SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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:
[X] Preliminary proxy statement
[ ] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
Europa Cruises 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 14a-6(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 Exchange Act Rule 0-11:(1)
- ----------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- ----------------------------------------------------------------------
(1)Set forth the amount on which the filing fee is calculated and state
how it was determined.
<PAGE>
[ ] 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:
- ----------------------------------------------------------------------
- 2 -
<PAGE>
Preliminary Proxy Soliciting Material
EUROPA CRUISES CORPORATION
150 153rd Avenue
Suite 200
Madeira Beach, FL 33708
----------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON APRIL 18, 1997
----------------
TO THE SHAREHOLDERS OF
EUROPA CRUISES CORPORATION:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of
Europa Cruises Corporation (the "Company") will be held on April 18, 1997 at the
North Redington Beach Hilton, 17120 Gulf Boulevard, North Redington Beach,
Florida 33708 at 9:00 a.m., local time, for the following purposes:
(1) To elect three directors to hold office until the next annual
meeting of shareholders and until their successors have been
duly elected and qualified.
(2) To transact such other business as may properly come before
the meeting and any adjournments thereof.
Management's slate for election as directors are Mr. Lester E. Bullock,
Ms. Deborah A. Vitale and Mr. Piers Hedley.
A rival group of persons referring to themselves as "The Committee to
Improve Shareholder Value of Europa Cruises Corporation" (hereafter "the
Catalano Committee"), filed a proxy statement with the Securities and Exchange
Commission on Schedule 14A, soliciting shareholder proxies and stating their
intention to nominate a slate of candidates consisting of Messrs. Peter J.
Catalano, Stephan A. Fitch, John H. Glassey and Paul Wells (hereafter "the
Catalano Slate"), to serve on the Board of Directors of the Company.
The Board of Directors urges you NOT TO vote for any of
the Catalano Slate.
Peter J. Catalano served as General Partner or a Director of six
entities which have, within the last five years, filed for protection under the
United States Bankruptcy Code (the "Bankruptcy Code"). These include Gold Star
Cruises of Galveston, L.C., a cruise ship and gaming operation that is the
subject of a liquidation proceeding under Chapter 7 of the Bankruptcy Code. In
addition, Peter J. Catalano has also filed a personal bankruptcy action for
protection from his creditors under Chapter 11 of the Bankruptcy Code. Paul
Wells, a second nominee of the Catalano Committee, served as President of Gold
Star Cruises of Galveston, L.C., the same cruise ship and gaming operation with
which Peter J. Catalano was affiliated, and which is the subject of a
liquidation proceeding under Chapter 7 of the Bankruptcy Code. John H. Glassey,
a third nominee of the Catalano Committee, served as Vice President of Corporate
Development from April 1993 through December 1995 of American Gaming
Entertainment, Ltd., a corporation whose subsidiary, AMGAM Associates, doing
business in Mississippi as Gold Shore Casino, was forced into involuntary
bankruptcy in May 1995.
The individuals named in the Catalano Committee's proxy statement and
their backgrounds, together with the reason for the Board's rejection of the
Catalano Slate, are further described in the Proxy Statement.
The Board of Directors has fixed the close of business on March 14,
1997 as the record date for the determination of shareholders entitled to notice
of and to vote at the Annual Meeting or any adjournments thereof.
Your shares should be represented at this meeting, whether or not you
are able to attend personally. Therefore, the Company requests that you sign,
date and return in the enclosed postage-paid envelope the WHITE proxy card
voting for the election of the Company's nominees, Mr. Lester E. Bullock, Ms.
Deborah A. Vitale and Mr. Piers Hedley, to the Board of Directors.
The Annual Report to Shareholders of Europa Cruises Corporation for the
year ended December 31, 1996 will be mailed to you at least 20 days prior to the
Annual Meeting.
By Order of the Board of Directors
Lester E. Bullock
President
March __, 1997
- 3 -
<PAGE>
Europa Cruises Corporation
----------------
PROXY STATEMENT
----------------
The enclosed proxy is solicited by the Board of Directors (the "Board")
of Europa Cruises Corporation (the "Company") for use at the Annual Meeting of
Shareholders, and any adjournments thereof, to be held on April 18, 1997, at the
North Redington Beach Hilton, 17120 Gulf Boulevard, North Redington Beach,
Florida 33708 at 9:00 a.m., local time, for the purposes set forth in the
foregoing Notice of Annual Meeting of Shareholders (the "Meeting").
Shareholders executing proxies may revoke them at any time prior to use
by written notice to the Secretary of the Company, by subsequently executing a
later dated proxy, or by attending the Meeting and voting in person. A proxy
when executed and not revoked will be voted and, if it contains any
specifications, it will be voted in accordance therewith. If no choice is
specified, shares covered by the proxy will be voted in favor of the Board's
nominees for election of directors and in the discretion of the proxy holder
upon such other matters as may properly come before such meeting.
