SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
AMENDMENT NO. 1
(MARK ONE)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
FOR THE FISCAL YEAR ENDED APRIL 30, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
FOR THE TRANSITION PERIOD FROM ______________________ TO ______________________
Commission File Number 0-20538
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CASINO AMERICA, INC.
--------------------
(Exact name of registrant as specified in its charter)
Delaware 41-1659606
------------------------------ ----------------------
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
711 Washington Loop, Biloxi, Mississippi 39530
- ---------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (601) 436-7000
Securities Registered Pursuant To Section 12(b) Of The Act: None
Securities Registered Pursuant To Section 12(g) Of The Act:
Common Stock, $.01 Par Value Per Share
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
--- ---
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
The aggregate market value of the voting stock held by non-affiliates/1/ of the
Company is $135,195,555, based on the last reported sale price of $8.25 per
share on June 28, 1996 on the Nasdaq National Market, multiplied by 16,387,340
shares of Common Stock outstanding and held by non-affiliates of the Company on
such date.
As of June 28, 1996, the Company had a total of 20,170,657 shares of Common
Stock outstanding.
- -------------------------
/1/"Affiliates" for the purpose of this item refer to the directors, executive
officers and/or persons owning 10% or more of the Company's common stock, both
of record and beneficially, as of June 28, 1996; however, this determination
does not constitute an admission of affiliate status for any of these individual
stockholders.
INDEX
PAGE
----
PART III.................................................................. 1
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT............. 1
ITEM 11. EXECUTIVE COMPENSATION......................................... 4
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT.......................................... 10
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS................. 12
SIGNATURE................................................................. 13
PART III
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ITEM 10 "DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT"
DIRECTORS
Set forth below is a table identifying the directors of the Company.
NAME AGE POSITION(S)
---- --- -----------
Bernard Goldstein.... 67 Chairman, Chief Executive Officer
and Director
John M. Gallaway..... 57 President, Chief Operating Officer
and Director
Allan B. Solomon..... 60 Executive Vice President, Secretary,
General Counsel and Director
Robert S. Goldstein.. 41 Director
Martin Greenberg..... 56 Director
Emanuel Crystal...... 69 Director
Bernard Goldstein has been Chairman of the Board of the Company since
June 1992 and Chief Executive Officer of the Company since December 1995.
From June 1992 until February 1993, Mr. Goldstein was also President and
Chief Executive Officer of the Company. Mr. Goldstein has been active in
the development of the riverboat gaming industry in a number of states and
was Chairman of the Board of Steamboat Development Corporation and
Steamboat Southeast, Inc. (collectively, the "Steamboat Companies"),
companies involved in the first legalized riverboat gaming ventures in the
United States. In addition to his involvement in the riverboat gaming
industry, Mr. Goldstein has been involved in scrap metal recycling since
1951 and barge-line transportation since 1960. Mr. Goldstein is the father
of Robert Goldstein.
John M. Gallaway has been President of the Company since December 1995,
Chief Operating Officer since July 1996 and a director since April 1996.
From July 1995 to November 1995, Mr. Gallaway was a professor at the
University of Houston. Mr. Gallaway was Deputy Managing Director, Gaming,
of Sun International, a company engaged in owning and operating casinos and
resorts, from September 1992 to August 1994. Prior to that, from 1984 to
1992, Mr. Gallaway was President and General Manager of TropWorld Casino
Resort in Atlantic City and, from 1981 to 1984, he was President and
General Manager of the Tropicana Casino Hotel in Las Vegas.
Allan B. Solomon has been Secretary and a director of the Company since
June 1992, served as the Chief Financial Officer and Treasurer of the
Company from June 1992 to October 6, 1993, and was Chairman of the
Executive Committee from January 1993 to April 1995. Mr. Solomon became
General Counsel of the Company in May 1994 and became Executive Vice
President in April 1995. Mr. Solomon
1
is President of Allan B. Solomon, P.A., which was a partner in the Florida law
firm of Broad and Cassel from 1986 to May 1994.
