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 [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 Rule 14a-11(c) or Rule 14a-12
American Bingo & Gaming Corp.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] 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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE>
AMERICAN BINGO & GAMING CORP.
1440 Charleston Highway
West Columbia, South Carolina 29169
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
11:00 AM CDT, MAY 31, 2000
THE FOUR SEASONS HOTEL - AUSTIN
98 SAN JACINTO BOULEVARD
AUSTIN, TEXAS 78701
The Annual Meeting of Stockholders of American Bingo & Gaming Corp. will be held
on the 31ST day of MAY 2000, at 11:00 AM CDT time, for the following purposes:
1. To elect three members to the Company's Board of Directors;
2. To ratify the appointment of Sprouse & Winn, L.L.P. as the Company's
independent auditors for 2000; and
3. To consider such other matters as may properly come before the Meeting
or any adjournment of the Meeting.
Only holders of record of the Company's Common Stock at the close of business on
April 10, 2000, will be entitled to notice of and to vote at the Meeting or any
adjournment of the Meeting. The stock transfer books will remain open.
You are cordially invited to attend the Meeting. WHETHER OR NOT YOU PLAN TO
ATTEND THE MEETING, PLEASE COMPLETE, DATE AND SIGN THE ACCOMPANYING PROXY AND
RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE TO ASSURE THAT YOUR SHARES ARE
REPRESENTED AT THE MEETING. If you receive more then one proxy card, it is an
indication that your shares are registered in more than one account. Please
complete, date and sign each proxy card you receive. You may revoke your proxy
----
at any time before it is voted.
Enclosed with these proxy materials is a copy of the Company's Annual Report on
Form 10-KSB for the fiscal year ended December 31, 1999 (without exhibits).
BY ORDER OF THE BOARD OF DIRECTORS
/s/ JEFFREY L. MINCH
JEFFREY L. MINCH
VICE CHAIRMAN OF THE BOARD
AND PRESIDENT
May 5, 2000
<PAGE>
AMERICAN BINGO & GAMING CORP.
-----------------------------
1440 Charleston Highway
West Columbia, South Carolina 29169
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
11:00 AM CDT, MAY 31, 2000
THE FOUR SEASONS HOTEL - AUSTIN
98 SAN JACINTO BOULEVARD
AUSTIN, TEXAS 78701
This Proxy Statement and the accompanying form of proxy are furnished in
connection with the solicitation of proxies for use at the Annual Meeting of
Stockholders of American Bingo & Gaming Corp. to be held on Wednesday, May 31,
2000, at 11:00 AM CDT, and at any adjournment thereof, for the purposes set
forth in this Proxy Statement. The Meeting will be held at The Four Seasons
Hotel - Austin, 98 San Jacinto Boulevard, Austin, Texas 78701
THE ACCOMPANYING PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF THE COMPANY.
The principal executive offices of the Company are located at 1440 Charleston
Highway, West Columbia, South Carolina 29169. This Proxy Statement and the
accompanying form of proxy were first mailed to the stockholders on or about May
5, 2000.
VOTING AND REVOCABILITY OF PROXY APPOINTMENTS
---------------------------------------------
The Company has fixed April 10, 2000, as the record date for determining the
stockholders entitled to notice of and to vote at the Meeting. The Company's
only class of stock currently outstanding is its Common Stock, par value $0.001
per share. At the close of business on the Record Date, there were outstanding
and entitled to vote 8,276,490 shares of Common Stock of the Company, with each
share being entitled to one vote. There are no cumulative voting rights. A
majority of the outstanding shares of Common Stock represented at the Meeting,
in person or by proxy, will constitute a quorum.
All proxies will be voted in accordance with the instructions contained in the
proxies. If no choice is specified, proxies will be voted in accordance with
the recommendations of the Board as set forth in this Proxy Statement, and at
the proxy holders' discretion on any other matter that may properly come before
the Meeting. Any stockholder may revoke a proxy given pursuant to this
solicitation at any time before it is voted. A stockholder may revoke his or
her proxy by voting in person at the Meeting or submitting to the Company's
Secretary at the Meeting a subsequently dated proxy. In addition, a stockholder
may revoke his or her proxy by notifying the Secretary of the Company either in
writing prior to the Meeting or in person at the Meeting. Revocation is
effective only upon receipt of such notice by the Secretary.
Management of the Company is not aware of any other matter to be presented for
action at the Meeting other than those mentioned in the Notice of Annual Meeting
of Stockholders and referred to in this Proxy Statement. If any other matters
come before the Meeting, it is the intention of the persons named in the
enclosed proxy to vote on such matters in accordance with their judgment.