Your shares should be represented at this meeting, whether or not you
are able to attend personally. Therefore, the Company requests that you sign,
date and return in the enclosed postage-paid envelope the WHITE proxy card
voting for the election of the Company's nominees, Mr. Lester E. Bullock, Ms.
Deborah A. Vitale and Mr. Piers Hedley, to the Board of Directors.
This Proxy Statement and the accompanying Proxy are being mailed to
shareholders on or about March ___, 1997. A copy of the Annual Report for 1996
will be forwarded to you at least 20 days prior to the Meeting.
The address of the Company's executive offices is 150 153rd Avenue,
Suite 200, Madeira Beach, Florida 33708. The Chairman of the Board, Deborah A.
Vitale, can be reached at (703) 683-6800 and the President, Lester E. Bullock,
can be reached at (813) 398-7347.
Shareholders Entitled to Vote and Principal Shareholders
At the close of business on March 14, 1997, the record date for
determining the shareholders entitled to vote at the annual meeting, there were
issued and outstanding and entitled to vote a total of 27,108,854 shares of the
Company's Common Stock, par value $.001 per share (the "Common Stock"), 926,000
shares of the Company's Series "S" Preferred Stock (the "S Preferred Stock") and
900,000 shares of the Company's Series "S- NR" Preferred Stock (the "NR
Preferred Stock"). The S Preferred Stock and the NR Preferred Stock are
collectively referred to herein as the "Preferred Stock." The Common Stock and
Preferred Stock vote as a single class, and each share is entitled to one vote
per share. The shares of stock represented at the Meeting, either in person or
by proxy, and entitled to vote thereat, shall constitute a quorum for the
purpose of the Meeting. Votes cast by proxy or in person at the Meeting will be
tabulated by the judge of elections appointed for the Meeting.
-1-
<PAGE>
The only persons who owned of record or were known by the Company to
own beneficially on March 14, 1997, more than 5% of any class of the outstanding
voting shares of the Company were as follows:
Name and Address Number of Shares Owned Percent(1)
- ---------------- ---------------------- ----------
Serco International Limited 3,316,334 (2) 10.57%
P.O. Box 15, A-9010
Klagenfurt, Austria
Austroinvest International Limited 3,316,334 (2) 10.57%
P.O. Box 15, A-9010
Klagenfurt, Austria
Gaming Invest Corporation 3,316,334 (2) 10.57%
P.O. Box 15, A-9010
Klagenfurt, Austria
Europa Cruises Corporation 4,750,000 (3) 15.14%
Employee Stock Ownership Plan,
Trust Agreement
150 153rd Avenue East
Madeira Beach, Florida 33708
Lester E. Bullock 5,306,270 (3)(4) 16.91%
150 - 153rd Avenue
Madeira Beach, FL 33708
Deborah A. Vitale, Esquire 5,753,500 (3)(4) 18.34%
1013 Princess Street
Alexandria, VA 22314
Ernst G. Walter 3,316,334 (2) 10.57%
14700 Gulf Blvd.
Apt 401
Madeira Beach, Florida 33708
- ----------------
(1) Common Stock and Preferred Stock amounts have been combined for the
purpose of calculating percentages.
(2) Serco International Limited, Austroinvest International Limited and
Gaming Invest Corporation are affiliated entities. The Company
understands that Dr. Ernst Walter is the sole director of each company.
The total beneficial ownership of securities of the Company by the
three corporations and Dr. Walter includes: 900,000 shares of Series
S-NR Preferred Stock and 1,090,334 shares of Common Stock owned by
Serco International Limited; 926,000 shares of S Preferred Stock owned
by Austroinvest International Limited; 200,000 shares of Common Stock
owned by Gaming Invest Corporation; and 200,000 shares of Common Stock
underlying options Dr. Walter has the current right to exercise.
(3) The Trustees of the Europa Cruises Corporation Employee Stock Ownership
Plan, Trust Agreement ("ESOP") are Lester E. Bullock, President and
director of the Company, and Deborah A. Vitale, Esq., Chairman of the
Board of the Company. The ESOP was established on August 18, 1994. The
participants in the ESOP are entitled to direct the Trustees as to the
manner in which the Company's allocated shares are voted. Unallocated
shares are voted by the Trustees. As of March 14, 1997, 250,000 shares
of Common Stock have been allocated to participants in the ESOP,
including 6,270 shares of Common Stock allocated to Mr. Bullock as a
participant.