Robert S. Goldstein has been a director of the Company since February 1993.
Mr. Goldstein is the President of Alter Trading Corporation, a company engaged
in the business of scrap metal recycling, and has been associated with that
company since 1977. Additionally, Mr. Goldstein was a director, officer and
stockholder of the Steamboat Companies and has been an officer of several
affiliated river transportation companies engaged in stevedoring and equipment
leasing since 1980. Mr. Goldstein is the son of Bernard Goldstein.
Martin Greenberg has been a director of the Company since October 1993, and
is currently Chairman of the Board and President of Sterling Commodities
Corporation, a clearing firm for all five New York commodities exchanges. Mr.
Greenberg is the founder of and has been employed by Sterling Commodities
Corporation in various capacities since its inception in 1982. He was Chairman
of the Board of Commodity Exchange, Inc. ("Comex") from 1990 to 1992 and was
also a director of Comex and the National Futures Association. Mr. Greenberg is
also the Chairman of the Board of P.P.I., Inc., a wholly-owned subsidiary of the
Company engaged in the operation of Pompano Park, a harness racing track in
Pompano Beach, Florida, and he serves as a director of the United Nations
Development Corporation.
Emanuel Crystal has been a director of the Company since October 1993, and is
currently the Chief Executive Officer of Jackson Iron & Metal Company in
Jackson, Mississippi. He has held that position for over five years and has
served in various positions with that company since 1949. Mr. Crystal serves on
the Board of Trustees of Tougaloo College in Mississippi.
EXECUTIVE OFFICERS
Set forth below is a table identifying the executive officers of the Company
other than Messrs. Goldstein, Gallaway and Solomon, who are identified in the
section entitled "Directors."
NAME AGE POSITION(S)
---- --- -----------
Rexford A. Yeisley... 49 Vice President and Chief Financial Officer
Robert Boone......... 47 Vice President
Edward Reese, Jr..... 61 Vice President
Rexford A. Yeisley has been Chief Financial Officer of the Company since
December 1995. Mr. Yeisley was Senior Vice President and Chief Financial
Officer of Six Flags Theme Parks, Inc. from 1991 to 1995, and from 1987 to 1991,
Mr. Yeisley was Vice President and Chief Financial Officer of that company.
Robert Boone has been Vice President in charge of human resources and risk
management since August 1994. From 1991 to 1994, Mr. Boone was the Director,
Human Resources and Administration for Simon MOA Management Company, the
managing general partner at Mall of America, the nation's
2
largest retail and entertainment complex. From 1986 to 1991, Mr. Boone
served as Director of Human Resources for IDS American Express in
Minneapolis, Minnesota.
Edward Reese, Jr. has been Vice President in charge of Construction and
Design since August 1996. From January 1996 to August 1996, Mr. Reese was
the Vice President, Construction for H.W.C.C. Development Corporation, a
subsidiary of a casino operator. From October 1986 to January 1996, Mr.
Reese was the Vice President-Design and Construction for Aztar Corporation,
a company engaged in gaming, and the gaming division of its predecessor,
Ramada, Inc.
COMPLIANCE WITH SECTION 16(A) OF THE
EXCHANGE ACT
Section 16(a) of the Exchange Act requires the Company's directors,
officers and certain stockholders to file with the Commission an initial
statement of beneficial ownership and certain statements of changes in
beneficial ownership of equity securities of the Company. Based solely upon
a review of Forms 3 and 4 and amendments thereto furnished to the Company
during fiscal 1996, Forms 5 and amendments thereto furnished with respect
to fiscal 1996, and certain written representations received by the Company
from certain reporting persons in regard to filing requirements, the
Company has determined that all such filings were made on a timely basis.
3
ITEM 11 "EXECUTIVE COMPENSATION"
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
SUMMARY COMPENSATION TABLE
The following table sets forth a summary of the annual, long-term and other
compensation for services rendered to the Company by the two individuals serving
as the Company's Chief Executive Officer during fiscal 1996 and the four most
highly compensated executive officers (other than the chief executive officer)
during fiscal 1996 (the "Named Executive Officers") for the years indicated.
