<PAGE>
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
Filed by the registrant /X/
Filed by a party other than the registrant / /
Check the appropriate box:
/ / Preliminary proxy statement
/X/ Definitive proxy statement
/ / Definitive additional materials
/ / Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
Florida Gaming Corporation
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
Florida Gaming Corporation
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
/X/ $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or
14a-6(j)(2).
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transactions applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:(1)
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
- --------------------------------------------------------------------------------
(2) Form, schedule or registration statement no.:
- --------------------------------------------------------------------------------
(3) Filing party:
- --------------------------------------------------------------------------------
(4) Date filed:
- --------------------------------------------------------------------------------
- ---------------
(1) Set forth the amount on which the filing fee is calculated and state
how it was determined.
<PAGE>
FLORIDA GAMING CORPORATION
September 4, 1996
Dear Florida Gaming Stockholder:
You are cordially invited to attend the 1996 Annual Meeting of Stockholders
of Florida Gaming Corporation which will be held on Thursday, October 10, 1996,
at Fort Pierce Jai-Alai, 1750 South Kings Highway, Fort Pierce, Florida, at
12:00 noon, local time. We hope you will be able to attend.
The enclosed meeting notice and proxy statement contain details concerning
the business to come before the Meeting. You will note that the Board of
Directors of the Company recommends a vote "FOR" election of six directors to
serve until the 1997 Annual Meeting of Stockholders.
Please sign and return your proxy card in the enclosed envelope at your
earliest convenience to assure that your shares will be represented and voted at
the Meeting even if you cannot attend.
Also included in these materials is the Company's 1995 Annual Report to
Stockholders. As we look forward to developing the many exciting opportunities
that lie ahead, I want to extend my thanks to our employees for their
significant contributions. I also want to express my appreciation to you, our
stockholders, for your continued confidence and support in our management team.
W. B. Collett
Chairman of the Board and
Chief Executive Officer
<PAGE>
FLORIDA GAMING CORPORATION
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To the Holders of Common Stock of Florida Gaming Corporation:
The 1996 Annual Meeting (the "Meeting") of Stockholders of Florida Gaming
Corporation (the "Company"), a Delaware corporation, will be held at Fort Pierce
Jai-Alai, 1750 South Kings Highway, Fort Pierce, Florida, on Thursday, October
10, 1996 at 12:00 noon, local time, for the following purposes:
1. To elect six directors to serve until the 1997 Annual Meeting of
Stockholders; and
2. To transact such other business as may properly come before the
Meeting, and any adjournments thereof.
Stockholders of record at the close of business on August 13, 1996, are
entitled to notice of and to vote at the Meeting, and any adjournments thereof.
A list of stockholders of the Company as of the close of business on August
13, 1996, will be available for inspection during normal business hours from
September 30 through October 9, 1996, at Fort Pierce Jai-Alai, 1750 South Kings
Highway, Fort Pierce, Florida.
By Order of the Board of Directors
September 4, 1996 W. B. Collett, Jr.
Executive Vice President and
Secretary
EACH STOCKHOLDER IS URGED TO EXECUTE AND RETURN THE ENCLOSED PROXY
PROMPTLY. IF A STOCKHOLDER DECIDES TO ATTEND THE MEETING, HE OR SHE MAY, IF SO
DESIRED, REVOKE THE PROXY AND VOTE THE SHARES IN PERSON.
<PAGE>
FLORIDA GAMING CORPORATION
1750 SOUTH KINGS HIGHWAY
FORT PIERCE, FLORIDA 34945-3094
(407) 464-7500
PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS
This Proxy Statement is furnished to the holders of common stock (the
"Common Stock") of Florida Gaming Corporation (the "Company") in connection with
the solicitation of proxies on behalf of the Board of Directors of the Company
to be voted at the 1996 Annual Meeting of Stockholders of the Company to be held
at Fort Pierce Jai-Alai, 1750 South Kings Highway, Fort Pierce, Florida, on
Thursday, October 10, 1996, at 12:00 noon, local time, and at any adjournments
thereof (the "Annual Meeting").
At the Annual Meeting, stockholders will be asked to vote on the election
of nominees to the Board of Directors.
All properly executed proxies delivered pursuant to this solicitation and
not revoked will be voted at the Annual Meeting in accordance with the
directions given. Regarding the election of directors to serve until the 1997
Annual Meeting of Stockholders, in voting by proxy, stockholders may vote in
favor of all nominees or withhold their votes as to all nominees or withhold
their votes as to specific nominees. If no specific instructions are given with
respect to voting for the nominees to the Board of Directors, the shares
represented by a properly signed and dated proxy will be voted "FOR" the
election of all nominees. The six nominees receiving the most votes cast in
their favor at the Annual Meeting will be elected as directors.