(4) Includes options to purchase shares of Common Stock exercisable within
the next sixty days. Of such options, 1,000,000 options are held by Ms.
Vitale, 550,000 options are held by Mr. Bullock. Also includes,
4,750,000 unallocated shares of Common Stock which will be voted by Ms.
Vitale and Mr. Bullock as Trustees of the ESOP.
The following table sets forth as of March 14, 1997, the beneficial
ownership of the outstanding voting shares of the Company by directors,
nominees, certain executive officers and all directors and executive officers as
a group.
- 2 -
<PAGE>
Name and Address Number of Shares Owned Percent(1)
- ---------------- ---------------------- ----------
Lester E. Bullock, President and 5,306,270 (3) 16.91%
director of the Company and director
of Casino World, Inc. and Mississippi
Gaming Corporation (2)
150 - 153rd Avenue
Madeira Beach, FL 33708
Deborah A. Vitale, Esquire 5,753,500 (4) 18.34%
Chairman of the Board and Secretary
of the Company and Chairman of the
Board of Casino World, Inc. and
Mississippi Gaming Corporation
1013 Princess Street
Alexandria, VA 22314
Piers Hedley, director 329,500 (5) 1.05%
150 - 153rd Avenue
Madeira Beach, FL 33708
Debra Gladstone, Chief Financial 67,045 (6) *
Officer
150 - 153rd Avenue
Madeira Beach, FL 33708
Charles H. Reddien, President and a 307,500 (7) *
director of Casino World, Inc. and
Mississippi Gaming Corporation
150 - 153rd Avenue
Madeira Beach, FL 33708
All directors and 7,013,815 22.36%
executive officers as
a group (5 persons)
- ---------------------------
* Less than one percent (1%)
(1) Common Stock and Preferred Stock amounts have been combined for the
purpose of calculating percentages.
(2) Casino World, Inc. and Mississippi Gaming Corporation are wholly owned
subsidiaries of the Company.
(3) Includes options to purchase 550,000 shares of Common Stock exercisable
within the next sixty days and 4,750,000 shares of Common Stock which
Mr. Bullock is authorized to vote as Trustee of the ESOP.
(4) Includes options to purchase 1,000,000 shares of Common Stock
exercisable within the next sixty days and 4,750,000 shares of Common
Stock which Ms. Vitale is authorized to vote as Trustee of the ESOP.
(5) Includes options to purchase 250,000 shares of Common Stock and
beneficial interest in 79,500 shares of Common Stock underlying
warrants exercisable within the next sixty days.
(6) Includes options to purchase 50,000 shares of Common Stock exercisable
within the next sixty days.
(7) Includes options to purchase 300,000 shares of Common Stock exercisable
within the next sixty days.
- 3 -
<PAGE>
ELECTION OF DIRECTORS
The Board has fixed the number of directors at three. The term of each
director elected will be until the next Annual Meeting of Shareholders or until
his or her successor is duly elected and qualified. Each nominee is, at present,
available for election, but if any nominee should become unavailable, the
persons voting the accompanying proxy may, at their direction, vote for a
substitute. The election of each director requires the vote of holders of a
plurality of the outstanding Common Stock and Preferred Stock, counted as a
single class, present and voting at the Meeting. Certain information concerning
the nominees is set forth below.
Candidates Nominated By the Board
The Board has nominated the following three persons for election at the Meeting.
Unless otherwise indicated in this proxy statement, the business address of each
nominee is the executive offices of the Company.
Lester E. Bullock, 43, has served as President of the Company since July 18,
1994, and has served as a director of the Company since March 1995. Under the
Company's bylaws the President is also the Chief Executive Officer of the
Company. He is responsible for the day to day operations of the Company. From
January 1994 to June 1994, Mr. Bullock was Vice President of Operations at the
Company. From January 1, 1992, through December 31, 1993, Mr. Bullock was
General Manager of the Company and was responsible for all port operations. In
1991, Mr. Bullock was Casino Pit Manager in Ft. Myers, Florida for Casinos
Austria Maritime Corporation. From 1989 to 1990, Mr. Bullock was General Manager
of the Sonesta Beach Resort and Crystal Casino in Oranjestead, Aruba. From 1984
through 1989, Mr. Bullock held various managerial and administrative positions
at the Tropicana Resort and Casino in Las Vegas, Nevada, and the Dunes Hotel
Casino and Country Club in Las Vegas, Nevada. Mr. Bullock received a B.S. in
Business, from Arizona State University in 1974.
