<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
(Amendment No. 1)
Filed by the Registrant [ ]
Filed by a Party other than the Registrant [ x ]
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
GLOBAL CASINOS, INC.
------------------------------------------------
(Name of Registrant as Specified In Its Charter)
Neuman & Drennen, LLC, 1507 Pine Street, Boulder, Colorado 80302
--------------------------------------------------------------------
(Name of Person 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>
<PAGE>
GLOBAL CASINOS, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JANUARY 30, 1998
The Annual Meeting of Shareholders of Global Casinos, Inc. (the "Company")
will be held at the principal executive offices of the Company, 4465 Northpark
Drive, No. 400, Colorado Springs, Colorado 80907 on January 30, 1998 at 10:00
o'clock a.m., Mountain Standard Time, for the purpose of considering and
voting upon the following:
1. To elect four (4) Directors to serve until the next Annual Meeting of
Shareholders or until their successors have been duly elected and
qualified.
2. To adopt and approve an increase in the number of shares issuable
pursuant to the exercise of options under the Company's Stock
Incentive Plan by an additional 150,000 shares.
3. Any other matters properly brought before said meeting or any
adjournment thereof.
Information relating to the above matters is set forth in the accompanying
Proxy Statement. Only holders of outstanding shares of Global Casinos, Inc.
common stock of record at the close of business on November 27, 1997 will be
entitled to vote at the meeting or any adjournment thereof.
A copy of the Company's Annual Report to Shareholders, including financial
statements for the year ended June 30, 1997, will be mailed to shareholders
concurrently with the mailing of the Proxy Statement.
Shareholders are cordially invited to attend the meeting in person.
IMPORTANT
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING IN PERSON, IT WOULD BE
APPRECIATED IF YOU WOULD PROMPTLY FILL IN, SIGN AND DATE THE ENCLOSED PROXY
STATEMENT AND RETURN IT IN THE ENCLOSED STAMPED ENVELOPE. Any proxy may be
revoked at any time before it is voted by written notice mailed or delivered
to the Secretary, by receipt or a proxy properly signed and dated subsequent
to an earlier proxy, and by revocation of a written proxy by request in person
at the Annual Meeting of Shareholders. If not so revoked, the shares
represented by the proxy will be voted in accordance with your instruction on
the proxy form.
GLOBAL CASINOS, INC.
---------------------------------
Windy Haddad, Secretary<PAGE>
<PAGE>
GLOBAL CASINOS, INC.
4465 Northpark Drive, Suite 400
Colorado Springs, Colorado 80907
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
This Proxy Statement is furnished to the Shareholders of Global Casinos,
Inc. (respectively, the "Shareholders" and the "Company") in connection with
the solicitation by the Company of proxies to be used at the Annual Meeting of
Shareholders on January 30, 1998 (the "Meeting"), at the time, place and for
the purposes set forth in the accompanying Notice of Annual Meeting of
Shareholders and at any adjournment thereof. When the accompanying proxy is
properly executed and returned, the shares of common stock it represents will
be voted at the Meeting and, where a choice has been specified on a proxy,
will be voted in accordance with such specification. If no choice is
specified on a proxy, the shares it represents will be voted FOR the election
of four (4) Directors of the Company, and FOR the adoption and approval of an
increase in the number of shares that may be issued pursuant to the exercise
of options granted under the Company's Stock Incentive Plan by an additional
150,000 shares and according to the judgment of the persons named in the
enclosed proxies as to any other action which may properly come before the
Meeting or any adjournment thereof.
ANY PROXY MAY BE REVOKED AT ANY TIME BEFORE IT IS VOTED BY WRITTEN NOTICE
MAILED OR DELIVERED TO THE SECRETARY, BY RECEIPT OF A PROXY PROPERLY SIGNED
AND DATED SUBSEQUENT TO AN EARLIER PROXY, AND BY REVOCATION OF A WRITTEN PROXY
BY REQUEST IN PERSON AT THE ANNUAL MEETING OF SHAREHOLDERS. IF NOT SO
REVOKED, THE SHARES REPRESENTED BY THE PROXY WILL BE VOTED IN ACCORDANCE WITH
THE INSTRUCTIONS ON THE PROXY FORM.
This Statement is being mailed on or about December 12, 1997, to
Shareholders eligible to vote at the Meeting. Concurrently with the mailing
of this Statement, the Company is furnishing to Shareholders its Annual Report
for its fiscal year ended June 30, 1997.
