UNITED
STATES
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SECURITIES AND EXCHANGE COMMISSION
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Washington, D.C. 20549
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SCHEDULE 14A
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Proxy
Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
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Filed by the Registrant
x
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Filed by a Party other than the
Registrant
o
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Check the appropriate box:
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o
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Preliminary Proxy Statement
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o
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Confidential, for
Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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x
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Definitive Proxy Statement
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o
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Definitive Additional Materials
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o
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Soliciting Material Pursuant to
§240.14a-12
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SOUTHWEST
CASINO CORPORATION
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(Name
of Registrant as Specified In Its Charter)
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(Name
of Person(s) Filing Proxy Statement, if other than the Registrant)
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Payment of Filing Fee (Check the
appropriate box):
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x
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No fee required.
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o
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Fee computed on table below per
Exchange Act Rules 14a-6(i)(1) and 0-11.
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(1)
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Title of each class of securities to
which transaction applies:
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(2)
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Aggregate number of securities to
which transaction applies:
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(3)
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Per unit price or other underlying
value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth
the amount on which the filing fee is calculated and state how it was
determined):
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(4)
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Proposed maximum aggregate value of
transaction:
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(5)
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Total fee paid:
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o
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Fee paid previously with preliminary
materials.
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o
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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.
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(1)
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Amount Previously Paid:
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(2)
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Form, Schedule or Registration
Statement No.:
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(3)
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Filing Party:
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(4)
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Date Filed:
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SOUTHWEST CASINO CORPORATION
2001 Killebrew Drive, Suite 350
Minneapolis, MN 55425
Dear Shareholder:
You are cordially invited to
attend an Annual Meeting of Shareholders to be held on June 2, 2008, at
3:00 p.m., local time, at Running Aces Harness Park, which is located at
15201 Zurich Street, Columbus, Minnesota. The Annual Meeting will be held
on the main level of the Grandstand Building.
The formal Notice of Annual
Meeting, proxy statement and form of proxy are enclosed.
Whether or not you plan to
attend the meeting, please date, sign and return the enclosed proxy in the
envelope provided as soon as possible so that your vote will be recorded.
Very truly yours,
James B.
Druck
Director
and CEO
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Thomas E.
Fox
President
and COO
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Jeffrey
S. Halpern
Vice President of Government Affairs
and Secretary
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May 5, 2008
YOUR VOTE IS IMPORTANT
In many cases, your broker will not vote your proxy for
you, even on routine matters.
PLEASE MARK, SIGN, DATE AND MAIL THE ENCLOSED PROXY CARD
in the postage-paid envelope provided, regardless of
whether you plan to attend in person.
THE PROMPT RETURN OF YOUR PROXY CARD WILL SAVE SOUTHWEST
THE EXPENSE OF FURTHER REQUESTS FOR PROXIES TO ENSURE A QUORUM AT THE MEETING.
SOUTHWEST CASINO CORPORATION
2001 Killebrew Drive, Suite 350
Minneapolis, MN 55425
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE 2, 2008
TO THE SHAREHOLDERS OF
SOUTHWEST CASINO CORPORATION:
Notice is hereby given that
an Annual Meeting of Shareholders of Southwest Casino Corporation, a Nevada
corporation, will be held on Monday, June 2, 2008, at 3:00 p.m.,
local time, at Running Aces Harness Park, which is located at 15201 Zurich
Street, Columbus, Minnesota (the Annual Meeting will be held on the main level
of the Grandstand Building), for the following purposes:
1.
To elect five directors to serve until our
next annual meeting of shareholders or until their respective successors are
elected and qualified.
2.
To ratify the selection of Eide Bailly LLP as
our independent public registered accounting firm for the fiscal year ending December 31,
2008.
4.
To
transact any other business that properly comes before the meeting or any
adjournment of the meeting.
The close of business on April 25,
2008 has been fixed as the record date for the determination of shareholders
who are entitled to vote at the meeting or any adjournment of the meeting.
A list of shareholders
entitled to vote at the Annual Meeting will be open for examination by any
shareholder for any purpose germane to the Annual Meeting during ordinary
business hours from April 25, 2008 through June 2, 2008, at our
principal executive offices located at 2001 Killebrew Drive, Suite 350,
Minneapolis, Minnesota.
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By Order of the Board of
Directors
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James B.
Druck
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Director
and Chief Executive Officer
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May 5, 2008
Minneapolis, Minnesota
SOUTHWEST CASINO CORPORATION
2001 Killebrew Drive, Suite 350
Minneapolis, MN 55425
PROXY STATEMENT FOR
ANNUAL MEETING OF SHAREHOLDERS
JUNE 2, 2008
INFORMATION CONCERNING THE ANNUAL MEETING
Date, Time,
Place and Purposes
The Annual Meeting of
Shareholders of Southwest Casino Corporation will be held on Monday, June 2,
2008 at 3:00 p.m., local time, at Running Aces Harness Park, 15201 Zurich
Street, Columbus, Minnesota for the purposes stated in the Notice of Annual
Meeting. Our corporate headquarters are
located at 2001 Killebrew Drive, Suite 350, Minneapolis, MN 55425.
Shareholders
Entitled to Vote
Shareholders of record at
the close of business on April 25, 2008 will be entitled to vote at the
meeting. As of that date, there were 27,460,953 shares of our common
stock outstanding and entitled to vote. Each share of our common stock is
entitled to one vote on each matter to be voted on at the Annual Meeting.
Shareholders are not entitled to cumulate voting rights.
Proxies
We are mailing this proxy
statement to our shareholders beginning on or about May 5, 2008 in
connection with the solicitation of proxies by the Board of Directors for use
at the Annual Meeting of Shareholders.
Your vote is
important. A proxy card is enclosed for your use.
You are solicited on behalf of the Board of Directors
to mark, sign, date and return the proxy card in the accompanying
envelope.
No postage is required if mailed within the United
States.
Proxies will be voted as
specified by you. Signed proxies that lack any specification will be
voted in favor of the election of all of the nominees for director listed and
in favor of the ratification of the selection of Eide Bailly LLP as our
registered public accounting firm, as stated in the Notice of Annual Meeting
and this proxy statement.
The Board of Directors recommends that you vote:
·
FOR all of the nominees for director listed in this
proxy statement, and
·
FOR the ratification of the selection of Eide Bailly
LLP as our independent registered public accounting firm for the year ended December 31,
2008.
Revocation of Proxies
Any shareholder giving a
proxy may revoke it at any time prior to its use at the Annual Meeting by:
·
giving
written notice of your revocation to our Corporate Secretary,
·
filing
a duly executed proxy bearing a later date with our Corporate Secretary, or
·
appearing
at the Annual Meeting and filing written notice of revocation with our
Corporate Secretary before the proxy is used.
Quorum
Requirement
The presence at the Annual
Meeting, in person or by proxy, of the holders of one-half of the outstanding
shares of our common stock (13,730,476 shares) as of the record date will
constitute a quorum for the transaction of business at the Annual
Meeting. In general, shares of our common stock represented by a properly
signed and returned proxy card will be counted as shares present and entitled
to vote at the Annual Meeting for purposes of determining a quorum, without
regard to whether the card reflects abstentions (or is left blank) or reflects
a broker non-vote on a
1
matter. A broker non-vote
is a card returned by a broker on behalf of its beneficial owner customer that
is not voted on a particular matter because voting instructions have not been
received by the broker from the customer, and the broker has no discretionary
authority to vote on behalf of such customer on such matter.
Vote
Required
Assuming a quorum is
represented at the Annual Meeting, either in person or by proxy:
·
the election of the five nominees for
director requires the affirmative vote of a plurality of the shares of common
stock, present in person or by proxy and entitled to vote, at the Annual
Meeting;
·
the ratification of the selection of our
independent registered public accounting firm requires the affirmative vote of
a majority of the shares of common stock, present in person or by proxy and
entitled to vote, at the Annual Meeting.
Broker non-votes represented
by a proxy card on a matter will be treated as shares not entitled to vote on
that matter, and thus will not be counted in determining whether that matter
has been approved. Shares represented by a proxy card voted as abstaining
on any of the proposals will be treated as shares present and entitled to vote
that were not cast in favor of a particular matter, and thus will be counted as
votes against that matter.
Signed proxies that lack any
specification will be voted in favor of all of the proposals stated in the
Notice of Annual Meeting and in favor of the election of all of the five
nominees for directors listed in this proxy statement.
Proxy Solicitation
Costs
The cost of soliciting
proxies, including the preparation, assembly and mailing of proxies and
soliciting material, as well as the cost of forwarding this material to the
beneficial owners of our common stock will be paid by Southwest. Our
directors, officers and regular employees may, without compensation other than
their regular compensation, solicit proxies by telephone, facsimile, telegraph
or personal conversation. We may reimburse brokerage firms and others for
expenses in forwarding proxy materials to the beneficial owners of our common
stock.
Procedures
at the Annual Meeting
The presiding officer at the
Annual Meeting will determine how business at the meeting will be
conducted. Only a natural person present at the Annual Meeting who is
either a Southwest shareholder or is acting on behalf of a shareholder may make
a motion or second a motion. A person acting on behalf of a shareholder
must present a written statement executed by the shareholder or the duly
authorized representative of the shareholder on whose behalf the person
purports to act.
Householding
of Annual Meeting Materials
Some banks, brokers and
other nominee record holders may household proxy statements and annual
reports. This means that only one copy of Southwests proxy statement or
annual report to shareholders may have been sent to multiple shareholders in a
household. Southwest will promptly deliver a separate copy of either
document to any shareholder upon written or oral request to Southwest Casino Corporation,
2001 Killebrew Drive, Suite 350, Minneapolis, MN 55425, telephone:
(952) 853-9990 (Attention: General Counsel). Any shareholder who
wants to receive separate copies of Southwests proxy statement or annual
report to shareholders in the future, or any shareholder who is receiving
multiple copies and would like to receive only one copy per household, should
contact the shareholders bank, broker, or other nominee record holder, or the
shareholder may contact Southwest at the above address and phone number.
