SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
[Amendment No. _________]
Filed by the Registrant _X_
Filed by a Party other than the Registrant ___
Check the appropriate box:
___ Preliminary Proxy Statement
___ Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
_X_ Definitive Proxy Statement
___ Definitive Additional Materials
___ Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
LAS VEGAS DISCOUNT GOLF & TENNIS, INC.
(Name of Registrant as Specified in Its Charter)
LAS VEGAS DISCOUNT GOLF & TENNIS, INC.
(Name of Person(s) Filing Proxy Statement)
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LAS VEGAS DISCOUNT GOLF & TENNIS, INC.
5325 SOUTH VALLEY VIEW BOULEVARD, SUITE 4
LAS VEGAS, NEVADA 89118
(702) 798-7777
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD DECEMBER 7, 1998
TO THE SHAREHOLDERS OF LAS VEGAS DISCOUNT GOLF & TENNIS, INC.:
NOTICE HEREBY IS GIVEN that the Annual Meeting of Shareholders of Las
Vegas Discount Golf & Tennis, Inc., a Colorado corporation, will be held at
the Pepsi Pavillion in the All-American SportPark, 121 East Sunset Road, Las
Vegas, Nevada 89119, near the intersection of Las Vegas Boulevard and Sunset
Road, Las Vegas, Nevada, on Monday, December 7, 1998, at 11:00 a.m., Pacific
Time, and at any and all adjournments thereof, for the purpose of considering
and acting upon the following matters:
1. The election of four (4) Directors of the Company to serve until the
next Annual Meeting of Shareholders and until their successors have been duly
elected and qualified.
2. The ratification of the appointment of Arthur Andersen LLP as the
Company's independent auditors;
3. The transaction of such other business as may properly come before
the meeting or any adjournment thereof.
Only holders of the Common Stock, no par value, of the Company of record
at the close of business on November 12, 1998, will be entitled to notice of
and to vote at the Meeting or at any adjournment or adjournments thereof. The
proxies are being solicited by the Board of Directors of the Corporation.
All shareholders, whether or not they expect to attend the Annual Meeting
of Shareholders in person, are urged to sign and date the enclosed Proxy and
return it promptly in the enclosed postage-paid envelope which requires no
additional postage if mailed in the United States. The giving of a proxy will
not affect your right to vote in person if you attend the Meeting.
BY ORDER OF THE BOARD OF DIRECTORS
VASO BORETA, PRESIDENT
Las Vegas, Nevada
November 12, 1998
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LAS VEGAS DISCOUNT GOLF & TENNIS, INC.
5325 SOUTH VALLEY VIEW BOULEVARD, SUITE 4
LAS VEGAS, NEVADA 89118
(702) 798-7777
-------------------------------------
PROXY STATEMENT
-------------------------------------
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD DECEMBER 7, 1998
GENERAL INFORMATION
The enclosed Proxy is solicited by and on behalf of the Board of
Directors of Las Vegas Discount Golf & Tennis, Inc., a Colorado corporation
(the "Company"), for use at the Company's Annual Meeting of Shareholders to be
held at the Pepsi Pavillion in the All-American SportPark, 121 East Sunset
Road, Las Vegas, Nevada 89119, near the intersection of Las Vegas Boulevard
and Sunset Road, Las Vegas, Nevada, on Monday, December 7, 1998, at 11:00
a.m., Pacific Time, and at any adjournment thereof. It is anticipated that
this Proxy Statement and the accompanying Proxy will be mailed to the
Company's shareholders on or about November 13, 1998.
Any person signing and returning the enclosed Proxy may revoke it at any
time before it is voted by giving written notice of such revocation to the
Company, or by voting in person at the Meeting. The expense of soliciting
proxies, including the cost of preparing, assembling and mailing this proxy
material to shareholders, will be borne by the Company. It is anticipated that
solicitations of proxies for the Meeting will be made only by use of the
mails; however, the Company may use the services of its Directors, Officers
and employees to solicit proxies personally or by telephone, without
additional salary or compensation to them. Brokerage houses, custodians,
nominees and fiduciaries will be requested to forward the proxy soliciting
materials to the beneficial owners of the Company's shares held of record by
such persons, and the Company will reimburse such persons for their reasonable
out-of-pocket expenses incurred by them in that connection.
All shares represented by valid proxies will be voted in accordance
therewith at the Meeting.
The Company's Annual Report which consists of the Annual Report on Form
10-KSB for the year ended December 31, 1997, is being simultaneously mailed to
the Company's shareholders, but does not constitute part of these proxy
soliciting materials.