The Company is bearing all costs of soliciting proxies, and expressly
reserves the right to solicit proxies otherwise than by mail. The
solicitation of proxies by mail may be followed by telephone, telegraph or
other personal solicitations of certain Shareholders and brokers by one or
more of the Directors or by Officers or employees of the Company. The Company
may request banks and brokers or other similar agents or fiduciaries for the
voting instructions of beneficial owners and reimburse the expenses incurred
by such agents or fiduciaries in obtaining such instructions. As of the date
of this mailing, however, the Company has not made any contracts or
arrangements for such solicitations, hence it cannot identify any parties or
estimate the cost of such solicitation.
Only Shareholders of record as of the close of business on December 11,
1997 (the "Record Date"), will be entitled to vote at the Meeting.
Representation of a majority of the Company's shares of common stock
outstanding on such date, either in person or by proxy, constitutes a quorum
for the Meeting. When a quorum is present, the vote by the holders of a
majority of the shares represented at the Meeting shall decide the proposals
to be voted upon at the Meeting. As of November 15, 1997, the Company had
outstanding 1,400,811 shares of common stock ("shares"), with each share being
entitled to one vote.
<PAGE>
<PAGE>
1. SECURITY OWNERSHIP OF MANAGEMENT AND PRINCIPAL STOCKHOLDERS
-----------------------------------------------------------
The following table sets forth, as of November 3, 1997, and as adjusted
for the sale of option and warrant stock, the stock ownership of (i) each
person known by the Company to be the beneficial owner of five (5%) percent or
more of the Company's Common Stock, (ii) all Directors individually, (iii) all
Officers individually, and (iv) all Directors and Officers as a group. Each
person has sole voting and investment power with respect to the shares shown,
except as noted.
<TABLE>
<CAPTION>
Title Name & Address Shares Beneficially Owned
of Class of Beneficial Owner Number Percent (1)
- -------- ------------------- ------- -----------
<S> <C> <C> <C>
Common Stephen G. Calandrella (2)
Stock 7210 Antelope Lane
Colorado Springs, CO 80920 209,470 14.2%
" Peter Bloomquist (3)
3600 Christy Ridge Road
Sedalia, Colorado 80135 39,463 3.0%
" Clifford C. Thygesen(4)
4893 Idylwild Trail
Boulder, Colorado 80301 5,500 0.4%
" Clifford L. Neuman(5)
1507 Pine Street
Boulder. Colorado 80302 50,000 3.5%
" All Officers and Directors
as a Group (4 Persons) 308,933 19.4%
- -------------------------------------
</TABLE>
(1) Shares not outstanding but beneficially owned by virtue of the
individuals' right to acquire them as of the date of this Proxy
Statement or within sixty days of such date, are treated as outstanding
when determining the percent of the class owned by such individual.
(2) Consists of 21,790 shares of Common Stock and non-qualified stock
options exercisable to purchase an additional 30,000 shares of Common
Stock at a price of $5.00 per share. Includes 17,680 shares of Common
Stock, a $175,000 Convertible Debenture convertible into 35,000 shares
of Common Stock and Warrants which may become exercisable to purchase an
additional 105,000 shares of Common Stock at an average exercise price
of $7.00 per share beneficially owned by The Rockies Fund, Inc., a
publicly traded business development company regulated under the
Investment Company Act of 1940. Voting and investment power with
respect to these securities is exercised by its Board of Directors,
whose members are Stephen G. Calandrella, Clifford C. Thygesen and
Charles Powell. Other than Messrs. Calandrella and Thygesen, no
officer, director or affiliate of The Rockies Fund, Inc. is an officer,
director or affiliate of the Registrant. Messrs. Calandrella and
Thygesen disclaim beneficial ownership of the shares of Common Stock and
Warrants held by The Rockies Fund, Inc. for purposes of Section 16 of
the Exchange Act.
(3) Includes 7,797 shares of Common Stock held by Mr. Bloomquist. Includes
666 shares of Common Stock held in an individual retirement account for
the benefit of Mr. Bloomquist. Includes 1,000 shares of Common Stock
held of record by the Bloomquist Family Partnership, of which Mr.
Bloomquist is a general partner, and, as such, would be deemed to
exercise voting and investment control with respect to shares owned by
the partnership. Also includes Incentive Stock Options exercisable to
acquire an additional 30,000 shares at an exercise price of $5.00 per
share.
(4) Does not reflect securities beneficially owned by the Rockies Fund,
Inc., for which Mr. Thygesen serves as a director.
(5) Includes warrants exercisable for three years to purchase 20,000 shares
of common stock at a price of $5.00 per share.
2. ELECTION OF DIRECTORS
---------------------
The Directors have voted to nominate four (4) Directors for election to
hold office until the next Annual Meeting of Shareholders and until their
successors are elected and qualified. Each of the following nominees has
consented to be nominated to serve as a Director of the Company. Messrs.
Calandrella, Bloomquist, Thygesen and Neuman are currently Directors of the
Company. Mr. Bloomquist is presently Chief Financial Officer.