Deborah A. Vitale, 46, was elected Chairman of the Board of Directors in March
1995 and was appointed Secretary of the Company in November 1994. She has been a
director since December 1992. On February 14, 1997, Ms. Vitale was appointed
Chairman of the Board of Directors of Casino World, Inc. and Chairman of the
Board of Directors of Mississippi Gaming Corporation. She is in charge of
managing all legal activity of the Company including the retention and direction
of outside counsel in connection with the Company's various pending cases,
appeals, legal proceedings, permits and licenses, and is also actively involved
in the day to day business operations of the Company. Ms. Vitale is responsible
for all negotiations to date with Hilton Gaming Corporation ("Hilton") and
supervises the Company's responses to Hilton's due diligence inquiries regarding
the Mississippi property. Ms. Vitale is a trial attorney with nineteen years of
experience handling complex civil litigation and is licensed to practice law in
Maryland, Virginia and Washington D.C. Ms. Vitale was a partner in the firm of
Miller & Vitale, P.C., from November 1990 to September 1992. From 1986 to 1990,
Ms. Vitale was of Counsel to the firm of Jacobi & Miller in Alexandria,
Virginia. Ms. Vitale has, in the past, served as a staff attorney at the Federal
Communications Commission and has served as Listing Official for the
Environmental Protection Agency
Piers Hedley, 40, has served as a director of the Company since November 1995.
Mr. Hedley is an Executive Managing Director of the investment banking firm of
Peerless Associates Limited in Europe. From 1991 to 1994, Mr. Hedley served as
the Managing Director of the U.K. investment banking firm, Multinational Capitol
Services Limited.
The Board held ___ meetings during 1996. During the past fiscal year,
each director attended at least 75% of the total number of Board meetings held
during the period for which he or she was a director. The Board does not have an
audit, compensation or nominating committee.
STATUS OF DEVELOPMENT AT DIAMONDHEAD, MISSISSIPPI
Permits. Since March 20, 1995, when Ms. Vitale became Chairman of the
Board and Mr. Bullock became a director of the Company, all but one of the
necessary permits have been obtained for the proposed Diamondhead casino resort
located on Bay St. Louis, Diamondhead, Mississippi. On June 15, 1995, the
Mississippi Gaming Commission granted site approval for the Diamondhead casino
resort site plan. On July 16, 1996, the Mississippi Commission on Marine
Resources granted approval to Casino World, Inc. and the Hancock County Port and
Harbor Commission for a change in the Coastal Use Plan and associated permit to
develop the approved site plan for the Diamondhead resort. On January 9, 1997,
the Mississippi Department of Environmental Quality granted Water Quality
Certification to the Hancock County Port and Harbor Commission and Casino World,
Inc. On January 22, 1997, the Mississippi Department of Environmental Quality
issued a Construction Storm Water General National Pollution Discharge
Elimination System permit to Casino World, Inc. The issuance of the permits has
been appealed but management is
- 4 -
<PAGE>
confident that the issuance will be sustained. The Company is in the process of
obtaining approval from the U.S. Army Corps of Engineers, which is the last
approval required, to begin development.
Hilton Gaming Corporation. On January 31, 1997, the Company entered
into an agreement with Hilton Gaming Corporation, the world's largest gaming
company, which gave Hilton the exclusive right to negotiate a joint venture
agreement with the Company for 180 days with respect to the development of the
Company's Diamondhead, Mississippi property. In exchange for the exclusive right
to negotiate, Hilton paid the Company a nonrefundable fee of $400,000. The joint
venture agreement to be negotiated between Hilton and the Company, if reached,
would be formed for the purpose of developing a destination casino resort and
hotel at the Company's 404 acre site in Diamondhead, Mississippi. The 404 acre
site, located immediately off Interstate 10, is adjacent to a site on which
Circus Circus Enterprises, Inc, also intends to develop a destination casino
resort and hotel. The Company's destination casino resort is expected to include
a luxury hotel and spa, a sports and entertainment center, 120,000 square feet
of casino space, and a golf course. The Company believes Mississippi represents
the most significant opportunity for an increase in shareholder value.
Section 16(a) Beneficial Ownership Reporting Compliance
Based solely upon its review of Forms 3, 4 and 5 and any amendments
thereto furnished to the Company pursuant to Section 16 of the Securities
Exchange Act of 1934, as amended, all of such forms were filed on a timely basis
by reporting persons during 1996 except for the late filing in 1996 by Mr.
Bullock, Ms. Vitale, Mr. Reddien, Mr. Hedley and Ms. Gladstone of their Forms 4
to report stock options granted in April 1996.
Executive Compensation
The following table provides information concerning the compensation of
certain executive officers of the Company and its wholly owned subsidiaries
Casino World, Inc. and Mississippi Gaming Corporation. No other person serving
as an executive officer on December 31, 1996, received cash compensation in
excess of $100,000 during any of the last three fiscal years.
