<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. ___)
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 & Cobb, 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)
[ ] 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>
GLOBAL CASINOS, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD FEBRUARY 3, 1997
The Annual Meeting of Shareholders of Global Casinos, Inc. (the "Company") will
be held at the principal executive offices of the Company, 1777 S. Harrison
Street, Skydeck, Denver, Colorado 80210 on February 3, 1997 at 10:00 o'clock
a.m., Mountain Standard Time, for the purpose of considering and voting upon
the following:
1. To elect three (3) 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 January 2, 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, 1996, 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.
/s/ Gerald Jacobs
----------------------------
Gerald Jacobs, Secretary
<PAGE>
GLOBAL CASINOS, INC.
1777 S. HARRISON STREET, SKYDECK
DENVER, COLORADO 80210
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 February 3, 1997 (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 three (3)
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 January 6, 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, 1996.
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 January 2, 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 December 16, 1996, the Company had outstanding 1,306,264 shares
of common stock ("shares"), with each share being entitled to one vote.
<PAGE>
1. SECURITY OWNERSHIP OF MANAGEMENT AND PRINCIPAL STOCKHOLDERS.
The following table sets forth, as of December 16, 1996, 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, Colorado 80920 209,470 14.2%
" Gerald Jacobs (3)
10229 Lodestone Way
Parker, Colorado 80134 47,040 3.5%
" Peter Bloomquist (4)
3600 Christy Ridge Road
Sedalia, Colorado 80135 39,463 3.0%
All Officers and Directors
as a Group (3 Persons) 295,973 19.3%
____________________
(1) Shares not outstanding but beneficially owned by virtue of the
individuals' right to acquire them as of December 16, 1996 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 Mr.
Calandrella, no officer, director or affiliate of The Rockies Fund, Inc.
is an officer, director or affiliate of the Registrant. Mr. Calandrella
disclaims 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) Consists of non-qualified stock options exercisable to purchase 30,000
shares of Common Stock at $5.00 per share granted to Mr. Jacobs for his
services as a director of the Company, and 8,040 shares of Common Stock
issued to CJS Partnership, a Colorado general partnership, of which Mr.
Jacobs is a general partner, and as such, would be deemed to exercise the
shared voting and investment control with respect to these securities.
<PAGE>
(4) 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.
</TABLE>
2. ELECTION OF DIRECTORS.
The Directors have voted to nominate three (3) 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 and Jacobs 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>
Gerald Jacobs 60 Director 1993
Stephen G. Calandrella 35 Interim President & Director 1993
Peter J. Bloomquist 37 CFO & Director 1994
</TABLE>
GERALD JACOBS. Mr. Jacobs holds a Limited Stake Gaming Operator's License
issued by the Colorado Limited Gaming Control Commission as a result of his
having served as shift supervisor at the Nitro Club between February and
December, 1992. Since June 1993, to the present, Mr. Jacobs has been licensed
by the Colorado Limited Gaming Control Commission as an associated person. On
March 12, 1996, Mr. Jacobs was appointed President of Casinos U.S.A., Inc., a
wholly-owned subsidiary of the Company. His K-License was renewed in June,
1995, which authorizes him to manage a limited stakes gaming operation for
another year. From 1990 to 1995, Mr. Jacobs has primarily been engaged in the
management of his personal investment portfolio. Since 1995, Mr. Jacobs has
devoted a substantial portion of his time to the business affairs of the
Company. From 1981 to 1990, Mr. Jacobs was a merchandiser for Fashion Bar, and
prior to that from 1967 to 1980 he served as supervisor of all Fashion Bar
stores. Mr. Jacobs attended the University of Illinois from 1953 to 1954 and
from 1957 to 1958, without earning a degree.
<PAGE>
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 served as a Director of Kelly Motors, Ltd., a Fort Collins, Colorado-based
manufacturer of specialty automobiles, Combined Penny Stock Fund, Inc. and
Redwood MicroCap Fund, Inc., both of which are closed-end investment companies
registered under the Investment Company Act of 1940, Good Times Restaurants,
Inc., a publicly-held Denver, Colorado-based company engaged in owning and
operating Good Times Restaurants and Round-The-Corner Restaurants Southshore
Corp., a publicly traded family entertainment company; Cogenco International,
Inc., a publicly traded financial services 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 NMS listed company engaged in the manufacture of supplemental
educational materials, and Optimax Industries, 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, age 38, 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.
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, 1996, five (5) meeting(s) of the
Board of Directors were held, including regularly scheduled and special
meetings. Mr. Bright attended one meeting in person and one meeting by
telephone. All other 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 15,000
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.
<PAGE>
During fiscal 1996, the Company had standing Audit and Compensation
Committees of the Board of Directors. The members of the Audit Committee were
Stephen G. Calandrella, Steven Bright and Gerald Jacobs. No member of the
Audit Committee receives any additional compensation for his service as a
member of that Committee. During fiscal 1996, 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 1996, the Compensation Committee consisted of Stephen G.
Calandrella, Steven Bright and Gerald Jacobs. No member of the Compensation
Committee receives any additional compensation for his service as a member of
that Committee. During fiscal 1996, 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.
<PAGE>
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.