The Company's Articles of Incorporation expressly prohibit cumulative
voting. Therefore, the holders of a majority of the Company's shares could
elect all of the Directors. It is expected that the proxies received by the
Directors' nominees will be voted, except to the extent that authority is
withheld on any proxy as to all or one or more individuals, to elect as
Directors the following nominees, whose principal occupations during the past
five (5) years, directorships and certain other affiliations and information
are set forth below:
<TABLE>
<CAPTION>
Director/
Name Age Position Officer Since
---- --- -------- -------------
<S><C> <C> <C> <C>
Stephen G. Calandrella 35 Interim President
& Director 1993
Peter J. Bloomquist 37 CFO & Director 1994
Clifford C. Thygesen 60 Director 1996
Clifford L. Neuman 49 Director 1997
</TABLE>
STEPHEN G. CALANDRELLA. Mr. Calandrella has been President and
Director of The Rockies Fund, Inc. since February, 1991. The Rockies Fund,
Inc., a Colorado Springs, Colorado-based business development company
regulated under the Investment Company Act of 1940, makes investments in, and
managerial assistance available to, certain eligible portfolio companies. Mr.
Calandrella has been a founder, director and officer of several public
companies, including Optimax Industries, Inc., a NASDAQ Company, and Gold
Capital Corporation, a publicly traded mining company. Mr. Calandrella
currently serves on the Board of Directors of American Educational Products,
Inc., a NASDAQ listed company engaged in the manufacture of supplemental
educational materials, and Guardian Technologies, Inc., a NASDAQ listed
manufacturing company. Mr. Calandrella is also engaged in financing and
consulting activities for development stage companies, which consists of
advising public and private companies on capital formation methods, enhancing
shareholder valuations, mergers, acquisitions and corporate restructurings, as
well as arranging for bridge loans and equity purchases.
PETER J. BLOOMQUIST. Mr. Bloomquist was retained to act as the
Company's Chief Financial Officer in 1994. Prior to accepting employment with
the Company, Mr. Bloomquist worked for Cohig & Associates, Inc., a Denver
based broker-dealer, in the Corporate Finance Department. Mr. Bloomquist was
employed by Cohig & Associates, Inc. from June of 1991 through June of 1994.
Prior to that time, and immediately following his graduation from college, Mr.
Bloomquist was employed by Leventhal and Horwath where he worked in the area
of income taxation. Mr. Bloomquist graduated from the University of Northern
Colorado in 1980 with a bachelor's degree in business management with an
emphasis in accounting.
CLIFFORD C. THYGESEN, has served as a Director of the Company since
1996. He has also been President of American Educational Products, Inc. since
January 22, 1996 and a Director since 1986, and also served as its Executive
Vice-President from 1986 until January 1992. Mr. Thygesen is also currently a
director of Rockies Fund, Inc. a Colorado Springs, Colorado based Business
Development Company registered under the Investment Company Act of 1940. He
received his B.S. degree in Industrial Administration from the University of
Illinois in 1961.
CLIFFORD L. NEUMAN has served as a Director of the Company since 1997.
Mr. Neuman is a licensed, practicing attorney and a partner in the law firm of
Neuman & Drennen, LLC, with offices located in Boulder and Denver, Colorado.
Mr. Neuman also serves on the Board of Directors of American Educational
Products, Inc. Mr. Neuman received his Bachelor of Arts degree from Trinity
College in 1970 and his Juris Doctorate degree from the University of
Pennsylvania School of Law in 1973.
All directors serve for terms of one (1) year each, and are subject to
re-election at the Company's regular Annual Meeting of Shareholders, unless
they earlier resign.
During the fiscal year ended June 30, 1997, four (4) meeting(s) of the
Board of Directors were held, including regularly scheduled and special
meetings. All Board members attended 100% of the Board meetings. Outside
Directors were reimbursed their expenses associated with attendance at such
meeting or otherwise incurred in connection with the discharge of their duties
as a Director. The Board of Directors has also adopted a compensation plan
for outside directors pursuant to which such persons receive, for each year of
service, non-qualified stock options exercisable to purchase 10,000 shares of
the Company's Common Stock. The exercise price of the options is the closing
bid price of the Company's Common Stock on the date of grant, and the options
are exercisable for a period of five (5) years. Directors who are also
executive officers of the Company receive no additional compensation for their
services as directors.
During fiscal 1997, the Company had standing Audit and Compensation
Committees of the Board of Directors. The members of the Audit Committee were
Stephen G. Calandrella, Clifford C. Thygesen and Gerald Jacobs, now deceased.
No member of the Audit Committee receives any additional compensation for his
service as a member of that Committee. During fiscal 1997, the Audit
Committee held one (1) meeting(s) which was attended by all of its members.
