Revised Preliminary Proxy Solicitation Material — Sch. 14A Filing Table of Contents
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‘PRER14A’ — Revised Preliminary Proxy Solicitation Material
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:
$64,600,000
5) Total
fee
paid:
$12,920
ý
Fee
paid previously with preliminary
materials.
o
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.
You
are
invited to attend a special meeting of stockholders of Nevada Gold &
Casinos, Inc., a Nevada corporation (“Nevada Gold & Casinos” or “we” or
“us”) to be held on Thursday, January 17, 2008, beginning at 10:00
a.m. Central Time, at the Sheraton Suites Houston, 2400 West Loop South,
Houston, Texas77027.
At
the
meeting you are being asked to consider and vote upon a proposal to approve
and
adopt a unit purchase agreement (the “Unit Purchase Agreement”), dated as of
November 13, 2007, by and among Nevada Gold & Casinos, our
wholly-owned subsidiary Blackhawk Gold, Ltd. a Colorado corporation
(“Blackhawk Gold”), Isle of Capri Casinos, Inc., a Delaware corporation (“Isle
of Capri”) and its wholly-owned subsidiary, Casino America of Colorado, Inc., a
Colorado corporation (“Casino America”), and the transactions contemplated
thereby. Pursuant to the terms of the Unit Purchase Agreement,
Casino America is purchasing all of Blackhawk Gold’s units in Isle of Capri
- Black Hawk, LLC, a Colorado limited liability company (“IC-BH”). The
units represent Blackhawk Gold’s entire ownership interest of 43% of the units
in IC-BH (“ownership interest”).
Enclosed
for your review are a number of important items, including the proposal
described above to be voted on at the meeting, our proxy statement and a proxy
card. We encourage you to read the entire proxy statement (including the
Appendix and the information incorporated by reference).
Our
board of directors has determined that the Unit Purchase Agreement and the
transactions contemplated thereby are fair to and in the best interests of
the
stockholders.The
board of directors has unanimously approved and adopted the Unit Purchase
Agreement and the transactions contemplated thereby, and unanimously recommends
that you vote “FOR” the proposal to approve and adopt the Unit Purchase
Agreement and the transactions contemplated thereby.
We
cannot
consummate the proposed sale of the ownership interest to Casino America unless
the Unit Purchase Agreement is approved and adopted by an affirmative vote
of
the holders of a majority of the outstanding shares of our common stock.
It
is
important that your shares be represented and voted at the special meeting.
Whether or not you plan to attend the meeting, please authorize your proxy
by
mail and please mark, sign and date the proxy card and return it in the enclosed
envelope. Your proxy may be revoked at any time before it is exercised as
explained in the proxy statement. Failure
to vote either by proxy or in person at the meeting will have the effect of
a
vote “AGAINST” the approval and adoption of the Unit Purchase Agreement and the
transactions contemplated thereby.
If
your
shares are held in the name of a broker, bank or other nominee and you wish
to
attend and vote in person at the special meeting, you must obtain from the
record holder a proxy issued in your name.
To
the
Stockholders of Nevada Gold & Casinos, Inc.:
Notice
is
hereby given that the special meeting of stockholders of Nevada Gold &
Casinos will be held on Thursday, January 17, 2008, beginning at
10:00 a.m. Central Time, at the Sheraton Suites Houston, 2400 West Loop
South, Houston, Texas77027 for the following purposes:
1. To
consider and vote upon a proposal to approve and adopt the Unit Purchase
Agreement, dated as of November 13, 2007, by and among Nevada Gold &
Casinos, Blackhawk Gold, Isle of Capri and Casino America, and the transactions
contemplated thereby; and
2. To
transact such other business as may properly come before the special meeting
or
at any adjournment or postponement thereof.
The
foregoing items of business are more fully described in the proxy statement
accompanying this Notice.
The
board
of directors has fixed the close of business on December 10, 2007 as the record
date for the determination of stockholders entitled to notice of, and to vote
at, the special meeting and at any adjournment or postponement thereof. The
special meeting may be adjourned from time to time without notice other than
by
announcement at the special meeting.
By
Order of the Board of Directors,
Ernest
E. East
Senior
Vice President,
General
Counsel and Secretary
Houston,
Texas
[_________]
[___,] 2007
All
stockholders are invited to attend the special meeting in person. Whether or
not
you expect to attend the special meeting, please complete, date, sign and return
the enclosed proxy card as promptly as possible in order to ensure your
representation at the special meeting. A return envelope is enclosed for that
purpose. Even if you have authorized your proxy, you may still vote in person
if
you attend the special meeting. Please note, however, that if your shares are
held of record by a broker, bank or other nominee and you wish to vote at the
special meeting, you must obtain from the record holder a proxy issued in your
name.
TABLE
OF CONTENTS
Page
SUMMARY
TERM SHEET
1
The
Parties to the Transaction
1
The
Unit Purchase Agreement
1
Reasons
for the Sale of our Ownership Interest
2
Recommendation
of the Board of Directors
3
The
Special Meeting
3
Stockholder
Support Agreement
3
Certain
United States Federal Income Tax Consequences
3
Pro
Forma Consolidated Balance Sheet and Statements of
Operations
4
QUESTIONS
AND ANSWERS ABOUT THE SPECIAL MEETING OF
STOCKHOLDERS
5
THE
SPECIAL MEETING
7
General;
Time, Place and Purpose of the Special Meeting
7
Solicitation
of Proxies
7
Voting,
Outstanding Shares and Quorum
7
Brokerage
Accounts
8
Attendance
at the Special Meeting
8
Revocability
of Proxies
8
CAUTIONARY
STATEMENT REGARDING FORWARD-LOOKING
STATEMENTS
9
SPECIAL
FACTORS
10
The
Parties to the Transaction
10
Background
of the Sale of our Ownership Interest
11
Reasons
for the Sale of our Ownership Interest
13
Effect
of the Sale of our Ownership Interest
14
Recommendation
of the Board of Directors
14
Use
of Proceeds
15
Stockholder
Support Agreement
15
Deposit
Amount
15
Interests
of Certain Persons
16
Regulatory
and Other Approvals
16
Dissenter’s
Rights of Appraisal
16
Certain
United States Federal Income Tax Consequences
16
Accounting
Treatment of the Transaction
16
THE
UNIT PURCHASE AGREEMENT
17
General
17
Ownership
of Interest to be Sold
17
Page
Purchase
Price
17
Representations
and Warranties
18
Pre-Closing
Covenants; Conduct of Business Prior to Closing
19
Tax
Matters
21
Indemnification
22
Conditions
to Closing
23
Termination
24
Termination
Fees and Expenses
25
PRO
FORMA CONSOLIDATED BALANCE SHEET AND STATEMENTS OF
OPERATIONS
27
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
32
WHERE
YOU CAN FIND MORE INFORMATION AND INCORPORATION
BY
REFERENCE
34
STOCKHOLDERS
SHARING AN ADDRESS
34
STOCKHOLDER
PROPOSALS
35
OTHER
BUSINESS
35
APPENDIX
A
A-1
ii
SUMMARY
TERM SHEET
The
following summary highlights selected information contained in this proxy
statement. This summary may not contain all of the information that you may
consider to be important in determining how to vote on the proposed transaction.
To understand the proposed transaction fully and for a more complete description
of the terms of the transaction, you should carefully read this entire proxy
statement and the Unit Purchase Agreement, a copy of which is attached to this
proxy statement as Appendix A. In addition, we encourage you to read the
documents referred to or incorporated by reference in this proxy statement,
which include important business and financial information about Nevada Gold
& Casinos and IC-BH that has been filed with the Securities and Exchange
Commission, which is referred to as the SEC.See
“Where You Can Find More Information and Incorporation by Reference” on page
34.
Each item in this summary includes a page reference to direct you to a more
complete description of that item in the proxy statement. The terms “we,”“us,”“our” and “our company” refer to Nevada Gold & Casinos, Inc.
·
The
Parties to the Transaction (See
page 10)
Nevada
Gold & Casinos, Inc. (“Nevada Gold & Casinos”) is headquartered in
Houston, Texas. Our principal executive offices are located at 50 Briar Hollow
Lane, Suite 500W, Houston, Texas77027, and our telephone number is (713)
621-2245. Our Internet site is www.nevadagold.com.
Nevada
Gold & Casinos is publicly traded on the American Stock Exchange (“Amex”)
under the symbol UWN.
Blackhawk
Gold, Ltd. (“Blackhawk Gold”) is a Colorado corporation and a wholly-owned
subsidiary of Nevada Gold & Casinos. Its principal executive offices are
located at 50 Briar Hollow Lane, Suite 500W, Houston, Texas77027, and its
telephone number is (713) 621-2245. Blackhawk Gold is a non-operating owner
of 43% of the units of Isle of Capri-Black Hawk, LLC (“IC-BH”).
Isle
of
Capri Casinos, Inc. (“Isle of Capri”) is a Delaware corporation with its
principal executive offices located at 600 Emerson Road, Suite 300, St.Louis, Missouri63141, and its telephone number is (314) 813-9200. Isle of
Capri is publicly traded on the National Association of Securities Dealers
Automated Quotations (“Nasdaq”) under the symbol ISLE.
Casino
America of Colorado, Inc. (“Casino America”) is a Colorado corporation and a
wholly-owned subsidiary of Isle of Capri. Its principal executive offices are
located at 600 Emerson Road, Suite 300, St. Louis, Missouri63141. Casino
America operates and manages IC-BH and owns 57% of the units in IC-BH.
·
The
Unit Purchase Agreement(See
page 17)
Under
the
terms of the Unit Purchase Agreement, Nevada Gold & Casinos and its
subsidiary Blackhawk Gold agree to sell Blackhawk Gold’s 43% ownership interest
in IC-BH to Casino America. The Unit Purchase Agreement is attached to this
proxy statement as Appendix A. We encourage you to read the Unit Purchase
Agreement in its entirety, as it is the legal document that governs the proposed
transaction between Nevada Gold & Casinos, Blackhawk Gold, Isle of Capri and
Casino America.
1
Purchase
Price(See
page
17)
The
consideration to be paid for our ownership interest is $64,600,000 in cash,
including $2,000,000 which was paid to Louise H. Rogers after the execution
of
the Unit Purchase Agreement.
Conditions
to Closing(See
page
23)
The
respective obligations of Nevada Gold & Casinos and Blackhawk Gold, on the
one hand, Isle of Capri and Casino America, on the other hand, to effect the
sale of our ownership interest are subject to the satisfaction or waiver of
certain conditions set forth in the Unit Purchase Agreement.