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 Director, which
loan, together with interest at the rate of 12% per annum has been repaid. 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 bears
interest at the rate of 12% per annum and is due upon demand. As of the date
of this proxy, $720 remains outstanding. The Bloomquist Family Partnership, of
which Mr. Bloomquist is a general partner, has loaned $82,000 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, $47,000 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.
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.
<PAGE>
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.
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>
<PAGE>
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. 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 1995. All of these filing requirements were satisfied by its Officers
and Directors and ten percent holders, except the following: Mr. Martindale
failed to timely file two (2) reports covering two (2) transactions in the
Company's securities; Mr. Bright failed to timely file a report covering one
(1) transaction in the Company's securities; Mr. Calandrella failed to timely
file two (2) reports covering two (2) transactions in the Company's securities;
and Mr. Jacob failed to file two (2) reports covering two (2) transactions in
the Company's securities. 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.
<PAGE>
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
three (3) 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.
<TABLE>
TABLE 1
SUMMARY COMPENSATION TABLE
<CAPTION>
Long Term Compensation
------------------------------
Annual Compensation Awards Payouts
---------------------------- --------------------- -------
Other All
Annual Restricted Other
Name and Compen- Stock Options Compen-
Principal Salary Bonus sation Award(s) SARs LTIP sation
Position Year $ ($) ($)(1) ($) (#) ($) ($)
- --------- ---- ------- ----- --------------------------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Stephen G. Calandrella, 1996 45,000 ____ ____ ____ 30,000 ____ ____
Interim President
and Director
Nathan Katz (2), CEO
and President 1995 122,720 -0- -0- -0- 30,000 -0- -0-
1994 122,158 -0- -0- -0- -0- -0- -0-
- --------------------
(1) All executive officers of the Company participate in the Company's group
health insurance plan. However, 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.
(2) Mr. Katz served as President of the Company from November 10, 1993 until
October 12, 1995. Mr. Katz resigned effective October 12, 1995, and was
replaced by Mr. Calandrella who is serving as Interim President of the
Company until a successor is identified and elected. Mr. Calandrella's
compensation is being paid through the issuance of securities of the
Company. (See discussion above.)
</TABLE>
<PAGE>
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, Netherland 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, Netherland
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 shall be exercisable for a period of
five (5) years from the date of grant, subject to vesting.
NON-QUALIFIED STOCK OPTION PLAN
In March, 1992, the Company's Board of Directors approved a limited non-
qualified stock option plan pursuant to which directors and certain officers
and key employees were granted non-qualified stock options exercisable to
purchase shares of the Company's common stock at an exercise price of $4.00 per
share. Options exercisable to purchase a total of 50,400 shares of Common
Stock of the Company were granted, expiring March 31, 1994. No options were
granted under the Plan during fiscal 1993. Effective March 31, 1994, all of
the options issued under the Plan were exercised by the holders thereof.
COMPANY STOCK INCENTIVE PLANS
<PAGE>
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 50,000 shares of the Company's Common Stock are reserved
for issuance under the Incentive Plan. As of June 30, 1996, options to
purchase 78,000 shares of Common Stock had been granted with a weighted average
exercise price of $5.00 per share. Of these, options to purchase 32,000 shares
are subject to future vesting requirements.
The following table sets forth certain information concerning the granting
of incentive stock options during the last completed fiscal year to each of the
named executive officers and the terms of such options:
<PAGE>
TABLE 2
OPTION/SAR GRANTS IN THE LAST FISCAL YEAR
-----------------------------------------
INDIVIDUAL GRANTS
-----------------
Number of % of Total
Securities Options/SARs
Underlying Granted to Exercise
Options/SARs Employees in or Base Expiration
Name Granted (#) Fiscal Year Price ($/Sh) Date
- ------------------------------------------------------------------------------
Stephen G. Calandrella 30,000(1) 20% $5.00 2001
- ------------------------------------------------------------------------------
(1) Consists of non-qualified stock options exercisable to purchase 30,000
shares of Common Stock at an exercise price of $5.00 per share, granted to
Mr. Calandrella in consideration of his services as a Director of the
Company. Mr. Calandrella did not receive any incentive stock options in
consideration of his services as Interim President during the last fiscal
year.
The following table sets forth certain information concerning the exercise
of incentive stock options during the last completed fiscal year by each of the
named executive officers and the fiscal year-end value of unexercised options
on an aggregated basis:
TABLE 3
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
---------------------------------------------------
AND FY-END OPTION/SAR VALUES
----------------------------
Value of
Number of Unexercised
Unexercised In-the-Money
at Options/SARsOptions/SARs
FY-End (#) at FY-End (S)(2)
Shares Value
Acquired Realized(1) Exercisable/ Exercisable/
Name on Exercise (#) ($) Unexercisable Unexercisable
- ------------------------------------------------------------------------------
Stephen G. Calandrella -0- $0.00 __________ N/A
- ------------------------------------------------------------------------------
(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.
<PAGE>
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.
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: /s/ Gerald Jacobs
------------------------------
Gerald Jacobs, Secretary
<PAGE>
1997 Annual Meeting
No definitive date for the Annual Meeting of Shareholders in 1996 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 1996 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, 1997.
<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, 1777 S. Harrison Street, Skydeck, Denver,
Colorado 80210, on February 3, 1997 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:
Gerald Jacobs, Stephen G. Calandrella and Peter J. Bloomquist
(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.