2
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The following table states
the information known to us with respect to the beneficial ownership of our
common stock as of April 25, 2008 for (1) each person known by us to
beneficially own more than 5% of our common stock, (2) each of our
executive officers, (3) each of our directors, and (4) all of our
executive officers and directors as a group.
Shares are deemed beneficially
owned by a person if that person, directly or indirectly, has sole or shared
power to vote or to direct the voting of those shares or sole or shared power
to dispose or direct the disposition of those shares. We believe that each of the beneficial owners
of our capital stock listed below, based on information provided by these
owners, has sole dispositive and voting power with respect to its shares,
subject to community property laws where applicable, except as descried in the
notes below. Shares not outstanding but
deemed beneficially owned by virtue of the right of a person or member of a
group to acquire them within 60 days are treated as outstanding only when
determining the amount and percent owned by that person or group.
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Common Stock
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Name and Address
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Number
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Percent
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James B. Druck (1)
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2,259,825
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(2)
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8.0
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%
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David H. Abramson (3)
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273,250
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(4)
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1.0
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%
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Gus A. Chafoulias (5)
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962,186
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(6)
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3.4
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%
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Jim Holmes (1)
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137,500
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(7)
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*
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Gregg P. Schatzman (1)
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137,500
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(7)
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*
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Thomas E. Fox (1)
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2,683,870
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(8)
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9.5
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%
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Jeffrey S. Halpern (1)
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2,331,105
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(9)
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8.3
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%
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Brian L. Foster (1)
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250,000
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(10)
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*
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Tracie L. Wilson (1)
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91,929
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(11)
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*
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All executive officers and directors as a
group (9 persons)
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9,127,165
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(12)
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29.4
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%
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* Less than 1 percent
(1)
Address: 2001 Killebrew Drive, Suite 350, Minneapolis, MN 55425
(2)
Includes (i) 100,000 shares held by Mr. Drucks wife, (ii) 353,125
shares of common stock issuable upon exercise of options, and (iii) 327,200
shares issuable upon exercise of warrants.
(3)
Address: Parkdale Plaza, 1660 S. Highway 100, Suite 500,
Minneapolis, MN 55416.
(4)
Includes 206,250 shares issuable upon exercise of stock options and
12,000 shares issuable upon exercise of a warrant.
(5)
Address: 121 23rd Avenue SW, Rochester, MN 55902.
(6)
Includes 137,500 shares issuable upon exercise of stock options and
522,728 shares issuable upon exercise of warrants.
(7)
Consists of 137,500 shares issuable upon exercise of stock options.
(8)
Includes: (i) 159,152 shares held by F&B Properties, a
partnership in which Mr. Fox is a 50% general partner; (ii) 181,819
shares held by BFL General Partnership, a partnership in which Mr. Fox is
a general partner, (iii) 353,125 shares issuable upon exercise of stock
options; (iv) 300,000 shares issuable upon exercise of warrants; (v) 54,546
shares issuable upon exercise of a warrant held by F&B Properties; and (vi) 72,728
shares issuable upon exercise of a warrant held by BFL General
Partnership. Does not include 381,819
shares and warrants to purchase 152,728 shares held by Richfield Hotel
Associates Limited Partnership (RHALP).
Mr. Fox is general partner of a partnership that is a limited
partner of RHALP and does not have or share investment control over RHALP and
disclaims any beneficial ownership interest in these shares.
(9)
Includes:
(i) 40,000 shares held by Mr. Halperns wife; (ii) 353,125
shares issuable upon exercise of stock options; and (iii) 327,280 shares
issuable upon exercise of warrants.
(10)
Consists of 250,000 shares issuable upon exercise of a stock option.
(11)
Consists of 91,929 shares issuable upon exercise of stock options.
(12)
Includes: (i) an aggregate of 2,020,054 shares issuable upon
exercise of options; (ii) 1,616,482 shares issuable upon exercise of
warrants; (iii) 340,971 shares held by partnerships in which an executive
officer is a general partner; and (iv) 140,000 shares held by spouses of
executive officers.
3
ELECTION OF DIRECTORS
(Proposal 1)
Number of Directors
The Board of Directors has
fixed the number of directors at five.
Nominees for Director
The Board of Directors has
nominated the following individuals to serve as our directors until the next
annual meeting of our shareholders or until their successors are elected and
qualified. All of the nominees named below are current members of the
Board and have consented to serve as a director if elected.
·
James B. Druck
·
David H. Abramson
·
Gus A. Chafoulias
·
Jim Holmes
·
Gregg P. Schatzman
Proxies can be voted only
for the number of persons named as nominees in this proxy statement, which is
five.
Vote Required
Assuming a quorum is
represented at the Annual Meeting, either in person or by proxy, the election
of a nominee for director requires the affirmative vote of a plurality of the
shares of common stock represented in person or by proxy at the Annual Meeting.
Board Recommendation
The Board of Directors recommends a vote FOR the election of
all of the nominees named above.
If the Board of Directors
learns before the Annual Meeting that any nominee will be unable to serve for
any reason, the proxies that otherwise would have been voted for that nominee
will be voted for a substitute nominee selected by the Board of Directors or,
at the Boards discretion, for fewer nominees as a result of the inability of
any nominee to serve. The Board of Directors has no reason to believe
that any of the nominees will be unable to serve.
Information
About Board Nominees
The names, ages and
principal occupations of the nominees as of April 25, 2008, as well as how
long each nominee has served as a director of Southwest, are stated in the
table below:
Name of Nominee
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Independent
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Age
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Principal Occupation
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Director
Since
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Committees
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James B. Druck
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No
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66
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Chief Executive Officer,
Southwest Casino Corporation
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2004
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*
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David H. Abramson
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Yes
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66
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Chairman and CEO, David
Abramson & Associates, LLC
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2005
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Audit (Chair);
Governance & Nominating
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Gus A. Chafoulias
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Yes
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72
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Chairman, Chafoulias
Management
Company
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2005
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Compensation; Governance &
Nominating (Chair)
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Jim Holmes
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Yes
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65
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President, Jim Holmes and
Company
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2005
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Audit; Compensation
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Gregg P. Schatzman
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Yes
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54
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Managing Director,
Schatzman &
Associates, LLC
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2005
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Audit;
Compensation (Chair)
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*
Because Mr. Druck is our CEO, he does not qualify as an
independent member of our Board of Directors under Nasdaq rules and thus
is not eligible for service on any of the standing committees of our Board.
4
Other Information About Board Nominees
James B.
Druck
joined the
Board of Directors and was appointed as our Chief Executive Officer and
Secretary on July 22, 2004 in connection with the closing of a
reorganization in which Southwest Casino and Hotel Corp. became a wholly-owned
subsidiary of Southwest Casino Corporation (formerly Lone Moose
Adventures). Mr. Druck has been a director of Southwest Casino and
Hotel Corp. since its inception in 1992. He served as President of
Southwest Casino and Hotel Corp. from October 1992 until June 2004,
and now is also the Chief Executive Officer of Southwest Casino and Hotel
Corp. From 1967 until April 1993 Mr. Druck was an attorney in
private practice in Minneapolis, Minnesota. His practice focused
primarily in the areas of real estate development and finance.
David H.
Abramson.
David
Abramson joined the Southwest Board of Directors on December 7, 2005 and
was elected to chair its Audit Committee on January 10, 2006. He is
also a member of the Boards Nominating Committee. Mr. Abramson is the
Chairman and CEO of David Abramson & Associates, LLC, a retained
executive search and leadership development firm he founded in January 2002.
Immediately before founding David Abramson & Associates, he was a
Senior Vice President of AXA Financial/Equitable Life Insurance and the
Chairman and CEO of Grant Thornton Advisors, a joint venture of AXA
Financial/Equitable Life Insurance and Grant Thornton, LLP, from January to
December 2001. Before this, Mr. Abramson had an extensive
career at Grant Thornton, certified public accountants, beginning in 1967
during which he was a member of the National Leadership and Senior Management
Team and the Managing Partner of and an audit partner in the Minneapolis
office. Among many board memberships, Mr. Abramson has been the
Chairman of Board of Directors of the Minneapolis Chamber of Commerce,
President and Board member of the Minnesota Society of Certified Public
Accountants, Chairman and board member of the Minnesota Cooperation Office for
Job Creation, and a member of the Governing Council of the American Institute
of CPAs. Mr. Abramson holds a B.S. in Accounting from the Carlson
School of Management and an MBA from the University of Michigan.
Gus A.
Chafoulias.
Gus Chafoulias joined Southwests Board of Directors on December 7, 2005
and was elected chair of its Nominating Committee on February 1,
2006. He is also a member of the Boards Compensation Committee. Mr. Chafoulias
is Chairman of the Board of Chafoulias Management Company, where he has worked
since 1987. Mr. Chafoulias has developed more than 3 million square
feet of apartments and commercial space during more than 40 years in the
development business. One of Mr. Chafoulias liquor stores, which Mr. Chafoulias
has owned and operated since 1957, has been voted a top ten liquor retailer in
the United States. Mr. Chafoulias is also a Leadership 100 board
member and Blue Cross Blue Shield Champions of Health award winner. He
has served on numerous boards of directors including the Rochester (MN) Chamber
of Commerce, Diversity Council, U.S. Bank, Medvision, and Comfortex, Inc.
In addition to serving on our Board, Mr. Chafoulias is the Chairman of
Kardia Health Systems.