Only holders of record of shares of Common Stock of the Company at the
close of business on August 13, 1996, (the "Record Date") are entitled to vote
at the Annual Meeting or adjournments thereof. Each holder of record on the
Record Date is entitled to one vote on all matters considered for each share of
Common Stock of the Company so held. On the Record Date, there were 3,400,779
shares of Common Stock of the Company issued and outstanding. A majority of the
outstanding shares will constitute a quorum at the Annual Meeting. Abstentions
and broker non-votes are counted for purposes of determining the presence or
absence of a quorum for the transaction of business. With regard to the
election of directors, abstentions and broker non-votes are not counted for
purposes of determining whether a nominee has been elected.
All proxies delivered pursuant to this solicitation are revocable at any
time at the option of the persons executing them by giving written notice to the
Secretary of the Company, by delivering a later proxy, or by voting in person at
the Annual Meeting.
The approximate date on which this Proxy Statement and form of proxy are
first being sent or given to stockholders is September 4, 1996.
ELECTION OF DIRECTORS
BOARD OF DIRECTORS
The Board of Directors of the Company, pursuant to the By-Laws of the
Company, has set the number of directors of the Company at six. All directors
hold office until the next annual meeting of stockholders following their
election and until their successors are elected and qualified.
<PAGE>
The Board of Directors has nominated W. Bennett Collett, Gary E. Bowman, W.
Bennett Collett, Jr., George W. Galloway, Jr., Roland M. Howell, and Robert L.
Hurd for election at the Annual Meeting. All nominees for election to the Board
of Directors are currently serving as directors of the Company.
DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth certain information concerning the Company's
executive officers and directors as of the Record Date:
Director or
Executive Officer
Name Age Position With The Company Since
- ---- --- ------------------------- -----------------
W. Bennett Collett 63 Chief Executive Officer 1993
and Chairman
Robert L. Hurd 56 President and Director 1993
W. Bennett Collett, Jr. 40 Executive Vice President, 1993
Secretary and Director
Timothy L. Hensley 40 Executive Vice President, 1993
Treasurer and Chief
Financial Officer
Gary E. Bowman 44 Director 1994
George W.
Galloway, Jr. 62 Director 1994
Roland M. Howell 80 Director 1995
W. BENNETT COLLETT has served as Chairman of the Board, Chief Executive
Officer and a director of Freedom Financial Corporation ("Freedom") since its
formation in 1985. In addition to its interest in the Company, Freedom's
interests include Interstate Capital Company, a wholly owned subsidiary
developing a residential real estate development in Loganville, Georgia. Mr.
Collett serves as chief executive officer of each of Freedom's subsidiaries.
Freedom was a bank holding company until January 1988, at which point it sold
its banking subsidiaries. Mr. Collett has served as President and as a director
of Freedom Holding, Inc. ("Holding") since its formation in December 1992.
Holding's sole business currently is to hold shares of Freedom. Mr. Collett has
been involved in the management of banking and financial service companies for
over 25 years, having been a principal of ten commercial banks. For 14 years,
Mr. Collett was a principal shareholder and chief executive officer of various
banks and finance companies in Alabama, Arkansas, Georgia, and Missouri ranging
in asset size from $1,000,000 to $250,000,000.
ROBERT L. HURD has served as President and a director of Freedom since July
1991. Since February 13, 1995, Mr. Hurd has served as President and Chairman of
General Health Care Company, a New Jersey based company in the health care
apparel business. Since March 1992, he has served as President and Chief
Executive Officer of International Barrier Company, a company formerly engaged
in the manufacture of metal highway barriers and currently the holder of several
highway barrier patents.
-2-
<PAGE>
From 1987 until 1991, Mr. Hurd was President and Chairman of Pacific Press &
Shear, Inc., a hydraulic press and shear manufacturer.
W. BENNETT COLLETT, JR. served as President of Freedom from 1988 to 1989;
since August 1989, Mr. Collett has served Freedom as Executive Vice President.
He has been a director of Freedom since its formation in 1985. He presently
serves as Secretary and Treasurer of Holding. Mr. Collett serves as the full-
time general manager of the Company's jai-alai fronton and pari-mutuel wagering
facility located in Fort Pierce, Florida. Mr. Collett was appointed to the
Company's Board of Directors on August 9, 1994. W. Bennett Collett, Jr. is the
son of W. Bennett Collett.
TIMOTHY L. HENSLEY has served Freedom since its formation in 1985 in
various capacities, including as President, Executive Vice President and
Treasurer and a director; he has served as Executive Vice President since 1988.
GARY E. BOWMAN has served since July 15, 1996, as Vice President of
Operations and Finance of Park Development Company, Murfreesboro, Tennessee, a
residential and commercial real estate development company. From February 2,
1996, until July 11, 1996, Mr. Bowman served as a loan officer with Jefferson
Banking Company, Louisville, Kentucky. From 1990 until February 1, 1996, Mr.