<PAGE>
AMERICAN BINGO - PROXY MATERIALS PAGE:2
- ------------------------------------ ------
SOLICITATION
------------
The costs of preparing, assembling and mailing the proxy materials will be borne
by the Company. Certain officers, directors and employees of the Company,
without additional compensation, may use their personal efforts, by telephone or
otherwise, to obtain proxies in addition to this solicitation by mail. The
Company expects to reimburse brokers, banks, custodians and other nominees for
their reasonable out-of-pocket expenses in handling proxy materials for
beneficial owners of the Common Stock.
ELECTION OF DIRECTORS
---------------------
Article III, Section 2 of the Company's Bylaws provides that the Board of
Directors shall consist of no less than two nor more than eleven directors. The
Board of Directors is currently set at three directors. All three of the
current members of the Board have been nominated for election to the Board at
the Meeting. The persons nominated for election at the Meeting shall, if
elected, serve on the Board for a term of one year until the 2001 Annual Meeting
of Stockholders and until their respective successors have been duly elected and
have qualified. The officers of the Company are elected annually by the Board
of Directors following the Annual Meeting of stockholders and serve for terms of
one year and until their successors are duly elected and qualified.
The directors shall be elected by a plurality of the votes cast at the Meeting.
A "plurality" means that the individuals who receive the largest number of votes
cast are elected as directors up to the maximum number of directors to be
elected at the Meeting. Consequently, any shares not voted (whether by
abstention, broker non-vote or otherwise) will have no impact on the election of
directors. It is the intention of the persons named as proxies in the
accompanying proxy to vote FOR the election of the nominees identified below.
If any nominee is unable or fails to accept nomination or election (which is not
anticipated), the persons named in the proxy as proxies, unless specifically
instructed otherwise in the proxy, will vote for the election of such other
person as the Company's existing Board of Directors may recommend.
The table below sets forth certain information about the nominees, including the
nominee's age, position with the Company and length of time served as a member
of the Board. All of the nominees are currently serving as directors of the
Company.
<TABLE>
<CAPTION>
Name Age Position with the Company Director Since
- --------------------------- --- ----------------------------------------- --------------
<S> <C> <C> <C>
Daniel W. Deloney 68 Chairman of the Board May 1999
Gordon R. McNutt 56 Director October 1999
Jeffrey L. Minch 49 Vice Chairman of the Board, President and July 1999
Chief Executive Officer
</TABLE>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF THE
THREE NOMINEES NAMED ABOVE.
DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY
-----------------------------------------------
The following sets forth the name and a brief description of the principal
occupation and business experience for at least the preceding five years for
each of the three nominees for election to the Board of Directors and the
executive officers of the Company. None of the directors or executive officers
are related.
<PAGE>
AMERICAN BINGO - PROXY MATERIALS PAGE:3
- ------------------------------------ ------
DANIEL W. DELONEY, 68, is currently the Chairman of the Board of the Company.
Mr. Deloney received a Bachelor of Science from Auburn University in 1955 and a
Juris Doctor from the Jones Law Institute in 1981. He began his career as a
district sales manager for the Ralston Purina Company in 1955. In 1965, he
became the regional director for Financial Service Corporation. In 1974, he
formed DFA Advisory Corporation, a registered investment advisory company. As
an independent certified financial planner, Mr. Deloney's principal emphasis was
on tax and financial planning. In 1986, Mr. Deloney became Vice President of
Rice Financial Corporation and has served as its President since 1994. He is
currently President and Chairman of the Board of Rice Acceptance Company, Inc.
(d/b/a Rice Banking Company) and its parent company Rice Financial Corporation.
Mr. Deloney is a member of the American Financial Services Association. He has
served as President of the Alabama Financial Services Association and is
currently Chairman of its Executive Committee. He also serves as Treasurer of
the Alabama Independent Automobile Dealers Association.
GORDON R. MCNUTT, 56, has served as a member of the Board of Directors since
October 1999. Mr. McNutt received a Bachelor of Business Administration from
the University of Texas in 1966 and a Master in Business Administration from the
Kellogg Graduation School of Management in 1967. In 1967, Mr. McNutt began his
banking career accepting a management position at the financial institution that
is now known as SunTrust Bank. By 1973, Mr. McNutt had already held several
positions at both SunTrust and Union Bank. In 1973, Mr. McNutt accepted a
position with First City Bancorp and rose to the level of Executive Vice
President and was a member of the Board of Directors. In 1988, Mr. McNutt
retired from the public banking industry and became a private investor. Since
1988, Mr. McNutt has primarily focused his attention and financial expertise on
real estate transactions and has held numerous financial advisory positions.