The Audit Committee is responsible for providing assurance that financial
disclosures made by Management reasonably portray the Company's financial
condition, results of operations, plan and long-term commitments. To
accomplish this, the Audit Committee oversees the external audit coverage,
including the annual nomination of the independent public accountants, reviews
accounting policies and policy decisions, reviews the financial statements,
including interim financial statements and annual financial statements,
together with auditor's opinions, inquires about the existence and substance
of any significant accounting accruals, reserves or estimates made by
Management, reviews with Management the Management's Discussion and Analysis
section of the Annual Report, reviews the letter of Management Representations
given to the independent public accountants, meets privately with the
independent public accountants to discuss all pertinent matters, and reports
regularly to the Board of Directors regarding its activities.
During fiscal 1997, the Compensation Committee consisted of Stephen G.
Calandrella, Clifford C. Thygesen and Gerald Jacobs. No member of the
Compensation Committee receives any additional compensation for his service as
a member of that Committee. During fiscal 1997, the Compensation Committee
held one (1) formal meeting(s) which was attended by all of its members. The
Compensation Committee is responsible for reviewing pertinent data and making
recommendations with respect to compensation standards for the executive
officers, including the President and Chief Executive Officer, establishing
guidelines and making recommendations for the implementation of Management
incentive compensation plans, reviewing the performance of the President and
CEO, establishing guidelines and standards for the grant of incentive stock
options to key employees under the Company's Incentive Stock Option Plan, and
reporting regularly to the Board of Directors with respect to its
recommendations.
No family relationship exists between any director or executive
officer.
There are no material proceedings to which any director, officer or
affiliate of the Company, any owner of record or beneficially of more than
five percent (5%) of any class of voting securities of the Company, or any
associate of any such director, officer, affiliate of the Company, or security
holder is a party adverse to the Company or any of its subsidiaries or has a
material interest adverse to the Company or any of its subsidiaries.
Except as noted herein or below, during the last five (5) years no
director or officer of the Company has:
(1) had any bankruptcy petition filed by or against any business of
which such person was a general partner or executive officer either at the
time of the bankruptcy or within two years prior to that time;
(2) been convicted in a criminal proceeding or subject to a pending
criminal proceeding;
(3) been subject to any order, judgment, or decree, not subsequently
reversed, suspended or vacated, of any court of competent jurisdiction,
permanently or temporarily enjoining, barring, suspending or otherwise
limiting his involvement in any type of business, securities or banking
activities; or
(4) been found by a court of competent jurisdiction in a civil
action, the Commission or the Commodity Futures Trading Commission to have
violated a federal or state securities or commodities law, and the judgment
has not been reversed, suspended, or vacated.
Any transactions between the Company and its officers, directors,
principal shareholders, or other affiliates have been and will be on terms no
less favorable to the Company than could be obtained from unaffiliated third
parties on an arms-length basis and will be approved by a majority of the
Company's independent, outside disinterested directors.
<PAGE>
3. TRANSACTIONS WITH MANAGEMENT AND OTHERS
---------------------------------------
Loans from Affiliates
- ---------------------
Since embarking upon its strategic plan to enter the gaming industry, the
Company has consistently experienced shortages in working capital and has
relied, from time to time, upon loans from affiliates to meet immediate cash
demands.
The Company has borrowed $10,000 from Gerald Jacobs, a former Director,
which loan, together with interest at the rate of 12% per annum has been
repaid. In fiscal 1997 the Company borrowed $1,000 at 10% due upon demand.
The Company borrowed $13,500 from Mr. Calandrella, also a Director, which loan
has been repaid. The sum of $26,000 was loaned to the Company by Peter
Bloomquist, Controller and Chief Financial Officer of the Company, which loan,
together with interest, has been repaid. The Bloomquist Family Partnership,
of which Mr. Bloomquist is a general partner, has loaned $85,000 to the
Company, which loan bears interest at the rate of 12% per annum and is due
upon demand. As of the date of this proxy, $50,000 remains unpaid. In
August, 1996, the Company borrowed $175,000 from The Rockies Fund, Inc., a
business development company for which Mr. Calandrella serves as President,
Director and principal shareholder. The loan bears interest at the rate of
twelve percent (12%) per annum. The Rockies Fund, Inc. converted the entire
outstanding principal amount of the loan into a convertible debenture which
the Company sold and offered as part of a private placement which was
completed during the third quarter of 1996. The Convertible Debenture bears
interest at twelve percent (12%) convertible into 35,000 shares of Common
Stock, or $5.00 per share. In August of 1997 the Company borrowed $75,000
from the Rockies Fund Inc. This loan bears interest at the rate of 24% and is
due in four equal monthly payments beginning January 1998.
All of the foregoing loans are unsecured and represent the demand
obligations of the Company to the foregoing affiliated parties.