SHARES OUTSTANDING AND VOTING RIGHTS
All voting rights are vested exclusively in the holders of the Company's
Common Stock. Only shareholders of record at the close of business on
November 12, 1998, are entitled to notice of and to vote at the Meeting or any
adjournment thereof. On November 12, 1998, the Company had 8,135,097 shares
of its Common Stock outstanding. Cumulative voting in the election of
Directors is not permitted.
A majority of the Company's outstanding Common Stock represented in
person or by proxy shall constitute a quorum at the Meeting.
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SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth the number and percentage of shares of
Common Stock entitled to vote owned beneficially, as of November 12, 1998, by
any person, who is known to the Company to be the beneficial owner of 5% or
more of the Company's Common Stock, and, in addition, by each Executive
Officer and Director of the Company and by all Directors, Nominees for
Director and Executive Officers of the Company as a group. Information as to
beneficial ownership is based upon statements furnished to the Company by such
persons.
NAME AND ADDRESS OF AMOUNT OF BENEFICIAL PERCENT
BENEFICIAL OWNER OWNERSHIP OF CLASS
- ------------------- -------------------- ----------
Vaso Boreta 1,837,637 (1) 22.6%
Suite 4
5325 South Valley View Blvd
Las Vegas, NV 89118
Ronald Boreta 1,723,288 (2) 20.5%
Suite 4
5325 South Valley View Blvd.
Las Vegas, NV 89118
Robert R. Rosburg 5,000 0.1%
49-425 Avenida Club La Quinta
La Quinta, CA 92253
William Kilmer 5,000 0.1%
1500 Sea Breeze
Ft. Lauderdale, FL 33316
John Boreta 1,059,374 (3) 12.8%
Suite 4
5325 South Valley View Blvd.
Las Vegas, NV 89118
Boreta Enterprises Ltd. (4) 1,304,445 16.0%
Suite 4
5325 South Valley View Blvd.
Las Vegas, NV 89118
ASI Group, L.L.C. (5) 2,651,656 (6) 31.3%
c/o Agassi Enterprises, Inc.
Suite 750
3960 Howard Hughes Parkway
Las Vegas, NV 89109
All Directors and Officers 3,570,925 42.4%
as a Group (4 Persons)
__________________
(1) Includes 1,823,810 shares held directly and 13,827 shares which
represents Vaso Boreta's share of the Common Stock held by Boreta Enterprises.
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(2) Includes 544,699 shares held directly, 897,589 shares which represents
Ronald Boreta's share of the Common Stock held by Boreta Enterprises Ltd., and
281,000 shares underlying Stock Options held by Ronald Boreta.
(3) Includes 536,345 shares held directly, 393,029 shares which represents
John Boreta's share of the Common Stock held by Boreta Enterprise Ltd. and
130,000 shares underlying Non-qualified Stock Options held by John Boreta.
(4) Boreta Enterprises Ltd. is a Nevada limited liability company whose
members and respective percentage ownership are as follows:
Ronald Boreta - 68.81%
John Boreta - 30.13%
Vaso Boreta - 1.06%
Ronald Boreta is the sole manager of Boreta Enterprises Ltd.
(5) ASI Group, L.L.C. is a Nevada limited liability company whose members are
Andre K. Agassi, Perry Craig Roberts and Sunbelt Communications Company.
(6) Includes 2,303,290 shares held directly and 347,975 shares underlying a
stock option held by ASI Group, L.L.C.
On October 19, 1998 the Company issued 2,303,290 shares of its Common
Stock to ASI Group, L.L.C. ("ASI"), for $2,500,000 in cash in a private
transaction. As part of this transaction, ASI also received an option to
purchase 347,975 shares of Common Stock at an exercise price of $1.8392 per
share through October 19, 2008 (the "Option"). As a result of this
transaction, ASI is now deemed to beneficially own approximately 31.3% of the
Company's Common Stock.
The Common Stock and Option were issued by the Company pursuant to the
terms of an Investment and Voting Agreement between the Company and ASI (the
"Agreement"). ASI is a Nevada limited liability company whose members are
Andre K. Agassi, a professional tennis player, Perry Craig Rogers, an attorney
and business manager, and Sunbelt Communications Company ("Sunbelt"). Sunbelt
is engaged in the broadcasting business and is owned by James Earl Rogers.
ASI obtained the funds for the purchase of the stock from its members,
including a bank loan taken by Sunbelt. Sunbelt obtained funds for this
transaction from an additional draw (the "Draw") on an existing loan between
AT&T Commercial Finance Corporation and Sunbelt. The Draw is in the amount of
$1.2 million and bears interest at the commercial paper rate at the close of
business on the first business day of every month plus 2.5%. Sunbelt is
required to make monthly payments of principal and interest through June 1,
2008.