LONG TERM
ANNUAL COMPENSATION COMPENSATION
---------------------------------------------- ---------------
SECURITIES
YEAR ENDED OTHER ANNUAL UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION APRIL 30, SALARY(1) BONUS(1) COMPENSATION (2) OPTIONS (#) (3) COMPENSATION (4)
- --------------------------- ---------- --------- -------- ---------------- --------------- ----------------
Bernard Goldstein 1996 $189,231 $50,000 -- 15,000 $50,705
Chairman and 1995 129,271 90,000 -- 10,000 50,000
Chief Executive Officer 1994 122,020 50,000 -- 22,500 50,000
James E. Ernst (5) 1996 180,404 -- -- -- --
President and Chief 1995 261,765 180,000 -- 20,000 52,310
Executive Officer 1994 213,618 200,000 -- 37,500 52,310
Allan B. Solomon 1996 232,563 140,000 -- 15,000 50,000
Executive Vice President 1995 221,962 50,000 -- 17,500 50,000
General Counsel and Secretary 1994 13,169 -- -- 22,500 50,000
Juris Basens (5) 1996 158,438 32,500 -- 15,000 2,310
Vice President and 1995 150,509 76,500 -- 27,500 2,310
Chief Operating Officer 1994 125,555 63,000 -- 12,000 2,310
David L. Paltzik (5) 1996 138,905 27,500 $21,363 15,000 2,053
Vice President 1995 126,098 67,500 -- 15,000 1,490
1994 111,234 75,000 -- 12,000 910
Kenneth N. Schultz (5) 1996 125,056 25,000 18,489 30,000 --
Vice President 1995 -- -- -- -- --
1994 -- -- -- -- --
(1) Mr. Goldstein receives his salary and bonus in shares of Common Stock.
Mr. Goldstein's salary is paid in the number of shares equal to his net
monthly salary based on the closing price of the Company's Common
Stock, as reported on NASDAQ, on the 15th day of that month (or the
last preceding trading day if the 15th is a Saturday, Sunday or
holiday).
(2) Includes $15,548 in relocation costs paid by the Company and a $5,815
auto allowance for Mr. Paltzik and a $13,412 housing allowance and a
$5,077 auto allowance for Mr. Schultz.
(3) Messrs. Basens, Paltzik and Schultz forfeited 12,000, 12,000 and 30,000
options, respectively, of the options awarded in fiscal 1996 and a
total of 43,125, 33,187 and 30,000 options, respectively, as a result
of resigning from their positions with the Company.
4
(4) Includes the Company's matching contribution to the Company's 401(k)
deferred compensation plan during fiscal 1996 for the accounts of Messrs.
Goldstein, Basens and Paltzik of $705, $2,310 and $2,053, respectively, and
the $50,000 annual retainer paid to all directors for Messrs. Goldstein and
Solomon during fiscal 1996.
(5) Effective September 9, 1995, Mr. Ernst resigned as President, Chief
Executive Officer and as a director of the Company; effective July 24, 1996,
Messrs. Basens and Paltzik resigned as Vice President and Chief Operating
Officer and Vice President, respectively; and effective June 24, 1996, Mr.
Schultz resigned as Vice President of the Company. See "Executive Officers"
for information concerning the Company's current executive officers.
OPTION GRANTS FOR LAST FISCAL YEAR
The following table sets forth information concerning options granted
during fiscal 1996 to the Named Executive Officers.