Summary Compensation Table
<TABLE>
<CAPTION>
Annual
Compensation Long Term Compensation
---------------------------- --------------------------------------------------------------
Awards Payouts
------ -------
Other
Annual Restricted All Other
Name and Principal Compen- Stock LTIP Compen-
Occupation Year Salary Bonus sation Awards Options Payouts sation
- ---------- ---- ------ ----- ------ ------ ------- ------- ------
($) ($) ($) ($) ($) (#) ($) ($)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Lester E. Bullock(1) 1996 $134,000 None None None 400,000 (2) None None
President of the Company 1995 $100,000 $29,000 None None None None None
1994 $ 85,352 $16,500 $2,100 (3) None 100,000 None None
Deborah A. Vitale, Chairman 1996 None (4) None None None 800,000 (5) None None
of the Board and Secretary of 1995 None (4) None None None None None None
the Company and Chairman of 1994 None (4) None None None 100,000 None None
the Board of Casino World,
Inc., and Mississippi Gaming
Corporation
1013 Princess Street
Alexandria, VA 22314
Charles H. Reddien President 1996 $125,000 None $7,500 (6) None 200,000 None None
of Casino World, Inc. and 1995 $125,000 None None None None None None
Mississippi Gaming 1994 $125,000 None $ 216 (7) None None None None
Corporation (1)
</TABLE>
- --------------
(1) On July 18, 1994, Mr. Bullock became President of the Company and Mr.
Reddien resigned as President and Chief Executive Officer of the
Company. Mr. Reddien remained President of Casino World, Inc. and
Mississippi Gaming Corporation, wholly-owned subsidiaries of the
Company.
- 5 -
<PAGE>
(2) Mr. Bullock was granted options to purchase 400,000 shares of Common
Stock exercisable at $.75 per share of which 250,000 were granted for
service on the Board not traditionally provided by a director.
(3) Automobile allowance.
(4) Ms. Vitale receives no cash compensation as an executive officer of the
Company.
(5) Ms. Vitale was granted options to purchase 800,000 shares of Common
Stock exercisable at $.75 per share for service on the Board not
traditionally provided by a director.
(6) Relocation Reimbursement.
(7) Includes insurance premiums paid by the Company on a policy in excess
of $50,000.
Option Grants in Last Fiscal Year
The following table provides information regarding stock options
granted to the executive officers and directors during the year ended December
31, 1996. None of the following options are "incentive stock options" within the
meaning of Section 422A of the Internal Revenue Code of 1986.
% Total
Options
Options Granted To
Granted Employees In Exercise Expiration
Name in 1996 Fiscal Year Price ($/Sh) Date
- ---- ------- ------------ ------------ -----
Lester E. Bullock 400,000 21.62% $.75 April 18, 2001
Deborah A. Vitale 800,000 43.24% $.75 April 18, 2001
Piers Hedley 250,000 13.51% $.75 April 18, 2001
Charles H. Reddien 200,000 10.81% $.75 April 18, 2001
Aggregate Option Exercises in Last Fiscal Year
and Fiscal Year-End Option Values
The following table shows stock option exercises by certain executive
officers during the fiscal year ended December 31, 1996. In addition, this table
includes the number of shares covered by both exercisable and non-exercisable
stock options as of December 31, 1996. None of the following options are
"incentive stock options" within the meaning of Section 422A of the Internal
Revenue Code of 1986.
<TABLE>
<CAPTION>
Value of Unexercised
Shares Value Number of Unexercised In-the-Money Options
Acquired Realized Options at Year-End at Year-End (2)
Name On Exercise (1) Exercisable Unexercisable Exercisable Unexercisable
- ---- ----------- ---------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Lester E. Bullock None None 550,000 None $0 --
Deborah A. Vitale None None 1,000,000 None $0 --
Charles H. Reddien None None 300,000 None $0 --
- ----------------
</TABLE>
(1) The "value realized" reflects the appreciation on the date of exercise
(based on the excess of the fair market value of the shares on the date
of exercise over the exercise price). However, because the officer may
keep the shares acquired upon the exercise of options or sell them at a
different price, this amount does not necessarily reflect cash realized
upon the sale of those shares.
- 6 -
<PAGE>
(2) "In-the-Money Options" are options outstanding at the end of the last
fiscal year for which the fair market value of the Common Stock at the
end of the last fiscal year ($.75 per share) exceeded the exercise
price of the options.
Directors Compensation
As of January 1, 1995, each director is paid $1,500 per month for
serving as a director of the Company. The Company reimburses directors for their
expenses of attendance at Board and committee meetings and for travel expenses
incurred in connection with Company business. In 1996, Lester E. Bullock was
awarded 400,000 stock options exercisable at $.75 per share, Piers Hedley was
awarded 250,000 stock options exercisable at $.75 per share, and Deborah A.