Bowman served as a loan officer in Louisville, Kentucky for PNC Bank. From 1981
to 1990, Mr. Bowman served as a loan officer in Louisville, Kentucky, for
Liberty National Bank and Trust Company.
GEORGE W. GALLOWAY, JR. has been a self-employed physician since 1958 and
most recently has served as the medical director of the emergency room at
Kennestone Hospital in Marietta, Georgia.
ROLAND M. HOWELL served in hotel management for over thirty years, and was
an owner and operator of hotels in Florida for approximately twenty years before
his retirement in 1969. He is currently a private investor, with investments
primarily in municipal bonds, stocks, and real estate.
The Company's Board of Directors had ten meetings during 1995. The Board
of Directors has no standing audit, nominating and compensation committees.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers, and persons who own more than 10 percent of
the Company's common stock, to file with the Securities and Exchange Commission
(the "SEC") initial reports of ownership and reports of changes in ownership of
common stock. Officers, directors and greater than 10 percent shareholders are
required by SEC regulation to furnish the Company with copies of all Section
16(a) forms they file.
To The Company's knowledge, based solely on a review of the copies of such
reports and certain representations furnished to the Company, during the fiscal
year ended December 31, 1995, all Section 16(a) filing requirements applicable
to its officers, directors and greater than ten percent beneficial owners were
satisfied.
PRIOR CIVIL AND ADMINISTRATIVE PROCEEDINGS
On February 28, 1990, Freedom filed a registration statement with the
Securities and Exchange Commission (Commission File No. 33-33625) (the "Freedom
Registration Statement") to register shares of its Common Stock, Class A
Preference. On March 5, 1990, Freedom filed an application with the New Jersey
Bureau of Securities pursuant to the New Jersey state securities laws to
register certain of
-3-
<PAGE>
the shares to be offered. The New Jersey Bureau of Securities indicated that
the Freedom Registration Statement may have been materially deficient because
certain civil and administrative proceedings involving Mr. Collett including an
injunction prohibiting future violations of federal securities laws were not
disclosed. Without admitting or denying the materiality of the omitted
information, which information had been omitted following consultation with
legal counsel, on June 11, 1990, Freedom requested withdrawal of the application
for registration of securities in New Jersey. On August 23, 1990, the State of
New Jersey Bureau of Securities issued a Consent Order IN THE MATTER OF:
FREEDOM FINANCIAL CORPORATION (SR-5587). On November 5, 1990, the Securities and
Exchange Commission issued an order consenting to the withdrawal of the Freedom
Registration Statement. The New Jersey Consent Order granted the request for
withdrawal of the application for registration and denied the effectiveness of
certain exemptions of the New Jersey state securities laws for secondary trading
in Freedom's securities. In addition, Freedom agreed that it would not sell,
give or otherwise distribute its securities in or from New Jersey without first
notifying and receiving written authority to do so from the New Jersey Bureau of
Securities.
The rules and regulations promulgated by the SEC pursuant to the Securities
Act of 1933 and the Securities Exchange Act of 1934 generally require that
proceedings involving management similar to the injunction be disclosed only for
events occurring during the past five years. The Company has included the
information above solely for informational purposes concerning the Company's
management team. These matters have not adversely affected the ability of the
Company to obtain any required gaming licenses, nor did they in the past
adversely affect the ability of Freedom to obtain state or federal approvals
required to operate as a bank holding company.
EXECUTIVE COMPENSATION
The following table sets forth all cash compensation paid by the Company
for the fiscal years ended December 31, 1995, 1994 and 1993 to W. Bennett
Collett, the Company's chief executive officer on December 31, 1995. As set
forth in the table, Mr. Collett received no cash compensation from the Company
from the time he began service as an executive officer on March 31, 1993 through
December 31, 1995. Effective January 1, 1996, the Company will pay Mr. Collett
a salary at an annual rate of $360,000. The Company had no executive officer as
to whom the total cash and cash-equivalent remuneration from the Company
exceeded $100,000 during fiscal 1995.
SUMMARY COMPENSATION TABLE
Annual Long Term
Compens. Compens.
------- ---------
Name and Principal Fiscal Options/ All Other
Position Year Salary SARS (#) Compensation
------------------ ------ ------ -------- -------------
W. Bennett Collett 1995 $ - 0 - 300,000 $ - 0 -
Chairman of the Board 1994 - 0 - 25,000 - 0 -
and Chief Executive 1993 - 0 - - 0 - - 0 -
Officer
-4-
<PAGE>
<TABLE>
<CAPTION>
OPTION GRANTS IN FISCAL 1995
Number of
Securities % of Total
Underlying Options Granted
Options to Employees Exercise Expiration
Name Granted in 1995 Price ($/Sh) Date
---- ---------- --------------- ------------ ----------
<S> <C> <C> <C> <C>
W. Bennett Collett 300,000(1) 94% $5.00 5/8/00
</TABLE>
- ---------------
(1) Options granted on May 8, 1995; approved by stockholders on July 7,
1995; became exercisable on November 8, 1995.