INDIVIDUAL GRANTS
-----------------------------
POTENTIAL REALIZABLE VALUE
NUMBER OF OF ASSUMED ANNUAL RATES OF
SECURITIES % OF TOTAL STOCK PRICE APPRECIATION
UNDERLYING OPTIONS GRANTED EXERCISE OR FOR OPTION TERM(1)
OPTIONS TO EMPLOYEES IN BASE PRICE EXPIRATION --------------------------
NAME GRANTED (#) FISCAL YEAR $/SHARE DATE 5% ($) 10% ($)
- ---- ----------- --------------- ----------- ---------- -------- --------
Bernard Goldstein... 15,000 3.0% $6.25 4/10/06 $ 58,959 $149,413
James E. Ernst...... -- -- -- -- -- --
Allan B. Solomon.... 15,000 3.0 6.25 4/10/06 58,959 149,413
Juris Basens........ 15,000 3.0 6.25 4/10/06 58,959 149,413
David L. Paltzik.... 15,000 3.0 6.25 4/10/06 58,959 149,413
Kenneth N. Schultz.. 30,000 6.1 6.25 11/22/05 117,918 298,827
(1) The potential realizable dollar value of a grant is the product of: (a) the
difference between (i) the product of the per-share market price at the time
of the grant and the sum of 1 plus the stock appreciation rate compounded
annually over the term of the option (here, 5% and 10%) and (ii) the per-
share exercise price of the option and (b) the number of securities
underlying the grant at fiscal year-end.
5
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES
The following table sets forth information concerning the number and
value of shares acquired on the exercise of options and exercisable and
unexercisable stock options at the end of fiscal 1996 for the Named Executive
Officers.
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
SHARES ACQUIRED OPTIONS AT FISCAL IN-THE-MONEY OPTIONS AT
ON EXERCISE VALUE YEAR END FISCAL YEAR END ($)
NAME (#) REALIZED EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
- -------------------- ----------------- -------- ------------------------- -------------------------
Bernard Goldstein... -- -- 16,750/30,750 $ 4,688/18,750
James E. Ernst...... 76,500 $164,906 -- --
Allan B. Solomon.... -- -- 74,875/92,625 144,141/158,203
Juris Basens........ 11,812 162,251 33,313/43,125 65,421/29,906
David L. Paltzik.... 9,000 123,625 29,063/37,687 65,130/28,510
Kenneth N. Schultz.. -- -- -- /30,000 -- /46,875
COMPENSATION OF DIRECTORS
All directors of the Company are compensated by a $50,000 annual
retainer, and directors who are not employed by the Company receive additional
compensation of $1,000 per day for Board meetings attended and other services
performed. All directors are reimbursed for travel and other expenses incurred
in connection with attending Board meetings. In addition, upon the initial
election or appointment of any person to the Board of Directors, such director
receives options to acquire 22,500 shares of Common Stock pursuant to the
provisions of the Company's 1993 Stock Option Plan.
EMPLOYMENT CONTRACTS, TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL
ARRANGEMENTS
In December 1995, the Company entered into separate employment
agreements with John M. Gallaway, President and Chief Operating Officer (as of
July 1996), Allan B. Solomon, Executive Vice President, General Counsel and
Secretary, and Rexford A. Yeisley, Vice President and Chief Financial Officer
(collectively, the "Employment Agreements"). Pursuant to the Employment
Agreements, Messrs. Gallaway, Solomon and Yeisley receive an initial annual base
salary of $300,000, $235,000 and $160,000, respectively, subject to increases as
may be determined by the Company's Board of Directors from time to time. In
addition, Messrs. Gallaway and Yeisley received options to purchase 50,000 and
30,000 shares of Common Stock, respectively, at the fair market price of shares
at the date of issuance. Each of Messrs. Gallaway, Solomon and Yeisley are
entitled to participate in any stock option or other benefit plans of the
Company. The Employment Agreements are each for an initial term of three years,
and are automatically renewable for successive one-year periods thereafter,
unless 90 days' written notice is given by either party. If the Company
terminates the employment of the respective party to the Employment Agreement
without "cause" (as defined in the Employment Agreements), either during the
initial term or any renewal term or by written notice of nonrenewal, such person
would be entitled, upon releasing the Company and its affiliates from any and
all claims, to receive his salary and employee benefits for the greater of (i)
one year or (ii) 50% of the salary and employee benefits for the remaining term
of employment.