Jim
Holmes.
Jim Holmes
was elected a Director of Southwest on December 7, 2005 and serves on the
Boards Audit Committee and Compensation Committee. Mr. Holmes is a
1965 graduate of West Points U.S. Military Academy and has a masters degree
in law enforcement administration from Central Missouri State University.
Mr. Holmes has significant experience on both the regulatory and business
sides of the gaming industry and is a licensed private investigator in
Nevada. Since 1991, Mr. Holmes has been President of Jim Holmes and
Company and, beginning in 1987, has acted as a national and international
gaming consultant for lottery operations, bingo projects, casinos and Indian
gaming, specializing in start-up operations and risk analysis. In
addition, from March 2005 to October 2005 Mr. Holmes was an
Executive Vice President for Cadillac Jack, Inc., a slot machine
manufacturer, and from February 2001 to January 2004, Mr. Holmes
was President of API Technologies, LLC. From January 2000 to January 2001,
Mr. Holmes was Executive Vice President of Sierra Design Group. In
1985, Mr. Holmes was appointed by then Governor Ashcroft as the first
Executive Director of the Missouri Lottery. Before working to establish
the Missouri Lottery, he spent 15 years with the FBI in Missouri as both a
Special Agent and Supervisor.
Gregg P.
Schatzman.
Gregg Schatzman joined Southwests Board of Directors on December 7,
2005. He also serves on the Boards Audit Committee and Compensation
Committee, which he chairs. Mr. Schatzman has in-depth experience as
both a regulator and an operator in the gaming industry. Mr. Schatzman
has been the Managing Director of Schatzman & Associates, LLC, which
provides consulting services to gaming companies and law firms regarding casino
operations and regulatory issues, since January 2003. Mr. Schatzmans
16 years in casino operations includes work as Chief Operating Officer of VSS
Enterprises, Executive Vice President of Primadonna Resorts, Inc.; Vice
President and General Manager for
5
Ameristar Casinos; Vice
President and General Manager for Gem Gaming; and work with Trump
casinos. Before joining the business side of the gaming industry, Mr. Schatzman
spent 10 years as a gaming regulator with the Nevada Gaming Control Board,
rising from Financial Investigator to Chief of Investigations. As Chief
of Investigations, Mr. Schatzman supervised the Investigations and
Corporate Securities Divisions of the Gaming Control Board.
Board and Annual Meeting Attendance
During 2007, our board of
directors held 4 regular and 10 special meetings. All of our directors attended
the regular meetings of the Board in person.
All of our directors also attended the special meetings of the Board,
either in person or by teleconference, except that Mr. Chafoulias and Mr. Schatzman
were each unable to participate in one telephonic Board meeting. We strongly
encourage directors to attend our annual meeting of Shareholders. Each of our
directors attended the 2007 Annual Meeting of Shareholders.
Director Compensation
The following table
states information concerning the compensation of members of our Board of
Directors during the fiscal year ended December 31, 2007.
Name
|
|
Fees
earned or
paid in
cash
|
|
Stock
Awards
|
|
Option
Awards
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|
Non-equity
incentive
plan
compensation
|
|
Non-qualified
deferred
compensation
earnings
|
|
All other
compensation
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Total
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David H. Abramson (1)
|
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$
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14,500
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
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$
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14,500
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Gus A. Chafoulias (2)
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14,000
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|
|
|
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14,000
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Jim Holmes (2)
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14,500
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|
|
|
|
|
|
|
|
|
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14,500
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Gregg P. Schatzman (2)
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14,000
|
|
|
|
|
|
|
|
|
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14,000
|
|
|
|
|
|
|
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(1)
As of December 31, 2007, Mr. Abramson
had options to acquire an aggregate of 225,000 shares of common stock at a
price of $0.65 per share outstanding that had been awarded to him in connection
with his service as a director. Does not
include additional options to purchase 225,000 shares of common stock at a
price of $0.48 per share awarded to Mr. Abramson on March 20, 2008.
(2)
As of December 31, 2007, Messrs. Chafoulias,
Holmes and Schatzman each had options to acquire an aggregate of 150,000 shares
of common stock at a price of $0.65 per share outstanding that had been awarded
to them in connection with their service as directors. Does not include additional options to
purchase 150,000 shares of common stock awarded to Messrs. Chafoulias,
Holmes and Schatzman on March 20, 2008.
James Druck, our CEO,
also serves as a director and does not receive any additional compensation for
that service.
Beginning in the first
quarter of 2006, the non-employee members of our Board of Directors receive a
quarterly retainer of $2,500, with an initial retainer of $5,000 paid for the
fourth quarter of 2005, their first quarter of service. Each director also
received a non-qualified option to purchase 150,000 shares of Southwest common
stock under our 2004 Stock Incentive Plan. These options were granted on January 10,
2006 and have an exercise price of $0.65 per share. We issued an additional
non-qualified option to purchase 75,000 shares of our common stock, on the same
terms, to David Abramson to compensate him for his work as Chairman of our
Audit Committee. The options become
exercisable in 12 equal quarterly installments on the grant date and the last
day of each quarter over three years. Southwest also pays directors meeting
fees of $1,000 for each in-person meeting and $500 for each telephonic meeting
at which formal action is taken by our board or any committee of the board.
These meeting fees do not apply to one in-person meeting of the Board of
Directors and one meeting of each committee on which a board member serves each
quarter. The increased retainer during the first quarter of a directors
service is intended to compensate the director for the extra time and meetings
required to orient a director to Southwest and the work of our Board.
On March 20, 2008,
we issued an additional option to purchase 150,000 shares of our common stock
to each of the independent members of our Board of Directors in consideration
of their continued service on our Board.
These shares will also become exercisable in 12 equal quarterly
installments beginning on the last day of the fourth quarter of 2008, which is
the first quarter after the options granted to them in January 2006
becomes fully exercisable. The exercise
price of these options is $0.48 per share.
We issued an additional non-qualified option to purchase 75,000 shares
of our common stock on the same terms to David Abramson on March 20, 2008
to compensate him for his continued work as Chairman of the Audit Committee of
our Board.
6
Family Relationships
No family relationships
exist among our directors and executive officers.
Legal
Proceedings
To the knowledge of our
management, except as disclosed below, during the past five years, no present
director, person nominated to become a director, executive officer, promoter or
control person of our company:
·
Was a general partner or executive officer of
any business by or against which any bankruptcy petition was filed, whether at
the time of such filing or two years prior the filing;
·
Was convicted in a criminal proceeding or
named the subject of a pending criminal proceeding (excluding traffic
violations and other minor offenses);
·
Was subject to any order, judgment or decree,
not subsequently reversed, suspended or vacated, of any court of competent
jurisdiction, permanently or temporarily enjoining, barring, suspending or
otherwise limiting his or her involvement in any type of business, securities
or banking activities; or
·
Was found by a court of competent
jurisdiction in a civil action, or by the Securities and Exchange Commission or
the Commodity Futures Trading Commission, to have violated federal or state
securities or commodities law, and the judgment has not been subsequently
reversed, suspended, or vacated.
Prior
Bankruptcy Proceeding of Subsidiary
James B. Druck, Jeffrey S.
Halpern and Thomas E. Fox are Managers of Gold Rush I, LLC, a Colorado limited
liability company and a wholly-owned subsidiary of Southwest Casino and Hotel
Corp. In August 2001, Cripple Creek
Development Corp., a Colorado corporation, Blue Building Development, Inc.,
a Wyoming corporation, Mark Brockley, an individual, and Annesse Brockley, an
individual, initiated a lawsuit against Gold Rush I, LLC, and Southwest Casino
and Hotel Corp. in District Court, Teller County, Colorado. The plaintiffs alleged that the defendants
failed to pay certain obligations to the plaintiffs under the terms of their
lease agreement and breach of contract.
The lease included a provision that capped the maximum monthly amount
required to be paid to Mr. Brockleys creditors. In the early years of the operation, Mr. Brockleys
obligations to creditors far exceeded this cap and Southwest paid these
obligations as they came due. Under the
lease, Southwest set off against current rent the amount of the excess
payments. In the lawsuit, Mr. Brockley
sought to evict Gold Rush I from the premises for failing to pay amounts
claimed to be owed under the Lease. Gold
Rush I responded by denying any failure to pay.
Before an evidentiary
hearing in this lawsuit was completed, Gold Rush I filed a voluntary petition
for reorganization under Chapter 11 of the United States Bankruptcy Code in the
Bankruptcy Court for the District of Minnesota (Case No. 01-33755) to
ensure that we did not lose possession of the premises while the underlying
claims were litigated. On October 15,
2001, the Colorado District Court entered an Order in which it found (a) that
Gold Rush I was not in default under the lease, (b) that Gold Rush I had
made payments in excess of the monthly caps provided in the lease (which
overpayments the court subsequently quantified at $554,362.09), and (c) that
Gold Rush I was entitled to offset the overpayments against rent and other
payments due under the terms of the lease.
Mr. Brockley appealed the Colorado District Courts Order to the
Colorado Court of Appeals, which dismissed the appeal on May 21,
2002. After successfully defending the
lawsuit brought by its landlord, Gold Rush I emerged from bankruptcy on January 10,
2003, when the Bankruptcy Court confirmed its reorganization plan, which
provided for full payment to all creditors, with interest.
Colorado
Regulatory Proceeding
Southwest Casino and Hotel
Corp. was fined $50,000 by the Colorado Division of Gaming in June 2004
for failure to properly maintain and review statistical data on slot machine
performance after receiving a warning letter regarding this deficiency and
failing to comply with its agreement to correct the deficiency. Southwest
Casino and Hotel Corp. paid the full amount of the fine. As part of these
proceedings, James Druck, in his capacity as manager of the facility in
question, without any admission of guilt, agreed to take the necessary steps to
ensure Southwest Casino and Hotel Corp.s compliance in this matter and,
further, agreed to pay $5,000 to the Limited Gaming Fund to reimburse expenses
incurred by Colorado in this investigation.
