<PAGE>
Schedule 14A Information
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
(Amendment No. ________ )
Filed by the Registrant /X/
Filed by a party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2)
/X/ Definitive Proxy Statement
/ / Definitive Proxy Materials
/ / Soliciting Material Pursuant to
Section 240.14a-11(c) or Section 240.14a-12
Florida Gaming Corporation
---------------------------------
Name of Registrant as Specified
in its Charter
---------------------------------
Name of Person(s) Filing Proxy
Statement if other than Registrant
Payment of Filing Fee (Check the
appropriate box):
/X/ No fee required
/ / Fee computed on table below per Exchange
Act Rules 14a6(i)(1) and 0-11.
(1) Title of each class of securities to
which transaction applies:
----------------------------------------------
(2) Aggregate number of securities to
which transaction applies:
----------------------------------------------
(3) Per unit price or other underlying value
of transaction computed pursuant to Ex-
change Act Rule 0-11 (set forth the amount
on which the filing fee is calculated and
state how it was determined):
----------------------------------------------
<PAGE>
(4) Proposed maximum aggregate value of
transaction:
----------------------------------------------
(5) Total fee paid:
----------------------------------------------
/ / Fee paid previously with preliminary
materials:
/ / Check box if any part of the fee is offset
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:
----------------------------------------------
<PAGE>
FLORIDA GAMING CORPORATION
November 25, 1998
Dear Florida Gaming Stockholder:
You are cordially invited to attend the 1998 Annual Meeting of
Stockholders of Florida Gaming Corporation which will be held on December 30,
1998 at Double Tree Club Hotel, 9700 Bluegrass Parkway, Louisville, Kentucky
40299 at 2:00 P.M. 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" the election of six directors to serve until the 1999 Annual
Meeting of Stockholders.
* "FOR" the appointment of King & Company PSC as the Company's
auditor for 1998.
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. Included in these materials is the
Company's Annual Report on Form 10-KSB/A for the year ended December 31, 1997.
W. B. Collett
Chairman of the Board and
Chief Executive Officer
<PAGE>
FLORIDA GAMING CORPORATION
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To all Holders of Common Stock of Florida Gaming Corporation:
The 1998 Annual Meeting (the "Meeting") of Stockholders of Florida
Gaming Corporation (the "Company"), a Delaware corporation, will be held at
Double Tree Club Hotel, 9700 Bluegrass Parkway, Louisville, Kentucky 40299 on
December 3O, 1998 at 2:00 P.M., local time, for the following purposes:
1. To elect six directors to serve until the 1999 Annual Meeting of
Stockholders;
2. To appoint King & Company PSC, as the Company's auditor for 1999;
3 To transact such other business as may properly come before the
Meeting and adjournments thereof.
Stockholders of record at the close of business on November 24, 1998,
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
November 24, 1998, will be available for inspection during normal business
hours from December 1 through December 30, 1998 at 2669 Charlestown Road,
Suite D, New Albany, Indiana 47150.
By Order of the Board of Directors
November 25, 1998 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
3500 N.W. 37TH AVENUE
MIAMI, FLORIDA 33142
(305) 633-6400
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 1998 Annual Meeting of Stockholders of the Company
to be held at Double Tree Club Hotel, 9700 Bluegrass Parkway, Louisville,
Kentucky 40299 on December 30, 1998, at 2:00 P.M., local time, and at any
adjournments thereof (the "Annual Meeting").
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 mailing address of the principal executive offices of the Company is
Florida Gaming Corporation, 3500 N.W. 37th Avenue, Miami, Florida 33142. The
approximate date on which this Proxy Statement and form of proxy are first
being sent or given to stockholders is December l, 1998.
At the Annual Meeting, stockholders will be asked to vote on the
election of nominees to the Board of Directors and the appointment of King &
Company PSC as the Company's auditor for 1999.
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 1999
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. Regarding the appointment of King &
Company PSC as the Company's auditor for 1998, stockholders may vote in favor
of, against or abstain from voting on the proposal. Stockholders should
specify their choice on the enclosed form of proxy.
If no specific instructions are given with respect to the matters to be
acted upon, the shares represented by a properly signed and dated proxy will
be voted "FOR" the election of all nominees and "FOR" the approval of King &
Company PSC as the Company's auditor for 1998.