6
In June 1992, the Company entered into an employment agreement with
James E. Ernst pursuant to which he was employed as President and Chief
Executive Officer of the Company from February 24, 1993, the date upon
which the Mississippi gaming authorities issued a finding of suitability
with respect to him, until September 9, 1995, the date on which Mr. Ernst
resigned as President, Chief Executive Officer and as a director of the
Company. Under the agreement, Mr. Ernst received an initial annual base
salary of $200,000, subject to annual increases after the first full year
of the term of employment as determined by the Company's Board of
Directors, plus bonuses determined by the Board of Directors from time to
time. In addition, Mr. Ernst was entitled to participate in any stock
option or other benefit plans of the Company as determined by the Board.
Mr. Ernst's agreement was for an initial term of three years that began on
June 2, 1992, and was automatically renewable for successive one-year
periods thereafter, unless 90 days' prior written notice was given by
either party. The agreement was automatically renewed on June 2, 1995. The
agreement provided that if the Company were to terminate Mr. Ernst's
employment without cause, either during the initial term or any renewal
term of the employment agreement or by written notice of nonrenewal, Mr.
Ernst would be entitled, if he released the Company and its affiliates from
any and all claims, to continue to receive his salary and employee benefits
for a period of 12 months after the date of termination. Following Mr.
Ernst's resignation as President, Chief Executive Officer and a director of
the Company, the Company entered into a consulting agreement (the
"Consulting Agreement") with Mr. Ernst, pursuant to which he was to remain
a consultant to the Company through September 30, 1996 under the terms of
his employment agreement. Under the Consulting Agreement, Mr. Ernst was to
continue to receive the salary and employee benefits he had been receiving
under his employment agreement until September 30, 1996, and all of Mr.
Ernst's stock options, to the extent not vested, would have vested on
September 30, 1996. On December 19, 1995, the Company, Mr. Ernst and Casino
Magic Corp. entered into an agreement whereby, inter alia, the Company
released Mr. Ernst from the terms of his non-competition agreement to allow
Mr. Ernst to accept a position as President and Chief Executive Officer of
Casino Magic Corp. As a result, Mr. Ernst forfeited all of his stock
options and, effective December 31, 1995, no longer received any benefits
under the Consulting Agreement.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Messrs. Martin Greenberg, Robert S. Goldstein and Emanuel Crystal are
members of the Company's Compensation Committee. Mr. Greenberg acts as
chairman of the Compensation Committee.
Mr. Greenberg is the Chairman of the Board of Directors of P.P.I., Inc.,
a wholly-owned subsidiary of the Company which operates Pompano Park, a
harness racing track in Pompano Beach, Florida. Mr. Robert S. Goldstein is
the son of Bernard Goldstein, the Chairman and Chief Executive Officer of
the Company.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee advises the Board of Directors concerning
executive compensation, including base salaries, bonuses and the bases for
their award, stock option plans and health, life insurance and other
benefits. Compensation Committee recommendations concerning executive
compensation are reviewed and approved by the Board. Board members who are
also executive officers of the Company do not participate in the
deliberations of the Board concerning their respective compensation and
benefits and do not vote on such matters.
7
The Company's objective concerning executive compensation is to design
an executive compensation program that attracts and retains qualified executives
and aligns executives' interests with those of the Company and its stockholders
in achieving the Company's operating goals and business objectives and
increasing stockholder value. The principal components of the Company's
executive compensation program are base salary, bonus and stock options. In
light of the Company's objective concerning executive compensation, a
substantial portion of the executive compensation above the base salary is
generally provided through bonuses tied to certain indicators of Company
performance and through the grant of stock options.
The Compensation Committee's determinations of overall executive
compensation for the fiscal year ended April 30, 1996, which includes salary,
bonus, certain benefits and stock option awards, were generally subjective based
upon consideration of, among other factors, the performance of the Company
during the fiscal year, the individual executive officer's contribution to the
achievement of operating goals and business objectives and levels of
compensation in comparable companies at similar stages of development, with
particular emphasis on those operating in the gaming industry.