Termination
(See
page
24)
The
Unit
Purchase Agreement may be terminated at any time prior to closing upon mutual
agreement of the parties. Under other specific circumstances, each party has
additional rights to terminate the Unit Purchase Agreement.
Termination
Fees and Expenses (See
page
25)
Under
certain circumstances, Nevada Gold & Casinos or Blackhawk Gold is required
to pay to Casino America a termination fee of $700,000. In addition, if within
24 months of such termination we enter into another letter of intent or an
agreement in principle to sell our ownership interest in IC-BH, we or Blackhawk
Gold may be required to pay an additional fee of $1,100,000.
·
Reasons
for the Sale of our
Ownership Interest (See
page 13)
The
sale
of our ownership interest in IC-BH will enable us to (i) reduce our outstanding
long-term debt by approximately $38,800,000, (ii) extend the maturity date
of
the remaining $15,550,000 balance of such debt from September 30, 2008 to June30, 2010, and (iii) provide additional funds to invest in other operating
assets in the gaming industry such as the Vicksburg Horizon Casino and Hotel
(which we refer to as the Vicksburg Facility). We entered into a contract to
acquire the Vicksburg Facility for a cash purchase price of $35,000,000 on
November 13, 2007. We expect that acquisition to close shortly after the
closing of the sale of our ownership interest in IC-BH.
We
intend
to use the net proceeds from the sale of our ownership interest in IC-BH
to pay
down approximately $38,800,000 of our currently outstanding long-term debt
of
$54,350,000, and approximately $15,000,000 (including the $2,000,000 cash
deposit received upon our execution of the Unit Purchase Agreement) to help
fund
the acquisition of the Vicksburg Facility and other future acquisitions.
The
balance of the proceeds of the sale is expected to be used to pay income
taxes
(approximately $9,800,000) and expenses (approximately $1,000,000) to be
incurred in connection with the sale of our ownership interest. The expenses
to
be incurred include those expenses in seeking our shareholders’ approval of the
proposed sale. See the “Use of Proceeds” section on page 15 and “Pro Forma
Consolidated Balance Sheet and Statements of Operations” beginning on
page 27 for more information concerning the use of the proceeds of the sale
and the financial implications of the sale for our company.
2
·
Recommendation
of the Board of Directors (See
page14)
Based
on
a recommendation from senior management and its evaluation of a number of
factors, the board of directors has determined that the Unit Purchase Agreement
and the transactions contemplated thereby are fair to and in the best interests
of the stockholders. On November 10, 2007, the board of directors unanimously
approved and adopted the Unit Purchase Agreement and the transactions
contemplated thereby, and unanimously recommends that you vote “FOR”
the
proposal to approve and adopt the Unit Purchase Agreement and the transactions
contemplated thereby. The affirmative vote, whether in person or by proxy,
of
holders of a majority of our outstanding common stock is required to approve
the
Unit Purchase Agreement and the transactions contemplated thereby.
·
The
Special Meeting (See
page 7)
The
special meeting of stockholders will be held on Thursday, January 17,2008 beginning at 10:00 a.m. Central Time, at the Sheraton Suites Houston,
2400 West Loop South, Houston, Texas77027, for the purposes set forth
herein and in the accompanying Notice of Special Meeting of Stockholders. We
will ask you to consider and vote upon the approval and adoption of the Unit
Purchase Agreement and the transactions contemplated thereby. The record date
for the special meeting is December 10, 2007. The proposed transaction requires
the affirmative vote of holders of a majority of the outstanding shares of
our
common stock.
·
Stockholder
Support Agreement
(See
page 15)
Under
the
Unit Purchase Agreement, we were required to secure stockholder support
agreements from the two largest stockholders of our company,Louise
H.
Rogers and Wynnefield Funds. They are beneficial holders of at least 17% of
the
outstanding shares of common stock of Nevada Gold & Casinos and have agreed
not to transfer their shares and to vote all of their shares of our common
stock
in favor of the Unit Purchase Agreement and the transactions contemplated
thereby and against any proposal that is made in opposition to or in competition
with the consummation of the transactions contemplated by the Unit Purchase
Agreement.
·
Certain
United States Federal Income Tax Consequences(See
page 16)
The
sale
of our ownership interest will result in a taxable gain to Nevada Gold &
Casinos and its wholly-owned subsidiary Blackhawk Gold. Nevada Gold &
Casinos does not expect that the sale of our ownership interest will result
in
any federal income tax consequences to our stockholders.
3
·
Pro
Forma Consolidated Balance Sheet and Statement of Operations
(See
page 27)
The
unaudited pro forma consolidated
balance sheet and statements of operations
for
Nevada Gold & Casinos giving effect to the proposed sale of our ownership
interest may be found in this proxy statement under the heading “Pro Forma
Consolidated
Balance Sheet and Statements of Operations”
and
show what our consolidated balance sheet and statements of operations would
have
been if this transaction had occurred at the beginning of our fiscal year
ended
April 29, 2007 or at the end of our fiscal quarter ended as of October 28,2007,
respectively. The unaudited pro forma consolidated
balance sheet and statements of operations
should
be read in conjunction with the related notes in this proxy statement and
our
and IC-BH’s historical and unaudited consolidated financial statements and the
related notes thereto included in our Annual Report on Form 10-K and our
Form
10-Q that are incorporated by reference to this proxy statement. See the
section
herein entitled “Where You Can Find More Information and Incorporation by
Reference” for information on how to obtain a copy of our annual reports on Form
10-K and our quarterly reports on Form 10-Q.
The
unaudited pro forma consolidated
balance sheet and statements of operations
are not
necessarily indicative of the operating results or financial position that
would
have occurred if this transaction had been consummated prior to or as of
the
times indicated, nor are they necessarily indicative of the future financial
position and results of operations of our company.
4
QUESTIONS
AND
ANSWERS ABOUT
THE
SPECIAL MEETING OF
STOCKHOLDERS
Q:Where
and when is the special meeting of stockholders?
A:
The
special meeting will be held on Thursday, January 17, 2008
beginning at 10:00 a.m. Central Time, at the Sheraton Suites Houston,
2400 West Loop South, Houston, Texas77027, or at a later date if the
meeting is adjourned.
Q:Who
is soliciting my proxy?
A:
The
board of directors is soliciting proxies from each of our stockholders.
Nevada Gold & Casinos will pay the expenses of preparing and
distributing this proxy statement and soliciting proxies, including
the
reasonable expenses incurred by brokers, dealers, banks and trustees
or
their nominees for forwarding solicitation materials to beneficial
owners.
Q:Who
is entitled to vote on the proposed transaction?
A:
Stockholders
of record as of the close of business on December 10, 2007, the record
date, are entitled to notice of and to vote at the special meeting.
Each
share of common stock is entitled to one
vote.
Q:What
am I being asked to vote upon at the special meeting?
A:
You
are being asked to vote upon a proposal to approve and adopt the
Unit
Purchase Agreement, dated as of November 13, 2007, by and among us,
Blackhawk Gold, Isle of Capri and Casino America. See “The Unit
Purchase Agreement” for a more detailed description of the proposed
transaction.
Q:What
will happen if the Unit Purchase Agreement is approved and adopted by our
stockholders?
A:
If
the Unit Purchase Agreement and the transactions contemplated thereby
are
approved and adopted by the holders of a majority of the outstanding
shares of our common stock, and the other conditions to closing of
the
transaction are satisfied or waived, we will sell our 43% ownership
interest in IC-BH to Casino America pursuant to the terms and conditions
set forth in the Unit Purchase Agreement as described in this proxy
statement.
Q:What
will happen if the Unit Purchase Agreement and the transactions contemplated
thereby are not approved or adopted by our stockholders or the sale of units
is
otherwise not completed?
A:
If
the Unit Purchase Agreement is not approved or adopted by the holders
of a
majority of the outstanding shares of our common stock, we will not
be
able to consummate the transactions contemplated by the Unit Purchase
Agreement and under certain circumstances, we or Blackhawk Gold may
be
required to pay a termination fee of $700,000 to Casino America.
In
addition, we would need to extend the maturity date of our existing
long-term debt or find other sources with which to help repay the
same
when it becomes due in September 30, 2008, and would have to find
other
sources to help finance the acquisition of the Vicksburg Facility.
No
assurance can be given that we would be able to extend the maturity
date
of our existing long-term debt or secure such other financing or
the terms
and conditions upon which we might be able to secure the
same.
5
Q:When
is the sale of our ownership interest to Casino America expected to be
completed?
A:
We
expect to complete the sale of our ownership interest to Casino America
on
the second business day or as soon as practicable after all of the
conditions to closing of the transaction have been satisfied or waived.
See “The Unit Purchase Agreement” for a more complete description of the
conditions to completion of the
sale.
Q:What
vote is required to approve and adopt the Unit Purchase Agreement and the
transactions contemplated thereby?
A:
The
affirmative vote of the holders of a majority of the outstanding
shares of
our common stock is required to approve and adopt the Unit Purchase
Agreement and the transactions contemplated thereby. The board of
directors recommends that you vote “FOR”
the proposal to approve and adopt the Unit Purchase Agreement and
the
transactions contemplated thereby. Failure to vote either by proxy
or in
person at the meeting will have the same effect as a vote against
the
proposal.
Q:What
do I need to do now?
A:
After
carefully reading and considering the information contained in this
proxy
statement, we urge you to complete, date, sign and return the enclosed
proxy card as promptly as possible in order to ensure your representation
at the special meeting. A return envelope is enclosed for that purpose.
Holders of a majority of the outstanding shares of our common stock
are
entitled to vote and must be represented in person or by proxy at
the
special meeting to enable us to conduct business at the special meeting.
See “The Special Meeting” for further information regarding the voting
process.
Q:Can
I change my vote after I have signed and returned my
proxy?
A:
Yes.
You can change your vote at any time before proxies are voted at
the
special meeting. Prior to the time proxies are voted, you may change
your
vote by submitting a written notice of revocation or a duly executed
proxy
bearing a later date to the following address: Investor Relations
of
Nevada Gold & Casinos at Nevada Gold & Casinos’ executive offices,
50 Briar Hollow Lane, Suite 500W, Houston, Texas77027. Alternatively,
you
may attend the special meeting and vote in
person.
Q:How
do I vote if my broker holds my shares in “street name”?
A:
Shares
held in “street name” are held in the name of your bank or broker. If your
shares are held in a brokerage account in “street name,” they are not
included in the total number of shares owned by you on the enclosed
proxy
card. Your bank or broker will send you instructions on how to vote
those
shares.