JEFFREY L. MINCH, 49, is currently serving as the Company's Vice Chairman of the
Board, President and Chief Executive Officer. Mr. Minch is a distinguished
graduate of the Virginia Military Institute in civil engineering with graduate
education in Finance. For the last three years Mr. Minch has been a private
investor and is a major shareholder of the Company. Mr. Minch co-founded, grew
and profitably sold a commercial real estate company, Littlefield Real Estate
Company. As President and Chief Executive Officer, Mr. Minch planned and
executed the strategy that Littlefield utilized to grow from a start up in 1984
to one of the largest commercial real estate companies in Texas. In 1996, Mr.
Minch sold Littlefield's substantial office, apartment and warehouse portfolios,
in three transactions, over a five-month period.
LARRY D. KASUFKIN, 56, is currently serving as the Secretary, Treasurer and
Controller of the Company. Mr. Kasufkin was employed for nineteen years with
three insurance groups on the executive management level. Mr. Kasufkin started
his career with KPMG Peat Marwick as a certified public accountant and served as
an auditor and tax advisor. Mr. Kasufkin serves in volunteer capacities with
the Leukemia Society of America.
COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS
------------------------------------------------
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table sets forth for the fiscal years ended December 31, 1997,
1998 and 1999, the cash compensation paid or accrued by the Company, as well as
certain other compensation paid or accrued for those years, for services in all
capacities to:
1. each person who served as the chief executive officer of the Company at
any time during 1999, and,
2. the two most highly compensated executive officers of the Company who
were no longer serving in such capacity as of December 31, 1999, who
earned total annual compensation, including salary and bonus, for the
fiscal year ended December 31, 1999, in excess of $100,000.
<PAGE>
AMERICAN BINGO - PROXY MATERIALS PAGE:4
- ------------------------------------ ------
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
LONG-TERM
COMPENSATION
---------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
---------------------------------------- ---------------------------
SECURITIES
NAME AND OTHER ANNUAL UNDERLYING ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION OPTIONS COMPENSATION
- ------------------------ ---- -------- -------- -------------- ----------- --------------
<S> <C> <C> <C> <C> <C> <C>
Jeffrey L. Minch (1) - 1999 $ 27,000 $ -- $ -- --- $ --
Vice Chairman of the
Board, President and 1998 $ -- $ -- $ -- --- $ --
Chief Executive Officer
1997 $ -- $ -- $ -- --- $ --
Daniel W. Deloney (2) - 1999 $ 35,597 $ -- $ -- --- $ --
Chairman of the Board
1998 $ -- $ -- $ -- --- $ --
1997 $ -- $ -- $ -- --- $ --
Andre M. Hilliou (3) - 1999 $128,152 $ 50,000 $ -- --- $ 228,600(4)
Former Chairman of the
Board, Former President 1998 $142,851 $ -- $ -- 300,000(5) $ --
and Former Chief
Executive Officer 1997 $ -- $ -- $ -- --- $ --
George M. Harrison, Jr. 1999 $ 45,049 $ -- $ -- --- $ 112,363(7)
(6) - Former Vice
Chairman of the Board, 1998 $127,816 $ -- $ 9,563(8) --- $ --
Former Vice President,
and Former Interim Chief 1997 $ 4,000 $ -- $ -- --- $ --
Executive Officer
Richard M. Kelley (9) - 1999 $ 80,476 $ -- $ -- --- $ 190,000(10)
Former Chief Financial
Officer, Former Vice 1998 $ 73,027 $100,000 $ -- 100,000(11) $ --
President and Former
Treasurer 1997 $ -- $ -- $ -- --- $ --
<FN>
(1) Mr. Minch began working with the Company on July 2, 1999, when he was
elected as a director to fill a vacancy on the Board of Directors. On July
8, 1999, Mr. Minch was elected Vice Chairman of the Board. In September
1999, Mr. Minch was elected President and Chief Executive Officer of the
Company.
(2) Mr. Deloney began working with the Company on May 27, 1999, when he was
elected as a director to fill a vacancy on the Board of Directors. On July
2, 1999, Mr. Deloney was elected Chairman of the Board and Interim
President and Chief Executive Officer. Mr. Deloney served as Interim
President and Chief Executive Officer until September 1999.