The election of directors will require the affirmative vote by the
holders of a plurality of the shares of Common Stock of the Company voting in
person or by proxy at the Annual Meeting and all
1
<PAGE>
other actions will require the affirmative vote by the holders of a majority
of the shares of Common Stock of the Company voting in person or by proxy at
the Annual Meeting.
Only holders of record of shares of Common Stock of the Company at the
close of business on November 24, 1998, (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
5,782,250 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. Abstentions are counted in tabulations of the votes cast on
proposals presented to stockholders, whereas broker non-votes are not counted
for purposes of determining whether a proposal has been approved.
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
elected at the Annual Meeting will hold office until the next annual meeting
of stockholders following their election and until their successors are
elected and qualified.
The Board of Directors has nominated W. Bennett Collett, W. Bennett
Collett, Jr., George W. Galloway, Jr., Timothy L. Hensley, Roland M. Howell,
and Robert L. Hurd for election at the Annual Meeting.
DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth certain information concerning the
Company's executive officers and directors as of the Record Date:
<TABLE>
<CAPTION>
Director or
Executive
Name(1) Age Position With The Company Officer Since
- ------- --- ------------------------- -------------
<S> <C> <C> <C>
W. Bennett Collett 66 Chief Executive Officer 1993
and Chairman
Robert L. Hurd 59 President and Director 1993
W. Bennett Collett, 43 Executive Vice President, 1993
Jr. Secretary and Director
Timothy L. Hensley 42 Director 1997
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
Director or
Executive
Name(1) Age Position With The Company Officer Since
- ------- --- ------------------------- -------------
<S> <C> <C> <C>
George W. Galloway, Jr. 64 Director 1994
Roland M. Howell 81 Director 1995
</TABLE>
(1) Gary E. Bowman, who was first elected a director of the Company at the 1994
Annual Meeting of Shareholders, resigned as a director for personal reasons
effective April 30, 1998.
NOMINEES FOR ELECTION TO BOARD OF DIRECTORS
The following information is furnished as of the Record Date. Each of the
nominees for election to the Board of Directors is currently serving as a
director of the Company.
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. 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 23 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, Indiana 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 1, 1991 and as President and as a director of Holding since April 20,
1998. Mr. Hurd has served as President and Chairman of General Health Care
Corporation, a New Jersey based company in the health care apparel business,
since February 13, 1995. 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 and
a director of Holding since April 20, 1998. He presently serves as Secretary
and Treasurer of Holding. Mr. Collett is responsible for supervision of the
Company's gaming operations (live jai-alai performances and inter tract
wagering). 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.
3
<PAGE>
TIMOTHY L. HENSLEY served Freedom from 1988 to June 1998 in various
capacities, including President, Executive Vice President and Treasurer and a
director. Mr. Hensley was appointed to the Company's Board of Directors on
February 27, 1997. Mr. Hensley served as Executive Vice President, Treasurer
and Chief Financial Officer of the Company from 1993 until he resigned in
June 1998 to accept a position as chief financial officer of Park Trust
Development, a residential and commercial real estate development company
located in Murfreesboro, Tennessee.
GEORGE W. GALLOWAY JR. has been a self-employed physician since 1958 and
has served as the medical director of the emergency room at Kennestone
Hospital in Marietta, Georgia since 1983.
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 held 7 meetings during 1997 and the
Acquisition Committee of the Board of Directors held 5 meetings during 1997.
Dr. George W. Galloway, Jr. attended 5 meetings of the Board of Directors and
3 meetings of the Acquisition Committee. All of the other directors attended
six or more meetings of the Board of Directors and all of the other members
of the Acquisition Committee attended all of its meetings. The Board of
Directors has no standing audit, nominating or 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
per Cent 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, 1997, all Section 16(a) filing requirements
applicable to its officers, directors and greater than ten percent beneficial
owners were satisfied.
EXECUTIVE COMPENSATION
The following table sets forth all cash compensation paid by the Company
for the fiscal years ended December 31, 1997, 1996, and 1995 to W. Bennett
Collett, W. Bennett Collett, Jr. (W. B. Collett, Jr.) and Timothy L. Hensley.