Transactions in Securities
- --------------------------
There have been several transactions in the securities of the Company
with related parties.
In October, 1995, the Company granted to each of Messrs. Martindale,
Bright, Jacobs and Calandrella non-qualified options exercisable to purchase
30,000 shares of Common Stock at an exercise price of $5.00 per share. The
options were granted as compensation for their services as Directors of the
Company.
The Rockies Fund, Inc., an affiliate of Mr. Calandrella, converted a
$175,000 note into a $175,000 twelve percent (12%) convertible debenture as
part of the Company's private placement of convertible debentures in 1995.
The debenture is convertible at $5.00 per share into 35,000 shares of Common
Stock. As part of the private placement, the Company issued and granted to
The Rockies Fund, Inc. additional common stock purchase warrants: 35,000
warrants exercisable at $6.00 per share, 35,000 warrants exercisable at $7.00
per share and 35,000 warrants exercisable at $8.00 per share.
For their services on behalf of the Company between October, 1995 and
June, 1996, the Company agreed to issue to each Messrs. Calandrella and Jacobs
the equivalent of $5,000.00 per month, payable in the form of shares of the
Company's Common Stock, valued at market. Under the foregoing compensation
arrangement, for the period from October, 1995 to June, 1996, the Company
issued each to Messrs. Calandrella and Jacobs 9,000 shares of Common Stock.
These shares are "restricted securities" under the Securities Act of 1933, as
amended. The foregoing compensation arrangement terminated June 30, 1996.
Beginning January of 1997 the Company agreed to pay Messrs. Calandrella and
Jacobs 4,000 and 2,500 per month respectively.
Debt Conversion
- ---------------
In June, 1995, the Company consummated the purchase of an aggregate of
$937,204 in subordinated secured promissory notes held by sixteen (16)
creditors of Casinos U.S.A. Pursuant to the terms of the Promissory Note
Purchase Agreements, the Company purchased the promissory notes and collateral
security in consideration for the issuance of an aggregate of 124,961 shares
of the Company's Common Stock, valued at $7.50 per share. The shares of
Common Stock were issued by the Company in reliance upon an exemption from the
registration requirements of the Securities Act contained in Section 4(2)
thereof. Mr. Martindale, formerly Chairman of the Company, converted $79,776
of debt to 10,639 shares of Common Stock and Mr. Bright, former Director,
converted $73,128 of debt to 9,751 shares of Common Stock in this transaction.
Formation and Organization of Global Internet Corporation
- ---------------------------------------------------------
During 1996, the Company formed and organized a subsidiary named Global
Internet Corporation, a Delaware corporation ("Global Internet"). Global
Internet was formed for the purpose of pursuing opportunities to develop a
casino gaming web site for the Internet.
In connection with the formation and organization of Global Internet,
Global Internet sold an aggregate of 2,985,000 shares of common stock for a
total consideration of $14,925, or $.005 per share. Among the investors who
purchased shares were the following:
<TABLE>
<CAPTION>
Name Relationship No. of Shares
- ---------------------- ------------------ -------------
<S> <C> <C>
Global Casinos, Inc. Parent 1,750,000
Steven Bright Officer & Director 300,000
Stephen G. Calandrella Director 150,000
William Martindale Officer & Director 100,000
Pete Bloomquist Director 57,500
Gerald Jacobs Director 35,000
</TABLE>
Concurrently with the foregoing share issuance, Global Internet adopted a
Stock Option Plan and granted an aggregate of 450,000 options exercisable at
$.25 per share. Among those granted options were the following:
<TABLE>
<CAPTION>
Name Position No. of Options
- ---------------------- -------- --------------
<S> <C> <C>
Steven Bright Director 50,000
Stephen G. Calandrella Director 50,000
William Martindale Director 50,000
Pete Bloomquist Director 50,000
Gerald Jacobs Director 50,000
</TABLE>
Concurrently with the foregoing issuances and grants, Mr. Bright resigned
as a Director of the Company and Mr. Martindale agreed to resign as an officer
and Director of the Company effective November 20, 1996, the termination date
of his Employment Agreement with the Company.
Further, concurrent with the foregoing Messrs. Calandrella, Martindale,
Bloomquist and Jacobs resigned as Directors of Global Internet.
The foregoing persons were given the opportunity to purchase the
securities and receive the options of Global Internet in consideration of
their services in developing the Internet gaming opportunity for that
subsidiary.
The Company currently owns approximately 58.6% of the outstanding common
stock of Global Internet, which interest the Company is currently under
agreement to sell to a non-affiliated third party.
Each of the Company's Directors who received securities in Global Internet
owns less than five percent (5%) of the outstanding securities of that
subsidiary.