Q:What
is a broker non-vote?
A:
When
shares are held in “street name,” a broker non-vote may occur when a bank
or brokerage firm does not vote on a proposal because it does not
have
discretionary voting power and has not received instructions from
the
beneficial owner of the shares. In this case your broker does not
have
discretionary authority; therefore, your failure to give your broker
or
nominee specific instructions will have the same effect as a vote
“AGAINST”
the proposal.
Q:What
happens if I do not indicate how to vote my proxy?
A:
If
your shares are not held in “street name” and you sign and send in your
proxy, but do not include instructions on how to vote your properly
signed
proxy card, your shares will be voted “FOR”
the proposal to approve and adopt the Unit Purchase Agreement and
the
transactions contemplated thereby.
Q:Who
can help answer my questions about the proposal?
A:
If
you have any questions about the proposal presented in this proxy
statement, you should contact: Nevada Gold & Casinos, Inc., 50 Briar
Hollow Lane, Suite 500W, Houston, Texas77027, Attn: Ernest E. East,
General Counsel, (713) 621-2245.
6
THE
SPECIAL MEETING
General;
Time, Place and Purpose of the Special Meeting
The
enclosed proxy is solicited by the board of directors of Nevada Gold &
Casinos for use at the special meeting of stockholders to be held on
Thursday, January 17, 2008 at 10:00 a.m. Central Time, or at any
adjournment or postponement thereof, for the purposes set forth herein and
in
the accompanying Notice of Special Meeting of Stockholders. The special meeting
will be held at the Sheraton Suites Houston, 2400 West Loop South, Houston,
Texas77027. Nevada Gold & Casinos intends to mail this proxy statement and
accompanying proxy card on or about [__________] [___], 2007 to all stockholders
entitled to vote at the special meeting. At the special meeting, the
stockholders will be asked to vote upon the proposal to approve and adopt the
Unit Purchase Agreement and the transactions contemplated thereby, and to
transact such other business as may properly come before the special meeting
and
at any adjournment or postponement thereof.
Solicitation
of Proxies
We
will
bear the entire cost of this solicitation of proxies, including preparation,
assembly, printing and mailing of this proxy statement, the proxy and any
additional information furnished to stockholders. Copies of solicitation
materials will be furnished to banks, brokerage houses, fiduciaries and
custodians holding in their names shares of common stock of Nevada Gold &
Casinos, par value $0.12 per share, beneficially owned by others to forward
to
such beneficial owners. Nevada Gold & Casinos may reimburse persons
representing beneficial owners of common stock for their costs of forwarding
solicitation materials to beneficial owners. We may use the services of our
officers, directors and others to solicit proxies, personally or by telephone,
facsimile or electronic mail, without additional compensation.
Voting,
Outstanding Shares and Quorum
Only
stockholders of record of Nevada Gold & Casinos’ common stock at the close
of business on December 10, 2007, the record date for the special meeting (the
“record date”), will be entitled to notice of, and to vote at, the special
meeting. At the close of business on December 10, 2007, Nevada Gold &
Casinos had outstanding and entitled to vote [__________] shares of common
stock. Each holder of record of our common stock on the record date above will
be entitled to one vote for each share held on all matters to be voted upon
at
the special meeting. If you were a stockholder as of the record date, you are
entitled to vote by proxy or in person at the special meeting.
However,
whether or not you intend to attend the special meeting, the board of directors
encourages you to vote for the proposal and requests that you complete, sign,
date and return the accompanying proxy card in order to ensure the presence
of a
quorum. A return envelope is enclosed for your convenience.
Holders
of a majority of the outstanding shares of common stock entitled to vote,
represented in person or by proxy, will constitute a quorum for the special
meeting. All votes will be tabulated by the inspector of elections appointed
for
the special meeting, who will separately tabulate affirmative and negative
votes, abstentions and broker non-votes.
7
Shares
represented at the special meeting in person or by proxy, but not voted, will
nevertheless be counted for purposes of determining a quorum. Abstentions and
broker non-votes
will be treated as shares that are present and entitled to vote for purposes
of
determining the presence of a quorum. However, abstentions and broker non-votes
will have the same effect as a vote “AGAINST”
the
proposal to be voted upon at the special meeting. A “broker non-vote” occurs
when a broker, bank or other holder of record holding shares for a beneficial
owner fails to execute and return a proxy or properly executes and returns
a
proxy without voting on a particular proposal because the holder of record
does
not have discretionary voting power for that particular item and has not
received instructions from the beneficial owner.
The
proposal to vote upon the approval and adoption of the Unit Purchase Agreement
and the transactions contemplated thereby requires the affirmative vote, whether
in person or by proxy, of holders of a majority of the shares of our outstanding
common stock.
Brokerage
Accounts
If
any of
your shares are held in the name of a brokerage firm, bank, bank nominee or
other institution, it can vote such shares only upon receipt of your specific
instructions. Accordingly, please contact the person responsible for your
account and instruct that person to execute the proxy card representing your
shares. In addition, if you hold your shares in a brokerage or bank account,
your broker or bank may allow you to provide your voting instructions by
telephone.
Attendance
at the Special Meeting
Only
holders of common stock, their proxy holders and guests we may invite may attend
the special meeting. If you wish to attend the special meeting in person but
you
hold your shares through someone else, such as a stockbroker, you must obtain
from the record holder a proxy issued in your name.
Revocability
of Proxies
Any
person giving a proxy pursuant to this solicitation has the power to revoke
it
at any time before it is voted. The proxy may be revoked by filing with Investor
Relations of Nevada Gold & Casinos at its principal executive offices at 50
Briar Hollow Lane, Suite 500W, Houston, Texas77027, a written notice of
revocation or a duly executed proxy bearing a later date, or it may be revoked
by attending the special meeting and voting in person. Attendance at the special
meeting will not, by itself, revoke a proxy.
PLEASE
COMPLETE, SIGN, DATE AND RETURN THE ACCOMPANYING PROXY CARD IN THE ENCLOSED
RETURN ENVELOPE AS PROMPTLY AS POSSIBLE.
8
CAUTIONARY
STATEMENT REGARDING
FORWARD-LOOKING
STATEMENTS
Certain
statements made in this proxy statement are “forward-looking statements” within
the meaning of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements can be identified by terminology such as “may,”“will,”“should,”“expect,”“intend,”“plan,”“anticipate,”“believe,”“estimate,”“predict,” or “continue” or the negative of these terms or other
comparable terminology. These forward-looking statements are based upon our
current expectations, forecasts, and assumptions that are subject to risks,
uncertainties and other factors that could cause actual outcomes and results
to
differ materially from those indicated by these forward-looking statements.
These risks, uncertainties, and other factors include, but are not limited
to:
·
the
ability to satisfy the conditions to the closing of the proposed
sale of
our ownership interest in IC-BH to Casino America, including, among
others, our ability to obtain stockholder
approval;
·
the
occurrence of any event, change or other circumstance that could
give rise
to the termination of the Unit Purchase
Agreement;
·
the
failure of the proposed transaction contemplated by the Unit Purchase
Agreement to close for any other
reason;
·
the
risk that our operations will be disrupted in the event the proposed
transaction does not close;
·
the
risk that one or more third parties may seek to initiate litigation
challenging the proposed transaction;
·
a
change in economic conditions;
·
our
ability to comply with the covenants contained in the Unit Purchase
Agreement;
·
the
risk that we will not be able to effectively implement our business
plan
for the use of the proceeds from the sale of our ownership interest
in
IC-BH which business plan contemplates the reinvestment of a significant
portion of the proceeds in other gaming ventures; and
·
the
other risks and uncertainties discussed in this proxy statement,
our
annual report on Form 10-K for the fiscal year ended April 29, 2007,
as
amended, and other reports we file from time to time with the SEC.
We
undertake no obligation to update any of the information included in this proxy
statement, except as otherwise required by law.
9
SPECIAL
FACTORS
The
Parties to the Transaction
Information
About Nevada Gold & Casinos
Nevada
Gold & Casinos, a Nevada corporation, was formed in April 1977 and, since
1994, has been primarily a gaming company involved in financing, developing,
owning and operating commercial gaming projects and financing and developing
Native American owned gaming projects. Through our subsidiary, Blackhawk Gold,
we indirectly own a 43% interest in IC-BH, a Colorado limited liability company
which owns and operates two commercial casino properties in Black Hawk, Colorado
-- the Isle of Capri-Black Hawk Casino and Colorado Central Station Casino.
In
addition, we own and operate the Colorado Grande Casino in Cripple Creek,
Colorado, we own a 40% interest in Buena Vista Development Company, LLC which
is
developing a casino for a Native American tribe in Amador County, California,
and we have real estate interests in Colorado, California, and Nevada. We report
our operations in two segments -- gaming projects and other assets.
We
are
headquartered in Houston, Texas. Our principal executive offices are located
at
50 Briar Hollow Lane, Suite 500W, Houston, Texas77027, and our telephone number
is (713)
621-2245. Our Internet site is www.nevadagold.com.
Our
common stock is traded on the Amex under the symbol UWN, and as a public company
we file periodic reports with the SEC concerning our business, financial
condition and results of operations.
Information
about Blackhawk Gold
Blackhawk
Gold is a Colorado corporation and a wholly-owned subsidiary of Nevada Gold
& Casinos. It was formed in April 1997 and its principal executive offices
are located at 50 Briar Hollow Lane, Suite 500W, Houston, Texas77027, and
its telephone number is (713) 621-2245. Blackhawk Gold is a non-operating
owner of 43% of the units in IC-BH.
Information
about Isle of Capri
Isle
of
Capri was incorporated in Delaware in February 1990. The principal executive
offices of Isle of Capri are located at 600 Emerson Road, Suite 300,
St. Louis, Missouri63141, and its telephone number is (314) 813-9200. It
is a leading developer, owner and operator of branded gaming facilities and
related lodging and entertainment facilities in markets throughout the United
States and internationally. Through its subsidiary, Casino America, it
indirectly owns 57% of the units in IC-BH and receives management fees for
operating the two gaming facilities in Black Hawk, Colorado owned by IC-BH.
In
addition, Isle of Capri owns and operates twelve casino gaming facilities in
the
United States located in Lake Charles, Louisiana; Lula, Biloxi and Natchez,
Mississippi; Kansas City, Caruthersville and Boonville, Missouri;
Bettendorf, Davenport, Waterloo and Marquette, Iowa; and Pompano Beach, Florida.