W. Bennett Collett received no cash
4
<PAGE>
compensation from the Company from the time he began service as an executive
officer on March 31, 1993 through December 31, 1995.
<TABLE>
<CAPTION>
Summary Compensation Table
Annual Long Term
Compensation Compensation
------------ ------------
Name and Principal Fiscal Options/ All Other
Position Year Salary SARS Compensation
- ----------------- ------- --------- -------- -------------
<S> <C> <C> <C> <C>
W. Bennett Collett 1997 $237,000 165,000 -0-
Chairman of the 1996 390,000 -0- -0-
Board and Chief 1995 -0- 300,000 -0-
Executive Officer
W. B. Collett, Jr. 1997 $165,000 40,000 -0-
Executive Vice 1996 97,000 100,000 -0-
President and 1995 84,000 -0- -0-
Director
Timothy L. Hensley 1997 $110,208 25,000 -0-
Executive Vice 1996 80,462 -0- -0-
President, CFO 1995 70,650 -0- -0-
and Director
</TABLE>
AGGREGATED OPTION EXERCISES IN FISCAL 1997
AND YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
Number of Securities
Underlying Unexercised
Options at Fiscal Year End
(#) (1)
Shares Acquired Value Exercisable/
Name on Exercise (#) Realized($) Unexercisable(#)
- ---- ---------------- ----------- -----------------
<S> <C> <C> <C>
W. Bennett Collett -0- -0- 490,000/-0-(2)
W. B. Collett, Jr. -0- -0- 215,000/0-(2)
Timothy L. Hensley -0- -0- 50,000/25,000(2)
</TABLE>
(1) Based on a per share closing price of $3.00 at December 31, 1997. None of
these options were in-the-money.
(2) These options were cancelled effective November 2, 1998.
5
<PAGE>
DIRECTOR COMPENSATION
The Company currently pays its non-management directors, Timothy L.
Hensley, Dr. George W. Galloway, Jr., and Roland M. Howell a $500 monthly
fee. W. Bennett Collett, W. B. 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 directors of the Company will
receive an option to purchase 25,000 shares of Common Stock. All options
previously granted pursuant to the Directors' Stock Option Plan were
cancelled effective November 2, 1998.
On February 26, 1997, the Company adopted a Directors' Continuing Stock
Option Plan that provides that every director will be granted an option to
purchase 10,000 shares of common Stock for each full or partial year that
such director served as such before January 1, 1997 and for each full year as
a director after December 31, 1996. All options previously granted pursuant
to the Directors' Continuing Stock Option Plan were cancelled effective
November 2, 1998.
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 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
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.
6
<PAGE>
On September 12, 1996, the Company consummated the purchase of notes
(the "WJA Notes") of WJA Realty Limited Partnership ("WJA") from the Bank of
Oklahoma, National Association ("BOK"). The WJA Notes totaled $20,728,826
(consisting of $16,887,907 principal and $3,840,919 accrued but unpaid
interest), bearing interest at 9.25% on the principal and unpaid interest.
The Company paid $2,000,000 in cash, issued 703,297 shares of the Company's
Common Stock to BOK DPC Asset Holding Corporation, a wholly owned subsidiary
of BOK, issued a promissory note in the original principal amount of
$6,000,000 (the BOK Note) to BOK bearing interest at New York Prime Rate
(subsequently changed to New York Prime plus two percent) and issued a
$1,000,000 original principal amount non-interest bearing promissory note to
BOK in payment of a contingent liability relating to certain collections by
the Company in excess of $12,000,000 on account of the WJA Notes. The terms
of the transaction were determined based on arm's length negotiations. The
principal balance due on the BOK Note is $2,800,000.
The WJA Notes were secured by real estate and improvements consisting of
jai-alai and inter-track wagering facilities located at Miami, Tampa and
Ocala, Florida. The Company entered into an Assets Purchase Agreement dated
as of November 20, 1996 (the "Agreement") between the Company, Florida Gaming
Centers, Inc. (the "Subsidiary"), and WJA, pursuant to which the Subsidiary
(a wholly owned subsidiary of Company) agreed to acquire all of the tangible
and intangible properties and assets owned by WJA. Upon the terms and subject
to the conditions set forth in the Agreement, on December 31, 1996, with an
effective date of January 1, 1997, the Company acquired WJA's jai-alai and
inter-track wagering facilities located in Miami, Tampa and Ocala, Florida.