Vitale was awarded 800,000 stock options exercisable at $.75 per share.
Certain Transactions
On August 18, 1994, the Company established the Europa Cruises
Corporation Employee Stock Ownership Plan (the "ESOP"). This ESOP, which is a
qualified retirement plan under the provisions of Section 401(a) of the Internal
Revenue Code and an employee stock ownership plan within the meaning of Section
4975(e)(7) of the Internal Revenue Code, was established primarily to invest in
stock of the Company. All employees as of December 31, 1994, and subsequent new
employees having completed 1,000 hours of service are eligible to participate in
the ESOP. The Company also established a trust called the Europa Cruises
Corporation Employee Stock Ownership Plan, Trust Agreement to serve as the
funding vehicle for the ESOP. The Trustees of this trust are Deborah A. Vitale
and Lester E. Bullock. As of March 14, 1997, 250,000 shares of Common Stock have
been allocated to participants in the ESOP. Unallocated shares are voted by the
Trustees.
On August 21, 1994, the Company loaned $4,275,000 to the ESOP in
exchange for a ten-year promissory note bearing interest at eight percent per
annum. On August 24, 1994, the ESOP purchased 2,880,000 shares of the Company's
Common Stock with the proceeds of the loan. On August 25, 1994 the Company
loaned an additional $3,180,000 to the ESOP in exchange for a ten year
promissory note bearing interest at eight percent per annum. On August 26, 1994,
the ESOP purchased an additional 2,120,000 shares of the Company's Common Stock
with the proceeds of the loan. The shares of Common stock were pledged to the
Company as security for the loans. The promissory notes will be repaid with the
proceeds of annual contributions made by the Company to the ESOP. In April of
1995, the Company agreed to extend the maturity of the loans to twenty years.
Through December 31, 1996, the Company paid $1,518,308 to the ESOP which was
used to repay principal and interest on the promissory notes.
The Board of Directors of Casino World, Inc. ("CWI") granted options to
purchase common shares of CWI to current and former officers and directors of
CWI, exercisable at $1.00 per share. These options expired in March, 1997.
During 1996, the Company completed three separate offerings of its
stock in Europe in accordance with Regulation S under the Securities Act of 1933
and in connection therewith paid commissions in Common Stock to Peerless
Associates Limited ("Peerless"), an investment banking firm located in Europe.
Piers Hedley, a director of the Company, serves as an Executive Managing
Director and consultant for Peerless. In connection with the Regulation S
offerings the Company issued: 331,360 shares of Common Stock at $.65 per share
on February 26, 1996, of which shares Peerless received 23,668 as a commission;
704,348 shares of Common Stock on July 18, 1996, at $.46 per share of which
shares Peerless received 52,174 as a commission; and 469,566 shares of Common
Stock on May 13, 1996, at $.46 per share of which shares Peerless received
34,783 as a commission. In addition, the Company completed several other
Regulation S offerings in 1996 with unrelated third parties and received
aggregate net proceeds of $574,000 from the sale of 1,182,752 shares of Common
Stock at prices ranging from $.44 to $.67 per share. The proceeds from each of
the Regulation S offerings described above (approximately $1,500,000) were used
primarily to pay costs associated with the drydocking of the Company's vessels
to comply with U.S. Coast Guard regulations and safety requirements.
Independent Certified Public Accountants
The Board of Directors has selected BDO Seidman, LLP, as the Company's
auditors for the current fiscal year ending December 31, 1997. BDO Seidman, LLP,
has served as independent auditors for the Company since 1990, and
representatives of that firm are expected to be present at the Meeting and shall
have an opportunity to make a statement if they desire to do so and to respond
to appropriate questions.
Certain Litigation
On January 8, 1997, Dana V. Catalano filed an action against the
Company in the Court of Chancery of the State of Delaware, New Castle County,
Civil Action No. 15455 seeking an order pursuant to 8 Del. C. ss.211(c)
scheduling an annual meeting for the election of directors of the Company. The
Board had
- 7 -
<PAGE>
previously voted on December 11, 1996, to hold the next annual meeting at which
an election of directors would take place on June 4, 1997. The Company advanced
the date of the annual meeting to April 18, 1997 and set the record date as
March 14, 1997. A Stipulation and Order was entered to that effect.
MANAGEMENT'S COMMENTS REGARDING THE CATALANO SLATE
WHO IS THE CATALANO SLATE ?
IS IT REALLY QUALIFIED TO MANAGE YOUR COMPANY?
The following information may be helpful to you in considering the questions
above.