7
Information
about the Board of Directors and its Committees
Audit
Committee
On January 10, 2006,
the Board of Directors established an Audit Committee and elected David
Abramson, Jim Holmes and Gregg Schatzman to serve on that committee. All
of the members of the Audit Committee qualify as independent under Nasdaq
rules. The Board elected Mr. Abramson to serve as the Chairman of
its Audit Committee. The Board of Directors has determined that Mr. Abramson
qualifies as an audit committee financial expert under SEC rules. On February 14, 2006, the Board of
Directors adopted a written charter for its Audit Committee and a copy of the
charter is attached to this Proxy Statement as Appendix A.
The Audit Committee is
responsible for engaging, retaining and replacing Southwests independent
registered public accounting firm, approving transactions between Southwest and
a director or executive officer, approving non-audit services provided to
Southwest by our independent registered public accounting firm, overseeing our
accounting, financial reporting, and disclosure controls and internal controls,
and receiving and addressing complaints regarding accounting, internal controls
and auditing matters. Our independent registered public accounting firm
reports directly to the Audit Committee.
Compensation
Committee
On February 1, 2006,
the Board established its Compensation Committee and appointed Gregg Schatzman,
Gus Chafoulias and Jim Holmes to serve on the committee. Mr. Schatzman
was appointed Chairman of the Compensation Committee. The Board of
Directors adopted a written charter for the Compensation Committee on April 26,
2006 and a copy of that charter is attached to this Proxy Statement as Appendix
B. All of the members of the Compensation Committee qualify as independent
directors under Nasdaq rules. The Compensation Committee oversees
Southwests overall compensation strategy and reviews and recommends to the
Board of Directors the compensation for our CEO and other executive
officers. The Compensation Committee also administers our 2004 Stock
Incentive Plan.
Governance
and Nominating Committee
On February 1, 2006,
the Board of Directors formed a Nominating Committee and selected Gus
Chafoulias and David Abramson, each independent members of the Board under
Nasdaq rules, to serve on that committee. On November 5, 2007 the Board
broadened the Nominating Committees responsibilities and renamed it the
Governance and Nominating Committee. The Board appointed Mr. Chafoulias as
Chairman of the committee and adopted a written charter that is attached to
this Proxy Statement as Appendix C. The Governance and Nominating
Committee has not established formal procedures for director nominations, but
may choose to do so in the future.
The Governance and
Nominating Committee will solicit recommendations for nominees from people the
committee believes are likely to be familiar with qualified candidates. These
people may include directors and executives of Southwest. The committee may
also engage a search firm to assist it in identifying qualified
candidates. The committee will evaluate each candidate it believes merits
serious consideration, taking into account available information, the
composition of the Board, and other relevant factors. In conducting its
evaluation, the committee may consult with Southwests management, other Board
members, and other individuals it believes may have insight into a
candidate. The committee will also consider recommendations for the
nomination of directors submitted by shareholders. Any shareholder
seeking to recommend a director nominee must submit a letter addressed to the
Chairman of the Governance and Nominating Committee, c/o Corporate Secretary,
Southwest Casino Corporation, 2001 Killebrew Drive Suite 350, Minneapolis,
Minnesota 55425, clearly identified as Director Nominee Recommendation.
There are no formal
requirements or minimum qualifications that a candidate must meet in order for
the Governance and Nominating Committee to recommend a candidate to the Board.
The committee believes that each nominee should be evaluated based on his or
her individual merits, taking into account the needs of Southwest and the
Board. However, in evaluating candidates, there are a number of criteria
that the Board generally views as relevant and is likely to consider.
Some of these considerations include:
·
whether the candidate is licensed or is
likely to receive any license required to be a director of a gaming company in
jurisdictions in which we have business interests;
8
·
whether the candidate qualifies as an independent
director under applicable laws, regulations and rules;
·
whether the candidate is financially
sophisticated and otherwise meets the requirements for serving as a member of
an audit committee;
·
whether the candidate is an audit committee
financial expert under the federal securities laws and the rules and
regulations of the Securities and Exchange Commission;
·
Southwests needs with respect to the talents
and experience of its directors; the personal and professional integrity and
reputation of the candidate; the candidates level of education and business
experience;
·
the candidates broad-based business acumen
and understanding of Southwests business and industry;
·
the fit of the candidates skills and
personality with those of other directors and potential directors in building a
board that is effective, collegial and responsive to the needs of Southwest;
·
whether the candidate possesses strategic
thinking and a willingness to share ideas;
·
the candidates diversity of experiences,
expertise and background;
·
the candidates ability to represent the
interests of all shareholders and not a particular interest group;
·
and the candidates willingness to devote
adequate time to the work of the Board and its committees.
Audit Committee Report
The Audit Committee reviewed
and discussed Southwests audited financial statements for the fiscal years
ended December 31, 2007 and 2006 with Southwests management. The
Audit Committee has discussed with Eide Bailly LLP, Southwests independent
public accountants, the matters required to be discussed by Statement on
Auditing Standards No. 61 (Communication with Audit Committees). The
Audit Committee received the written disclosures and the letter from Eide
Bailly LLP required by Independence Standards Board Standard No. 1
(Independence Discussions with Audit Committees) and the Audit Committee
discussed the independence of Eide Bailly LLP with them.
Based on the Audit
Committees review and discussions noted above, the Audit Committee recommended
to the Board of Directors that Southwests audited financial statements be
included in our Annual Report on Form 10-KSB for the fiscal year ended December 31,
2007 for filing with the SEC and the Board approved that recommendation.
This report is dated March 20,
2008.
Southwest
Casino Corporation
Audit
Committee of the Board of Directors
David
Abramson, Chair
|
|
Jim
Holmes
|
|
Gregg
Schatzman
|
The Audit
Committee report above must not be deemed soliciting material or to be filed
with the United States Securities and Exchange Commission or subject to
Regulation 14A or 14C under the Securities Exchange Act of 1934, as amended, or
to the liabilities of Section 18 of the Exchange Act. Notwithstanding anything to the contrary
stated in any of our previous filings under the Securities Act of 1933, as
amended, or the Securities and Exchange Act of 1934, as amended, that might
incorporate future filings, including this proxy statement, in whole or in
part, the foregoing Audit Committee Report cannot be incorporated by reference
into any such filing.
9
EXECUTIVE COMPENSATION
The following table
provides summary information concerning cash and non-cash compensation paid to
or earned by our principal executive officer and our two other highest paid
executive officers during the Southwest Casino Corporation fiscal year ended December 31,
2007.
SUMMARY COMPENSATION TABLE
Name and Principal
|
|
|
|
Salary
|
|
Bonus
|
|
Stock
Award(s)
|
|
Option
Awards
|
|
Nonequity
Incentive Plan
Compensation
|
|
Non-qualified
Deferred
Compensation
Earnings
|
|
All Other
Compensation
|
|
Total
|
|
Position
|
|
Year
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
James B. Druck
|
|
2007
|
|
243,100
|
|
55,000
|
|
|
|
|
|
|
|
|
|
48,637
|
|
346,737
|
|
CEO & Director
|
|
2006
|
|
220,000
|
(1)
|
|
|
|
|
|
|
|
|
|
|
44,988
|
|
264,988
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thomas E. Fox
|
|
2007
|
|
243,100
|
|
55,000
|
|
|
|
|
|
|
|
|
|
42,200
|
|
340,300
|
|
President & COO
|
|
2006
|
|
220,000
|
(1)
|
|
|
|
|
|
|
|
|
|
|
31,961
|
|
251,961
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Brian L. Foster
|
|
2007
|
|
46,500
|
(3)
|
192,422
|
|
|
|
|
|
|
|
|
|
17,536
|
|
256,458
|
|
VP Native American Operations
|
|
2006
|
|
|
(3)
|
203,790
|
|
|
|
|
|
|
|
|
|
14,746
|
|
218,536
|
|
(1)
Does not include $50,000 paid to Mr. Druck
and $10,000 paid to Mr. Fox during the second quarter of 2006 as partial
payment of salary earned in years before 1998 but not paid.
(2)
Consists of company paid medical, dental,
life and disability insurance, 401(k) matching funds, and a car allowance.
(3)
Mr. Foster managed two gaming facilities
owned by the Cheyenne and Arapaho Tribes of Oklahoma until August 17,
2007. Mr. Foster also received compensation, including a salary,
directly from the Cheyenne and Arapaho Tribes of Oklahoma tribal enterprises.
(4)
Consists of company paid medical, dental,
life and disability insurance, and 401(k) matching funds.
James
Druck and Thomas Fox Employment Agreements
In July 2004, we
entered into employment agreements with James B. Druck and Thomas E. Fox under
which Mr. Druck serves as our Chief Executive Officer and Mr. Fox
serves as our President and Chief Operating Officer. The initial term of each
agreement continued until July 1, 2006, after which the term renews
automatically for additional one-year periods unless terminated earlier by
either party. Under this agreement, Mr. Druck and Mr. Fox each
received a base salary of $220,000 per year, an automobile allowance of $1,000
per month, and are eligible for an additional performance bonus if granted by
our Board of Directors. Any adjustment to base salary will be determined
by the Board of Directors. Effective April 1, 2007, Mr. Druck
and Mr. Foxs base salaries were each increased to $250,800 per year. Bonuses are discretionary. No bonus was
awarded during fiscal year 2006 or 2005. Our Board of Directors approved
bonus payments of $110,000 to both Mr. Druck and Mr. Fox at its
meeting on March 13, 2007. The
initial $55,000 of that bonus was paid on March 31, 2007 and the remaining
$55,000 will be paid on or after July 1, 2007, at such time as management
determines that Southwest has sufficient financial resources for the
payments. This is the first bonus or
salary increase awarded to Messrs. Druck and Fox since entering into their
employment agreements in 2004. Under
those employment agreements, Mr. Druck and Mr. Fox were also granted
a non-plan option to purchase 300,000 shares of our common stock at a price of
$1.00 per share that is now fully vested.