Its international gaming interests include a wholly-owned casino in Freeport,
Grand Bahama, a two-thirds ownership interest in casinos in Dudley and
Wolverhampton, England and a wholly-owned casino in Coventry, England. It also
wholly owns and operates a pari-mutuel harness racing facility in Pompano Beach,
Florida at the site of its Pompano Beach casino facility.
10
Isle
of
Capri’s common stock is traded on the Nasdaq under the symbol ISLE, and as a
public company it files periodic reports with the SEC concerning its business
operations, financial conditions and results of operations.
Information
about Casino America
Casino
America is a Colorado corporation and a wholly-owned subsidiary of Isle of
Capri. It was formed in April 1997 and maintains principal executive offices
at
600
Emerson Road, Suite 300, St. Louis, Missouri63141, and its telephone number
is
(314) 813-9200.
Casino America operates and manages IC-BH and owns 57% of the units in
IC-BH.
Information
about IC-BH
The
securities of IC-BH are not publicly traded, but because our interest in IC-BH
represents a significant part of our total assets and accounts for a significant
portion of our revenues, we include information concerning the financial
condition and results of operations of IC-BH in our periodic reports filed
with
the SEC.
Background
of the Sale
of our Ownership Interest
General
On
April25, 1997, Blackhawk Gold and Casino America formed IC-BH which owns and operates
two commercial casino properties in Black Hawk, Colorado (Isle of Capri-Black
Hawk Casino and Colorado Central Station Casino). Through our wholly-owned
subsidiary, Blackhawk Gold, we own 43% of the interest in IC-BH, and Isle of
Capri, through its wholly-owned subsidiary, Casino America, owns the remaining
57% interest in IC-BH. Casino America operates the two casino properties under
the Second Amended and Restated Management Agreement between Isle of Capri
and
IC-BH for a management fee based upon a percentage of the revenues and operating
profit of the casinos.
The
Isle of Capri-Black Hawk Casino
The
Isle
of Capri-Black Hawk Casino, which commenced operations in December 1998, is
located on an approximately 10-acre site and is one of the first gaming
facilities reached by customers arriving from Denver via Highway 119. The
property currently consists of a casino with approximately 1,378 slot machines,
18 table games, a 238-room hotel and 1,100 parking spaces in an attached parking
garage. The Isle of Capri-Black Hawk Casino also offers customers a wide variety
of non-gaming amenities, including four dining facilities and a 4,000 square
foot event center that can be used for meetings and entertainment.
11
The
Colorado Central Station Casino
The
Colorado Central Station is located across the intersection, from the Isle
of
Capri-Black Hawk Casino, of Main Street and Mill Street. The property currently
consists of a casino with 778 slot machines, 15 table games, a 162-room hotel
and 1,200 parking spaces. The property also offers guests three dining options.
Background
of the Transaction
In
March
of 2006, we retained Libra Securities, LLC, an investment banking firm, to
assist us in connection with a general review of alternatives available to
us to
maximize the value of our 43% ownership interest in IC-BH.
Over
the
course of the summer of 2006, we internally considered the possibility and
relative advantages and disadvantages of an outright sale of our ownership
interest, a “swap” of our interest for other assets and a sale leaseback
transaction involving our ownership interest in IC-BH.
In
the
summer and fall of 2006, we initiated conversations with Isle of Capri with
respect to a possible sale of our ownership interest, and in January and
February of 2007 we exchanged draft agreements with Isle of Capri contemplating
a transaction in which (i) our ownership interest in IC-BH would be
redeemed in exchange for title to certain real property and facilities owned
by
IC-BH and used for its casino and hotel operations, (ii) we would lease the
acquired property back to IC-BH for an extended term at a minimum rent of
$3,600,000 a year and (iii) at the end of the lease term, Isle of Capri
would have an option to buy back the assets for a balloon payment of
$25,000,000. The annual rent would be subject to possible upward
adjustment based on a formula geared to the earnings before interest, taxes,
depreciation and amortization (“EBITDA”) generated by IC-BH from certain of its
operations during the three fiscal years ending April 24, 2009. Our management
ascribed a net present value to such transaction in the range of $42,000,000
to
$48,000,000 without giving effect to the contingent rent adjustment
formula.
Although
conversations between the parties continued throughout the first quarter of
2007, we and Isle of Capri were not able to reach a final agreement as to the
terms of the transaction, and on April 19, 2007, Nevada Gold & Casinos
issued a press release indicating conversations with Isle of Capri had
terminated.
Additionally,
over the course of late 2006 and early 2007 we contacted at least seven
potential financial buyers of which only two communicated interest in holding
further discussions. Discussions with these potential buyers failed to produce
an agreement as to an acceptable range of values for our ownership interest
and
did not progress beyond the preliminary stage. The major issues cited by these
potential buyers as adversely affecting their views as to the value of our
ownership interest in IC-BH were: (i) Isle of Capri’s right of first refusal in
connection with any sale of our ownership interest in IC-BH, (ii) the fact
that the interest was a minority interest with limited rights to participate
in
management decisions or to control the timing of any sale or “exit” and (iii)
the economic terms of the management agreement pursuant to which Casino America
managed IC-BH.
12
The
conversations between Isle of Capri and Nevada Gold & Casinos were renewed
in the fall of 2007 when Libra Securities, on behalf of Nevada Gold &
Casinos, contacted Isle of Capri to discuss an all-cash buyout. On October22,2007, we provided Isle of Capri with a proposed term sheet.
Over
the
course of the following weeks, Nevada Gold & Casinos and Isle of Capri
agreed on a price and eventually definitive transaction terms. On November10,2007, the board of directors approved and adopted the Unit Purchase Agreement
and the transactions contemplated thereby and on November 13, 2007, the parties
executed the Unit Purchase Agreement. See “The Unit Purchase Agreement” for a
more detailed description of the definitive terms.
Because
the sale of our ownership interest may be deemed to be the sale of assets that
would require stockholder approval under the laws of the state of Nevada, the
board of directors of Nevada Gold & Casinos has determined to seek the
approval of our stockholders.
Reasons
for the Sale of our
Ownership Interest
On
January 19, 2006, Nevada Gold & Casinos entered into a $55,000,000 revolving
credit facility with Louise H. Rogers, as amended on July 30, 2007 and October12, 2007. The credit facility, which replaced a prior version of the credit
facility dated June 29, 2006, was secured, in part, by Nevada Gold &
Casino’s ownership in Blackhawk Gold, and Blackhawk Gold’s ownership in IC-BH.
The credit facility allows Nevada Gold & Casinos to borrow up to $55,000,000
at any time prior to September 30, 2008. As of November 12, 2007, the
aggregate outstanding principal balance of this credit facility was $54,350,000.
The credit facility was amended and restated as of November 13, 2007 conditioned
upon the completion of the proposed sale of our interest in IC-BH and the
application of not less than $38,800,000 of the proceeds therefrom to partially
pay down our outstanding long-term indebtedness. Under the November 13,2007 agreement, the maturity date for the credit facility is extended to
June 30, 2010. The funds we receive from the sale of our ownership
interest will primarily be used to pay down such debt. Upon such payment, the
credit facility will remain secured by all of our assets and we will continue
to
pay interest payments monthly; however, under the November 13, 2007
agreement, the interest rate will be reset at a rate to be negotiated by the
parties but in no event will the rate be less than 10% per annum. See Exhibit
10.1 to our current report of Form 8-K, dated November 13, 2007 for a copy
of
the amended and restated credit facility agreement.
Pursuant
to a promissory note dated November 13, 2007, Ms. Rogers agreed to loan an
additional $2,000,000 to Nevada Gold & Casinos separate and apart from the
$55,000,000 credit facility. On November 16, 2007, we paid the outstanding
amount due under the promissory note to Ms. Rogers from the deposit
amount required to be paid by Casino America in connection with the
proposed sale of our ownership interest. See “Deposit Amount” for a more
detailed description of the payment to Ms. Rogers. See Exhibits 10.2, 10.3
and
10.4 to our current report on Form 8-K, dated November 13, 2007 for copies
of
the amendment to the security agreement, use of proceeds agreement and the
promissory note.
13
Additionally,
$13,000,000 of the balance of the funds from the sale of our ownership interest
will be placed in an investment fund, or a special “project fund.” These funds
shall be placed in an interest-bearing account set up separately from any and
all other accounts held by Nevada Gold & Casinos and used solely for (i)
acquisitions or financing of new projects or (ii) repayment to Ms. Rogers
on any of her loans to Nevada Gold & Casinos. We may not borrow against such
project fund or use it as collateral for any loan transaction without the
express written consent of Ms. Rogers. We may only borrow against the project
fund if the loan is used to finance a new project or acquisition which has
been
approved by Ms. Rogers, such as our proposed acquisition of the Vicksburg
Horizon Casino and Hotel. On November 13, 2007, our wholly owned subsidiary,
Nevada Gold Vicksburg, LLC entered into an agreement to purchase the Vicksburg
Horizon Casino and Hotel in Vicksburg, Mississippi from Columbia Properties
Vicksburg, LLC for $35,000,000. Specifically, up to $8,000,000 of the project
fund may be used for investment in the Vicksburg Facility. Any funds remaining
in the project fund following the Vicksburg Facility acquisition will be
committed to at least one other new acquisition within 12 months of completing
such acquisition, otherwise such funds shall be delivered to Ms. Rogers and
applied to the payment of her loans to us. See Exhibit 10.6 to our current
report of Form 8-K, dated November 13, 2007 for a copy of the Vicksburg Facility
agreement.
If
the
Unit Purchase Agreement and the transactions contemplated thereby are not
approved or adopted by the holders of a majority of the outstanding shares
of
our common stock, we will not be able to consummate the transactions
contemplated by the Unit Purchase Agreement or the agreement relating to our
amended and restated credit facility.
In
addition, we may not be able to complete the Vicksburg Facility acquisition,
and
may have to seek other strategic alternatives and arrangements.
Effect
of the Sale of our
Ownership Interest
The
sale
of our ownership interest will terminate our interest in IC-BH and we will
not
have any interest in its future operations.
As
described above, the sale of our ownership interest will also permit us to
substantially reduce our existing long-term debt and provide necessary capital
to assist us to make other investments in the gaming industry.
Recommendation
of the Board of Directors
At
its
meeting held on November 10, 2007, the board of directors determined that the
Unit Purchase Agreement and the transactions contemplated thereby are fair
and
in the best interests of Nevada Gold & Casinos and its stockholders and
recommends that you vote “FOR”
the
Unit Purchase Agreement and the transactions contemplated thereby. The
affirmative vote, whether in person or by proxy, of a majority of the holders
of
our outstanding common stock is required to approve the proposed
transaction.