Management of the Company is of the opinion that the terms of all of the
foregoing arrangements, transactions and events are no less favorable than
could be obtained from unaffiliated third parties on the dates such
transactions occurred.
4. COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
-------------------------------------------------
Under the Securities Laws of the United States, the Company's
Directors, its Executive (and certain other) Officers, and any persons holding
more than ten percent (10%) of the Company's common stock are required to
report their ownership of the Company's common stock and any changes in that
ownership to the Securities and Exchange Commission and the NASDAQ stock
market. Specific due dates for these reports have been established and the
Company is required to report in this Proxy Statement any failure to file by
these dates during fiscal 1997. All of these filing requirements were
satisfied by its Officers and Directors and ten percent holders. In making
these statements, the Company has relied on the written representation of its
Directors and Officers or copies of the reports that they have filed with the
Commission.
5. EXECUTIVE COMPENSATION
----------------------
The following tables and discussion set forth information with respect
to all plan and non-plan compensation awarded to, earned by or paid to the
Chief Executive Officer ("CEO"), and the Company's four (4) most highly
compensated executive officers other than the CEO, for all services rendered
in all capacities to the Company and its subsidiaries for each of the
Company's last two (2) completed fiscal years; provided, however, that no
disclosure has been made for any executive officer, other than the CEO, whose
total annual salary and bonus does not exceed $100,000.
<PAGE>
<TABLE>
TABLE 1
SUMMARY COMPENSATION TABLE
<CAPTION>
Long Term Compensation
----------------------------------
Annual Compensation(1) Awards Payouts
-------------------------- --------------------- -------
Other All
Annual Restricted Other
Name and Compen- Stock LTIP Compen-
Principal Salary Bonus sation Award(s) Options/ Payouts sation
Position Year ($) ($) ($)(2) ($) SARs ($) ($)
- --------------- ------- -------- ----- --------- ---------- -------- ------- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Stephen G. Calandrella, 1997 45,000 ____ ____ ____ 30,000 ____ ____
Interim President and
Director
1996 45,000
- ----------------------------------
</TABLE>
(1) All executive officers of the Company are eligible to participate in the
Company's group health insurance plan, although Mr. Calandrella does not
participate. No executive officer received perquisites and other
personal benefits which, in the aggregate, exceeded the lesser of either
$50,000 or 10% of the total of annual salary and bonus paid during the
respective fiscal years.
Employment Agreements
- ---------------------
Effective May 1, 1995, the Company entered into a written Employment
Agreement with George Garman for a term of three (3) years, with automatic one
(1) year renewals, pursuant to which Mr. Garman serves as General Manager of
the Company's casino and gaming facility located in the Aruba Radisson Hotel
on the island of Aruba, Netherlands Antilles, known as the "Casino
Masquerade". The Agreement provides that Mr. Garman shall be paid a base
salary of $6,000.00 per month until termination of the Agreement or until
modified by further written agreement between the Company and Mr. Garman. In
addition to the foregoing, Mr. Garman shall be paid a bonus equal to five (5%)
percent of the net operating profit from gaming operations at the Casino
Masquerade. Under the Agreement, Mr. Garman is also entitled to receive, as
incentive compensation, incentive stock options exercisable to purchase up to
30,000 shares of the Company's Common Stock, at $5.00 per share. 20,000 of
the incentive stock options are subject to vesting over a period of three
years (3) contingent upon Mr. Garman's continued employment with the Company
on the second and third anniversary dates of the date of his Employment
Agreement. The incentive stock options are exercisable for a period of five
(5) years from the date of grant, subject to vesting. Mr. Garman shall be
entitled to receive customary benefits and perquisites made generally
available to other executive officers of the Company, and is also entitled to
be reimbursed for reasonable and necessary expenses incurred on behalf of the
Company in the discharge of his duties. Beginning in August, 1996, Mr. Garman
became General Manager of the newly acquired Pelican Bay Casino on the island
of St. Maarten, Netherlands Antilles. Mr. Garman continues to serve under the
terms of his written employment agreement as General Manager of the Pelican
Bay Casino.
The Company also entered into a written Employment Agreement with Peter
Bloomquist for a term of three (3) years pursuant to which Mr. Bloomquist
serves as Chief Financial Officer of the Company. The Agreement provides for
payment of base salary of $90,000 per year. Under the Agreement, Mr.
Bloomquist is also entitled to receive, as incentive compensation, incentive
stock options exercisable to purchase up to 30,000 shares of the Company's
Common Stock, valued at fair market value on the date of grant. Such
incentive stock options shall be subject to vesting over a period of three
years (3) contingent upon Mr. Bloomquist's continued employment with the
Company on the first, second and third anniversary dates of the date of his
Employment Agreement. The incentive stock options are exercisable until the
year 2000. The Employment Agreement expired in July 1997; and Mr. Bloomquist
continues to serve on an at-will basis.