(3) Mr. Hilliou began working with the Company on May 18, 1998, as the
President and Chief Executive Officer of the Company. On July 30, 1998, he
was elected as the Chairman of the Board. Mr. Hilliou continued to serve in
these capacities until July 2, 1999, at which point he resigned from the
Board and terminated his employment with the Company.
<PAGE>
AMERICAN BINGO - PROXY MATERIALS PAGE:5
- ------------------------------------ ------
(4) This represents the severance payment paid to Mr. Hilliou on July 2, 1999.
(5) When Mr. Hilliou terminated his employment with the Company, he forfeited
200,000 of these stock options and thus only 100,000 remain outstanding.
(6) Mr. Harrison began working with the Company in December 1997 following the
acquisition by the Company of Darlington Music Co., Inc., of which Mr.
Harrison was the President and one-third owner. Mr. Harrison served as the
interim Chairman of the Board from April 10, 1998 until July 30, 1998, and
as the interim Chief Executive Officer of the Company from April 10, 1998
until May 18, 1998. Mr. Harrison's employment with the Company terminated
July 2, 1999.
(7) This represents the severance payment paid to Mr. Harrison on July 2, 1999.
(8) This represents contributions under the profit sharing plan for Darlington
Music Co., Inc.
(9) Mr. Kelley began working with the Company on June 29, 1998, as the Vice
President and Chief Financial Officer of the Company. On July 30, 1998, he
was elected as the Treasurer of the Company. Mr. Kelley continued to serve
in these capacities until July 2, 1999, at which point his employment with
the Company terminated.
(10) This represents the severance payment paid to Mr. Kelley on July 2, 1999.
(11) When Mr. Kelley terminated his employment with the Company, he forfeited
50,000 of these stock options and thus only 50,000 remain outstanding.
</TABLE>
STOCK OPTIONS
During the fiscal year ended December 31, 1999, 178,000 options were granted to
employees and directors of the Company, of which 123,500 were subsequently
forfeited. None of the options granted in 1999 have been exercised. As a
result, 54,500 of the options granted in 1999 are currently outstanding. None
of the 178,000 options granted during the fiscal year ended December 31, 1999,
were granted to the executive officers listed in the Summary Compensation Table
above.
OPTION EXERCISES AND HOLDINGS
The following table sets forth information with respect to the executive
officers listed in the Summary Compensation Table concerning the exercise of
options during the last fiscal year and unexercised options held as of the end
of the fiscal year.
<PAGE>
AMERICAN BINGO - PROXY MATERIALS PAGE:6
- ------------------------------------ ------
<TABLE>
<CAPTION>
AGGREGATED OPTION EXERCISES DURING FISCAL YEAR 1999
AND FISCAL YEAR-END OPTION VALUES
Number of
Securities
Underlying Value of Unexercised
Unexercised In-the-Money
Options at Options at
Fiscal Year End Fiscal Year End(1)
Shares Acquired Exercisable/ Exercisable/
Name on Exercise Value Realized Unexercisable Unexercisable
- -------------------- --------------- --------------------- ------------- -------------
<S> <C> <C> <C> <C>
Andre M. Hilliou -- -- 100,000/-0- -0- / -0-
Richard M. Kelley -- -- 50,000/-0- -0- / -0-
<FN>
(1) Based on the closing bid price for the Company's Common Stock on December 31,
1999, of $.875 per share, all of the options held by Mr. Hilliou and Mr. Kelley
are out-of-the-money.
</TABLE>
COMPENSATION OF DIRECTORS
During the first half of 1999, non-employee directors of the Company (James L.
Hall, Grover C. Seaton and A. Joe Willis) received a fee of $1,000 for their
services on the Board, plus a fee of $500 for each committee meeting attended.
Any of these non-employee directors who served as a chairman of a committee
during the first half of 1999 also received a fee of $5,000. In addition, on
March 15, 1999, these non-employee directors were each granted options for 6,000
shares of the Company's Common Stock. During the second half of 1999, the
directors did not receive any compensation for serving on the Board. The
Company reimburses the directors for travel expenses incurred in connection with
attending meetings of the Board and committees.
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND CHANGE IN CONTROL
ARRANGEMENTS
Effective as of September 21, 1999, the Company entered into a three-year
employment agreement with Jeffrey L. Minch, pursuant to which he agreed to serve
as the President of the Company for an annual base salary of $100,000. The
agreement also provides that the Company shall pay to Mr. Minch, as incentive
compensation, 100,000 shares of the Company's Common Stock at such time as the
stock price closes at $2.00/share and 100,000 additional shares at each and
every time that the stock price closes at an even multiple above $2.00/share.