In
reaching its conclusion, the board of directors considered a recommendation
by
senior management in favor of the proposal as well as a number of factors,
including:
(i)
The
fact that Isle of Capri, as the majority owner of IC-BH, is the only
purchaser likely to pay a purchase price for our interest based upon
a pro
rata share of the enterprise value of IC-BH without imposing the
significant discount commonly applied to the purchase of minority
interests.
(ii)
The
fact that the operating agreement of IC-BH gives to Isle of Capri
a right
of first refusal with respect to any sale of our ownership interest
to a
third party which adversely affects the marketability of our ownership
interest.
(iii)
A
recently enacted ban (which is to take effect on January 1, 2008),
on
smoking in all Colorado casinos which our senior management believes
may
add uncertainty to the valuation of Colorado casinos.
(iv)
The
fact that the sale price of $64,600,000 represented a multiple of
8.1
times our pro rata share of IC-BH’s trailing twelve month’s EBITDA through
September 30, 2007. Based on information presented to it by
management, the board of directors determined that this multiple
compared
favorably to the mean and median multiples paid during the 2004-2007
period in transactions involving gaming industry
facilities.
(v)
The
experience of our management in negotiating other transactions in
the
gaming industry (including our proposed acquisition of the Vicksburg
Facility) which provided first hand knowledge of the current market
for
properties such as those operated by
IC-BH.
Another
significant factor considered by the board of directors was our need for
liquidity. We currently have outstanding approximately $54,350,000 of long-term
debt that is scheduled to mature on September 30, 2008. We have negotiated
an
extension of the maturity date to June 30, 2010. That extension is
conditioned upon the completion of the sale of our ownership interest in IC-BH
and the application of not less than $38,800,000 of the proceeds therefrom
to
the partial payment of such outstanding long-term indebtedness. This extension
of the maturity date for the remaining balance of $15,550,000 of long-term
debt
was a material factor in the board of directors’ decision with respect to the
sale of our ownership interest in IC-BH.
The
proceeds from the sale of our ownership interest will allow us to pursue future
acquisitions such as the Vicksburg Facility acquisition.
Based
on
the above factors, the board of directors concluded that the purchase price
was
likely the highest price reasonably obtainable and that the transaction was
fair
to and in the best interests of our stockholders.
The
board of directors did not obtain or rely upon a
fairness opinion from an investment bank.
14
Use
of Proceeds
In
connection with the sale of our ownership interest in IC-BH, we intend to apply
the proceeds from the sale in the following manner:
Partial
Payment of Outstanding Long-Term Debt
$
38,800,000
Project
Fund (including the Vicksburg Facility acquisition)
$
13,000,000
Pay-Off
of Promissory Note to Louise H. Rogers
$
2,000,000
Taxes
$
9,800,000
Transaction
Fees and Expenses
$
1,000,000
TOTAL:
$
64,600,000
Stockholder
Support Agreement
Under
the
terms of the Unit Purchase Agreement, we were required to secure stockholder
support agreements from the two largest stockholders,Louise
H.
Rogers and Wynnefield Funds. They are beneficial holders of at least 17% of
the
outstanding shares of our common stock and have each agreed not to transfer
any
of their shares and to vote all of their shares of our common stock in favor
of
the sale of Blackhawk Gold’s beneficial interest in IC-BH, the Unit Purchase
Agreement and the transactions contemplated thereby. The stockholders also
agreed not to transfer their shares and to vote all of their shares of common
stock against any proposal that is made in opposition to or in competition
with
the consummation of the transactions contemplated by the Unit Purchase Agreement
or would impede, frustrate or prevent the sale of our ownership interest,
including but not limited to, any amendment to Nevada Gold & Casinos’
certificate of incorporation or any dissolution, liquidation or winding up
of
Nevada Gold & Casinos or Blackhawk Gold.
Pursuant
to the stockholder support agreement, the stockholders granted an irrevocable
proxy with an interest to Casino America, pursuant to which, in the case of
default by the stockholders under the stockholder support agreement, Casino
America is appointed as their agent, attorney-in-fact and proxy for all of
the
shares of Nevada Gold & Casinos owned by such stockholders. The stockholder
support agreement and the proxy, if applicable, will terminate upon (i) the
closing of the sale of Nevada Gold & Casinos ownership interest (as defined
in the Unit Purchase Agreement) or (ii) the end of the fifth day following
the
date of termination of the Unit Purchase Agreement in accordance with its terms.
Deposit
Amount
Pursuant
to the Unit Purchase Agreement, Casino America is required to pay a deposit
amount. Accordingly, on November 16, 2007, pursuant to Nevada Gold &
Casinos’ instructions, the deposit amount of $2,000,000 was paid directly to Ms.
Rogers as such amount was due to her under the November 13, 2007 promissory
note. See “Reasons for the Sale of our Ownership Interest” beginning on page 13
for a description of the promissory note. In the event that Casino America
is
entitled to a return of its deposit under the Unit Purchase Agreement, Blackhawk
Gold is required to pay such deposit within two business days after the date
on
which Casino America is entitled to receive such payment. If Blackhawk Gold
fails to pay back the deposit, Nevada Gold & Casinos and Blackhawk Gold
specifically authorizes and directs Casino America to cause IC-BH to withhold
any and all disbursements due to Blackhawk Gold.
15
Interests
of Certain Persons
One
of
our members of the board of directors, John Gallaway, who was appointed as
director in November 2005, served in the office of the chairman of Isle of
Capri
from 2003-2005 and as president and chief operating officer of Isle of Capri
from 1995 through 2003. Mr. Gallaway has no continuing interest, direct or
indirect, in Isle of Capri other than his ownership of less than 1% of its
outstanding publicly traded common stock. None of the other directors or any
officers or executive employees has any interest in Isle of Capri.
Regulatory
and Other Approvals
There
are
no material United States or state regulatory approvals required for the
completion of the sale of our ownership interest. The approval of the Unit
Purchase Agreement by our stockholders is being sought under the corporate
laws
of the state of Nevada because the sale of our ownership interest may be deemed
to represent substantially all of our assets under Nevada law.
Dissenter’s
Rights of Appraisal
Under
Nevada law, our stockholders are not entitled to appraisal rights in connection
with the asset sale.
Certain
United States Federal Income Tax Consequences
The
sale
of our ownership interest to Casino America pursuant to the Unit Purchase
Agreement will result in a realized taxable gain to Nevada Gold & Casinos
and its subsidiary Blackhawk Gold, with respect to which Nevada Gold and Casinos
and its subsidiary Blackhawk Gold may be required to pay federal income taxes.
This gain will be measured by the difference between the amount realized from
the sale and Blackhawk Gold’s tax basis in the ownership interest. In addition,
we will utilize net operating losses and other tax credits available to us
to
reduce any realized taxable gains. The amount realized by Blackhawk Gold will
include the cash received by it and any other consideration received by it
for
the sale of our ownership interest. The tax, if any payable, with respect to
any
realized gain will depend on numerous factors but is not expected to exceed
$10,500,000.
Nevada
Gold & Casinos (and its subsidiary Blackhawk Gold) also may be subject to
state income and transfer taxes, but Nevada Gold & Casinos does not
anticipate that such taxes, if any, will be significant.
Nevada
Gold & Casinos does not expect that the sale of our ownership interest will
result in any federal income tax consequences to our stockholders.
Accounting
Treatment of the Transaction
We
have
accounted for our 43% interest in IC-BH as an investment of an unconsolidated
affiliate. The contemplated transaction will be accounted for as a sale of
an
investment. The investment balance recorded on the financial records of our
company will be removed upon completion of the sale. Any proceeds received
in
excess of the investment balance and related transaction and closing costs
will
be accounted for as a gain. Appropriate federal, state and local taxes will
be
recorded.
16
THE
UNIT PURCHASE AGREEMENT
The
following is a summary of the material provisions of the Unit Purchase
Agreement. This summary does not purport to be complete and is qualified in
its
entirety by reference to the full text of the Unit Purchase Agreement, which
is
incorporated by reference in its entirety and attached as Appendix A to this
proxy statement. We urge you to read this proxy statement and the Unit Purchase
Agreement in their entirety. See “Where You Can Find More Information and
Incorporation by Reference” beginning on page 34.
General
Nevada
Gold & Casinos and its wholly-owned subsidiary, Blackhawk Gold, entered into
a Unit Purchase Agreement with Isle of Capri and its wholly-owned subsidiary,
Casino America, dated as of November 13, 2007, pursuant to which
Blackhawk Gold has agreed to sell all of its units in IC-BH, representing its
entire ownership interest in IC-BH to Casino America, subject to certain terms
and conditions, including approval by the holders of a majority of the
outstanding shares of Nevada Gold & Casinos’ common stock at the special
meeting. Nevada Gold & Casinos has unconditionally guaranteed all of the
obligations of Blackhawk Gold, and Isle of Capri has unconditionally guaranteed
all of the obligations of Casino America, under the Unit Purchase
Agreement.
The
closing of the sale of our ownership interest will occur the second business
day
after the conditions to closing set forth in the Unit Purchase Agreement have
been satisfied or waived, unless a different date is agreed upon by the
parties.
If
the
Unit Purchase Agreement is approved and adopted by an affirmative vote of a
majority of holders of our outstanding common stock and the sale of our
ownership interest to Casino America is completed, we intend to apply the net
proceeds of the sale to pay down our debt and to finance future transactions.
No
assurance can be given that we will be able to conclude any such future
transactions or that, if concluded, our investment in them will be
successful.
Ownership
of Interest to be Sold
The
units
in IC-BH to be sold represent Blackhawk Gold’s entire ownership interest in
IC-BH.
Purchase
Price
The
total
consideration to be paid to Blackhawk Gold for our ownership interest is
$64,600,000 in cash, including $2,000,000 which was paid to Ms. Rogers after
the
execution of the Unit Purchase Agreement. Upon Casino America’s option, a
portion of the purchase price will be paid at closing directly to Ms. Rogers
as
lender to remove her lien on Blackhawk Gold’s units in IC-BH.