Company Stock Incentive Plans
- -----------------------------
In 1993, the Board of Directors and the Shareholders of the Company
adopted the Global Casinos, Inc. Stock Incentive Plan (the "Incentive Plan").
The Incentive Plan allows the Company to grant incentive stock options, non-
qualified stock options and/or stock purchase rights (collectively "Rights")
to officers, employees, former employees and consultants of the Company and
its subsidiaries. Options granted to eligible participants may take the form
of Incentive Stock Options ("ISO's") under Section 422 of the Internal Revenue
Code of 1986, as amended (the "Code") or options which do not qualify as ISO's
("Non-Qualified Stock Options" or "NQSO's"). As required by Section 422 of
the Code, the aggregate fair market value (as defined by the Incentive Plan)
of the Company's Common Stock (determined as of the date of grant of ISO) with
respect to which ISO's granted to an employee are exercisable for the first
time in any calendar year may not exceed $100,000. The foregoing limitation
does not apply to NQSO's. Rights to purchase shares of the Company's Common
Stock may also be offered under the Incentive Plan at a purchase price under
terms determined by the Incentive Plan Administrator.
Either the Board of Directors (provided that a majority of Directors are
"disinterested") can administer the Incentive Plan, or the Board of Directors
may designate a committee comprised of Directors meeting certain requirements
to administer the Incentive Plan. The Administrator will decide when and to
whom to make grants, the number of shares to be covered by the grants, the
vesting schedule, the type of awards and the terms and provisions relating to
the exercise of the awards.
An aggregate of 150,000 shares of the Company's Common Stock are reserved
for issuance under the Incentive Plan. As of June 30, 1997, options to
purchase 78,000 shares of Common Stock had been granted with a weighted
average exercise price of $5.00 per share.
The following table sets forth certain information concerning the
granting of incentive stock options during the last completed fiscal year to
each of the named executive officers and the terms of such options:
<TABLE>
TABLE 2
Option/SAR Grants for Last
Fiscal Year - Individual Grants
<CAPTION>
Number of % of Total
Securities Options/SARs
Underlying Granted to Exercise
Options/SARs Employees in or Base Expiration
Name Granted (#) Fiscal Year Price ($/Sh) Date
- ---------------------- ------------ ------------ ------------ ----------
<S> <C> <C> <C> <C>
Stephen G. Calandrella 30,000 (1) 20% $5.00 2001
- --------------------------
</TABLE>
(1) Consists of non-qualified stock options exercisable to purchase 30,000
shares of Common Stock at an exercise price of $5.00 per share, granted
to Mr. Calandrella in consideration of his services as a Director of the
Company. Mr. Calandrella did not receive any incentive stock options in
consideration of his services as Interim President during the last fiscal
year.
The following table sets forth certain information concerning the
exercise of incentive stock options during the last completed fiscal year by
each of the named executive officers and the fiscal year-end value of
unexercised options on an aggregated basis:
<PAGE>
<PAGE>
<TABLE>
TABLE 3
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES
----------------------------------------------------
<CAPTION>
Value of
Number of Unexercised
Unexercised In-the-Money
Options/SARs Options/SARs
at FY-End (#) at FY-End ($) (1)
Shares Acquired Value Realized Exercisable Exercisable/
Name on Exercise (#) ($) (Unexercisable) Unexercisable
- ---------------- --------------- -------------- --------------- -----------------
<S> <C> <C> <C> <C>
Stephen G. Calandrella -0- $0.00 30,000/-0- N/A
- --------------------------------
</TABLE>
(1) Value Realized is determined by calculating the difference between the
aggregate exercise price of the options and the aggregate fair market
value of the Common Stock on the date the options are exercised.
(2) The value of unexercised options is determined by calculating the
difference between the fair market value of the securities underlying the
options at fiscal year end and the exercise price of the options.
6. INCENTIVE STOCK OPTION PLAN - ADDITIONAL SHARES
-----------------------------------------------
The Board of Directors of the Company has determined that, in order to be
able to provide additional incentive to the Company's management employees, it
is in the best interest of the Company and its stockholders that an additional
150,000 shares be authorized to be issued pursuant to the exercise of options
granted under the Company's Stock Incentive Plan. Section XVIII of the Plan,
Section 422 of the Internal Revenue Code and Rule 16b-3 under the Securities
Exchange Act of 1934, as amended, each require that any increase in the
aggregate number of shares which may be issued under the Plan be approved by a
majority of the stockholders of the Company at a regular or special meeting of
the stockholders called for that purpose.