During the fiscal year ended April 30, 1996, Mr. Ernst served as Chief
Executive Officer ("CEO") until he resigned on September 9, 1995. During this
period, Mr. Ernst was compensated as indicated in the Summary Compensation
Table, in accordance with the terms of an employment agreement with the Company
effective as of June 2, 1992. Pursuant to this employment agreement, Mr. Ernst
was entitled to annual salary increases above his initial base salary of
$200,000 as determined by the Board of Directors. See "Employment Contracts,
Termination of Employment and Change-in-Control Arrangements."
Mr. Goldstein succeeded Mr. Ernst on September 9, 1995 as CEO of the
Company. Mr. Goldstein serves as CEO at the will of the Board and has not
entered into an employment agreement with the Company. The Board of Directors,
with Mr. Goldstein abstaining from the deliberations, determined to compensate
Mr. Goldstein for his services as CEO with an annual salary of $300,000. This
salary level was set based on a general review of compensation levels of other
chief executive officers in comparable companies. Mr. Goldstein's pro rata
portion of salary is paid at the end of each month in shares of Common Stock,
based on the closing price of Common Stock on the 15th day of that month (or the
last preceding trading day if the 15th is a Saturday, Sunday or holiday). In
formulating Mr. Goldstein's bonus and stock option awards, the Board principally
considered the difficulty and additional effort required of him in replacing Mr.
Ernst and Mr. Goldstein's valuable experience from being involved in the
formation of the Company and all stages of the Company's development. In that
regard, Mr. Goldstein received a bonus of $50,000 in fiscal 1996, paid in shares
of Common Stock, and options to purchase 15,000 shares of Common Stock.
8
Section 162(m) of the Internal Revenue Code (the "Code") limits the
Company's deduction for compensation paid to the executive officers named in the
Summary Compensation Table to $1 million unless certain requirements are met.
The policy of the Compensation Committee with respect to section 162(m) is to
establish and maintain a compensation program which will optimize the
deductibility of compensation. In that regard, no executive officer received
compensation in excess of $1 million during fiscal 1996. The Compensation
Committee, however, reserves the right to use its judgment, where merited by the
Compensation Committee's need for flexibility to respond to changing business
conditions or by an executive officer's individual performance, to authorize
compensation which may not, in a specific case, be fully deductible by the
Company.
By The Compensation Committee:
Martin Greenberg
Robert S. Goldstein
Emanuel Crystal
STOCK PERFORMANCE GRAPH
The following graph compares the total return on the Common Stock with the
cumulative total return on the Nasdaq Market Index (a broad market index) and
the Media General Industry Group 241--Hotels, Motels and Resorts Index (an
industry index) for the period from August 19, 1992, the date upon which the
Common Stock was registered pursuant to Section 12 of the Exchange Act, through
April 30, 1996. The comparison reflects the investment of $100 on August 19,
1992, and the reinvestment of dividends (if paid), in each of the Company's
Common Stock (for which no dividends have been paid), the NASDAQ Market Index
and the Media General Industry Group 241-Hotels, Motels and Resorts Index. The
stock price performance of the Company reflected in this comparison is not
necessarily indicative of the future stock price performance of the Company's
Common Stock.
MEDIA GENERAL INDUSTRY
CASINO AMERICA, INC. NASDAQ GROUP 241 - HOTELS, MOTELS
FISCAL YEAR COVERED (TICKER:CSNO) MARKET INDEX AND RESORTS INDEX
- ------------------- ------------- -------------- -----------------------
August 1992 $ 100.00 $ 100.00 $ 100.00
1993 373.30 119.36 146.53
1994 558.14 133.97 169.48
1995 457.00 146.29 197.12
1996 234.12 204.20 278.09
9
ITEM 12 "SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT"
OWNERSHIP OF THE CAPITAL STOCK OF THE COMPANY
The following table sets forth certain information with respect to the
beneficial ownership of the outstanding Common Stock as of July 31, 1996 (unless
otherwise indicated) by (i) each director of the Company, (ii) the individuals
serving as the Company's chief executive officer during fiscal 1996 and each of
the four individuals serving as executive officers of the Company as of April
30, 1996 named in the table under "Compensation of Directors and Executive
Officers--Summary Compensation Table," (iii) all directors and officers of the
Company as of July 31, 1996 as a group and (iv) based on information available
to the Company and a review of statements filed with the Securities and Exchange
Commission (the "Commission") pursuant to Sections 13(d) and 13(g) of the
Securities Exchange Act of 1934 (the "Exchange Act"), each person that owned
beneficially (directly or together with affiliates) more than 5% of the Common
Stock. Unless otherwise indicated, all persons listed have sole voting and
dispositive power over the shares beneficially owned.