In addition, the agreement provides that the Company will reimburse Mr. Minch
for 50% of his office expenses in Austin, Texas, including expenses for rent,
parking, administrative support, insurance, maintenance, telephone, utilities,
office machines, office supplies and any other normal expenses of maintaining a
business office.
Pursuant to the agreement, the Board of Directors of the Company will nominate
Mr. Minch to serve as a director of the Company and Mr. Minch will serve in such
capacity if elected by the Company's shareholders. Mr. Minch will not receive
any additional compensation for serving as a director.
The agreement provides that the Company may terminate the agreement and Mr.
Minch's employment in its absolute discretion upon thirty days written notice to
Mr. Minch. In the event that the Company terminates the agreement and Mr.
Minch's employment, the Company will be obligated to pay to Mr. Minch $100,000
as a severance payment. The agreement also provides that Mr. Minch may
terminate the agreement in his absolute discretion upon ninety days written
notice to the Company.
In the event the Company is sold to or merged with another company, the
agreement will terminate automatically. If such a sale or merger results in the
shareholders of the Company receiving consideration in any form equal to or
greater than $3.00/share, the agreement provides that Mr. Minch shall be
entitled to receive 500,000 shares of the Common Stock of the Company
immediately prior to the consummation of any such sale or merger.
<PAGE>
AMERICAN BINGO - PROXY MATERIALS PAGE:7
- ------------------------------------ ------
The agreement also contains certain restrictions on Mr. Minch's ability to
compete with the Company following termination of his employment and it contains
certain confidentiality and other standard provisions.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires:
1. the Company's directors and executive officers; and
2. persons who own more than 10% of a registered class of the Company's
equity securities
to file with the Securities and Exchange Commission, within certain specified
time periods, reports of ownership and changes in ownership. Such officers,
directors and stockholders are required by SEC regulations to furnish the
Company with copies of all such reports that they file.
To the Company's knowledge, based solely upon a review of copies of such reports
furnished to the Company and representations by certain officers and directors
that no other reports were required with respect to the year ended December 31,
1999, all persons subject to the reporting requirements of Section 16(a) filed
the required reports on a timely basis with respect to 1999 except for
Gordon R. McNutt who filed his initial report late after joining the Company's
Board of Directors.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
-----------------------------------------------
AND MANAGEMENT
--------------
The following table sets forth the number and percentage of outstanding shares
of the Company's Common Stock beneficially owned as of March 31, 2000, by:
1. each executive officer of the Company, including each of the executive
officers listed in the Summary Compensation Table above;
2. each director and each nominee for director of the Company;
3. all of the executive officers and directors of the Company as a group;
and,
4. each person or entity known to the Company to own more than five
percent of the outstanding Common Stock.
<TABLE>
<CAPTION>
NUMBER OF SHARES PERCENT OF
NAME OF BENEFICIAL OWNER BENEFICIALLY OWNED(1) CLASS(2)
- ------------------------------------ --------------------- -----------
<S> <C> <C>
Daniel W. Deloney(3) 500,650(10) 6.05%
George M. Harrison, Jr.(4) 291,333(11) 3.52%
Andre M. Hilliou (5) 125,000(12) 1.49%
Larry D. Kasufkin(6) 0 *
Richard M. Kelley(7) 50,000(13) 0.60%
Gordon R. McNutt(8) 23,000 0.28%
Jeffrey L. Minch(9) 1,255,800 15.17%
Executive officers and directors of 1,779,450 21.50%
the Company as a group (4
persons)
<PAGE>
AMERICAN BINGO - PROXY MATERIALS PAGE:8
- ------------------------------------ ------
<FN>
(1) Information relating to beneficial ownership of the Common Stock is based
upon "beneficial ownership" concepts set forth in rules of the SEC under
Section 13(d) of the Securities Exchange Act of 1934. Under these rules a
person is deemed to be a "beneficial owner" of a security if that person
has or shares "voting power," which includes the power to vote or direct
the voting of such security, or "investment power," which includes the
power to dispose or to direct the disposition of such security. A person is
also deemed to be a beneficial owner of any security of which that person
has the right to acquire beneficial ownership within 60 days. Under the
rules, more than one person may be deemed to be a beneficial owner of the
same securities, and a person may be deemed to be a beneficial owner of
securities as to which he has no beneficial interest. For instance,
beneficial ownership includes spouses, minor children and other relatives
residing in the same household, and trusts, partnerships, corporations or
deferred compensation plans which are affiliated with the principal.