Pursuant to the terms of the Agreement, ASI entered into a Voting
Agreement with Vaso Boreta, Ronald Boreta and John Boreta and Boreta
Enterprises, Ltd. (collectively "Boreta"). The Voting Agreement provides that
while ASI is an equity owner of the Company and/or the Company's majority-
owned subsidiary Saint Andrews Golf Corporation ("SAGC"), ASI and Boreta will
(a) vote the shares of capital stock of the Company any of them is entitled to
vote as mutually agreed by ASI and Boreta, and (b) Boreta will, if it acquires
additional capital stock of the Company or SAGC, transfer a portion of such
capital stock to ASI so as to maintain their relative proportionate direct and
indirect equity ownership in each of the Company and SAGC.
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ELECTION OF DIRECTORS
The Bylaws currently provide for a Board of Directors of four (4)
members. The Board of Directors recommends the election as Directors of the
four (4) nominees listed below, to hold office until the next Annual Meeting
of Shareholders and until their successors are elected and qualified or until
their earlier death, resignation or removal. Each member of the present Board
of Directors has been nominated for reelection. The person named as "Proxy"
in the enclosed form of Proxy will vote the shares represented by all valid
returned proxies in accordance with the specifications of the shareholders
returning such proxies. If at the time of the Meeting any of the nominees
named below should be unable to serve, which event is not expected to occur,
the discretionary authority provided in the Proxy will be exercised to vote
for such substitute nominee or nominees, if any, as shall be designated by the
Board of Directors.
The following table sets forth the name and age of each nominee for
Director, indicating all positions and offices with the Company presently
held, and the period during which each person has served as a Director:
POSITIONS AND OFFICES
NAME AGE HELD AND TERM AS A DIRECTOR
- --------------- --- --------------------------------------
Vaso Boreta 65 President, Chairman of the Board,
Secretary, Treasurer and Director
since 1988
Ronald S. Boreta 35 President of Saint Andrews Golf
Corporation and Director of the Company
since 1988
Robert S. Rosburg 71 Director since 1989
William Kilmer 58 Director since 1990
Except for the fact that Vaso Boreta and Ronald Boreta are father and
son, respectively, there is no family relationship between any Director or
Officer of the Company.
In February 1998, the Company established an audit committee whose
members are William Kilmer and Robert Rosburg, both of whom are independent
Directors of the Company. The Company presently has no compensation or
nominating committee.
Set forth below are the names of all Directors and Executive Officers of
the Company, all positions and offices with the Company held by each such
person, the period during which he has served as such, and the principal
occupations and employment of such persons during at least the last five
years:
VASO BORETA has been Chairman of the Board of Directors since December
1989, President since July 1994, and Treasurer and Secretary since June 1992,
and a Director of the Company since February 1988. He also served as the
Company's President from February 1988 to December 1989, and October 1990 to
June 1992. Mr. Boreta has also been an Officer and a Director of Saint
Andrews Golf Corporation since its formation in March 1984. In 1974, Mr.
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Boreta first opened a specialty business named "Las Vegas Discount Golf &
Tennis," which retailed golf and tennis equipment and accessories. Mr.
Boreta's original store is now an Affiliated Store of the Company. Mr.
Boreta devotes approximately 80% of his time to the business of the Company
and the balance to operating his Affiliated Store.
RONALD S. BORETA has been a Director since February 1988, and served as
President of the Company from June 1992 until July 1994, when he resigned to
become President and Chief Executive Officer of Saint Andrews. He also
previously served as Vice President, Secretary and Treasurer of the Company.
He has been employed by Saint Andrews Golf Corporation ("Saint Andrews") since
its inception in March 1984, with the exception of a 6-month period in 1985
when he was employed by a franchisee of Saint Andrews located in San
Francisco, California. Mr. Ron Boreta has also been a Director of Saint
Andrews Golf Corporation since 1984, and an Officer since 1986. Prior to his
employment by Saint Andrews, Mr. Boreta was an assistant golf professional at
San Jose Municipal Golf Course in San Jose, California, and had worked for two
years in the areas of sales and warehousing activities with a golf discount
store in South San Francisco, California.
ROBERT R. ROSBURG has served as a Director of the Company since November
1989, and has been a director of Saint Andrews since August 1994. Mr. Rosburg
has been a professional golfer since 1953. From 1953 to 1974 he was active on
the Professional Golf Association tours, and since 1974 he has played
professionally on a limited basis. Since 1975 he has been a sportscaster on
ABC Sports golf tournament telecasts. Since 1985 he has also been the
Director of Golf for Rams Hill Country Club in Borrego Springs, California.
Mr. Rosburg received a Bachelor's Degree in Humanities from Stanford
University in 1948.