After the initial two-year term of their agreements, if Mr. Druck
or Mr. Fox is terminated without cause, in connection with a change in
control of Southwest, or if Mr. Druck or Mr. Fox terminates his
employment for good reason, Mr. Druck or Mr. Fox, as the case may
be, may elect to continue employment with us in a diminished capacity. If Mr. Druck
or Mr. Fox elects to do so, he will continue to receive his base salary
and medical benefits for 12 months. After 12 months, he will receive a salary
of not less than $25,000 and continuing medical benefits. Messrs. Druck
and Fox are also subject to customary assignment of inventions,
confidentiality, non-solicitation and non-compete provisions.
10
Change in Control Arrangements.
Under our employment
agreements with Mr. Druck and Mr. Fox, if either of them is
terminated within nine months after a change in control occurs, they may elect
to continue their employment with us in a diminished capacity and receive
continuing salary and medical benefits at his then base rate for 12 months
after which his salary may be reduced to not less than $25,000 with continuing
medical benefits. In addition, any unexpired stock options will vest
immediately.
For purposes of
these employment agreements, a change in control includes:
·
any
merger, acquisition, reorganization or consolidation after which the
shareholders of Southwest immediately before the transaction do not own a
majority of the surviving corporation;
·
any
sale, lease, license or transfer of substantially all of our assets;
·
any
statutory exchange of securities with another entity (except where we are the
acquiring entity);
·
acquisition
by any individual or group of more than 50 percent of our outstanding voting
stock from existing shareholders;
·
members
of our Board of Directors as of July 1, 2004 or new board members approved
by a majority of those board members cease to constitute a majority of our
Board of Directors; or
·
any other transaction or series of
transactions (other than venture capital or institutional investor financings)
that the SEC would require us to report.
Under our 2004
Stock Incentive Plan, incentive awards granted under the plan will become fully
exercisable after certain changes in control of our company, such as:
·
the sale, lease, exchange or other transfer
of all or substantially all of our assets;
·
our shareholders approve any plan of or
proposal for the liquidation or dissolution of our company;
·
any person becomes the beneficial owner of:
·
20% or more, but not 50% or more, of the
combined voting power of our outstanding securities ordinarily having the right
to vote at elections of directors, unless the transaction resulting in their
ownership was approved in advance by the continuity directors who are members
of the Board of Directors at the time of the special meeting or whose
nomination for election meets certain approval requirements related to
continuity with our current Board of Directors; or
·
50% or more of the combined voting power of
our outstanding securities ordinarily having the right to vote at elections of
directors (regardless of any approval by the continuity directors); provided
that a traditional institution or venture capital financing transaction are
excluded from this definition;
·
we are a party to a merger or consolidation
that results in our shareholders beneficially owning securities representing:
·
more than 50%, but less than 80%, of the
combined voting power of the surviving corporations then outstanding
securities ordinarily having the right to vote at elections of directors,
unless the merger or consolidation was approved in advance by the continuity
directors; or
·
50% or less of the combined voting power of
the surviving corporations then outstanding securities ordinarily having the
right to vote at elections of directors (regardless of any approval by the continuity
directors);
·
a change in control that outside legal
counsel determines must be reported under Section 13 or 15(d) of the
Exchange Act, whether or not we are then subject to these reporting
requirements; or
·
the continuity directors cease, for any
reason, to constitute at least a majority of the Board of Directors, at any
time after the date that our securities are first sold in a registered public
offering.
11
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR
END TABLE
The following table provides
information regarding unexercised options for our named executive officers that
were outstanding at December 31, 2007.
|
|
Option Awards
|
|
Stock Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
Market
|
|
|
|
Incentive
|
|
|
|
|
|
|
|
Incentive
|
|
|
|
|
|
Number
|
|
Value of
|
|
Equity
|
|
Plan
|
|
|
|
|
|
|
|
Plan
|
|
|
|
|
|
of
|
|
Shares
|
|
Incentive
|
|
Awards;
|
|
|
|
|
|
|
|
Awards:
|
|
|
|
|
|
Shares
|
|
or Units
|
|
Plan
|
|
Market
|
|
|
|
|
|
|
|
Number of
|
|
|
|
|
|
or Units
|
|
of Stock
|
|
Awards:
|
|
Value of
|
|
|
|
Number of
|
|
Number of
|
|
Securities
|
|
|
|
|
|
of Stock
|
|
that
|
|
Number
|
|
Shares or
|
|
|
|
Securities
|
|
Securities
|
|
Underlying
|
|
Option
|
|
|
|
that
|
|
have
|
|
of Shares
|
|
Units of
|
|
|
|
Underlying
|
|
Underlying
|
|
Unexercised
|
|
Exercise
|
|
Option
|
|
have not
|
|
not
|
|
that have
|
|
Stock that
|
|
|
|
Unexercised
|
|
Unexercised
|
|
Unearned
|
|
price
|
|
Expiration
|
|
Vested
|
|
Vested
|
|
not
|
|
have not
|
|
Name
|
|
Options (#)
|
|
Options (#)
|
|
Options (#)
|
|
($/share)
|
|
Date
|
|
(#)
|
|
($)
|
|
Vested (#)
|
|
Vested ($)
|
|
|
|
Exercisable
|
|
Unexercisable
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
James Druck
|
|
300,000
|
(1)
|
|
|
|
|
1.00
|
|
6/30/2009
|
|
|
|
|
|
|
|
|
|
Thomas Fox
|
|
300,000
|
(1)
|
|
|
|
|
1.00
|
|
6/30/2009
|
|
|
|
|
|
|
|
|
|
Brian Foster
|
|
250,000
|
|
|
|
|
|
0.12
|
|
12/7/2013
|
|
|
|
|
|
|
|
|
|
(1)
Does
not include (i) options to purchase 170,000 shares of our common stock at
a price of $0.48 per share granted to Mr. Druck and Mr. Fox on March 20,
2008, and (ii) warrants issued to Mr. Druck, Mr. Fox or parties
in which Mr. Fox has a beneficial ownership interest in connection with
their participation in our October 2005 private placement of warrants, our
January and February 2007 private placement of common stock with
accompanying warrants, and our March 2008 private placement of warrants.
Compensation
Committee Interlocks and Insider Participation
None of our executive
officers serve as a member of the Board of Directors or compensation committee
of any entity that has one or more executive officers who serve on our Board of
Directors or Compensation Committee. None of the members of our Compensation
Committee have been an officer or employee of Southwest or any of our
subsidiaries.
Certain
Relationships and Related Transactions
We issued warrants to
purchase 250,000 shares of our common stock at a price of $0.39 per share to
each of James B. Druck, CEO, Thomas E. Fox, President and COO, and Jeffrey S.
Halpern, Vice President of Government Affairs, on March 10, 2008. These
warrants are exercisable for a period of five years. We issued these warrants
to Messrs. Druck, Fox and Halpern in consideration of their agreement to
increase the amount of their personal guarantees of our indebtedness from
$150,000 to $250,000 and to extend the termination date of those guarantees from
April 19, 2008 to January 11, 2010.
We issued a warrant to
purchase 300,000 shares of our common stock at a price of $0.39 per share to
Gus Chafoulias, a member of the companys Board of Directors, on March 10,
2008. This warrant is exercisable for a
period of five years. We issued this
warrant to Mr. Chafoulias in consideration of his agreement to co-sign a
$300,000 promissory note with Southwest Casino & Hotel Corp. for a
bank loan to Southwest.
On January 24 and February 26,
2007, we held separate closings in a private placement of common stock with
accompanying warrants in which we raised $4.1 million. We sold units consisting of one share of
common stock and a warrant to purchase 0.4 shares of common stock at a price of
$0.55 per unit. The warrants are
exercisable for five years at a price of $0.61 per share. James B. Druck, CEO, Thomas E. Fox, President
and COO, Jeffrey S. Halpern, Vice President of Government Affairs, Gus
Chafoulias, Director and David Abramson, Director each participated in this
offering on the same terms as all other investors. The amounts of their respective investments
are stated in the table below:
12
Name
|
|
Title
|
|
Common
Shares
|
|
Warrant
Shares
|
|
Price
|
|
James
Druck
|
|
CEO,
Director
|
|
68,000
|
|
27,200
|
|
$
|
37,400
|
|
Thomas
Fox
|
|
President,
COO
|
|
318,183
|
*
|
127,274
|
*
|
$
|
175,000
|
|
Jeffrey
Halpern
|
|
VP
Govt. Affairs
|
|
68,200
|
|
27,280
|
|
$
|
37,510
|
|
Gus
Chafoulias
|
|
Director
|
|
181,819
|
|
72,728
|
|
$
|
100,000
|
|
David
Abramson
|
|
Director
|
|
30,000
|
|
12,000
|
|
$
|
16,500
|
|
*
Consists of common shares and warrants to
purchase common shares acquired by entities in which Mr. Fox has an
ownership interest. Does not include
381,819 shares and warrants to purchase 152,728 shares held by Richfield Hotel
Associates Limited Partnership (RHALP).
Mr. Fox is general partner of a partnership that is a limited
partner of RHALP and does not have or share investment control over RHALP and
thus does not beneficially own these shares.