SHARES OF PERCENTAGE OF
COMMON STOCK OUTSTANDING
NAME AND ADDRESS BENEFICIALLY SHARES
OF 5% BENEFICIAL OWNERS OWNED(1) OWNED(1)
- ----------------------- ------------ ---------------
Bernard Goldstein (2)....................... 2,743,000 12.1%
2200 Corporate Boulevard, N.W.
Boca Raton, Florida 33431
Crown Casino Corporation (3)................ 2,683,334 11.5%
4040 North MacArthur Boulevard, Suite 100
Irving, Texas 75038
Robert S. Goldstein (4)..................... 820,530 3.6%
Allan B. Solomon (5)........................ 364,920 1.6%
Martin Greenberg (6)........................ 91,677 *
Emanuel Crystal (7)......................... 51,593 *
Juris Basens (8)............................ 45,125 *
David L. Paltzik (9)........................ 32,829 *
John M. Gallaway (10)....................... 15,000 *
James E. Ernst.............................. 2,375 *
Kenneth N. Schultz.......................... -- *
All Officers and
Directors as a Group
(9 persons)(11)............................. 4,099,595 18.0%
- --------------
*Less than 1%.
(1) Calculated pursuant to Rule 13d-3 under the Exchange Act. Under Rule 13d-
3(d), shares not outstanding that are subject to options, warrants, rights
or conversion privileges exercisable within 60 days of July 31, 1996, are
deemed outstanding for the purpose of calculating the number and percentage
owned by such person, but are not deemed outstanding for the purpose of
calculating the percentage owned by each other person listed.
10
(2) Does not include an aggregate of 3,041,590 shares (including 68,875 shares
issuable upon exercise of stock options and warrants that are exercisable
within 60 days) that are beneficially owned by members of Bernard
Goldstein's family. Bernard Goldstein disclaims beneficial ownership of the
shares owned by members of his family. Includes 24,375 shares issuable upon
exercise of stock options that are exercisable within 60 days.
(3) Includes 833,334 shares issuable upon exercise of warrants that are
exercisable within 60 days, but does not include 684,786 shares of Common
Stock issued to Crown Casino Corporation in August 1996 in connection with
the Company's rights offering. Crown Casino Corporation granted to the
Company an irrevocable proxy to vote all of such shares of Common Stock.
See "Certain Relationships and Related Transactions."
(4) Does not include an aggregate of 4,964,060 shares (including 49,375 shares
issuable upon exercise of stock options and warrants that are exercisable
within 60 days) that are beneficially owned by members of Robert
Goldstein's family. Robert Goldstein disclaims beneficial ownership of the
shares owned by members of his family. Includes 43,875 shares issuable upon
exercise of stock options that are exercisable within 60 days.
(5) Includes 82,500 shares issuable upon exercise of stock options that are
exercisable within 60 days.
(6) Includes 56,375 shares issuable upon exercise of stock options that are
exercisable within 60 days.
(7) Includes 21,375 shares issuable upon exercise of stock options that are
exercisable within 60 days and 1,976 shares owned by Mr. Crystal's wife.
(8) Includes 33,313 shares issuable upon exercise of stock options that are
exercisable within 60 days.
(9) Includes 24,563 shares issuable upon exercise of stock options that are
exercisable within 60 days.
(10) Includes 15,000 shares issuable upon exercise of stock options that are
exercisable within 60 days.