WILLIAM KILMER has served as a Director of the Company since July 1990,
and has been a director of Saint Andrews since August 1994. Mr. Kilmer is a
retired professional football player, having played from 1961 to 1978 for the
San Francisco Forty-Niners, the New Orleans Saints and the Washington
Redskins. Since 1978, he has toured as a public speaker and also has served
as a television analyst. Mr. Kilmer received a Bachelor's Degree in Physical
Education from the University of California at Los Angeles.
The Company's Board of Directors held no formal meetings during the
fiscal year ended December 31, 1997. However, the Board of Directors did take
action by unanimous consent on one occassion.
The Company's executive officers hold office until the next annual
meeting of directors of the Company, which currently is scheduled for December
7, 1998. There are no known arrangements or understandings between any
director or executive officer and any other person pursuant to which any of
the above-named executive officers or directors was selected as an officer or
director of the Company.
SECTION 16(A) BENEFICIAL REPORTING COMPLIANCE
Based solely on a review of the Forms 3 and 4 and amendments thereto
furnished to the Company during its most recent fiscal year, and Forms 5 and
amendments thereto furnished to the Company with respect to its most recent
fiscal year and certain written representations, no persons who were either a
director, officer or beneficial owner of more than 10% of the Company's common
stock, failed to file on a timely basis reports required by Section 16(a) of
the Exchange Act during the most recent fiscal year, except that Ronald S.
5
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Boreta filed one Form 4 late reporting the exchange of Preferred Stock for
Common Stock.
EXECUTIVE COMPENSATION
The following table sets forth information regarding the executive
compensation for the Company's President and each other executive officer who
received compensation in excess of $100,000 for the years ended December 31,
1997, 1996 and 1995 from the Company:
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
LONG-TERM COMPENSATION
ANNUAL COMPENSATION AWARDS PAYOUTS
SECURI-
TIES
UNDERLY-
OTHER RE- ING ALL
ANNUAL STRICTED OPTIONS/ OTHER
NAME AND PRINCIPAL COMPEN- STOCK SARs LTIP COMPEN-
POSITION YEAR SALARY BONUS SATION AWARD(S) (NUMBER)PAYOUTS SATION
- ------------------ ---- ------- -------- ------- -------- ------- ------- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Vaso Boreta, 1997 $100,000 -0- $40,000 -- -- -- -0-
President and <FN3>
Chairman of the 1996 $100,000 $40,000 -- -- -- -0-
Board<FN1> <FN3>
1995 $100,000 -0- $ 4,584 -- -- -- -0-
<FN3>
Ronald S. Boreta, 1997 $101,000 $100,000 $58,183 -- <FN5> -- $4,231
President and CEO <FN4> <FN6>
of Subsidiary 1996 $120,000 $5,500 $39,160 -- <FN5> -- $8,265
<FN4> <FN6>
1995 $100,000 -0- $ 19,071 -- -0- -- -0-
<FN2> <FN4>
_________________________
<FN>
<FN1>
Vaso Boreta has served as President of the Company since August 1, 1994.
<FN2>
Ronald S. Boreta has served as President and CEO of Saint Andrews Golf
Corporation since August 1, 1994, and Saint Andrews has paid all of his salary
since that time. From June 1992 to July 1994, Mr. Boreta served as President
of both Saint Andrews and the Company and during this period the Company and
Saint Andrews each paid one-half of his salary.
<FN3>
Represents amount contributed by the Company to retirement plans on behalf of
Vaso Boreta.
<FN4>
Represents amounts paid for country club memberships for Ronald S. Boreta, an
automobile for his personal use and contributions made by the Company to
retirement plans on his behalf. For 1997, these amounts were $16,393 for club
memberships, $16,790 for an automobile and $25,000 to the Company's
Supplemental Retirement Plan.
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<FN5>
In addition to the options to purchase shares of the Company's Common Stock
shown, during 1994, Ronald S. Boreta also received options to purchase 110,000
shares of the common stock of Saint Andrews, and in 1996 he received options
to purchase 325,000 shares of common stock of Saint Andrews.
<FN6>
Represents premiums paid on a life insurance policy for Ronald S. Boreta's
benefit.
</FN>
</TABLE>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES
SECURITIES
UNDERLYING VALUE OF UNEXER-
SHARES UNEXERCISED CISED IN-THE
ACQUIRED OPTIONS MONEY OPTIONS/
ON SARs AT FY-END SARs AT FY-END
EXERCISE VALUE EXERCISABLE/ EXERCISABLE/
NAME (NUMBER) REALIZED UNEXERCISABLE UNEXERCISABLE
- ---------------- -------- -------- -------------- ----------------
Ronald S. Boreta -0- -0- 281,000 / 0* $12,294 / 0*
Vaso Boreta -0- -0- -0-* -0-*
_____________
* Does not include options to purchase common stock of Saint Andrews held by
such person.