DID YOU KNOW:
PETER J. CATALANO
o FILED BANKRUPTCY last July as an individual
o Was a director of Gold Star Cruises of Galveston, L.C. which FILED
BANKRUPTCY in 1994
o Was General Partner in 1412 Broadway Associates which FILED BANKRUPTCY
in December 1995
o Was General Partner in 24 East 23rd Street Association, L.P. which
FILED BANKRUPTCY in October 1994
o Was a General Partner in 14 West 23rd Street Associates which FILED
BANKRUPTCY in October 1994
o Was a General Partner in 304 Park Avenue Associates which FILED
BANKRUPTCY in November 1993
o Was a General Partner in Grammercy Twin Associates which FILED
BANKRUPTCY in August 1992
o OWNS NO STOCK OF RECORD and disclaims ownership of stock held by his
wife
JOHN H. GLASSEY
o Was Vice President of Corporate Development from April 1993 through
December 1995 of American Gaming Entertainment, Ltd., a corporation
whose subsidiary AMGAM Associates doing business in Mississippi as Gold
Shore Casino, was FORCED INTO INVOLUNTARY BANKRUPTCY by its creditors
in May 1995
o OWNS NO STOCK OF RECORD OR BENEFICIALLY
PAUL WELLS
o Was President of Gold Star Cruises of Galveston, L.C. which FILED
BANKRUPTCY in 1994
o OWNS NO STOCK OF RECORD OR BENEFICIALLY
STEPHAN A. FITCH
o OWNS NO STOCK OF RECORD
o Claimed beneficial ownership of 145,000 warrants to purchase shares of
Common Stock issued to NWCM Limited, not to him personally. These
warrants EXPIRED on February 28, 1997.
o Claims a beneficial interest in the Company through warrants to
purchase 69,500 shares of Common Stock issued to NWCM Limited. These
warrants are exercisable at $1.93 per share and EXPIRE on June 30,
1997.
o Are These the People You Want to Manage Your Company?
o How Will the Company's Lenders React to the Catalano Slate
Whose Members Have Been Involved in 7 Bankruptcies in the Past
5 Years?
o What Effect Will the Catalano Slate Have on a Hilton
Agreement?
o Do the Members of the Catalano Slate Have a Proven Track
Record of Success?
o Do You Want Europa Cruises Corporation to Be Managed by People
Whose Only Identified Experience in the Cruise Ship Industry
Ended in Bankruptcy?
o Do the Members of the Catalano Slate Have Personal Long-Term
Economic Stakes in the Company?
o How Much Compensation Will the Catalano Slate Award Itself?
o The Catalano Slate Claims it Will "Explore" a Vague Set of
So-called "Goals":
- 8 -
<PAGE>
DON'T YOU DESERVE A BOARD OF DIRECTORS THAT HAS
A PROVEN TRACK RECORD?
o Can the Company Afford to Lose its Top Five Officers and
Managers?
The Catalano Committee has stated its intention to invite Lester E.
Bullock and Charles Reddien to serve on the Board of Directors if the Catalano
Slate is successful. Lester E. Bullock and Charles Reddien have not consented to
be included among the Catalano Slate, and thus neither is a bona fide nominee of
the Catalano Committee. Mr. Bullock has informed the Company that if the
Catalano Slate is successful, he will refuse their planned invitation to serve
on the Board. Mr. Reddien has not consented to serve if asked by the Catalano
Committee and has refused to inform the Company whether he will do so. Further,
senior management employees of the Company, including Debra Gladstone, Chief
Financial Officer; Andrew Rufo, Director of Gaming Operations and General
Manager, Madeira Beach, Florida; Michael Reeves, General Manager, Ft. Myers
Beach, Florida; and Jim Monninger, General Manager, Miami Beach, Florida, have
informed the Company that they will not serve under a Board that does not
include Lester E. Bullock.
THE BOARD URGES YOU NOT TO VOTE FOR THE CATALANO SLATE
---------------
COST OF PROXY SOLICITATION
The Catalano Committee's initiation of a proxy contest will materially
increase the Company's normal cost of proxy solicitation. Although no precise
estimate can be made at this time, the Company currently estimates that its
expenses (including possible litigation, but excluding amounts normally paid in
the absence of a contest and salaries paid to officers and employees) will be at
least $______, of which approximately $_____ has been incurred to date.
The Company has retained D.F. King & Co. ("King") to provide proxy
solicitation, press, investor relations and consulting services in connection
with the election of the Company's nominees to the board of directors. The
Company has agreed to pay King a fee not to exceed $125,000 and to reimburse it
for its out-of-pocket expenses. Approximately 50 persons will be used by King in
connection with its solicitation efforts. In addition, the Company's directors,
nominees, officers, and regular employees, without additional remuneration, may
solicit proxies by telephone, telegraph, telefax, personal interviews and over
the Internet.