<TABLE>
<CAPTION>
AGGREGATED OPTION EXERCISES IN FISCAL 1995 AND YEAR-END OPTION VALUES
Number of Securities Value of Unexercised In-the-
Underlying Unexercised Money Options at Fiscal Yr.
Options at Fiscal Year End End ($)(1)
(#)
Name Shares Acquired Value Exercisable/ Exercisable/
---- on Exercise (#) Realized ($) Unexercisable Unexercisable
--------------- ------------ ------------- -------------
<S> <C> <C> <C> <C>
W. Bennett Collett - 0 - - 0 - 325,000/-0- $1,618,750/$0.00
</TABLE>
- ---------------
(1) Based on a per share closing price of $10.50 at December 31, 1995.
DIRECTOR COMPENSATION
The Company currently pays its non-management directors, Gary E. Bowman,
George W. Galloway, Jr., and Roland M. Howell a $500 monthly fee. W. Bennett
Collett, W. Bennett Collett, Jr., and Robert L. Hurd receive no directors fees.
On August 9, 1994, the Company adopted a Directors' Stock Option Plan
pursuant to which each current and future director of the Company will receive
an option to purchase 25,000 shares of Common Stock. During 1995, Roland M.
Howell received an option to purchase 25,000 Shares of Common Stock pursuant to
this plan.
INDEMNIFICATION
Under Section 145 of the Delaware General Corporation Law ("DGCL"), the
Company has the power to indemnify directors and officers under certain
prescribed circumstances and subject to certain limitations against certain
costs and expenses, including attorney's fees, actually and reasonably incurred
in connection with any action, suit or proceeding, whether civil, criminal,
administrative, or investigative, to which any of them is a party by reason of
his being a director or officer of the Company if it is determined that he acted
in accordance with the applicable standard of conduct set forth in such
statutory
-5-
<PAGE>
provisions. The Company's Bylaws provide that the Company shall indemnify each
person who may be indemnified pursuant to Section 145, as amended from time to
time (or any successor provision thereto), to the fullest extent permitted by
Section 145. Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Company pursuant to the foregoing provisions, or otherwise, the Company
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Certain relationships among the Company, its management and affiliates,
including Freedom, create various potential and actual conflicts of interest.
In situations where there will be an ongoing relationship with related parties,
including the purchase of services or products or the making of loans, it is the
Company's policy that all such material affiliated transactions and loans will
be made or entered into on terms that are no less favorable to the Company than
those that can be obtained from unaffiliated third parties. It is the Company's
policy that a majority of the independent and disinterested directors will be
required to approve continuation or initiation of such a relationship and will
periodically review such transactions to assure that they meet the
aforementioned standard.
Ronald P. Perella, a former director of the Company, served as a
consultant to the Company to assist the Company in identifying and reviewing
businesses to merge with or be acquired by the Company. Mr. Perella received a
total of $34,416.67 for his services during the year ended December 31, 1994.
The Company and Freedom have entered into a Credit Line Agreement dated
December 1, 1995, whereby the Company will lend Freedom up to $1,000,000 at an
annual interest rate of 2% above the prime rate, secured by Freedom's federal
tax refunds receivable totaling approximately $600,000 through and for the year
ended December 31, 1994, and certain real estate in Georgia. The maximum debt
outstanding under the Credit Line Agreement during 1995 was approximately
$350,000 and the debt outstanding at June 30, 1996 was approximately $922,641.
Principal and interest outstanding under the Credit Line Agreement are payable
upon demand by the Company; the agreement does not provide for periodic payments
of principal or interest.
Freedom and Holding may each be deemed to be a "parent" of the Company as
such term is defined in the rules promulgated under the Exchange Act. For
information with respect to the ownership of stock in Freedom and Holding, see
"Security Ownership of Certain Beneficial Owners and Management" elsewhere
herein.
The Company acquired the jai-alai fronton and pari-mutuel wagering facility
located in Fort Pierce, Florida (the "Fronton") from WJA Realty Limited
Partnership ("WJA Realty"), a then-unrelated party, pursuant to an agreement
with WJA Realty dated October 6, 1993. On February 1, 1994, the Company
received approval from the DPMW to transfer the pari-mutuel permit for the
Fronton from WJA Realty to the Company and also closed the purchase transaction
with WJA Realty on that date. Consideration for the acquisition consisted of
200,000 shares of Company Common Stock and $1,500,000 paid in cash at the
closing (including $100,000 previously deposited in an escrow account) and
$1,000,000 which was in the form of a ten-year 8% mortgage.