(2) Percentage is determined on the basis of 8,276,490 shares of Common Stock
issued and outstanding plus shares subject to options or warrants held by
the named individual for whom the percentage is calculated which are
exercisable within the next 60 days as if outstanding, but treating shares
subject to warrants or options held by others as not outstanding. An
asterisk (*) indicates less than 1% ownership.
(3) Address is 109 South Court Street, Montgomery, Alabama 36104.
(4) Address is 208 Wyandot Street, Darlington, South Carolina 29532.
(5) Address is Route 2, Box 314, Fincastle, Virginia 24090.
(6) Address is 1440 Charleston Highway, West Columbia, South Carolina 29169.
(7) Address is 14612 Addison Street, Sherman Oaks, California 91403.
(8) Address is 3605 Mount Bonnell Road, Austin, Texas 78731.
(9) Address is 1250 Frost Bank Plaza, Congress Avenue at Ninth Street, Austin,
Texas 78701.
(10) Includes 348,900 shares owned by Rice Acceptance Company, Inc., 114,000
shares owned by Rice Financial Corporation, 10,000 shares owned by Southern
Warehouse Partners and 2,750 shares held in Mr. Deloney's IRA, in which
shares Mr. Deloney possesses sole voting and investing power, and 25,000
shares held in his daughter's IRA, in which shares Mr. Deloney shares
voting and investing power.
(11) Includes 5,000 shares owned by Mr. Harrison's wife in which he shares
voting and investing power.
(12) Includes 100,000 shares Mr. Hilliou has the right to acquire within 60 days
pursuant to the exercise of options.
(13) Includes 50,000 shares Mr. Kelley has the right to acquire within 60 days
pursuant to the exercise of options.
</TABLE>
<PAGE>
AMERICAN BINGO - PROXY MATERIALS PAGE:9
- ------------------------------------ ------
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
----------------------------------------------
In connection with the acquisition of Darlington Music Co., Inc., the Company
loaned George M. Harrison, Jr. and both of his brothers $81,999 pursuant to
unsecured promissory notes. These notes accrued interest at 8% per annum and
were to be repaid in three equal installments of $27,333 due on December 15,
1998, 1999, and 2000. These promissory notes were forgiven by the Company in
1999 in connection with the severance agreements entered into with each of them.
On June 4, 1998, the Company loaned Michael W. Mims $284,889 pursuant to a
promissory note and security agreement. This note accrued interest at 7% per
annum and was due in full on May 31, 2001. This note was secured by 100,000
shares of the Company's Common Stock. Mr. Mims repaid this promissory note in
full in June 1999, and the stock was returned to him.
On November 9, 1998, the Company reorganized its South Carolina video gaming
operations by entering into a three-year agreement with Mims & Dye Enterprises,
L.L.C. ("Mims & Dye") which effectively served to outsource the operations of
the Company's non-route video gaming operations at eight video gaming machine
centers. Mims & Dye is managed by Michael W. Mims, who is also a 50% owner of
that entity. Pursuant to the agreement, seven of the eight video gaming centers
were leased or sub-leased by the Company to Mims & Dye. Under the agreement,
the Company retained ownership of the video gaming machines and all related
assets. In connection with the execution of the agreement, the Company loaned
$80,000 to Mims & Dye through two promissory notes, which notes were paid in
full on May 9, 1999. On October 23, 1999, the Company renegotiated this
agreement to receive all net proceeds from the operation of the video gaming
machine centers. Subsequently, the Company terminated its contractual relations
with Mims & Dye and entered into a new contract with Consolidated Gaming
Company, LLC of Columbia, South Carolina, an unrelated party, to operate and
manage a portion of the Company's video gaming machines.
Effective as of September 21, 1999, the Company and Jeffrey L. Minch entered
into a three year Employment Agreement pursuant to which the Company will
reimburse Mr. Minch for 50% of his office expenses in Austin, Texas, including
expenses for rent, parking, administrative support, insurance, maintenance,
telephone, utilities, office machines, office supplies and any other normal
expenses of maintaining a business office.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
-------------------------------------------------
During 1999, the Company had an Audit and Compensation Committee, a Nominating
Committee, an Acquisition Committee and a Compliance Committee. Following the
resignation of six members of the Board of Directors on July 2, 1999, the Board
operated with only two or three members for the remainder of the year. Due to
the small size of the Board during the second half of 1999, all of the members
of the Board essentially served on all of the Board committees.