EMPLOYMENT AGREEMENTS
The Company's President, Vaso Boreta, does not have an employment
agreement with the Company. Since July 31, 1994, Mr. Vaso Boreta has been
paid an annual salary of $100,000 by the Company.
Effective August 1, 1994, Saint Andrews Golf Corporation ("Saint
Andrews"), a majority-owned subsidiary of the Company, entered into an
employment agreement with Ronald S. Boreta, Saint Andrew's President and Chief
Executive Officer, pursuant to which he receives a base salary of $100,000 per
year plus annual increases as determined by the Board of Directors. His
salary was increased to $120,000 for the year ended December 31, 1996. The
employment agreement is automatically extended for additional one year periods
unless 60 days' notice of the intention not to extend is given by either
party. In addition to his base salary, Ronald S. Boreta also will receive a
royalty equal to 2% of all gross revenues directly related to the All-American
SportPark and Slugger Stadium concepts. However, such royalty is only payable
to the extent that Saint Andrews' annual consolidated income before taxes
after the payment of the royalty exceeds $1,000,000. Ronald S. Boreta also
receives the use of an automobile, for which Saint Andrews pays all expenses,
and full medical and dental coverage. Saint Andrews also pays all dues and
expenses for membership at two local country clubs at which Ronald S. Boreta
entertains business contacts for Saint Andrews. Ronald S. Boreta has agreed
that for a period of three years from the termination of his employment
agreement that he will not engage in a trade or business similar to that of
Saint Andrews. In the event of a change of more than 25% of the beneficial
ownership of the Company or its parent, the termination date is extended from
December 31, 1996 to December 31, 1998, and it may be extended up to an
additional five years under certain conditions.
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In June 1997, Saint Andrews' Board of Directors awarded a $100,000 bonus
to Ronald S. Boreta for his extraordinary services related to the raising of
capital and development of Saint Andrews' Las Vegas SportPark.
COMPENSATION OF DIRECTORS
Directors who are not employees of the Company do not receive any fees
for Board meetings they attend but are entitled to be reimbursed for
reasonable expenses incurred in attending such meetings.
STOCK OPTION PLANS
In December 1989, the Company's Board of Directors adopted an Incentive
Stock Option Plan (the "1989 Plan") under which options granted are intended
to qualify as "incentive stock options" under Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code"). This Plan replaced an earlier
incentive stock option plan of the Company. Pursuant to the Plan, options to
purchase up to 300,000 shares of the Company's Common Stock may be granted to
employees of the Company. The Plan is administered by the Board of Directors,
which is empowered to determine the terms and conditions of each option,
subject to the limitation that the exercise price cannot be less than the
market value of the Common Stock on the date of the grant (110% of the market
value in the case of options granted to an employee who owns 10% or more of
the Company's outstanding Common Stock) and no option can have a term in
excess of 10 years (5 years in the case of options granted to employees who
own 10% or more of the Company's Common Stock). On December 29, 1989, the
Board of Directors granted an option to Larry Jordan, the Company's former
President, to purchase up to 200,000 shares of Common Stock at $2.00 per
share. However, that option expired when he resigned in October 1990. No
other options have been granted under the 1989 Plan.
In June 1991, the Company's Board of Directors adopted a Stock Option
Plan (the "1991 Plan"), and it was approved by the Company's shareholders in
June 1992. The 1991 Plan allows the Board to grant stock options from time to
time to employees, officers and directors of the Company and consultants to
the Company. The Board of Directors has the power to determine at the time
the option is granted whether the option will be an Incentive Stock Option (an
option which qualifies under Section 422 of the Internal Revenue Code of 1986)
or an option which is not an Incentive Stock Option. However, Incentive Stock
Options will only be granted to persons who are employees or officers of the
Company. Vesting provisions are determined by the Board of Directors at the
time options are granted. The total number of shares of Common Stock subject
to options under the 1991 Plan may not exceed 500,000, subject to adjustment
in the event of certain recapitalizations, reorganizations and so forth. The
option price must be satisfied by the payment of cash and will be no less than
the fair market value of the Common Stock on the date the option is granted.
There are currently a total of 437,000 options outstanding under the 1991
Plan with exercise prices ranging from $.80 to $1.35 per share.
401(K) PLAN
The Company maintains a 401(k) employee retirement and savings program
(the "401(k) Plan") which covers the employees of the Company and its
subsidiaries. Under the 401(k) Plan, an employee may contribute up to 17% of
his or her gross annual earnings, subject to a statutory maximum, for
investment in one or more funds identified under the plan. The Company makes
matching contributions equal to 50% of participants' contributions up to a
maximum of 6% of the participant's salary.