On July 3, 1996, the Company signed an agreement to purchase notes (the
"WJA Notes") of WJA Realty, with balances aggregating $20,000,000 from the Bank
of Oklahoma, N.A., Tulsa, Oklahoma. The WJA Notes are secured by real estate
and improvements consisting of three jai-alai pari-mutuel
-6-
<PAGE>
facilities located in Miami, Tampa and Ocala, Florida. Consideration for the
WJA Notes will be a combination of $8,000,000 in cash, 615,385 shares of the
Company's Common Stock and a $1,000,000 non-interest bearing note. Closing is
scheduled for October 28, 1996, however, the closing is subject to all approvals
required under the State of Florida House Bill #337 to establish and operate
card rooms in Dade County (Miami) and Hillsborough County (Tampa) Florida, and
other approvals required by the State of Florida Department of Business and
Professional Regulation, Division of Pari-Mutuel Wagering. The Company and
principals of WJA Realty are presently engaged in negotiations concerning a
combination of the two companies or their operations.
The Company has entered into a letter of intent dated October 4, 1994 (the
"Letter of Intent") with Casino America, Inc. ("Casino America") to form a joint
venture (the "Joint Venture") to build and operate a casino at the Fronton. If
the Joint Venture is formed before passage of an amendment to the Florida
Constitution to permit casino gaming at the Fronton, the Company will contribute
its interest in the Fronton to the Joint Venture with a credit to its capital
account of $5,000,000. Casino America will contribute up to $2,500,000, as
needed, to construct a 100,000 square foot indoor facility suitable for a casino
or flea market. If casino gaming is not permitted in Florida within six years
from October 4, 1994, Casino America has a continuing option to convert the
money contributed to the Joint Venture to a promissory note from the Joint
Venture payable in equal payments over a ten year period with interest at 8% per
annum. If casino gaming is permitted at the Fronton before October 4, 2000, the
value of the assets contributed by the Company to the Joint Venture will be
adjusted to increase the Company's capital account up to $22,500,000. Casino
America would fund its capital account on an as needed basis up to $22,500,000.
All profits and losses of the Joint Venture will be allocated between the
partners based upon capital accounts.
The Letter of Intent provides that Casino America will be the manager of
the casino and all casino-related activities. The Company will manage the
operation of the jai-alai fronton, inter-track wagering and all other non-casino
related activities. Each corporation will receive a management fee based on
costs. The Letter of Intent provides that Casino America has the exclusive
right to enter into a Joint Venture with the Company for six years from October
4, 1994, and Casino America has a right of first refusal to enter into other
potential casino gaming opportunities in Florida with the Company for such
period and during the term of the Joint Venture.
The formation of the Joint Venture is subject to certain conditions,
including the satisfactory completion of due diligence by Casino America, the
receipt of all required regulatory approvals, the approval of each partner's
board of directors, the execution of a definitive joint venture agreement, and
the approval of the Company's stockholders, if required by law. If no
definitive Joint Venture agreement is executed by March 31, 1995, and the Letter
of Intent is not extended by either party no later than June 30, 1995, either
party may terminate discussions in connection with the Joint Venture and neither
party shall have any liability to the other, except as otherwise specified in
the Letter of Intent. By letter dated March 21, 1995, Casino America extended
the period of time to June 30, 1995. No definitive Joint Venture agreement has
yet been executed, and though the June 30, 1995, date has passed, the Company
and Casino America are continuing negotiations.
Freedom has informed the Company that Casino America has purchased 22,500
shares of Freedom's 7% Series AA Mandatorily Redeemable Preferred Stock (the
"Freedom Preferred Stock") for an aggregate purchase price of $2,250,000.
Freedom has also issued 1,181 shares of Freedom Preferred Stock to Casino
America in payment of dividends. The Freedom Preferred Stock is convertible
into shares of the Company's Common Stock owned by Freedom at prices ranging
from $7.50 per share of Common Stock to $15.00 per share of Common Stock,
depending upon the timing of the conversion and passage of an amendment to the
Florida Constitution permitting casino gaming at the Fronton. The
-7-
<PAGE>
Freedom Preferred Stock is convertible into a minimum of 157,873 shares of the
Common Stock and a maximum of 315,746 shares of the Common Stock. Casino
America is the sole holder of Freedom Preferred Stock. Freedom has granted
certain piggyback registration rights to Casino America with respect to the
Freedom Preferred Stock and the shares of the Company's Common Stock into which
it is convertible.