During the first half of 1999, the Audit and Compensation Committee was composed
of James L. Hall (Chairman), Grover C. Seaton III and A. Joe Willis. The Audit
and Compensation Committee met four times in 1999. This committee has the
responsibility for reviewing the financial condition and accounting controls and
determining that all audits and examinations required by law are performed. The
committee recommends to the Board the appointment of the independent auditors
for the next fiscal year, reviews and approves the auditors' audit plans, and
reviews with the independent auditors the results of the audit and management's
response thereto. This committee is also responsible for establishing all
benefit and compensation plans for the Company.
During the first half of 1999, the Nominating Committee was composed of James L.
Hall (Chairman), Andre M. Hilliou, Grover C. Seaton III and A. Joe Willis. The
Nominating Committee met one time in 1999. This committee is responsible for
nominating individuals for election to the Company's Board of Directors. The
Board of Directors and the Nominating Committee welcome recommendations made by
stockholders of the Company for individuals to be included in the slate of
nominees for election at the annual meeting of stockholders. Any recommendations
for the 2001 Annual Meeting of Stockholders must comply with the requirements of
the Company's Certificate of Incorporation and should be made in writing
addressed to the Company's Board of Directors, 1440 Charleston Highway, West
Columbia, SC 29169. Under the Company's Certificate of Incorporation, any such
recommendations must be delivered in writing to the Company not less than sixty
days prior to the meeting date or, if less than seventy days' notice of the
meeting date is given, ten days after notice of the meeting date is given by
public disclosure.
<PAGE>
AMERICAN BINGO - PROXY MATERIALS PAGE:10
- ------------------------------------ -------
The Board of Directors of the Company held fifteen meetings during the year
ended December 31, 1999. All of the directors of the Company attended at least
75% of the aggregate of such board meetings and the meetings of each committee
on which they served.
RATIFICATION OF APPOINTMENT
---------------------------
OF INDEPENDENT AUDITORS
-----------------------
Subject to ratification by the stockholders, the Board of Directors has
appointed Sprouse & Winn, L.L.P. as independent auditors to audit the financial
statements of the Company for the 2000 fiscal year. Sprouse & Winn, L.L.P.
served as the independent auditors to audit the Company's financial statements
for the fiscal year ended December 31, 1999.
King Griffin & Adamson P.C. was the Company's independent auditors for the
fiscal years ended December 31, 1997 and 1998. After approval by the Board, the
Company dismissed King Griffin & Adamson P.C. on September 17, 1999. Their
independent auditor's reports for 1997 and 1998 did not contain an adverse
opinion or a disclaimer of opinion and was not qualified or modified as to
uncertainty, audit scope or accounting principles. The Company did not have any
disagreements with them on any matter of accounting principles or practices,
financial statement disclosure, or auditing scope or procedure, which if not
resolved to their satisfaction, would have caused them to make reference to such
matters in their report. The firm of Sprouse & Winn, L.L.P. was engaged as the
Company's new independent auditors.
A representative of Sprouse & Winn, L.L.P. is expected to be present at the
Meeting and will have an opportunity to make a statement, if the representative
so desires, and will be available to respond to any appropriate questions
stockholders may have.
The affirmative vote of the majority of the shares of the Company's Common Stock
present in person or represented by proxy at the Meeting and entitled to vote is
required for the ratification of the appointment of Sprouse & Winn, L.L.P. as
the Company's independent auditors for the 2000 fiscal year. With respect to
this vote, abstentions will have the effect of a "no" vote and broker non-votes
will have no effect on the vote.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE RATIFICATION OF
SPROUSE & WINN, L.L.P. AS INDEPENDENT AUDITORS.
STOCKHOLDER PROPOSALS
---------------------
Notices of stockholder proposals intended to be presented at the Meeting must
have been provided in writing to the Company by no later than April 10, 2000 in
order to be voted on at the Meeting. With respect to stockholder proposals for
which notices were not provided to the Company by April 10, 2000 the person or
persons designated as proxies in connection with the Company's solicitation of
proxies shall have the discretionary voting authority to vote the shares of the
Company's Common Stock represented by the proxy cards returned to the Company in
accordance with their judgment on such matters when such proposals are presented
at the Meeting.