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SUPPLEMENTAL RETIREMENT PLAN
In November 1996, the Company established a Supplemental Retirement Plan,
pursuant to which certain employees selected by the Company's Chief Executive
Officer receive benefits based on the amount of compensation elected to be
deferred by the employee and the amount of contributions made on behalf of the
employee by the Company. Company contributions to the Supplemental Retirement
Plan are immediately vested for Category I employees, and vest 20% per year of
employment for Category II employees. Vested amounts under the Supplemental
Retirement Plan are paid out over 5 to 20 years upon retirement, disability,
death or termination of employment.
For 1997, Vaso Boreta (President and Chairman of the Board of the
Company), John Boreta (a principal shareholder of the Company), and Ronald S.
Boreta (a Director of the Company and President of Saint Andrews) were
designated as Category I employees. The Company made contributions to the
Supplemental Retirement Plan on behalf of these persons for 1997 as follows:
Vaso Boreta - $40,000; John Boreta - $4,167; and Ronald S. Boreta - $25,000.
The Company's Board of Directors has not yet determined the amounts, if
any, which will be contributed to the Supplemental Retirement Plan for 1998.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company presently owns 66.7% of the outstanding common stock of Saint
Andrews Golf Corporation ("Saint Andrews"). Vaso Boreta, the Company's
President and Chairman of the Board, is Chairman of the Board of Saint
Andrews. Ronald S. Boreta, a Director of the Company, is President and a
Director of Saint Andrews. Robert S. Rosburg and William Kilmer, Directors of
the Company, are also Directors of Saint Andrews.
Until August 1, 1994, the Company and Saint Andrews shared the expenses
of jointly-used facilities and administrative and accounting personnel on a
50-50 basis under a verbal agreement. Since August 1994, the Company and
Saint Andrews have allocated these costs on a pro rata basis based on which
entity receives the benefit of the particular expense. With respect to the
lease for office and warehouse space, the Company pays 33% of the monthly
lease payments and Saint Andrews pays 67%.
Effective August 1, 1994, the Company also agreed to purchase, warehouse
and make available to Saint Andrews and its franchisees certain merchandise.
In exchange, Saint Andrews agreed to pay $350,000 to retire certain bank
indebtedness described below. The agreement terminated on July 31, 1997.
Effective August 1, 1994, the Company granted Saint Andrews a license to
use all of its trademarks, trade names and other commercial names and symbols
for so long as such trademarks, trade names and other commercial names and
symbols are being used by Saint Andrews and its franchisees.
Through February 1997, certain facilities used by the Company and Saint
Andrews were leased by the Company from Vaso Boreta, the Company's Chairman of
the Board. The Company leased approximately 15,500 square feet of warehouse
space and 6,000 square feet of office space from Mr. Boreta at a base monthly
rent of approximately $13,700. The Board of Directors of the Company believes
that the terms of this lease were at least as favorable as those which could
be obtained from an unaffiliated entity.
9
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Effective October 1, 1990, a franchise agreement between Saint Andrews
and Vaso Boreta, the Company's President and Chairman of the Board, was
mutually terminated, and a new agreement was entered into with him pursuant to
which he was permitted to operate a Las Vegas Discount Golf & Tennis store in
Las Vegas, Nevada, which is not a franchise store. The agreement also
provided that Mr. Boreta may purchase certain merchandise for his store at the
same cost as the Company, use the facilities and personnel of the Company on a
limited basis, and operate a limited mail order business from his store. In
exchange for these rights, Mr. Boreta paid Saint Andrews a fee of $3,000 per
month. This agreement with Saint Andrews was terminated on July 31, 1994,
when Mr. Boreta entered into a similar agreement with the Company. This store
is referred to herein as the "Affiliated Store."
During 1996 and 1997, the Affiliated Store purchased $1,120,000 and
$163,000, respectively, in sporting goods merchandise from the Company. Also
during 1996 and 1997, the Affiliated Store sold $382,000 and $1,059,239,
respectively, in merchandise to the Company. The Company's Board of Directors
believes that the terms of these transactions were on terms no less favorable
to the Company than if the transactions were with unaffiliated third parties.
The Company owns a retail store in Las Vegas and the Company and the
Affiliated Store share advertising costs in the Las Vegas market on an equal
basis. During 1996 and 1997, the Company paid $228,000 and $320,000,
respectively, for advertising shared with the Affiliated Store, which
represented approximately one-half of the costs of such advertising.