Pursuant to a Stock Purchase Agreement, on March 31, 1993, the Company sold
603,000 shares of Common Stock to Freedom for total cash consideration of
$874,350 ($1.45 per share) (the "Equity Infusion"). In addition, the Company
granted Freedom options to purchase an additional 1,750,000 shares of Common
Stock at an exercise price of $1.45 per share, exercisable at any time before
the fifth anniversary of the closing. The Stock Purchase Agreement provided
that if the Common Stock was delisted from the Nasdaq SmallCap Market pursuant
to a proceeding commenced before 181 days after March 31, 1993 (regardless of
whether the Common Stock was subsequently relisted), (i) the effective per share
purchase price would be adjusted to $1.25, the purchase price would remain at
$874,350 and the number of shares sold to Freedom would be increased to 699,480
shares, and (ii) the per share price pursuant to the options granted to Freedom
would be adjusted to $1.25 and the number of shares which would be available to
be purchased pursuant to the option would be increased to 2,030,000.
By letter dated April 7, 1993, the Company received notice that, following
review of the Company's submissions concerning the Equity Infusion, the Nasdaq
Stock Market would delist the Common Stock effective April 8, 1993. As a result
of the delisting of the Common Stock and pursuant to the Stock Purchase
Agreement, the Company issued an additional 96,480 shares of Common Stock to
Freedom and the exercise price per share of the options was reduced to $1.25 per
share and the number of shares subject to the options increased to 2,030,000.
The Common Stock was later relisted following appeal and review by the Nasdaq
Qualifications Committee.
On August 26, 1994, and October 4, 1994, Freedom exercised its option in
part to purchase 400,000 shares and 300,000 shares of Common Stock,
respectively. Freedom retains an option to purchase 1,330,000 shares at an
exercise price of $1.25 per share.
In connection with the sale of the Company's previously majority-owned
subsidiary, Sports-Tech International, Inc., in July 1991 to Sports-Tech, Inc.
("Sports-Tech") for $40,000 cash, the Company sold to Sports-Tech a three-year
Warrant to purchase up to 400,000 shares of the Company's Common Stock at an
aggregate purchase price of $1,000,000. As a result of the Equity Infusion by
Freedom, the shares issuable under this Warrant increased to 651,752 shares. On
July 28, 1994, Sports-Tech exercised the Warrant and purchased the 651,752
shares at a per share exercise price of approximately $1.534. Pursuant to the
request by Sports-Tech in accordance with the Warrant, the Company filed a
registration statement with the Securities and Exchange Commission with respect
to the resale of these shares. On March 9, 1995, Sports-Tech informed the
Company that it had sold all 651,752 shares.
-8-
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth certain information as of the Record Date
concerning each stockholder known to the Company to own beneficially more than
five percent of the outstanding Common Stock of the Company, and information
regarding beneficial ownership of Common Stock and the Class B Common Stock of
Freedom and the Common Stock of Holding by each director and executive officer,
and all directors and executive officers as a group. Of the 1,349,480 shares of
the Company's Common Stock currently held of record by Freedom, 1,000,000 shares
have been pledged by Freedom to a bank to secure a $2,000,000 line of credit and
25,000 shares have been pledged by Freedom to a director of the Company to
secure a loan. Information is provided with respect to the ownership of stock
in Freedom and Holding because Freedom and Holding may each be deemed to be a
"parent" of the Company as such term is defined in the rules promulgated under
the Securities Exchange Act of 1934. Holding's sole business currently is to
hold shares of Freedom.
<TABLE>
<CAPTION>
THE COMPANY FREEDOM HOLDING
----------- ------- -------
Directors and Number of Percent of Number of Percent of Number of Percent of
Executive Officers Shares(1) Class(2) Shares(1) Class(3) Shares(1) Class(4)
- ------------------ --------- ---------- --------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
W. B. Collett . . . . . . . . . . 3,004,480(5) 59.4% 1,000,372(6) 84.3% 397(7) 79.4%
Robert L. Hurd . . . . . . . . . 26,000(8) * 108,639 9.2% --- ---
W. B. Collett, Jr. . . . . . . . 75,000(9) 2.2% 40,000(10) 3.4% 88 17.6%
Timothy L. Hensley . . . . . . . 50,000(11) 1.4% 40,000(10) 3.4% 5 1.0%
Roland M. Howell . . . . . . . . 336,000(12) 9.8% --- --- --- ---
Gary E. Bowman . . . . . . . . . 25,500(13) * --- --- --- ---
George W. Galloway, Jr. . . . . . 25,000(13) * --- --- --- ---
All current directors and officers
as a group (7 persons). . . . . . 3,541,980(14) 67.1% 1,189,011(15) 93.8% 490(7) 98%
5% Beneficial Owners
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Freedom Financial
Corporation(16) . . . . . . . . 2,679,480(17) 56.6% N/A N/A N/A N/A
WJA Realty Limited
Partnership . . . . . . . . . . . 200,000(18) 5.9% N/A N/A N/A N/A
P.O. Box 1439
Tulsa, Oklahoma 74101
Roland M. and Dorothy V.