For the reasons stated above, the Company recommends a vote FOR approval
of the proposal to increase by 150,000 shares the total number of shares which
may be issued pursuant to options granted under the Company's Stock Incentive
Plan.6
7. CHANGE IN INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT
-------------------------------------------------
On May 29, 1996, the client-auditor relationship between the Company and
its principal accountants, Ernst & Young LLP, ceased. The cessation of the
relationship was effective May 29, 1996. At a meeting held on May 29, 1996,
the Board of Directors of the Company approved the engagement of Gelfond
Hochstadt Pangburn & Co. as its independent auditors to replace Ernst & Young
LLP who resigned as auditors of the Company effective May 29, 1996. The audit
committee of the Board of Directors approved the change on May 29, 1996. The
reports of Ernst & Young LLP related to the consolidated financial statements
of the Company for the fiscal years ended June 30, 1994 and 1995 contain a
going concern modification. In connection with the audits of the Company's
financial statements for each of the fiscal years ended June 30, 1994 and 1995
there were no disagreements with Ernst & Young LLP on any matters of
accounting principles or practices, financial statement disclosure, or
auditing scope and procedures which, if not resolved to the satisfaction of
Ernst & Young LLP, would have caused Ernst & Young LLP to make reference to
the matter in their report.
OTHER MATTERS
-------------
The Company's management is not aware of other matters which may come
before the Meeting. The Directors' designees or other persons named in the
accompanying form of proxy will vote said proxy in accordance with their
judgment if any other matter does properly come before the Meeting. A
majority of those votes present at the Meeting cast in favor of any such
matter will result in the passage of such matter.
A copy of Form 10-KSB, the annual report filed by the Company with the
Securities and Exchange Commission, will be furnished without charge to any
person who requests it in writing, from the office of the company at its
address noted on this Proxy Statement.
GLOBAL CASINOS, INC.
By: _______________________________________________
Windy Haddad, Secretary
1998 Annual Meeting
No definitive date for the Annual Meeting of Shareholders in 1998
has been established. Qualifying shareholders may submit proposals that are
consistent with the Company's Bylaws and federal securities laws to the
Company for inclusion in the Company's proxy material relating to the 1998
Annual Meeting. The Company must receive such proposals at its business
address (set forth at the beginning of this Proxy Statement) no later than
June 30, 1998.
<PAGE>
<PAGE>
GLOBAL CASINOS, INC.
PROXY SOLICITED ON BEHALF OF THE COMPANY
The undersigned hereby constitutes and appoints Stephen G. Calandrella
(SEE NOTE BELOW) with full power of substitution the true and lawful attorney
and proxy of the undersigned to attend the Annual Meeting of the Shareholders
of Global Casinos, Inc. (the "Company") to be held at the principal executive
offices of the Company, 4465 Northpark Drive, No. 400, Colorado Springs,
Colorado 80907, on January 30, 1998 at 10:00 o'clock a.m. Mountain Standard
Time, or any adjournment or adjournments thereof, and vote all the shares of
the Company standing in the name of the undersigned with all the powers the
undersigned would possess if present at said meeting.
1. FOR _______________ WITHHOLD AUTHORITY ____________
To elect all of the nominees listed below:
Stephen G. Calandrella, Peter J. Bloomquist,Clifford C.
Thygesen and Clifford L. Neuman
(INSTRUCTION: To withhold authority to vote for any individual
nominee, write that nominee's name below)
________________________________________________
2. To adopt and approve an increase in the number of shares
issuable pursuant to the exercise of options granted under the
Company's Stock Incentive Plan by an additional 150,000 shares.
FOR __________ AGAINST __________ ABSTAIN _________
3. Upon such other matters as may properly come before the
meeting.
UNLESS OTHERWISE SPECIFIED, THIS PROXY WILL BE VOTED FOR ITEM 1 AND ITEM 2 AND
IN THE DISCRETION OF THE PERSON HOLDING THE PROXY FOR ANY OTHER BUSINESS.
(NOTE: Should you desire to appoint a proxy other than the management designee
named above, strike out the name of management designee and insert the name of
your proxy in the space provided above. Should you do this, give this proxy
card to the person you appoint instead of returning the proxy card to the
Company.)
(PLEASE DATE, SIGN AND PROMPTLY RETURN THIS PROXY IN THE ENCLOSED ENVELOPE.)
Receipt is acknowledged of Notice of Annual Meeting and Proxy Statement for
the meeting.
Date ______________________________________________, 1997
__________________________________________________________
Name (please type or print)
__________________________________________________________
Signature
__________________________________________________________
Signature, if held jointly
Please sign exactly as name appears to the left. When shares are held by
joint tenants, both should sign. When signing as executor,
administrator, attorney, trustee, or guardian, please give full title as
such. If a corporation, please sign in full corporation name by
President or other authorized officer. If a partnership, please sign in
partnership name by authorized person.