During the year ended December 31, 1994, Vaso Boreta loaned the Company a
net amount of approximately $387,000 which, when combined with the balance
owed to Mr. Boreta of $231,000 on December 31, 1993, resulted in an amount due
Mr. Boreta on December 31, 1994, of $618,000. This amount was increased to
$663,000 as of December 31, 1995 due to additional loans from Mr. Boreta to
the Company. This amount was represented by an unsecured note bearing
interest at 10% which was due on January 31, 1997. On February 1, 1997, the
Company issued a new note on the same terms for $631,149 due on December 31,
1998. The terms of the note with Mr. Boreta are substantially equivalent to
the terms of the loans he took out from a bank to fund his loans to the
Company. This note was paid off during 1997, and then the Company borrowed an
additional $600,000 by the end of 1997. This loan is evidenced by a demand
note bearing interest at 10%. During the nine months ended September 30,
1998, Mr. Boreta loaned an additional $1,050,000 to Saint Andrews.
In October 1992, the Board of Directors established 512,799 shares of
Series A Convertible Preferred Stock and issued such shares to Vaso Boreta in
exchange for services valued at $5,128. These shares were issued to Mr.
Boreta to replace shares which he previously relinquished in order to
facilitate a proposed public offering in early 1990. Each share of the Series
A Convertible Preferred Stock is convertible into one share of Common Stock in
the event that the Company has annual income before taxes of at least
$1,000,000 for any fiscal year. Each share of Series A Preferred Stock is
entitled to one vote and with respect to that vote the holder is entitled to
vote with the holders of the Company's Common Stock as a single class. In the
event of liquidation, the holder of the Series A Convertible Preferred Stock
is entitled to receive $.01 per share before any assets are distributed to the
holders of Common Stock. The Series A Convertible Preferred Stock has no
redemption or dividend rights. During 1994, Vaso Boreta transferred all of
his shares of Series A Convertible Preferred Stock to Ronald Boreta, a son of
Vaso Boreta and a Director of the Company. In April 1996, the Board of
Directors approved an agreement with Ronald Boreta that in the event that the
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Company were to spin off its shares of Saint Andrews Golf Corporation to the
Company's shareholders or otherwise distribute or issue shares of Saint
Andrews Golf Corporation in any form of reorganization involving the Company,
that the Company would allow Ronald Boreta to convert the 512,799 shares of
Series A Convertible Preferred Stock into Common Stock of the Company even if
the conversion requirements have not been met. In June 1997, the Board of
Directors determined that since the Company would have net income before taxes
of at least $1,000,000 during 1997, and in recognition of his services in
connection with the development of the Las Vegas SportPark, that the Company
would exchange 512,799 shares of the Company's Common Stock for all of his
shares of Series A Convertible Preferred Stock.
John Boreta, the son of Vaso Boreta and a principal shareholder of the
Company, served as manager of the Company's Westwood store until it was sold
in February 1997, was paid $13,340 by the Company for his services in 1997.
The Company also provided medical insurance for him for which the Company paid
$757 in premiums, and paid $4,800 for his housing expenses. The Company also
contributed $4,167 on his behalf under the Company's Supplemental Retirement
Plan for 1997.
On October 19, 1998, the Company issued 2,303,290 shares of its Common
Stock to ASI Group, L.L.C. ("ASI"), for $2,500,000 in cash in a private
transaction. As part of this transaction, ASI also received an option to
purchase 347,975 shares of Common Stock at an exercise price of $1.8392 per
share through October 19, 2008 (the "Option"). As a result of this
transaction, ASI is now deemed to beneficially own approximately 31.3% of the
Company's Common Stock.
The Common Stock and Option were issued by the Company pursuant to the
terms of an Investment and Voting Agreement between the Company and ASI (the
"Agreement"). ASI is a Nevada limited liability company whose members are
Andre K. Agassi, a professional tennis player, Perry Craig Rogers, an attorney
and business manager, and Sunbelt Communications Company ("Sunbelt"). Sunbelt
is engaged in the broadcasting business and is owned by James Earl Rogers.
Pursuant to the terms of the Agreement, ASI has a right of first refusal
to purchase its pro rata share of all or any part of any shares of capital
stock of the Company (or securities that are convertible into shares of common
or preferred stock of the Company) which the Company may propose to sell or
issue. The number of shares of Common Stock of the Company owned by ASI by
reason of purchase pursuant to the Agreement shall be adjusted in the event
the Company offers to sell any shares of its capital stock to any other person
or entities at a lower price per share than the purchase price paid by ASI or
otherwise on more favorable terms.
ASI has the right to demand that the Company effect a registration under
the Securities Act of 1933 of the Common Stock of the Company purchased
pursuant to the Agreement or upon exercise of the Option or to participate in
any registration of Common Stock undertaken by the Company as long as ASI owns
at least five percent (5%) of the Company's outstanding voting equity
securities.