Howell . . . . . . . . . . . . 336,000(12) 9.8% N/A N/A N/A N/A
Plaza Venetia; Suite 22A-B
555 N.E. 15th Street
Miami, Florida 33132
Casino America, Inc. . . . . . . 315,746(19) 9.2% N/A N/A N/A N/A
711 Washington Loop
Biloxi, Mississippi 39530
</TABLE>
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* Represents less than 1% of class.
(1) Based upon information furnished to the Company by the named person, and
information contained in filings with the Securities and Exchange
Commission (the "Commission"). Under
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<PAGE>
the rules of the Commission, a person is deemed to beneficially own shares
over which the person has or shares voting or investment power or which the
person has the right to acquire beneficial ownership within 60 days.
Unless otherwise indicated, the named persons have sole voting and
investment power with respect to shares shown by them.
(2) Based on 3,400,779 shares outstanding as of the Record Date. Shares of
Common Stock subject to exercisable options or options exercisable within
60 days are deemed outstanding for computing the percentage of class of the
person holding such options but are not deemed outstanding for computing
the percentage of class for any other person.
(3) Based on 1,187,293 shares outstanding as of the Record Date. Class B
Common Stock is the only class of Freedom's capital stock issued and
outstanding. Shares of Freedom common stock subject to exercisable options
or options exercisable within 60 days are deemed outstanding for computing
the percentage of class of the person holding such options but are not
deemed outstanding for computing the percentage of class for any other
person.
(4) Based on 500 shares outstanding as of the Record Date.
(5) Includes 2,679,480 shares beneficially owned by Freedom, including
1,330,000 shares which Freedom currently has the right to acquire. See
Note 16. Mr. Collett may be deemed to beneficially own the shares held by
Freedom, although he disclaims beneficial ownership of such shares.
Includes 325,000 shares that Mr. Collett may purchase pursuant to options.
(6) Includes 1,000,372 shares owned by Holding. Mr. Collett may be deemed to
beneficially own the shares held by Holding, although he disclaims
beneficial ownership of such shares.
(7) Includes 88 shares owned by Mr. Collett's former spouse for which he has
sole voting power, but no power of disposition.
(8) Includes 1,000 shares owned by the Hurd Family Partnership, L.P., of which
Mr. Hurd is general partner. Includes 25,000 shares that Mr. Hurd may
purchase pursuant to options.
(9) Includes 75,000 shares that may be purchased pursuant to options.
(10) Includes 40,000 shares that may be purchased pursuant to options under
Freedom's stock option plan.
(11) Includes 50,000 shares that may be purchased pursuant to options.
(12) Of the 336,000 shares, Mr. and Mrs. Howell own 156,000 shares as joint
tenants and share voting and investment power, Mr. Howell owns 35,000
shares individually (including options for 25,000 shares) and retains sole
voting and investment power with respect to these shares, and Mrs. Howell
owns 145,000 shares individually and retains sole voting and investment
power with respect to these shares.
(13) Includes 25,000 shares that may be purchased pursuant to options.
(14) Includes 1,880,000 shares which may be acquired by all directors and
officers as a group pursuant to options, including options for 1,330,000
shares owned by Freedom. See Note 5.
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<PAGE>
(15) Includes 80,000 shares which may be acquired upon the exercise of stock
options by all directors and officers as a group.
(16) The address of Freedom Financial Company is 2669 Charlestown Road, New
Albany, Indiana 47150. The business address of W. B. Collett is 1750 South
Kings Highway, Fort Pierce, Florida 34945-3099. The address of Freedom
Holding, Inc. is P.O. Box 216, Floyds Knobs, Indiana 47119.
(17) Includes 1,330,000 shares which Freedom currently has the right to acquire.
See also Note 16.
(18) Roger M. Wheeler, Jr. and E.H.P. Company (wholly owned by Pamela W.
Norberg) are the general partners of WJA Realty Limited Partnership. As
the general partners, each may be deemed to share with the other voting and
dispositive power with respect to the shares.
(19) Casino America, Inc. owns 23,681 shares of Freedom's 7% Series AA
Mandatorily Redeemable Preferred Stock (the "Freedom Preferred Stock").
Until October 4, 1999, the Freedom Preferred Stock is convertible into
157,873 shares of the Company's Common Stock owned by Freedom if at the
time of conversion Florida law permits casino style gaming at the Fronton
and 315,746 shares if at the time of conversion Florida law does not permit
casino style gaming at the Fronton.