17
Representations
and Warranties
The
Unit
Purchase Agreement contains representations and warranties made by Nevada Gold
& Casinos and Blackhawk Gold to Casino America. These include
representations and warranties relating to:
·
the
valid existence and good standing of each of Nevada Gold & Casinos and
Blackhawk Gold;
·
the
power and authority of Nevada Gold & Casinos and Blackhawk Gold to
enter into the Unit Purchase Agreement and carry out the transactions
contemplated in the Unit Purchase
Agreement;
·
the
approval by the board of directors of each of Nevada Gold & Casinos
and Blackhawk Gold of the Unit Purchase Agreement and deposit escrow
agreement;
·
the
determination by the board of directors of each of Nevada Gold &
Casinos and Blackhawk Gold that the terms of the transactions contemplated
by the Unit Purchase Agreement are fair to and in the best interests
of
their respective stockholder(s);
·
the
recommendation by the board of directors of each of Nevada Gold &
Casinos and Blackhawk Gold that their respective stockholder(s) approve
and adopt the Unit Purchase Agreement and the deposit escrow
agreement;
·
the
required approval and adoption of the Unit Purchase Agreement by
the
holders of a majority of the outstanding shares of Nevada Gold &
Casinos’ common stock;
·
the
approval and adoption of the Unit Purchase Agreement by the sole
stockholder of Blackhawk Gold;
·
the
capital structure and ownership of Blackhawk
Gold;
·
the
absence of undisclosed litigation;
·
the
absence of violations or conflicts with or breaches of or defaults
under,
and consents or approvals required under, organizational documents,
contracts or applicable law (other than as may be required by the
Colorado
Limited Gaming Authority and pursuant to municipal, local and state
laws
such as those regulating liquor sales) as a result of entering into
the
Unit Purchase Agreement and the consummation of the transactions
contemplated thereby;
·
the
absence of undisclosed broker’s or finder’s fees;
and
·
the
execution of the stockholder support agreements by beneficial holders
of
at least 17% of the outstanding shares of common stock of Nevada
Gold
& Casinos.
18
The
Unit
Purchase Agreement contains representations and warranties made by Isle of
Capri
and Casino America to Blackhawk Gold. These include representations and
warranties relating to:
·
the
due organization, valid existence and good standing of each of Isle
of
Capri and Casino America;
·
the
corporate power of each to enter into the Unit Purchase Agreement
and
carry out its obligations under the Unit Purchase
Agreement;
·
the
absence of violations or conflicts with or breaches of or defaults
under,
and consents or approvals required under, organizational documents,
contracts or applicable law (other than as may be required by the
Colorado
Limited Gaming Authority and pursuant to municipal, local and state
laws
such as those regulating liquor sales) as a result of entering into
the
Unit Purchase Agreement and the consummation of the transactions
contemplated thereby;
·
the
absence of Casino America and IC-BH having directly or indirectly
engaged
in any discussions with, or solicited or received any offer from,
any
person (other than Nevada Gold & Casinos, Blackhawk Gold and their
representatives) regarding a change in control transaction affecting
IC-BH
or Isle of Capri itself;
·
the
absence of undisclosed litigation;
and
·
the
absence of undisclosed broker’s or finder’s
fees.
Pre-Closing
Covenants; Conduct of Business Prior to Closing
The
Unit
Purchase Agreement contains certain mutual covenants of the parties, including
covenants relating to:
·
using
commercially reasonable efforts to cause the closing to occur, including
taking all commercially reasonable actions necessary to comply with
legal
requirements that may be imposed with respect to the closing and
to obtain
the necessary consents from, and filings with, governmental
authorities;
·
cooperating
with each other to obtain any necessary consents from governmental
authorities and promptly provide drafts to each other, allow reasonably
adequate time for comment by the other party and agree promptly to
the
contents of notifications, filings, submissions, further documentation
and
evidence to be submitted to all relevant governmental
authorities;
·
giving
written notice to the other party of any material adverse development
that
causes a breach of any such party’s representations and warranties
contained in the Unit Purchase Agreement; and
19
·
consulting
with each other with respect to public announcements concerning the
transactions contemplated by the Unit Purchase
Agreement.
The
Unit
Purchase Agreement also contains covenants requiring Nevada Gold & Casinos
to:
·
subject
to our board of directors’ fiduciary duty to our stockholders, recommend
approval of the matters submitted to our
stockholders;
·
enter
into good faith negotiations with the other parties for at least
20 days
to attempt to revise the terms of the Unit Purchase Agreement in
the event
that our stockholders fail to approve the Unit Purchase Agreement
at the
stockholders meeting;
·
take
all action necessary in accordance with applicable law and its
organizational documents to convene as promptly as practicable, but
in any
event no later than 35 days after the date on which this proxy statement
can be mailed to stockholders under applicable rules of the SEC,
a
stockholders meeting to obtain the required stockholder vote in favor
of
approving and adopting the Unit Purchase Agreement and the transactions
contemplated by the Unit Purchase
Agreement;
·
prepare
and file with the SEC this proxy statement and use commercially reasonable
efforts to cause the proxy statement to be mailed to its stockholders
as
promptly as practicable after the date of the Unit Purchase Agreement;
·
afford
Casino America the opportunity to review and comment on the proxy
statement prior to submission of such proxy statement to the SEC,
and
provide to Casino America copies of all correspondence between Nevada
Gold
& Casinos or Blackhawk Gold and the SEC relating to the proxy
statement and stockholders meeting;
and
·
not
permit Blackhawk Gold’s units to become subject to any lien, claim or
encumbrance (other than those in effect as of the date of the Unit
Purchase Agreement).
Exclusivity;
No Solicitation
Except
as
described below, during the period prior to closing, each of Nevada Gold &
Casinos and Blackhawk Gold and their affiliates will not (and each of Nevada
Gold & Casinos and Blackhawk Gold will not permit any of their respective or
any of their respective affiliates’ officers, directors, employees or any
investment banker, financial advisor, attorney, accountant or other agent or
representative retained by Nevada Gold & Casinos or Blackhawk Gold or any of
their respective affiliates to), directly or indirectly:
·
solicit,
encourage, initiate, engage in discussions or negotiate with any
person
(other than Casino America), or take any other action intended or
designed
to facilitate any inquiry or effort of any person (other than Casino
America), relating to any possible business combination with Nevada
Gold
& Casinos or Blackhawk Gold or any possible acquisition of Blackhawk
Gold, Blackhawk Gold’s units or Nevada Gold & Casinos or any material
portion of Blackhawk Gold’s or Nevada Gold & Casinos’ outstanding
capital stock or assets (with efforts by any such person, including
a firm
proposal to make such an acquisition, to be referred to as an “alternative
acquisition”);
20
·
provide
information to any person (other than Casino America) relating to
a
possible alternative acquisition by any person (other than Casino
America);
·
enter
into an agreement with any person (other than Casino America) providing
for a possible alternative acquisition;
or
·
make
or authorize any statement, recommendation or solicitation in support
of
any possible alternative acquisition by any person (other than Casino
America).
Notwithstanding
the foregoing limitations and subject to the stockholders meeting, the board
of
directors of Nevada Gold & Casinos may pursue an alternative proposal
relating to the sale of our ownership interest (“an alternative acquisition
proposal”) if the board of directors of Nevada Gold & Casinos, in response
to an unsolicited third party proposal that did not result from a breach of
the
Unit Purchase Agreement, determines, in good faith after consultation with
independent legal counsel and an independent financial advisor as necessary,
that such proposal is or is reasonably likely to result in a superior
proposal.
During
the term of the Unit Purchase Agreement, the board of directors of each of
Nevada Gold & Casinos or Blackhawk Gold will not withdraw or modify, or
propose to withdraw or modify, in a manner adverse to Casino America, the
approval or recommendation of the Unit Purchase Agreement or approve or cause
or
permit Nevada Gold & Casinos or Blackhawk Gold to enter into any letter of
intent, agreement in principle or similar agreement constituting an alternative
acquisition proposal. Notwithstanding the foregoing, the board of directors
of
Nevada Gold & Casinos may withdraw or modify its approval or recommendation
and recommend such superior proposal and enter into such letter of intent,
agreement in principle or similar agreement if prior to the date of the
stockholder approval, in response to an unsolicited third party proposal that
did not result from a breach of the Unit Purchase Agreement, the board of
directors determines in good faith after consultation with independent legal
counsel that it is necessary to approve and recommend such superior proposal
to
comply with its fiduciary obligations.
Tax
Matters
The
sale
of our ownership interest to Casino America pursuant to the Unit Purchase
Agreement will result in a taxable gain to Nevada Gold & Casinos and its
subsidiary Blackhawk Gold, with respect to which Nevada Gold and Casinos and
its
subsidiary Blackhawk Gold may be required to pay federal income taxes. This
gain
will be measured by the difference between the amount realized from the sale
and
Blackhawk Gold’s tax basis in the ownership interest. In addition, we will
utilize net operating losses and other tax credits available to us to reduce
any
realized taxable gains. The amount realized by Blackhawk Gold will include
the
cash received by it and any other consideration received by it for the sale
of
our ownership interest. The tax if any payable, with respect to any realized
gain will depend on numerous factors but is not expected to exceed
$10,500,000.
21
Nevada
Gold & Casinos (and its subsidiary Blackhawk Gold) also may be subject to
state income and transfer taxes, but Nevada Gold & Casinos does not
anticipate that such taxes, if any, will be significant. All transfer,
documentary, sales, use, stamp, registration and other such taxes, and all
conveyance fees, recording charges and other fees and charges incurred in
connection with the consummation of the transactions contemplated by the Unit
Purchase Agreement will be paid 50% by Blackhawk Gold and 50% by Casino America
when due and Blackhawk Gold will file all necessary tax returns and other
documentation for all such transfer taxes, the expenses, fees and charges of
the
filings to be paid 50% by Blackhawk Gold and 50% by Casino America.
Nevada
Gold & Casinos does not expect that the sale of our ownership interest will
result in any federal income tax consequences to our stockholders.
Indemnification
Pursuant
to the Unit Purchase Agreement, Nevada Gold & Casinos and Blackhawk Gold
agree to jointly and severally indemnify Isle of Capri and Casino America for
damages arising from:
·
any
breach of or any inaccuracy in the representations and warranties
made by
Nevada Gold & Casinos or Blackhawk Gold in the Unit Purchase Agreement
(as more fully described under “Representations and Warranties”);
and
·
any
breach of or failure by Nevada Gold & Casinos or Blackhawk to perform
any covenant or obligation set forth in the Unit Purchase Agreement.