Pursuant to the terms of the Agreement, ASI entered into a Voting
Agreement with Vaso Boreta, Ronald Boreta and John Boreta and Boreta
Enterprises, Ltd. (collectively "Boreta"). The Voting Agreement provides that
while ASI is an equity owner of the Company and/or the Company's majority-
owned subsidiary Saint Andrews Golf Corporation ("SAGC"), ASI and Boreta will
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(a) vote the shares of capital stock of the Company any of them is entitled to
vote as mutually agreed by ASI and Boreta, and (b) Boreta will, if it acquires
additional capital stock of the Company or SAGC, transfer a portion of such
capital stock to ASI so as to maintain their relative proportionate direct and
indirect equity ownership in each of the Company and SAGC.
INDEPENDENT ACCOUNTANTS
The independent accounting firm of Arthur Andersen LLP audited the
financial statements of the Company for the years ended December 31, 1997, and
has been selected in such capacity for the current fiscal year. At the
direction of the Board of Directors, this appointment is being presented to
the shareholders for ratification or rejection at the Annual Meeting of
Shareholders. If the Shareholders do not ratify the appointment of Arthur
Andersen LLP the appointment of auditors will be reconsidered by the Board of
Directors.
It is expected that representatives of Arthur Andersen LLP will be
present at the meeting and will be given an opportunity to make a statement if
they desire to do so. It is also expected that the representatives will be
available to respond to appropriate questions from shareholders.
OTHER BUSINESS
As of the date of this Proxy Statement, management of the Company was not
aware of any other matter to be presented at the Meeting other than as set
forth herein. However, if any other matters are properly brought before the
Meeting, the shares represented by valid proxies will be voted with respect to
such matters in accordance with the judgment of the persons voting them. A
majority vote of the shares represented at the meeting is necessary to approve
any such matters.
ANNUAL REPORT
The Company's Annual Report on Form 10-KSB for the fiscal year ending
December 31, 1997, accompanies this Proxy Statement. The Annual Report is not
incorporated into this Proxy Statement and is not to be considered part of the
solicitation material.
DEADLINE FOR RECEIPT OF SHAREHOLDER PROPOSALS
FOR THE ANNUAL MEETING TO BE HELD IN NOVEMBER 1999
Any proposal by a shareholder intended to be presented at the Company's
Annual Meeting of Shareholders to be held in November 1999 must be received at
the offices of the Company, 5325 South Valley View Boulevard, Suite 4, Las
Vegas, Nevada 89118, on or before July 16, 1999, in order to be included in
the Company's proxy statement and proxy relating to that meeting.
VASO BORETA, PRESIDENT
Las Vegas, Nevada
November 12, 1998
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P R O X Y
LAS VEGAS DISCOUNT GOLF & TENNIS, INC.
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Vaso Boreta, with the power to appoint
his substitute, and hereby authorizes him to represent and to vote as
designated below, all the shares of Common Stock of Las Vegas Discount Golf &
Tennis, Inc. held of record by the undersigned on November 12, 1998, at the
Annual Meeting of Shareholders to be held on December 7, 1998, or any
adjournment thereof.
1. Election of Directors:
___ FOR all nominees listed below
___ FOR all nominees except as crossed out below:
Vaso Boreta Robert R. Rosburg
Ronald S. Boreta William Kilmer
[INSTRUCTION: To withhold authority to vote for any individual nominee, cross
out that nominee's name above.]
2. The ratification of the appointment of Arthur Andersen LLP as the
Company's independent auditors.
____ FOR ____ AGAINST ____ ABSTAIN
3. The transaction of such other business as may properly come before
the meeting or any adjournment thereof.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY
WILL BE VOTED FOR PROPOSALS 1 AND 2.
SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AT THE MEETING IN
ACCORDANCE WITH THE SHAREHOLDER'S SPECIFICATIONS ABOVE. THIS PROXY CONFERS
DISCRETIONARY AUTHORITY IN RESPECT TO MATTERS NOT KNOWN OR DETERMINED AT THE
TIME OF THE MAILING OF THE NOTICE OF THE ANNUAL MEETING OF SHAREHOLDERS TO THE
UNDERSIGNED.
The undersigned hereby acknowledges receipt of the Notice of Annual
Meeting of Shareholders, Proxy Statement and Annual Report.
Dated: __________________________ ____________________________________
Signature(s) of Shareholder(s)
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF LAS VEGAS
DISCOUNT GOLF & TENNIS, INC. PLEASE SIGN AND RETURN THIS PROXY IN THE
ENCLOSED PRE-ADDRESSED ENVELOPE. THE GIVING OF A PROXY WILL NOT AFFECT YOUR
RIGHT TO VOTE IN PERSON IF YOU ATTEND THE MEETING.