The assets acquired have been combined under the Company's Ft. Pierce
Jai-Alai and Inter-Track Wagering operations into the Subsidiary .
The Company and Freedom entered into a Credit Line Agreement dated
October 1, 1996, whereby the Company agreed to lend Freedom up to $2,000,000
at an annual interest rate of 2% above the prime rate, partially secured by
Freedom's federal tax refunds receivable totaling approximately $600,000
through and for the year ended December 31, 1994, and a first mortgage on 23
acres of partially-developed commercial real estate in Georgia with an
appraised value of $1,600,000. This line of credit superseded a $1,000,000
line of credit established on December 1, 1995. Principal and interest
outstanding under the Credit Line Agreement were payable upon demand by the
Company. The agreement did not provide for periodic payments of principal or
interest.
Pursuant to the Asset Purchase Agreement dated as of September 24, 1997,
the Company purchased from Interstate Capital Corporation ("Interstate") 23
acres of partially developed commercial real property and a residential real
estate development called Tara Club Estates (collectively, the "Properties"),
all of which are situated in Loganville, Walton County, Georgia. Interstate
is a wholly owned subsidiary of Freedom. As consideration for the purchase,
the Company paid Interstate the sum of $6,373,265, payable as follows: (i)
the Company's assumption of $1,081,102 of first mortgage
7
<PAGE>
promissory notes to certain lenders secured by the Properties, (ii) the
Company's issuance of 2,084 shares of Series F 8% Convertible Preferred Stock
at a stated value of $1,000 per share (convertible on the basis of 296.6689
shares of the Company's common stock for each $1,000 of stated value of the
Preferred Stock), and (iii) the cancellation of $3,208,163 owed by Freedom to
the Company in accordance with the Credit Line Agreement and otherwise. The
transaction was approved by a Committee of the Board of Directors of the
Company who did not have a direct financial interest in the transaction after
receiving a fairness opinion from an independent investment banker.
In addition to loans made to Freedom under the Credit Line Agreement
described above, the Company provided working capital advances to Freedom and
made payments to third parties on Freedom's behalf throughout 1997. These
third party payments comprised transfers totaling approximately $582,000 to
Freedom's brokerage margin account, which funds were used by Freedom to cover
margin calls made by the brokerage as the value of Freedom's collateral in
the margin account decreased in value. The collateral included the Company's
common stock acquired by Freedom during 1997 pursuant to its exercise of
options. The Company also advanced approximately $118,000 directly to Freedom
through this open account during the year. Freedom made payments to the
Company during 1997 totaling $259,500 as a reimbursement of these advances
and also incurred expenses on behalf of the Company totaling approximately
$207,500, which were credited to Freedom's open account. On June 22, 1998,
the Company repurchased 84 shares of its $1,000 par value Series F Preferred
Stock from Interstate for $84,000 and Freedom paid in full the remaining
balance of $233,034, plus interest at 2% above the prime rate.
On July 10, 1997, the Company issued to an unrelated party a $1,200,000
5% Cumulative Convertible Debenture due December 31, 1998 (the "Debenture").
The Debenture provided its holder with certain demand rights after December
31, 1997 to redeem part of the Debenture under certain circumstances (the
"Demand Rights"). Freedom guaranteed the Demand Rights by pledging 300,000
shares of the Company's Common Stock pursuant to a Guaranty and Stock Pledge
Agreement. The Company completed its redemption of the Debenture on
December 5, 1997.
Pursuant to a Stock Purchase Agreement, on March 31, 1993, the Company
issued an aggregate of 699,480 shares of Common Stock and options for
1,630,000 shares of Common Stock to Freedom at an exercise price of $1.25 per
share. In 1994, Freedom exercised options to purchase 300,000 shares of
Common Stock. In 1997, Freedom exercised options to purchase 425,000 shares
of Common Stock. Freedom used its working capital to effect these purchases.