INDEPENDENT PUBLIC ACCOUNTANTS
King & Company, PSC, has served as the Company's independent public
accountants and audited the Company's financial statements for the fiscal year
ending December 31, 1995, following the engagement of King & Company, PSC, on
January 9, 1995. It is anticipated that a representative of King & Company,
PSC, will be present at the Annual Meeting, will have an opportunity to make a
statement should he desire to do so, and will be available to respond to
appropriate questions.
For the past several years, Arthur Andersen & Co. had been engaged by the
Company to audit the Company's financial statements. On January 9, 1995, the
Company dismissed Arthur Andersen & Co. Arthur Andersen & Co's accountant's
reports on the Company's financial statements for the past two years did not
contain an adverse opinion or a disclaimer of opinion and were not qualified or
modified as to uncertainty, audit scope, or accounting principles. The decision
to dismiss Arthur Andersen & Co. and to engage other accountants was approved by
the Company's Board of Directors. During the Company's two most recent fiscal
years and the interim period preceding the dismissal of Arthur Andersen & Co.,
there were no disagreements between the Company and Arthur Andersen & Co. on any
matter of accounting principles or practices, financial statement disclosure, or
auditing scope or procedure, which disagreements, if not resolved to the
satisfaction of Arthur Andersen & Co., would have caused Arthur Andersen & Co.
to make a reference to the subject matter of the disagreement in connection with
its reports.
EXPENSES OF SOLICITATION
All expenses incurred in connection with the solicitation of proxies will
be borne by the Company. The Company will reimburse brokers, fiduciaries and
custodians for their costs in forwarding proxy materials to beneficial owners of
Common Stock held in their names. Solicitation may be undertaken by mail,
telephone and personal contact by directors, officers and employees of the
Company without additional compensation.
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<PAGE>
STOCKHOLDERS' PROPOSALS FOR 1997 ANNUAL MEETING
Proposals of stockholders intended to be presented at the 1997 Annual
Meeting of Stockholders must be received by the Company on or before May 16,
1997, to be eligible for inclusion in the Company's proxy statement and proxy
relating to that meeting.
OTHER INFORMATION
Management does not know of any matters other than those referred to in the
accompanying Notice of Annual Meeting of Stockholders which may properly come
before the meeting. As to any other matter or proposal that may properly come
before the meeting, it is intended that proxies solicited will be voted in
accordance with the discretion of the proxy holders.
The form of proxy and the proxy statement have been approved by the Board
of Directors and are being mailed and delivered to stockholders by its
authority.
A COPY OF THE COMPANY'S FORM 10-KSB FOR THE YEAR ENDED DECEMBER 31, 1995,
WITHOUT EXHIBITS, MAY BE OBTAINED WITHOUT CHARGE BY WRITING TO: TIMOTHY L.
HENSLEY, FLORIDA GAMING CORPORATION, 1750 SOUTH KINGS HIGHWAY, FORT PIERCE,
FLORIDA 34945-3094.
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<PAGE>
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
FLORIDA GAMING CORPORATION (THE "CORPORATION")
The undersigned hereby appoints Robert L. Hurd and W.B. Collett, Jr., or
either of them (with full power to act alone), as proxies, with the
Corporation's Chief Executive Officer retaining the power of substitution should
either of them be unable to serve, to represent and to vote all of the stock of
the Corporation held of record or which the undersigned is otherwise entitled to
vote, at the close of business on August 13, 1996, at the 1996 Annual Meeting of
Stockholders to be held at Fort Pierce Jai-Alai, 1750 South Kings Highway, Fort
Pierce, Florida, on October 10, 1996, at 12:00 noon, local time, and at any
adjournments thereof, with all the powers the undersigned would possess if
personally present, as follows:
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<S> <C> <C> <C>
1. ELECTION OF DIRECTORS
/ / FOR all nominees listed below / / WITHHOLD AUTHORITY to
(except as marked to the contrary vote for all nominees listed below
below)
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W. Bennett Collett, Gary E. Bowman, W. Bennett Collett, Jr.,
George W. Galloway, Jr., Roland M. Howell, and Robert L. Hurd
(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEES,
WRITE THE NOMINEE'S NAME ON THE LINE BELOW)
________________________________________
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<S> <C> <C> <C>
2. In their discretion, the Proxies are authorized to vote upon such other business as may properly
come before the meeting.
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<PAGE>
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS AND WILL BE VOTED AS SPECIFIED
AND IN ACCORDANCE WITH THE ACCOMPANYING PROXY STATEMENT. IF NO INSTRUCTION IS
INDICATED, THIS SIGNED AND DATED PROXY WILL BE VOTED "FOR" ALL OF THE NOMINEES
LISTED IN ITEM 1.
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<S> <C>
Signature
Additional signature, if held jointly
Dated , 1996
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY
PROMPTLY USING THE ENCLOSED ENVELOPE
Please sign exactly as name appears at left.
When shares are held by joint tenants, 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.
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