Pursuant
to the Unit Purchase Agreement, Isle of Capri and Casino America agree to
jointly and severally indemnify Nevada Gold & Casinos and Blackhawk Gold for
damages arising from:
·
any
breach of or any inaccuracy in the representations and warranties
made by
Isle of Capri or Casino America in the Unit Purchase Agreement (as
more
fully described under “Representations and Warranties”);
·
any
breach of or failure by Isle of Capri or Casino America to perform
any
covenant or obligation set forth in the Unit Purchase Agreement;
and
·
any
failure on the part of IC-BH to file, or any inaccuracy in information
contained in, any state or federal income tax return or notification
of
IC-BH only to the extent that Blackhawk Gold would have been entitled
to
any tax distributions had such filing
occurred.
22
The
maximum liability of each party (in the aggregate) under the indemnifications
described above will be equal to the purchase price, except such limitation
to
liability will not apply to any breach of or inaccuracy in any representation
and warranty relating to title and authorization.
Conditions
to Closing
The
obligations of Blackhawk Gold to complete the sale of our ownership interest
are
subject to the satisfaction or waiver of the following conditions:
·
Compliance
with Agreements and Covenants.
Casino America must have performed and complied with, in all material
respects, all of its covenants and obligations under the Unit Purchase
Agreement required to be performed and complied with on or prior
to the
closing date.
·
Representations
and Warranties True.
Casino America’s representations and warranties must be accurate, true and
correct in all material respects on and as of the date of the Unit
Purchase Agreement, and must be accurate, true and correct in all
material
respects on and as of the closing date as though made by Casino America
on
and as of the closing date.
·
Stockholder
Approval.
Nevada Gold & Casinos must have obtained the affirmative vote of the
holders of a majority of the outstanding shares of its common stock
entitled to vote at the special meeting of
stockholders.
·
No
Court Order.
No court order or action or proceeding pending by any person is in
effect
which would enjoin, restrain or prohibit the Unit Purchase Agreement
or
the transactions contemplated thereby, or seek any material damages
or
payments from Blackhawk Gold as a result of the
consummation.
·
Regulatory
Approvals.
Blackhawk Gold must have obtained all necessary approvals or consents
required to be obtained from the Colorado Limited Gaming Authority
with
respect to the purchase and sale of Blackhawk Gold’s
units.
The
obligations of Casino America to complete the purchase of the units are subject
to the satisfaction or waiver of the following conditions:
·
Compliance
with Agreements and Covenants.
Nevada Gold & Casinos and Blackhawk Gold must have performed and
complied with, in all material respects, all of its covenants and
obligations under the Unit Purchase Agreement required to be performed
and
complied with on or prior to the closing
date.
·
Representations
and Warranties True.
The representations and warranties of Nevada Gold & Casinos and
Blackhawk Gold must be accurate, true and correct in all material
respects
on and as of the date of the Unit Purchase Agreement, and must
be
accurate, true and correct in all material respects on and as of
the
closing date as though made by Blackhawk Gold on and as of the
closing date.
23
·
No
Court Order.
No
court order or action or proceeding pending by any person is in effect
which would enjoin, restrain or prohibit the Unit Purchase Agreement
or
the transactions contemplated thereby, or seek any material damages
or
payments from Casino America or IC-BH as a result of the
consummation.
·
No
Material Adverse Change.
Since the date of the Unit Purchase Agreement, there must not have
occurred a material adverse change that could reasonably be expected
to
have an effect upon IC-BH (including its business, assets, operations,
results of operations or financial conditions), except for any event
directly attributable to or resulting from (a) changes in the industry
or
markets in which IC-BH operates that are not unique to IC-BH, in
each case
that do not have a disproportionate effect on IC-BH, (b) compliance
with the terms of the Unit Purchase Agreement, (c) changes in law
enacted
after the date of the Unit Purchase Agreement that do not have a
disproportionate effect on IC-BH and (d) the smoking ban to be effected
on
January 1, 2008 within the state of
Colorado.
·
Regulatory
Approvals.
Casino America must have obtained all necessary approvals or consents
required to be obtained from the Colorado Limited Gaming Authority
with
respect to the purchase and sale of Blackhawk Gold’s
units.
Termination
The
Unit
Purchase Agreement may be terminated at any time prior to the closing, as
follows:
·
(a) upon
the mutual agreement of Blackhawk Gold and Casino
America;
·
(b) by
either Blackhawk Gold or Casino America
if:
(i)
the
closing has not occurred on or before April 15, 2008 (the “outside date”),
provided that the outside date will be June 15, 2008 if the approval
or
consent of the Colorado Limited Gaming Control Commission is required
to
consummate the transactions contemplated by the Unit Purchase Agreement;
or
(ii)
after
the thirtieth day following the date of the stockholders meeting
of Nevada
Gold & Casinos, if the required stockholder vote has not been
obtained;
·
(c) by
Casino America upon written notice to Blackhawk Gold
if:
(i)
(A)
the conditions precedent have become incapable of being fulfilled
(and
have not been waived by Casino America) and (B) there has been a
breach by
or inaccuracy of Nevada Gold & Casinos or Blackhawk Gold of any
representation, warranty, covenant or agreement in the Unit Purchase
Agreement, and the breach or inaccuracy has not been cured (if curable)
within 15 days following receipt by Nevada Gold & Casinos or Blackhawk
Gold from Casino America of notice of such breach or inaccuracy;
or
24
(ii)
the
board of directors of Nevada Gold & Casinos or any of its committees
withdraws or modifies in a manner adverse to Casino America its approval
or recommendation of the Unit Purchase Agreement or fails to recommend
to
its stockholders that they give stockholder approval, or recommends
an
alternative acquisition proposal or the board of directors or any
of its
committees resolves to take any of the foregoing actions;
or
(iii)
the
board of directors of Nevada Gold & Casinos fails to reaffirm publicly
and unconditionally its recommendation to Nevada Gold & Casinos’
stockholders that they give stockholder approval within 10 business
days
of Casino America’s written request to do so (which request may be made
following public disclosure of an alternative acquisition proposal),
and
the public reaffirmation must include the unconditional rejection
of such
alternative acquisition proposal;
·
(d) by
Blackhawk Gold, upon written notice to Casino America,
if:
(i)
the
conditions precedent (other than obtaining stockholder approval)
have
become incapable of being fulfilled (and have not been waived by
Blackhawk
Gold) or there has been a breach by or inaccuracy of Casino America
of any
representation, warranty or covenant in the Unit Purchase Agreement,
and
the breach or inaccuracy has not been cured (if curable) within 15
days
following receipt by Casino America from Blackhawk Gold of notice
of such
breach or inaccuracy; or
(ii)
prior
to the date of stockholder approval (A) the board of directors of
Nevada
Gold & Casinos shall have recommended an alternative acquisition
approval, (B) on the same day as such notice, Nevada Gold & Casinos or
Blackhawk Gold enters into a definitive agreement for an alternative
acquisition proposal that is a superior proposal (as defined in the
Unit
Purchase Agreement), and (C) Nevada Gold & Casinos and Blackhawk Gold
have complied with each of its obligations set forth in the Unit
Purchase
Agreement in all respects; provided that Blackhawk Gold has no right
to
terminate the Unit Purchase Agreement pursuant to this paragraph
after
stockholder approval.
Termination
Fees and Expenses
If
the
Unit Purchase Agreement is terminated by Blackhawk Gold or Casino America as
provided above under the heading “Termination,” the Unit Purchase Agreement will
become void and have no effect, without liability or obligation on the part
of
Blackhawk Gold, Nevada Gold & Casinos or Casino America except that certain
provisions, including the provision relating to the effect of termination and
fees and expenses will survive, including the additional fee, and if the Unit
Purchase Agreement is terminated by a party due to breach or because one or
more
of the conditions to the terminating party’s obligations under the Unit Purchase
Agreement is not satisfied as a result of another party’s failure to comply with
its obligations under the Unit Purchase Agreement, the terminating party’s right
to pursue legal remedies shall survive such termination.
25
Nevada
Gold & Casinos or Blackhawk Gold has agreed to pay to Casino America a
termination fee of $700,000 if the Unit Purchase Agreement is terminated, except
pursuant to (a), (b)(i) (but only if the closing does not occur by the outside
date), (c)(i)(A) (but only if the conditions which have not been fulfilled
or
waived are those involving the absence of court orders or any material adverse
change described under the heading “Conditions to Closing”) or (d)(i), all of
which are described above under the heading “Termination.”
In
addition, Nevada Gold & Casinos or Blackhawk Gold has agreed to pay to
Casino America an additional fee of $1,100,000 if within 24 months of any
termination of the Unit Purchase Agreement Nevada Gold & Casinos or
Blackhawk Gold enters into a letter of intent or agreement in principle for
or
consummates an alternative acquisition.
Concurrently
with the payment of, and as a condition to receiving, a termination fee or
additional fee, Casino America will deliver to Nevada Gold & Casinos and
Blackhawk Gold a general release.
In
the
event that the termination fee or additional fee is or becomes payable pursuant
to the terms described above, Nevada Gold & Casinos or Blackhawk Gold has
agreed promptly but no later than 10 business days following written notice,
to
pay all reasonable fees and disbursements of counsel and expenses of litigation
incurred by Casino America in connection with the Unit Purchase
Agreement.
26
PRO
FORMA CONSOLIDATED BALANCE SHEET
AND
STATEMENTS OF OPERATIONS
The
unaudited pro forma consolidated balance sheet as of October 28, 2007 reflects
the financial position of Nevada Gold & Casinos after giving effect to the
disposition of our ownership interest in IC-BHand the receipt of net proceeds
as
if the disposition occurred on October 28, 2007.
The
unaudited pro forma consolidated statements of operations for the six
months ended October 28, 2007 and for the fiscal year ended April 29, 2007
have
been derived from the historical consolidated financial statements of Nevada
Gold & Casinos to give effect to the proposed sale of our ownership interest
in IC-BH to Casino America as if it had been consummated on
May 1, 2006.
The
pro
forma adjustments are described in the accompanying notes and are based upon
available information and various assumptions that management believes are
reasonable. These adjustments give effect to events directly attributable to
the
transaction.
The
accompanying unaudited pro forma consolidated
balance sheet and statements of operations
should
be read in conjunction with the historical and unaudited consolidated financial
statements and the related notes thereto of our company and IC-BH incorporated
by reference to this proxy statement. The unaudited pro forma are not
necessarily indicative of the operating results or financial position that
would
have occurred if the transaction had been consummated at the times indicated,
nor are they necessarily indicative of the future financial position and
the
results of operations of Nevada Gold & Casinos.
