8K filing part 2.....
Voting Agreement
Pursuant to the Acquisition, the Harrisons, Mims and
Gregory Wilson, the Registrant's Chief Executive Officer
and President ("Wilson"), will enter into a voting agreement
("Agreement") providing for (i) the expansion of the Board
of Directors to seven directors, four of which will be nominated
by Wilson, one to be nominated by Mims, one to nominated
by the Harrisons and one to be jointly nominated by the Harrisons
and Mims. The Agreement will terminate upon the following
occurrences: (i) for Wilson, when he no longer owns at least
126,000 shares of voting stock of the Registrant (Wilson
currently owns approximately 1,260,000 shares); (ii) for Mims,
when he no longer owns at least 82,768 shares (Mims currently
owns approximately 727,680 shares; and (iii) for the each
Harrison, when that Harrison no longer owns 33,333 shares
(each Harrison currently owns approximately 333,333 shares).
Item 5. Other Events.
In early December 1997, the Office of the Attorney General
for the State of South Carolina issued an "Advisory"
("Advisory") regarding the intended prosecution of video
gaming payouts as violative of state criminal laws against lotteries.
The Advisory stated that, in the opinion of the Attorney General,
video poker payoffs constitute a lottery and are illegal under South
Carolina law. The Advisory further stated that as of December
15, 1997, all South Carolina law enforcement officers and
prosecuting agencies were to be authorized to enforce the lottery
statutes through seizure of video gaming machines and arrests.
Shortly thereafter, the Attorney General reversed this position
in a public statement. He stated that he had no present intention
to prosecute video gaming operators under State law, but would
instead join a class action civil suit filed by an individual targeting
video gaming operaters. Such civil suit is likely to test the
legality of video gaming under South Carolina law. The
Registrant's South Carolina subsidiaries could be added as
defendants at any time in such action. There has been editorial
comment in local newspapers strongly urging the State legislature
to address this issue by either abolishing video gaming in its
entirety or instituting stronger regulations governing the operations
of video gaming, including heavier taxes.
Should South Carolina legislatively abolish its video gaming
industry, the Registrant's video gaming operations would be
substantially, detrimentally and materially impacted. Should South
Carolina institute extensive regulations governing the operations
of video gaming, the Registrant's operations could be materially
impacted. The Registrant believes that responsible regulation
could be beneficial to the Company's operations, since settled
regulatory structures provide a basis for stability in operating
businesses which are under their umbrella. The Registrant
currently derives over 50% of its revenues from its South Carolina
video gaming operations. |