(11) Information provided is for the individuals who were officers and directors
of the Company on July 31, 1996 and includes 256,375 shares issuable upon
exercise of stock options that are exercisable within 60 days. The amount
does not include 2,221,060 shares (including 25,000 shares issuable upon
exercise of warrants that are exercisable within 60 days) beneficially
owned by relatives of Bernard Goldstein and Robert S. Goldstein, other than
them, the beneficial ownership of which is disclaimed by Bernard Goldstein
and Robert S. Goldstein. If such shares were included in the category "All
Officers and Directors as a Group," the number of shares of Common Stock
beneficially owned by such group as of July 31, 1996 would have been
6,320,655, and the percentage of outstanding shares of Common Stock owned
by such group as of July 31, 1996 would have been 27.7%. In addition, the
amount does not include shares owned by Messrs. Ernst, Schultz, Basens and
Paltzik, each of whom had resigned from the Company prior to July 31, 1996.
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ITEM 13 "CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS"
In June 1995, Louisiana Riverboat Gaming Partnership ("LRGP"), of which
the Company owned a 50% interest at such time (and of which the Company now
owns a 100% interest), acquired a 50% interest in St. Charles Gaming
Company, Inc. ("SCGC") from Crown Casino Corporation ("Crown Casino"), a
beneficial owner of more than 5% of the Company's Common Stock, for $21
million. The consideration for such purchase consisted of $1 million in
cash and a $20 million promissory note bearing interest at 11-1/2%. In
addition, the Company issued a warrant to Crown Casino to purchase 416,667
shares of Common Stock at $12 per share by converting up to $5 million in
principal of such note. In May 1996, the Company acquired the remaining
50% interest in SCGC from Crown Casino in exchange for 1,850,000 shares of
Common Stock and a five-year warrant to purchase an additional 416,667
shares of Common Stock at $12 per share by converting up to $5 million in
principal of one of the two $10 million promissory notes that replaced the
original $20 million note held by Crown Casino from the June 1995
acquisition. In connection with the May 1996 transaction, Crown Casino
granted the Company an irrevocable proxy to vote all shares issued, or to
be issued, to Crown Casino pursuant to both of the June 1995 and May 1996
transactions.
In December 1995, the Company established a $2 million line of credit
at an interest rate of 11-1/2% with Alter Barge Line, Inc., a company
affiliated with Alter Trading Corporation of which Mr. Robert S. Goldstein
is the president. During fiscal 1996, the maximum amount outstanding at
any one time was $1 million. All borrowings were repaid and the line of
credit was terminated in March 1996 in connection with the Goldstein Family
Equity Purchase (as defined).
On March 11, 1996, the Company sold an aggregate of 1,020,940 shares of
its Common Stock, at a price of $5.875 per share, to Bernard Goldstein, the
Chairman and Chief Executive Officer of the Company, and three members of
his family (the "Goldstein Family Equity Purchase"). Proceeds from the
sale totaled approximately $6.0 million. A portion of the proceeds was
used to retire approximately $1.6 million in loans payable to Mr. Goldstein
and a related party, which amount includes accrued interest. In connection
with the Company's rights offering, Mr. Solomon, the Executive Vice
President, General Counsel and Secretary of the Company, acquired 57,240
shares of Common Stock at a price of $5.875 per share in July 1996.
In connection with the Company's acquisition of Grand Palais Riverboat,
Inc. ("GPRI") on May 3, 1996, Bernard Goldstein, the Chairman and Chief
Executive Officer, and three of his sons (including Robert Goldstein, a
director of the Company) pledged certain of their assets for the issuance
of a letter of credit to secure the repayment of a portion of the principal
of certain notes issued by the Company to effect the acquisition of GPRI.
Pursuant thereto, the Company issued to each of the two sons (excluding
Robert Goldstein) a five-year warrant to purchase 12,500 shares at an
exercise price of $5.875 per share.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
CASINO AMERICA, INC.
Dated: August 27, 1996 By: /s/ Bernard Goldstein
----------------------
Bernard Goldstein, Chairman of the
Board, Chief Executive Officer and
Director
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