Options for the remaining 905,000 shares of Common Stock expired on March 31,
1998.
During 1996, the Board of Directors established the annual salary of W.
Bennett Collett, the Chairman of the Board and Chief Executive Officer of the
Company, at $360,000, payable monthly.
8
<PAGE>
Mr. Collect had received no salary for the previous two years. During 1997,
Mr. Collett received 8 monthly payments of $30,000 consistent with the
Board's directive. In September, 1997, the Company discontinued the salary
payments to the Mr. Collett and began paying $30,000 per month to Freedom in
lieu of his salary. No written employment or consulting agreement exists
between the Company and Freedom. Beginning November 1, 1997, the Company
discontinued salary payments of $9,000 per month to Robert L. Hurd, the
President of the Company, and began paying $8,000 per month to Freedom in
lieu of his salary. Mr. Collett and Mr. Hurd are Chairman of the Board and
Chief Executive Officer and President, respectively, of Freedom.
On November 10, 1998, the Board of Directors of the Company authorized
the Company to borrow up to $1,500,000 from Freedom with the loan to be
represented by a promissory note (the "Company Note") bearing interest at the
rate of 15% per annum secured by a first lien on the shares of the Company's
wholly-owned subsidiaries, Florida Gaming Centers, Inc. ("Gaming Centers")
and Tara Club Estates, Inc. ("Tara") and by a second lien on substantially
all of the Company's other assets. The Note will be guaranteed by Gaming
Centers and Tara with their guaranties secured by a second lien on
substantially all of their respective assets. Freedom may partially fund the
Company Note out of the proceeds of a loan from a commercial bank (the
"Freedom Note"). The Freedom Note will bear interest at the rate of 13% per
annum and must be personally guaranteed by W. Bennett Collett, the Company's
Chairman and Chief Executive Officer. The Freedom Note will be secured by the
assignment of the Company Note and the collateral securing the Company Note.
The Company Note and the Freedom Note will be due on demand or one year from
date if no demand is made. Five points must be paid at the closing of the
Freedom Note and a like amount will be paid at the closing of the Company
Note.
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, 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 1,652,480 shares of the Company's Common Stock currently held of record
by Freedom, 1,100,000 shares have been pledged by Freedom to a bank to secure
a $1,800,000 line of credit and the remaining shares have been pledged to
other creditors. Freedom and Holding each may 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.
9
<PAGE>
<TABLE>
<CAPTION>
THE COMPANY FREEDOM HOLDING
----------- ------- -------
Directors and Number Percent Number Percent Number Percent
Executive of of of of of of
Officers Shares(1) Class(2) Shares(1) Class(3) Shares(1) Class(4)
- ------------ ---------- --------- ---------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
W. B. Collett.... 2,245,818(5) 35.2% 1,109,011(6) 95.0% 412.1(7) 74.3%
Robert L. Hurd .. 1,000(8) * ---- ---- 54.3(9) 9.8%
W. B. Collett, Jr. ---- ---- ---- ---- 87.9 15.9%
Timothy L.
Hensley ......... ---- ---- ---- ---- ---- ----
Roland M.Howell.. 352,500(10) 6.1% ---- ---- ---- ----
George W.
Galloway, Jr..... ---- ---- ---- ---- ---- ----
All current
directors and
executive
officers as a
group (6 persons) 2,599,318(11) 42.8% 1,109,011 95.0% 554.3 100%
5% BENEFICIAL OWNERS
Freedom
Financial
Corporation(15).. 2,245,818(12) 35.2% N/A N/A N/A N/A
BOK DPC Asset
Holding
Corporation (14) 703,297 12.2% N/A N/A N/A N/A
Roland M. and
Dorothy V.
Howell(15)...... 352,500 6.1% N/A N/A N/A N/A
Casino
America,
Inc(16)......... 369,425(17) 6.0% N/A N/A N/A N/A
</TABLE>
*Less than 1%.
(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 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 5,782,250 shares outstanding as of the Record Date. Shares of
Common Stock subject to options exercisable or preferred
10
<PAGE>
stock convertible within 60 days are deemed outstanding for computing the
percentage of class of the person holding such options or preferred stock,
but are not deemed outstanding for computing the percentage of class for any
other person.