Stockholder proposals intended to be presented at the 2001 Annual Meeting of
Stockholders and included in the Company's Proxy Statement and form of proxy for
that meeting must be received by the Company in writing by no later than
December 29, 2000. Any stockholder of the Company who intends to present a
proposal at the 2001 Annual Meeting of Stockholders to be voted on at that
meeting, which proposal is not included in the Company's Proxy Statement, must
deliver written notice of such proposal to the Company by no later than sixty
days prior to the meeting date or, if less than seventy days' notice of the
meeting date is given, ten days after notice of the meeting date is given by
public disclosure. If the proposing stockholder fails to deliver written notice
of such proposal to the Company by such date, then the person or persons
designated as proxies in connection with the Company's solicitation of proxies
shall have the discretionary voting authority to vote the shares of the
Company's Common Stock represented by the proxy cards returned to the Company in
accordance with their judgment on such matters when such proposals are presented
at the 2001 Annual Meeting. Any such notice of a stockholder proposal must be
made in writing addressed to Secretary, American Bingo & Gaming Corp., 1440
Charleston Highway, West Columbia, South Carolina 29169.
<PAGE>
AMERICAN BINGO - PROXY MATERIALS PAGE:11
- ------------------------------------ -------
OTHER MATTERS
-------------
The Board of Directors knows of no business other than that set forth above to
be transacted at the Meeting, but if other matters requiring a vote of the
stockholders arise, the persons designated as proxies will vote the shares of
Common Stock represented by the proxy cards in accordance with their judgment on
such matters.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ JEFFREY L. MINCH
JEFFREY L. MINCH
VICE CHAIRMAN OF THE BOARD AND PRESIDENT
May 5, 2000
<PAGE>
APPENDIX A
----------
AMERICAN BINGO & GAMING CORP.
ANNUAL MEETING OF STOCKHOLDERS - MAY 31, 2000
PROXY SOLICITED BY THE BOARD OF DIRECTORS
The undersigned hereby appoints Larry D. Kasufkin and Jeffrey L. Minch,
and either of them, proxies of the undersigned, with full power of substitution,
to vote all Common Shares of American Bingo & Gaming Corp. owned by the
undersigned at the Annual Meeting of Stockholders of American Bingo & Gaming
Corp. to be held on May 31, 2000, and at any adjournments thereof, hereby
revoking any proxy heretofore given, upon the matters and proposals set forth in
the Notice of Annual Meeting and Proxy Statement dated May 5, 2000, copies of
which have been received by the undersigned. The undersigned instructs such
proxy to vote as follows:
(CONTINUED ON REVERSE SIDE)
<PAGE>
PLEASE DATE, SIGN AND MAIL YOUR
PROXY CARD BACK AS SOON AS POSSIBLE!
ANNUAL MEETING OF STOCKHOLDERS
AMERICAN BINGO & GAMING CORP.
MAY 31, 2000
PLEASE DETACH AND MAIL IN THE ENVELOPE PROVIDED
- --------------------------------------------------------------------------------
A X PLEASE MARK YOUR VOTES
AS IN THIS EXAMPLE.
- --------------------------------------------------------------------------------
1. To elect three members to the Company's Board of Directors;
[ ] FOR the election of all nominees listed at right (except as marked to the
contrary)
[ ] WITHHOLD AUTHORITY to vote for all nominees listed at right
NOMINEES:
Daniel W. Deloney
J Gordon R. McNutt
Jeffrey L. Minch
2. To ratify the appointment of Sprouse & Winn, L.L.P. as the Company's
independent auditors for 2000; and
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
3. To consider such other matters as may properly come before the
Meeting or any adjournment of the Meeting.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
FOR THE ELECTION OF ALL NOMINEES LISTED AT RIGHT (EXCEPT AUTHORITY IS WITHHELD
WITH RESPECT TO EACH NOMINEE WHOSE NAME IS LINED THROUGH)
IF NO DIRECTION TO THE CONTRARY IS GIVEN, THEN THE SHARES REPRESENTED BY
THIS PROXY WILL BE VOTED FOR APPROVAL OF THE FOREGOING PROPOSALS.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED BY THE
UNDERSIGNED SHAREHOLDER.
THE PROXY WILL USE HIS DISCRETION WITH RESPECT TO ANY OTHER MATTERS WHICH
MAY PROPERLY COME BEFORE THE MEETING.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. PLEASE SIGN
AND RETURN IN THE ENCLOSED ENVELOPE. THE GIVING OF A PROXY WILL NOT AFFECT
YOUR RIGHT TO VOTE IN PERSON IF YOU ATTEND THE MEETING.
SIGNATURE(S) Dated ,2000
------------------- ---------------- ------------------
IF HELD JOINTLY
Important: (Please date and sign exactly as your name appears herein. For
joint accounts, each joint owner should sign. Executors, administrators,
trustees, etc. should also so indicate when signing.)
<PAGE>