As of December 31,
2007, we had accrued liabilities in the amount of $140,000 for bonuses awarded
but not paid to executive officers of the company. We also had outstanding liabilities to James
B. Druck, Thomas E. Fox and Jeffrey S. Halpern for unpaid compensation and
expense reimbursements of $122,467 as of December 31, 2007.
Southwest Casino and Hotel
Corp. and North Metro Harness Initiative, LLC purchased furniture and equipment
from Berc & Fox for $25,000 during 2007. The operations of Berc & Fox were
sold in January 2007 and as a result certain furniture and equipment were
available for purchase. The purchase
price for the furniture and equipment was less than their value as determined
by independent third-party appraisers.
Thomas Fox, our President and COO, is a shareholder and officer in Berc &
Fox Limited.
During the year ended December 31,
2007, we paid Jennifer Sparlin Druck $1,000 for performing at the Gold Rush
Palladium. Ms. Druck is the wife of
James B. Druck.
Virginia Skruppy is a
part-time employee of North Metro. Ms. Skruppy
is the wife of Tom Fox, our President. Ms. Skruppy
did not receive compensation from North Metro during 2007 and we anticipate
that her earnings in 2008 will not exceed $20,000.
13
RATIFICATION OF SELECTION OF INDEP
ENDENT PUBLIC
REGISTERED ACCOUNTING FIRM
(Proposal 2)
Appointment
of Auditors
The Board of Directors
has appointed Eide Bailly LLP as our independent public registered accounting
firm for the year ending December 31, 2008. Eide Bailly LLP has
acted as the independent registered public accounting firm of Southwest since September 2004
and independent auditor of our wholly owned subsidiary, Southwest Casino and
Hotel Corp., since December 2003. Although it is not required to do
so, the Board of Directors wishes to submit the selection of Eide Bailly LLP to
the shareholders for ratification. If our shareholders do not ratify the
appointment of Eide Bailly LLP, the Board will consider another independent
public registered accounting firm.
Representatives of Eide
Bailly LLP currently plan to be present at the Annual Meeting and will be
available to respond to appropriate questions.
Audit,
Audit-Related, Tax and Other Fees
The following table
presents fees billed by Eide Bailly LLP, our principal accountant, for the
audit of Southwest Casino Corporations consolidated financial statements and
other professional services provided to Southwest Casino Corporation for the
fiscal years ended December 31, 2007 and 2006.
|
|
Aggregate Amount Billed
|
|
|
|
2007
|
|
2006
|
|
|
|
|
|
|
|
Audit Fees
|
|
$
|
172,263
|
(1)
|
$
|
141,521
|
(1)
|
Audit-Related Fees
|
|
$
|
6,709
|
(2)
|
$
|
0
|
(2)
|
Tax Fees
|
|
$
|
0
|
(3)
|
$
|
0
|
(3)
|
All Other Fees
|
|
$
|
10,492
|
(4)
|
$
|
8,604
|
(4)
|
(1)
Aggregate fees billed for professional services rendered to us for
audit of our consolidated financial statements by year (including estimated
fees for fiscal year 2007 audit that have not yet been billed), review of the
consolidated financial statements included in our quarterly reports on Form 10-QSB,
and other services normally provided in connection with our statutory and
regulatory filings or engagements.
(2)
These other audit-related services consisted of accounting research and
related issues and assistance with response to SEC correspondence. The Board
has considered whether the provision of these services is compatible with
maintaining Eide Bailly LLPs independence and has determined that it is.
(3)
We did not pay nor incur any fees for tax services provided by our
principal accountants.
(4)
Consists of fees paid for an audit of our 401(k) employee benefit
plan and finance charges.
Audit
Committee Pre-Approval Policy
On February 14,
2006, the Board of Directors adopted a written charter for its Audit Committee
that requires Audit Committee pre-approval of all future audit and permissible
non-audit services provided to Southwest by its independent public accountants.
All services provided to
Southwest by Eide Bailly for 2007 and 2006 were approved in advance by the
Audit Committee.
Vote Required
The affirmative vote of a
majority of the shares of our common stock, present in person or by proxy on
this matter at the Annual Meeting, is necessary for the ratification of Eide
Bailly LLP, as our independent public registered accounting firm for the year
ending December 31, 2008
Board
Recommendation
The Board of Directors recommends a vote FOR ratification of
the appointment of Eide Bailly LLP
as our independent public registered accounting firm for the
year ending December 31, 2008.
14
OTHER MATTERS
Section 16(a) Beneficial
Ownership Reporting Compliance
Section 16(a) of
the Securities Exchange Act of 1934, as amended, requires our directors and
executive officers and all persons who beneficially own more than 10% of the
outstanding shares of our common stock to file with the Securities and Exchange
Commission initial reports of ownership and reports of changes in ownership of
our common stock. Executive officers, directors and greater than 10%
beneficial owners are also required to furnish us with copies of all Section 16(a) forms
they file. All Section 16 reports under the Securities Exchange Act
of 1934, as amended, for our directors, executive officers and, to our
knowledge, beneficial owners of greater than 10% of our common stock were filed
on a timely basis during the fiscal year ended December 31, 2007.
Shareholder
Proposals For 2009 Annual Meeting
Proposals of shareholders
intended to be presented in the proxy materials relating to our 2009 annual
meeting of shareholders must be received by us at our principal executive
offices on or before January 1, 2009 unless the date of that meeting has
been changed by more than 30 calendar days, and must satisfy the requirements
of the proxy rules promulgated by the Securities and Exchange
Commission. A shareholder who wishes to make a proposal at our 2009
annual meeting of shareholders without including the proposal in our proxy
statement must notify us by March 15, 2009 unless the date of the meeting
has been changed by more than 30 calendar days. If a shareholder fails to
provide notice by this date, then the persons named as proxies in the proxies
that we solicit for the next annual meeting will have discretionary authority
to vote on the proposal.
Other
Business
Our management does not
intend to present other items of business and knows of no items of business
that are likely to be brought before the Annual Meeting, except those described
in this proxy statement. However, if any other matters should properly
come before the Annual Meeting, the persons named in the enclosed proxy will
have discretionary authority to vote such proxy in accordance with their best
judgment on the matters.
Communications
with Directors
Shareholders may communicate
with the Board of Directors or any one or more particular directors by sending
correspondence, addressed to our Corporate Secretary, Southwest Casino
Corporation, 2001 Killebrew Drive, Suite 350, Minneapolis, MN 55425, with
an instruction to forward the communication to the Board of Directors or any
one or more particular directors. Our Corporate Secretary will receive
the correspondence and forward it to the Board of Directors or any one or more
particular director to whom the communication is directed.
Copies of
our Annual Report on Form 10-KSB (without exhibits) for the fiscal year
ended December 31, 2007 have been delivered to our shareholders with this
Proxy Statement
.
We will furnish a copy of any exhibit to our Form 10-KSB or 10-QSB upon
receipt from any shareholder of a written request for the exhibits and payment
of our reasonable expenses in furnishing the exhibits.
This request should be
sent to:
|
|
Southwest Casino
Corporation
|
|
|
Attn: Shareholder
Information
|
|
|
2001 Killebrew Drive,
Suite 350
|
|
|
Minneapolis, Minnesota
55425
|
Your vote
is important.
Whether or not you plan to attend the Annual Meeting, please vote your shares
of common stock by marking, signing, dating and promptly returning the enclosed
proxy card in the envelope provided. No postage is required for mailing
in the United States.
By Order of the Board of
Directors,
James Druck
Director and CEO
David Abramson
Director
Gus Chafoulias
Director
Jim Holmes
Director
Gregg Schatzman
Director
May 5, 2008
Minneapolis,
Minnesota
15
Appendix A
SOUTHWEST CASINO CORPORATION
AUDIT
COMMITTEE OF THE BOARD OF DIRECTORS
CHARTER*
1.
PURPOSE:
The Audit Committee
assists the Board of Directors of Southwest Casino Corporation (Southwest), a
Nevada corporation, in overseeing the accounting and financial reporting
processes of Southwest, the audits of Southwests financial statements, and
other matters stated in this Charter.
2.
COMPOSITION/ELIGIBILITY:
The Audit Committee must
be comprised of at least 3 directors who satisfy the independence and other
requirements of the primary stock exchange on which Southwest shares may be
listed (the Exchange), as applicable, as well as other applicable
requirements for audit committee service imposed by the Securities Exchange Act
of 1934, as amended (the Act), and the applicable rules of the
Securities and Exchange Commission (the SEC).
All members of the Audit Committee must have a basic understanding of
finance and accounting and be able to read and understand financial statements.
The Board of Directors determines whether a particular director (a) satisfies
the requirements for membership on the Audit Committee, and (b) qualifies
as an audit committee financial expert, as defined by the SEC.
3.
EXTERNAL ADVISERS:
The Audit Committee has
authority to engage independent counsel and other advisers as the Audit
Committee deems necessary to carry out its duties. The Audit Committee also has
authority to obtain advice and assistance from any officer or employee of
Southwest or any of its subsidiaries.
4.
FUNDING:
Southwest will provide
appropriate funding, as determined by the Audit Committee, for payment of:
·
compensation
to Southwests independent public accountants as well as any other accounting
firm engaged to perform audit, review or attest services for Southwest;
·
any
independent counsel or other adviser retained by the Audit Committee; and
·
ordinary
administrative expenses of the Audit Committee that are necessary or
appropriate in carrying out the committees duties.
The Audit
Committee must report promptly to the Board of Directors the scope and terms of
its engagement of any adviser.
5.
FUNCTIONS:
The Audit Committee will:
·
Meet
as often as it determines, but not less frequently than quarterly.