The
pro
forma adjustments footnoted in the unaudited pro forma consolidated balance
sheet are explained below:
(1)
Represents
the portion of the purchase price proceeds not required for the
payment of long-term debt, income taxes and the payment of a deposit
on
the acquisition of the Vicksburg Facility. Pursuant to an agreement
entered into with our principal creditor, restricted cash may only
be used
for acquisitions.
(2)
Represents
the book value of our interest in IC-BH which is being
sold.
Basic
weighted average number of shares outstanding
12,939,130
-
12,939,130
Diluted
weighted average number of shares outstanding
12,939,130
-
12,939,130
The
pro
forma adjustments footnoted in the unaudited pro forma statements of operations
are explained below:
(1)
Eliminates
the equity in income attributable to our interest in IC-BH for the
period.
(2)
Reflects
the pre-tax book gain recognized upon the sale of our ownership interest
in IC-BH.
(3)
Eliminates
interest paid on the $38,800,000 of long-term debt which is to
be paid
down at the closing of the sale, and we added estimated interest
earned on the investment of the balance of the sale proceeds (at
an
assumed interest rate of 4% a
year).
(4)
Reflects
federal and state income taxes due in respect of the gain recognized
upon
the sale of our ownership interest (at a projected income tax rate
of 34%
(federal) plus 3% (state)).
31
SECURITY
OWNERSHIP OF CERTAIN
BENEFICIAL
OWNERS AND MANAGEMENT
The
following table sets forth certain information known to us with respect to
beneficial ownership of our common stock as of December 10, 2007 by
(i) each of our executive officers, (ii) each of our directors,
(iii) each stockholder that we know is the beneficial owner of more than 5%
of our common stock, and (iv) all executive officers and directors as a
group. We have relied exclusively upon information provided to us by our
directors and executive officers and copies of documents sent to us that
have
been filed with the SEC by others for purposes of determining the amount
of
common stock each person beneficially owns. Beneficial ownership is determined
in accordance with the rules and regulations of the SEC and generally includes
those persons who have voting or investment power with respect to the
securities. Except as otherwise indicated, and subject to applicable community
property laws, the persons named in the table have sole voting and investment
power with respect to all shares of our common stock beneficially owned such
persons. Shares of our common stock subject to options or warrants that are
exercisable within 60 days of December 10, 2007 are also deemed outstanding
for
purposes of calculating the percentage ownership of that person, and if
applicable, the percentage ownership of executive officers and directors
as a
group, but are not treated as outstanding for the purpose of calculating
the
percentage ownership of any other person. Unless otherwise stated, the address
for each director, executive officer and stockholder listed in the table
below
is c/o Nevada Gold & Casinos, Inc., 50 Briar Hollow Lane, Suite 500W,
Houston, Texas77027.
All
current directors and executive officers as a group (12
persons)
1,528,601
(13)
11.8%
_________________
*
Less
than one percent
32
(1)
Includes
options to purchase 136,666 shares of common stock held by Mr.
Sturges.
(2)
Includes
options to purchase 100,000 shares of common stock.
(3)
Includes
options to purchase 36,000 shares of common stock.
(4)
Includes
options to purchase 40,000 shares of common stock.
(5)
Includes
options to purchase 83,334 shares of common stock.
(6)
Includes
options to purchase 70,000 shares of common stock.
(7)
Includes
options to purchase 13,000 shares of common stock.
(8)
Includes
options to purchase 30,000 shares of common stock.
(9)
Includes
(a) options to purchase 225,000 shares of common stock held by Mr.
Winn,
(b) 286,574 shares of common stock owned by Aaminex Capital Corporation
and (c) 30,933 shares of common stock owned by The H. Thomas Winn
Foundation. Mr. Winn is the president of The H. Thomas Winn Foundation
and
Aaminex Capital Corporation.
(10)
Includes
(a) options to purchase 70,000 shares of common stock held by Mr.
Jayroe
and (b) 14,000 shares of common stock owned by The Jayroe Foundation.
Mr.
Jayroe is the president of The Jayroe Foundation.
(11)
Includes
options to purchase 25,000 shares of common stock held by Mr.
Sherlock.
Includes:
(i) 307,300 shares of common stock held by Wynnefield Partners Small
Cap
Value, L.P. (“WPSCV”), (ii) 443,800 shares of common stock held by
Wynnefield Partners Small Cap Value, L.P. I (“WPSCVI”), (iii) 485,300
shares of common stock held by Wynnefield Small Cap Value Offshore
Fund,
Ltd. (“WSCVOF”), (iv) 40,000 shares of common stock held by Channel
Partnership II, L.P. (“CPII”), and (v) 9,200 shares of common stock held
by Profit Sharing and Money Purchase Plans, Inc. (the “Plan”).
Wynnefield Capital Management, LLC (“WCM”), a New York limited liability
company, is the general partner of WPSCV and WPSCVI, private investment
companies organized as limited partnerships under the laws of the
State of
Delaware. Wynnefield Capital, Inc. (“WCI”) is the sole investment manager
of WSCVOF. Nelson Obus and Joshua Landes are the managing members
of WCM
and the principal executive officers of WCI, the investment manager
of
WSCVOF, a private investment company organized under the laws of
the
Cayman Islands. Mr. Obus is also the general partner of CPII, a private
investment company organized as a limited partnership under the laws
of
the State of New York. The Plan is an employee profit sharing plan
organized under the laws of the State of Delaware. Mr. Obus has the
power
to direct the vote and the disposition of the Shares held by the
Plan. Mr.
Obus and Mr. Landes are citizens of the united States of America. The
mailing address of Mr. Obus is 450 Seventh Avenue, Suite 509,
New York, New York10123.
(13)
Includes
options to purchase 829,000 shares of common
stock.
33
WHERE
YOU CAN FIND MORE INFORMATION
AND
INCORPORATION BY REFERENCE
We
file
annual, quarterly and current reports, proxy statements and other information
with the SEC. You may read and copy any public offering document we file,
including a copy of this proxy statement. Additionally, the SEC maintains an
internet site that contains reports, proxies and information statements and
other information regarding electronic filers and these documents are available
to the public from the SEC's web site at http://www.sec.gov.
In
addition, our website is www.nevadagold.com.
The
SEC
allows us to "incorporate by reference" in this proxy statement the information
we file with the SEC. This means that we are disclosing important information
to
you by referring to other documents. The information incorporated by reference
is an important part of this proxy statement, and information that we file
later
with the SEC will automatically update and supersede this information.
We
incorporate by reference certain sections of the documents listed below (unless
the information is deemed furnished and not filed) and any future filings made
with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act
after the initial filing date of this proxy statement and before the date of
the
special meeting:
§
Financial
Statements of Nevada Gold & Casinos and IC-BH reported in Item 15 of
the Annual Report on Form 10-K for the fiscal year ended April 29,2007
(electronically filed as an exhibit to this proxy
statement);
§
Financial
Statements of Nevada Gold & Casinos and IC-BH reported in Item 1 of
the Quarterly Report on Form 10-Q for the quarter ended October28, 2007
(electronically filed as an exhibit to this proxy statement); and
§
Exhibits
filed to the Current Report on Form 8-K, filed on November 14,2007.
We
make
available, free of charge through our website (www.nevadagold.com),
our
annual reports on Form 10-K, quarterly reports on Form l0-Q, current reports
on
Form 8-K and amendments to those reports filed or furnished pursuant to Section
13(a) or 15(d) of the Securities Exchange Act of 1934, as soon as reasonably
practicable after such documents are electronically filed with or furnished
to
the SEC. These reports can be found under the “Investor Relations” section of
our website. We will provide to any stockholder without charge, upon the written
or oral request of that stockholder, a copy of any and all information of the
information incorporated by reference to this proxy statement. Such requests
should be addressed to Investor Relations, Nevada Gold & Casinos, Inc., 50
Briar Hollow Lane, Suite 500W, Houston, Texas77027.
Exhibits
to any documents incorporated by reference in this prospectus will not be sent,
unless those exhibits have been specifically referenced in this
prospectus.
STOCKHOLDERS
SHARING AN ADDRESS
Stockholders
sharing an address with another stockholder may receive only one set of proxy
materials at that address unless they have provided contrary instructions.
Any
such stockholder who wishes to receive a separate set of proxy materials now
or
in the future may write or call Nevada Gold & Casinos to request a separate
copy of these materials from: Investor Relations, Nevada Gold & Casinos,
Inc., 50 Briar Hollow Lane, Suite 500W, Houston, Texas77027.
34
Similarly,
stockholders sharing an address with another stockholder who have received
multiple copies of Nevada Gold & Casinos’ proxy materials may write or call
the above address and phone number to request delivery of a single copy of
these
materials.
If
you
would like to receive separate copies of Nevada Gold & Casinos’ proxy
statement or annual report in the future, or if you are receiving multiple
copies and would like to receive only one copy for your household, you should
contact your bank, broker, or other nominee record holder, or you may contact
Nevada Gold & Casinos at the address and telephone number set forth
above.
STOCKHOLDER
PROPOSALS
Under
the
rules of the SEC, if a stockholder wants us to include a proposal in our proxy
statement for presentation at the 2008 annual meeting, the proposal must be
submitted to us in writing and be received by us at our principal executive
offices at Nevada Gold & Casinos, Inc, 50 Briar Hollow Lane, Suite 500W,
Houston, Texas77027, Attention: Investor Relations, by April 28,2008.
Under
our
bylaws, and as permitted by the rules of the SEC, a stockholder must follow
certain procedures to nominate a person for election as a director or to
introduce an item of business at an annual meeting. These procedures provide
that a nomination or proposal to be considered at an annual meeting must
generally be submitted in writing to the corporate secretary so that it is
received no earlier than the close of business on the 120th day, and no later
than the close of business on the 90th day, before the first anniversary of
the
date of the prior year’s annual meeting of stockholders. Stockholders intending
to submit a proposal or nomination for next year’s annual meeting should review
our bylaws, which contain the deadlines and other requirements with respect
to
advance notice of stockholder proposals and director nominations. Stockholders
may obtain a copy of the bylaws from us upon request, or may access them
directly from our website, www.nevadagold.com.
OTHER
BUSINESS
The
board
of directors knows of no other matters that will be presented for consideration
at the special meeting. If any other matters are properly brought before the
special meeting or with respect to any matters incidental to the conduct of
the
special meeting, it is the intention of the persons named in the accompanying
proxy to vote on such matters in their discretion in accordance with their
best
judgment.
35
Appendix
A
A-1
Dates Referenced Herein and Documents Incorporated by Reference