(3) Based on 1,167,943 shares outstanding as of the Record Date. Class B
Common Stock is the only class of Freedom's capital stock issued and
outstanding.
(4) Based on 554.3 shares outstanding on the Record Date.
(5) Includes 2,245,818 shares beneficially owned by Freedom, which includes
593,338 shares into which 2,000 shares of the Company's Series F Preferred
Stock owned by Interstate are convertible. Mr. Collett may be deemed to
beneficially own the shares held by Freedom, although he disclaims beneficial
ownership of such shares.
(6) Includes 1,109,011 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) lncludes 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.
(9) Includes 54.3 shares owned by the Hurd Family Partnership, L.P., of which
Mr. Hurd is general partner.
(10) Of the 352,500 shares, Mr. and Mrs. Howell own 197,500 shares as joint
tenants and share voting and investment power, Mr. Howell owns 10,000 shares
individually 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.
(11) Includes 593,338 shares which may be acquired by all directors and
executive officers as a group.
(12) See Note (5). The address of Freedom Financial Corporation and Freedom
Holding, Inc. is 2669 Charlestown Road, Suite D, New Albany, Indiana 47150.
The business address of W. B. Collett is 1750 South Kings Highway. Fort
Pierce, Florida 34945-3099.
(13) Casino America, Inc. owns 27,707 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
184,713 shares of the Company's Common Stock owned by Freedom if at the time
of conversion Florida law permits casino style gaming in Florida and 369,426
shares if at the time of conversion Florida law does not permit casino style
gaming in Florida.
11
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(15) BOK DPC Asset Holding Corporation's address is Bank of Oklahoma Tower,
P.O. Box 2300, Tulsa Oklahoma 74192
(16) Roland M. and Dorothy V. Howell's address is Plaza Venetia, Suite 22
A-B, Miami, Florida 33123.
(17) Casino America Inc.'s address is 711 Washington Loop, Biloxi,
Mississippi 39530.
INDEPENDENT PUBLIC ACCOUNTANTS
King & Company, PSC serves as the Company's independent public
accountants and audited the Company's financial statements for the fiscal
years ended December 31, 1995, 1996 and 1997 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.
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.
STOCKHOLDERS' PROPOSALS FOR 1998 ANNUAL MEETING
Proposals of stockholders intended to be presented at the 1999 Annual
Meeting of Stockholders must be received by the Company on or before August
17, 1999 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/A FOR THE YEAR ENDED DECEMBER 31,
1997, WITHOUT EXHIBITS, IS BEING DELIVERED WITH THIS PROXY STATEMENT. A COPY
OF THE COMPANY'S FORM 10-KSB/A FOR THE YEAR ENDED DECEMBER 31, 1997 AND/OR A
COPY OF THE COMPANY'S FORM 10-QSB FOR THE QUARTER ENDED SEPTEMBER 30, 1998
MAY BE OBTAINED WITHOUT CHARGE BY WRITING TO: W. BENNETT COLLETT, FLORIDA
GAMING CORPORATION, 2669 CHARLESTOWN ROAD, SUITE D, NEW ALBANY, INDIANA 47150
OR CALLING (502) 589-2000.
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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 November 24, 1998, at the 1998 Annual Meeting
of Stockholders to be held at Double Tree Club Hotel, 9700 Bluegrass Parkway,
Louisville, Kentucky 40299 on December 30, 1998, at 2:00 P.M. (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, W. Bennett Collett, Jr., George W. Galloway, Jr.,
Timothy L. Hensley, 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. PROPOSAL TO RATIFY THE APPOINTMENT OF KING & COMPANY AS INDEPENDENT AUDITORS OF THE CORPORATION
FOR 1998.
/ / FOR / / AGAINST / / ABSTAIN
</TABLE>
________________________________________
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<S> <C> <C> <C>
3. In their discretion, the Proxies are authorized to vote upon such other business as may properly
come before the meeting.
</TABLE>
<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 AND "FOR" ITEM 2.
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<S> <C>
Signature
Additional signature, if held jointly
Dated: , 1998
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY
PROMPTLY USING THE ENVELOPE PROVIDED
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 officer.
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