·
Be
directly responsible for the appointment, compensation, evaluation, retention
and oversight of the work of Southwests independent public accountants
(including resolution of disagreements between management and the independent
public accountants regarding financial reporting). Southwests independent public accountants
report directly to the Audit Committee.
·
Ensure
receipt of an annual formal written statement from Southwests independent
public accountants delineating all relationships between the independent public
accountants and Southwest. The Audit
Committee will discuss with the independent public accountants any
relationships that may impact the objectivity and independence of the
independent public accountants and take appropriate action to oversee the
independence of the independent public accountants. Pre-approve all audit services and
permissible non-audit services to be provided to Southwest by Southwests
independent public accountants, subject to any exceptions provided in the Act
and the rules of the SEC (it being understood that the Audit Committee may
delegate to one or more of its members the authority to grant these
pre-approvals, provided that any pre-approval granted by that member or members
must be presented to the full Audit Committee at its next scheduled meeting).
A-1
·
Review,
in consultation with the independent public accountants, Southwests
management, and any other advisors the Audit Committee deems necessary, the
scope, purpose and procedures of the overall audit plans, with emphasis on
accounting and financial areas where the independent public accountants,
management or the Audit Committee believe special attention should be directed.
·
Review,
in consultation with the independent public accountants, Southwests
management, and any other advisors the Audit Committee deems necessary:
·
the
results of the overall audit;
·
The
accounting and management personnels financial competency
·
the
independent public accountants opinion on Southwests financial statements;
·
the
independent public accountants judgment on the quality, not just the
acceptability, of Southwests accounting principles as applied in the financial
statements;
·
the
independent public accountants and managements evaluations of the adequacy of
Southwests internal controls over financial reporting;
·
the
independent public accountants and managements evaluations of the adequacy of
Southwests disclosure controls and procedures; and
·
significant
disputes, if any, between the independent public accountants Southwests
management.
·
Compliance
with regulatory filing requirements
·
Obtain
and review annually, before the filing of Southwests Annual Report on Form 10-K,
a report from the independent public accountants describing:
·
all
critical accounting policies and practices used in the overall audit of
Southwests financial statements;
·
all
alternative treatments within generally accepted accounting principles for
policies and practices related to material items that have been discussed with
management, including ramifications of the use of such alternative disclosures
and treatments, and the treatment preferred by the independent public
accountants; and
·
other
material written communications between the independent public accountants and
management, such as any management letter or schedule of unadjusted
differences, and discuss with the independent public accountants any material
issues raised in such report.
·
Review
and discuss with the independent public accountants and Southwests management
the annual audited financial statements, including Managements Discussion and
Analysis of those financial statements, and recommend to the Board of Directors
the inclusion of Southwests audited financial statements in its Form 10-K.
·
Review
and discuss with the independent public accountants and Southwests management
the quarterly unaudited financial statements before the publication of
Southwests earnings release and before the inclusion of the financial
statements, including Managements Discussion and Analysis of those financial
statements, in Southwests Form 10-Q.
The Audit Committee may delegate to one or more of its members the
authority to represent the committee for purposes of this review.
·
Before
the filing of each Form 10-Q and the Form 10-K, be available to
discuss with the independent public accountants, without management present,
the matters to be discussed by Statement on Auditing Standards No. 61 and
other matters that should be communicated to the Audit Committee under the
professional standards of the American Institute of Certified Public
Accountants.
·
Review
audit results, audit reports and recommendations made by the independent public
accountants and Southwests management, and report to the Board of Directors
with respect to those results, reports and recommendations, and take any
necessary actions in connection with those results, reports and
recommendations.
A-2
·
Assure
the regular rotation of the lead audit partner, the concurring partner and
other audit partners engaged in the annual audit as by law or the rules of the Exchange.
·
Review
legal and regulatory matters that may have a material impact on the financial
statements.
·
Review
and concur annually with Southwests Code of Business Conduct, Southwests Code
of Ethics for the Board of Directors and Southwests program to monitor
compliance with those Codes.
·
Meet
with the independent public accountants in separate executive sessions without
management present at least annually.
·
Prepare
the Audit Committee Report for inclusion in Southwests annual proxy statement.
·
Be
responsible In advance for the review and oversight of all related-party
transactions.
·
Establish
procedures for:
·
the
receipt, retention and treatment of complaints received by Southwest regarding
accounting, internal accounting controls, or auditing matters;
·
the
confidential, anonymous submission by employees of Southwest of concerns regarding
questionable accounting or auditing matters; and
·
review
periodically with management these procedures and, if appropriate, any
significant complaints received, to the extent
by the Act, the rules of the SEC or the Exchange.
·
Review
and reassess the adequacy of this Charter on an annual basis.
·
Review
and evaluate at least annually performance and effectiveness of the Audit
Committee.
·
Submit
the minutes of all meetings of the Audit Committee to, or discuss the matters
discussed at each Audit Committee meeting with, the Board of Directors.
·
Perform
any other duties assigned to the committee by the Board of Directors.
6.
LIMITATIONS:
While the Audit Committee has
the functions stated in this Charter, it is not the duty of the Audit Committee
to plan or conduct audits or to determine that Southwests financial statements
are complete and accurate or are in accordance with generally accepted
accounting principles. Southwests management is principally responsible for
Company accounting policies, the preparation of the financial statements, and
ensuring that the financial statements are prepared in accordance with
generally accepted accounting principles. Southwests independent public
accountants are responsible for auditing Southwests financial statements.
In
its oversight capacity, the Audit Committee is neither intended nor equipped to
guarantee with certainty to the full Board of Directors and Shareholder the
accuracy and quality of Southwests financial statements and accounting
practices. Nor is it the duty of the Audit Committee to assure Southwests
compliance with laws and regulations or compliance with Southwests Code of
Business Conduct or the Board of Directors compliance with Southwests Code of
Ethics for Board of Directors. The primary responsibility for these matters
rests with Southwests management. The Audit Committee can do no more than rely
upon information it receives, questions and assesses in fulfilling its
functions.
The
Board of Directors and the Audit Committee recognize that meeting the
responsibilities of an Audit Committee requires a degree of flexibility. To the
extent that procedures included in this Charter go beyond what is of an Audit Committee by existing law and
regulation, those procedures are meant to serve as guidelines rather than
inflexible rules and the Audit Committee is encouraged to apply any
different or additional procedures it deems necessary to fulfill its functions.
* As adopted by the Board of Directors on February 14,
2006.
A-3
Appendix B
SOUTHWEST CASINO CORPORATION
COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
CHARTER*
1.
PURPOSE:
The Compensation Committee
reviews and makes recommendations to the Board of Directors of Southwest Casino
Corporation (Southwest), a Nevada corporation, regarding all forms of
compensation provided to the directors and executive officers of Southwest,
including without limitation bonus and stock compensation. The Compensation Committee also oversees significant
aspects of Southwests compensation policies, plans and programs for all
employees of Southwest and its subsidiaries.
2.
PHILOSOPHY:
Southwests
philosophy in setting its compensation policies is to maximize Shareholder
value over time. The Compensation
Committee sets the compensation for Southwests executive officers and
evaluates the performance of those executive officers. The Compensation Committee believes executive
compensation should be tied to continuous improvements in corporate performance
and increases in Shareholder value. In
this regard, the Compensation Committee applies the following guidelines to its
compensation decisions:
·
Align
pay programs with Southwests annual and long-term business strategies and
objectives.
·
Provide
a competitive total compensation package that enables Southwest to attract and
retain key executive talent.
·
Determine
that the compensation programs include a significant element that is directly
linked to the performance of Southwest and Shareholder return.
The Compensation
Committee focuses primarily on the following three components in forming the
total compensation package for executive officers:
·
Base
salary.
·
Annual
incentive bonus.
·
Long-term
incentives.
3.
COMPOSITION/ELIGIBILITY:
The Compensation Committee must
be comprised of at least 2 directors who satisfy the independence and other
requirements of the primary stock exchange on which Southwest shares may be
listed (the Exchange), as applicable, as well as other applicable
requirements for independence imposed by the Securities Exchange Act of 1934,
as amended (the Act), and the applicable rules of the Securities and
Exchange Commission (the SEC).
4.
EXTERNAL
ADVISERS:
The Compensation Committee has
authority to engage independent counsel and other advisers as the Compensation
Committee deems necessary to carry out its duties. The Compensation Committee
also has authority to obtain advice and assistance from any officer or employee
of Southwest or any of its subsidiaries.
5.
FUNCTIONS:
The responsibilities of the
Compensation Committee are:
·
Overall Compensation Strategy
. The Compensation Committee
reviews, modifies as needed, and approves the overall compensation strategy and
policies of Southwest and its subsidiaries and, as appropriate, advises the
Board regarding its decisions. This
overall review includes:
a.
Evaluating the performance and establishing
the compensation and benefit programs for each of Southwests executive
officers, including all equity-based compensation.
b.
Reviewing and approving at the program-level
the compensation and benefit programs for non-executive officers and senior
managers of the company, including all equity-based compensation. In addition, the
B-1
Compensation Committee may determine to individually evaluate and
establish the compensation and benefit programs for any non-executive officer
or senior manager of Southwest selected by the Committee.
c.
Reviewing and approving at the program-level
the compensation and benefits programs and strategies for all other Southwest
employees.
The Board of Directors has the
authority to modify any compensation strategy and policy approved by the
Compensation Committee.
·
Compensation of Executive Officers
. The Compensation Committee
establishes performance goals and objectives for Southwests executive
officers, including the Chief Executive Officer. The Compensation Committee also reviews and
makes recommendations to the Board of Directors for the approval of the
compensation and other terms of employment of Southwests executive officers,
including the Chief Executive Officer.