OTHER MATTERS
The management is not aware of any matters not referred to in the
attached Notice of Meeting which will be presented for action at the Meeting. If
any other matters come before the Meeting, it is intended that the shares
represented by the proxy will be voted with respect thereto in accordance with
the judgment of the persons voting them.
SHAREHOLDER PROPOSALS FOR 1998 ANNUAL MEETING
Proposals which shareholders intend to present at the 1998 Annual
Meeting of Shareholders must be received by Europa Cruises Corporation no later
than February 1, 1998, to be eligible for inclusion in the proxy material for
the meeting.
By Order of the Board of Directors
Lester E. Bullock
President
- 9 -
<PAGE>
APPENDIX A
Additional Information
The information contained in this Appendix A is in response to the
preliminary soliciting material filed by the Catalano Committee. By reason of
the solicitation by the Catalano Committee, the Company is required to furnish
certain additional information to its stockholders pursuant to rules and
regulations under the Securities Exchange Act of 1934. The information contained
in this Appendix must be read together with the attached Proxy Statement in
determining whether to return the Company's Proxy.
The following sets forth with respect to each of the nominees and each
of the current directors certain information known to the Company with respect
to transactions in the Company's securities in the past two years.
Nominees for Election
Lester E. Bullock. As set forth in the Proxy Statement, Mr. Bullock
received an option grant from the Company on April 18, 1996 for 400,000 shares
of Common Stock exercisable at $.75 per share.
Deborah A. Vitale. As set forth in the Proxy Statement, Ms. Vitale
received an option grant from the Company on April 18, 1996 for 800,000 shares
of Common Stock exercisable at $.75 per share.
Piers Hedley. As set forth in the Proxy Statement, Mr. Hedley received
an option grant from the Company on April 18, 1996 for 250,000 shares of Common
Stock exercisable at $.75 per share. In addition, Mr. Hedley also has a
one-third beneficial interest in shares of Common Stock underlying certain
warrants issued to NWCM Limited as a result of a Regulation S offering completed
in 1994. A total of 383,500 warrants were issued to NWCM, Limited. Of these,
145,000 expired on February 28, 1997. Of the remaining 238,500 warrants issued
to NWCM Limited, 69,500 are exercisable at $1.93 and expire on June 30, 1997;
139,000 are exercisable at $1.93 and expire on June 30, 1997; and 30,000 are
exercisable at $1.80 and expire on June 30, 1997.
Except for the information disclosed herein or in the Proxy Statement,
to the Company's knowledge, none of the Company's nominees, the other current
directors or their associates) has any contract, arrangement or understanding
with any person with respect to the Company's securities, any future employment
with the Company or its affiliates, any future transactions to which the Company
or any of its affiliates will or may be a party, or any material interest,
direct or indirect, in any transaction which has occurred since December 31,
1995 or any proposed transaction to which the Company or any of its subsidiaries
was or is to be a party.
- 10 -
<PAGE>
EUROPA CRUISES CORPORATION
This Proxy is solicited on behalf of the Board of Directors
The undersigned, revoking any prior proxies or consents, hereby
appoints as his or her proxies with full power of substitution and revocation
Lester E. Bullock and Deborah A. Vitale, or either of them, to vote all shares
of Common Stock or S Preferred Stock or S-NR Preferred Stock of the undersigned
in Europa Cruises Corporation with all of the powers that the undersigned would
have if personally present, at the Annual Meeting of Shareholders of Europa
Cruises Corporation, to be held on Friday, April 18, 1997 at the North Redington
Beach Hilton, 17120 Gulf Boulevard, North Reddington Beach, Florida 33708 at
9:00 a.m. local time and at any and all adjournments thereof and to take the
actions specified in item 2 below.
The Board of Directors recommends a vote FOR Proposal 1
1. To elect three Directors to hold office until the next Annual Meeting of
Shareholders.
o FOR all nominees listed below
o WITHHOLD AUTHORITY to vote for all nominees listed below
Lester E. Bullock
Deborah A. Vitale
Piers Hedley
INSTRUCTIONS: To withhold authority to vote for any individual nominee(s) write
such nominee's name in the space below
---------------------------------------------------------------------
2. To transact such other business as may properly come before the meeting and
any adjournments thereof.
(Continued and to be signed and dated on reverse side)
- 11 -
<PAGE>
(Continued from previous side)
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 in favor of each of the nominees in Proposal 1 set forth
above.
Please sign exactly as name
appears below. 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.
DATED: , 1997
----------------------------------
Signature
----------------------------------
Signature, If Held Jointly
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE
ENCLOSED ENVELOPE.
- 12 -
