Wilms out-of-pocket expenses incurred in connection with the transactions
with Kirkland, the restructuring of the VSI Loan and the related documentation
in an aggregate amount of $201,750. As of June 30, 1995 the aggregate amount
of the amended VSI Loan outstanding was approximately $4.1 million.
In connection with its retention of GSA for financial advisory services, the
Company has issued to it warrants to purchase Common Stock as provided in the
GSA Advisory Agreement.
During fiscal 1995, David Robbins, a director of the Company appointed to the
Board of Directors in July 1994, was employed by the law firm of Kramer, Levin,
Naftalis, Nessen, Kamin & Frankel which has represented the Company in various
matters.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Amendment No. 1 to Form 10-K to be signed on
its behalf by the undersigned, thereunto duly authorized.
ALLIANCE GAMING CORPORATION
Date: October 26, 1995 By /s/ John W. Alderfer
Name: John W. Alderfer
Title: Senior Vice President, Treasurer
and Chief Financial Officer