The Chief Executive Officer must not be present when the Compensation
Committee or the Board of Directors reviews and approves the compensation and
other terms of employment for the CEO.
·
Directors Compensation
. The Compensation Committee makes
recommendations to the Board of Directors regarding the amount of compensation
paid by Southwest to directors for their service, including retainer, meeting,
committee and committee chair fees. Director
compensation may be a combination of cash fees and/or stock option grants or
awards.
·
Plan Administrator
. The Compensation Committee will act as the Committee
that administers Southwests 2004 Stock Incentive Plan. The Committee will also consider and
recommend changes to the existing plan or plans or the adoption of additional
plans, which plans the Committee will also administer. Committee approval of awards granted under
equity-based compensation plans will be final unless applicable law, regulation
or rule requires full board approval.
·
Employee Benefit Plans
. The Compensation Committee will periodically
review, recommend changes, and approve Southwests 401(k) Plan, and any
similar ERISA plans Southwest may adopt, including the available investment
options, performance, participation and plan administration.
·
Preparation of Reports
. The Compensation Committee will prepare and
review any report regarding compensation required under applicable SEC rules and
regulations for inclusion in Southwests annual proxy statement.
6.
MEETINGS:
The Compensation
Committee will meet as often as it determines, but not less frequently than one
meeting per year. The Compensation
Committee will cause minutes of each meeting to be prepared and delivered to
the Board of Directors. The Compensation
Committee will also provide to the Board of Directors any written or oral
reports regarding its activities requested by the Board.
* As adopted by the Board of Directors April 26,
2006.
B-2
SOUTHWEST
CASINO CORPORATION
GOVERNANCE
AND NOMINATING
COMMITTEE OF THE BOARD OF DIRECTORS
CHARTER*
1.
PURPOSE:
Governance reflects the tone and behavioral expectations that the board
sets on behalf of stakeholders. It encompasses the companys decision-making
structures and the mechanisms used to manage the organization. The governance
structures and processes are regularly reviewed to ensure that the highest
levels of behavior and accountability are achieved.
The Governance and Nominating Committee, in consultation with the Board
and the Chief Executive Officer, identifies, evaluates, proposes, and nominates
candidates for election to Southwests Board of Directors by the Shareholders
of the company.
The
Governance and Nominating Committee also develops and recommends to the Board a
set of corporate governance guidelines and principles applicable to the
Company. In doing so, the Committee will endeavor to maintain free and open
means of communication between the members of the Committee, other members of
the Board, and management of the Company.
The cornerstone Southwest Governance principles are:
1.
Determine an appropriate company wide
strategy is developed and implemented.
2.
Establish a clear framework for
oversight and management of the companys operations and for defining the
respective roles and responsibilities of the Board and management.
3.
Structure itself to be effective in
discharging its responsibilities and duties.
4.
Set standards of behavior expected of
company personnel.
5.
Safeguard the integrity of the companys
financial reporting.
6.
Respect and facilitate the rights of
shareholders.
7.
Recognize and manage risk.
8.
Encourage board and management
effectiveness.
9.
Remunerate fairly and responsibly.
10.
Recognize the obligations to all stakeholders.
2.
COMPOSITION/ELIGIBILITY:
The Governance and Nominating Committee must be comprised of at least 2
directors who satisfy the independence and other requirements of the primary
stock exchange on which Southwest shares may be listed (the Exchange), if
any. The Board will appoint the
Committee members and the Committee chair giving consideration to the
independence requirements imposed by the Securities Exchange Act of 1934, as
amended (the Act), the applicable rules of the Securities and Exchange
Commission (the SEC) and other applicable requirements
3.
FUNCTIONS:
The responsibilities of the Governance and Nominating Committee are:
·
Establish and review periodically Board
membership required and desired qualifications. This will include expertise,
experience and characteristics, including business experience, skills and
knowledge of gaming, finance, real estate development, hospitability and
entertainment industries and the functional experience and skills of financial
reporting, strategy, governance, operations and other areas that may contribute
to an effective Board of Directors.
C-1
·
Consider each
candidates general business and industry experience, his or her ability to act
on behalf of shareholders, overall Board diversity, potential concerns
regarding independence or conflicts of interest and other factors relevant in
evaluating Board nominees. Additionally, the Board will consider whether or not
the candidate would be found suitable to be issued a gaming license.
·
Consider and, if
the Committee determines appropriate, recommend to the Board of Directors a
policy for the consideration of candidates for the Board of Directors submitted
by stockholders.
·
Evaluate,
propose, and nominate candidates for election to the Companys Board of
Directors by the Shareholders of the company
·
Establish and
review periodically required and desired qualifications, expertise, experience
and characteristics, for participation on any committee of the Board of
Directors.
·
Make
recommendations regarding a change in the number of Board members and/or other
changes in Board membership including the size and composition of the Board.
·
As needed,
conduct searches for and evaluates potential Board members that satisfy the
criteria for Board membership established by the Committee.
·
Review and
approve the disclosure in any report regarding nomination of Board candidates
required under applicable SEC rules and regulations for inclusion in
Southwests annual proxy statement.
·
Annually
determine the Board reviews its performance and that of individual directors
and evaluates the nomination for re-election of current directors
·
The Committee
evaluates its own performance including its compliance with this Charter, and
provide any written material with respect to such evaluation to the Board,
including any recommendations for changes in procedures or policies governing
the Committee. The Committee shall conduct such evaluation and review in such
manner as it deems appropriate.
·
Review and reassess the adequacy of this
Charter at least annually and submit any recommended changes to the Board for
its consideration
·
Review, approve
and report to the Board any transactions involving any material amounts between
the Company and any related party.
·
Periodically
review and assess the adequacy of the Companys Code of Conduct and Code of
Ethics for Senior Executives including Financial Officers, including without
limitation, assessing such Codes compliance with applicable laws and Exchange
rules where applicable.
·
The Corporate
Governance Committee will ensure that a code of ethics and conduct policies are
formalized in writing and that management takes the necessary actions to
disseminate the information and educate all employees. The program for
monitoring compliance and updates from management and the Companys General
Counsel regarding implementation of these codes and related training process
are reviewed periodically.
·
Determine that
an appropriate check and balance mechanisms exist to encourage, support but
also provide appropriate oversight regarding senior management leadership.
·
Recommend such
other policies and procedures as the Committee may deem necessary to help
ensure appropriate and ethical corporate practices
·
Recommend
overall compensation program for Directors, including the Chairperson,
committee member and chair retainers. Include in the program the consideration
of cash retainers, perquisites, deferred compensation, stock or option plans or
other incentive plans and retirement plans.
4.
MEETINGS AND PROCEDURE:
The Governance and Nominating
Committee will meet as often as it determines appropriate. The Governance and Nominating Committee will
cause minutes of each meeting to be prepared and delivered to the Board of
Directors.
C-2
The
Governance and Nominating Committee will also provide to the Board of Directors
written or oral reports regarding its activities as requested by the Board.
The Committee shall have the sole authority, as it deems appropriate,
to retain and/or replace, as needed, any independent council and other outside
experts or advisors that the Committee believes to be necessary or appropriate.
The Committee may also utilize the services of the Companys regular legal
counsel or other advisors to the company. The Company shall provide for
appropriate funding, as determined by the committee for payment of compensation
to any such persons retained bye the Committee. The committee shall have sole
authority to retain and terminate any search firm to be used to identify
director candidates, including sole authority to approve such search firms
fees and other retention terms.
* As adopted by the Board of Directors on November 5, 2007.
C-3
Southwest Casino Corporation
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2001 Killebrew Drive,
Suite 350
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Minneapolis, Minnesota 55425
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PROXY
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This
Proxy is solicited by the Board of Directors
The undersigned appoints James B. Druck and Thomas E. Fox and each of
them, as proxies, each with full power of substitution, and authorizes each of
them to represent and to vote, as designated below, all the shares of common
stock of Southwest Casino Corporation held of record by the undersigned on
April 25, 2008 at the Annual Meeting of Shareholders to be held on
June 2, 2008, or any adjournment of that Annual Meeting.
x
Please mark your votes as in this
example.
1. Election of Directors.
o
FOR all nominees listed
below (except as marked to the contrary below)
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o
Vote WITHHELD for all
nominees listed below
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James B. Druck
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David H. Abramson
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Gus A. Chafoulias
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Jim Holmes
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Gregg P. Schatzman
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(INSTRUCTION:
To withhold authority to vote for any individual nominee, strike a line through
the nominees name.)
2.
To consider and act upon a proposal to
ratify the selection of Eide Bailly LLP as our independent public registered
accounting firm for the fiscal year ending December 31, 2008.
o
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FOR
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o
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AGAINST
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o
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ABSTAIN
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3.
To consider and act upon such other matters as may
properly come before the Annual Meeting or any adjournment of the Annual
Meeting.
(Please
Sign Below)
This proxy, when properly executed,
will be voted in the manner directed herein by the undersigned
shareholder. If no direction is made, this proxy will be voted FOR all
nominees named in Proposal 1 above and FOR Proposal 2.
Please sign exactly as name
appears below. When joint tenants hold shares, both should sign.
When signing as attorney, executor, administrator, trustee or guardian, please
give full title as such. If a corporation, please sign in full corporate name
by President or other authorized officer. If a partnership, please sign in
partnership name by authorized person.
PLEASE MARK, SIGN,
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Dated: ,
2008
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DATE AND RETURN THE
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PROXY CARD
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PROMPTLY USING THE
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ENCLOSED ENVELOPE,
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WHICH REQUIRES
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NO POSTAGE IF MAILED
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Signature
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IN THE UNITED
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STATES.
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Signature if held jointly
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P-1
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