<PAGE> 1
COAST RESORTS, INC.
4500 WEST TROPICANA AVENUE
LAS VEGAS, NEVADA 89103
April 12, 1999
Dear (Name of Stockholder):
You are cordially invited to attend the 1999 Annual Meeting of Stockholders of
Coast Resorts, Inc., which will be held in the Second Floor Conference Room at
The Orleans Hotel and Casino, 4500 West Tropicana Avenue, Las Vegas, Nevada
89103, on Wednesday, May 12, 1999 at 10:00 a.m. (Pacific Daylight Time). We hope
you will be able to attend the Annual Meeting in person and look forward to
seeing you.
At the Annual Meeting, stockholders will be asked to elect three directors to
the Board of Directors. Class III directors will be elected to serve until the
2002 Annual Meeting of Stockholders and until their successors have been elected
and qualified. You are requested to give your prompt attention to this matter,
which is more fully described in the accompanying proxy materials.
Whether or not you plan to attend the Annual Meeting in person, it is important
that your shares be represented and voted at the Annual Meeting. Accordingly,
after reading the enclosed Notice of Annual Meeting and Proxy Statement, you are
urged to sign, date and return the enclosed proxy in the envelope provided at
your earliest convenience.
Thanks for taking the time to read this letter. Hope to see you at the meeting.
Sincerely,
Michael J. Gaughan
Chairman of the Board
and Chief Executive Officer
<PAGE> 2
COAST RESORTS, INC.
4500 WEST TROPICANA AVENUE
LAS VEGAS, NEVADA 89103
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
April 12, 1999
The 1999 Annual Meeting of the Stockholders of Coast Resorts, Inc., a
Nevada corporation (the "Company"), will be held in the Second Floor Conference
Room at The Orleans Hotel and Casino, 4500 West Tropicana Avenue, Las Vegas,
Nevada 89103, on Wednesday, May 12, 1999, commencing at 10:00 a.m. (Pacific
Daylight Time) for the following purposes:
1. To elect three Class III directors to serve until the 2002
Annual Meeting of Stockholders and until their successors are elected and
qualified; and
2. To consider and act upon such other business as may
properly come before the Annual Meeting and at any adjournment or postponement
thereof.
Pursuant to the Bylaws of the Company, the time and date for the
determination of stockholders entitled to notice of and to vote at the Annual
Meeting and at any adjournment or postponement thereof is fixed as of the close
of business on April 9, 1999. Accordingly, only stockholders of record as of the
commencement of business on April 9, 1999 will be entitled to vote at the Annual
Meeting and any adjournment or postponement thereof, notwithstanding any
transfer of stock on the books of the Company thereafter.
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE ANNUAL MEETING,
REGARDLESS OF THE NUMBER OF SHARES YOU HOLD. WHETHER OR NOT YOU PLAN TO ATTEND
THE ANNUAL MEETING, PLEASE SIGN, DATE AND MAIL THE ENCLOSED PROXY IN THE RETURN
ENVELOPE, WHICH REQUIRES NO POSTAGE IN THE UNITED STATES.
Stockholders who attend the Annual Meeting may vote in person even
though they have previously mailed their Proxy.
By Order of the Board Directors
/s/ J. TITO TIBERTI
-------------------------------
J. Tito Tiberti
Secretary
Las Vegas, Nevada
April 12, 1999
<PAGE> 3
COAST RESORTS, INC.
4500 WEST TROPICANA AVENUE
LAS VEGAS, NEVADA 89103
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
MAY 12, 1999
This Proxy Statement is first being mailed on or about April 12, 1999
to stockholders of Coast Resorts, Inc., a Nevada corporation (the "Company"), of
record as of the close of business on April 9, 1999.
The enclosed Proxy is solicited on behalf of the Board of Directors
(the "Board") of the Company for use at the Company's 1999 Annual Meeting of
Stockholders (the "Annual Meeting") to be held on May 12, 1999, and at any
adjournment(s) or postponement(s) thereof. Pursuant to the Bylaws of the
Company, a Proxy must be filed with the Secretary of the Company at or before
the Annual Meeting in order to be valid. It may be revoked at any time prior to
its use by (1) providing a written revocation to the Secretary of the Company at
its offices, (2) executing and delivering a later dated Proxy, or (3) attending
the Annual Meeting and voting in person. Shares represented by an unrevoked
Proxy will be voted as directed by the stockholder. If no direction is given,
such shares will be voted for the election of the nominees named herein for
election as directors, and in the discretion of the proxy holders with respect
to any other matters properly presented to the Annual Meeting and at any
adjournment(s) or postponement(s) thereof.
VOTING RIGHTS
Only stockholders of record at the close of business on April 9, 1999
are entitled to notice of and to vote at the Annual Meeting. On that date, there
were outstanding 1,499,491.27 shares of the Company's common stock, $.01 par
value (the "Common Stock"). The presence, either in person or by proxy, of
persons entitled to vote 50% of the Company's outstanding Common Stock is
necessary to constitute a quorum for the transaction of business at the Annual
Meeting. Each share is entitled to one vote in connection with each matter
submitted for stockholder approval. Abstentions and any shares as to which a
broker or nominee has indicated that it does not have discretionary authority to
vote on a particular matter will be treated as shares that are present and
entitled to vote for purposes of determining the presence of a quorum but as
unvoted for purposes of determining whether approval of the stockholders has
been obtained with respect to any such matter and thus will have the effect of a
"No" vote in connection with each such matter submitted for stockholder
approval.
ELECTION OF DIRECTORS
Pursuant to the Articles of Incorporation and Bylaws of the Company, at
the Annual Meeting stockholders will elect directors to serve until the 2002
Annual Meeting of Stockholders and until their successors are duly elected and
qualified. The Board has nominated the three current directors to stand for
re-election at the Annual Meeting for the following terms: Messrs. Jerry Herbst,
J. Tito Tiberti and Franklin Toti, each of whom will be designated as Class III
directors with a term ending at the 2002 Annual Meeting of Stockholders and
until their successors have been elected and qualified. The enclosed Proxy,
unless indicated to the contrary, will be voted for the Board's nominees.
1
<PAGE> 4
Under the Company's Bylaws, in order to be effective, nominations by a
stockholder of a candidate for election as a director must be submitted to the
Secretary of the Company not later than sixty days in advance of the Annual
Meeting. Any such notice of nomination must set forth: (i) the name, age,
business address and residence address of each nominee proposed in such notice,
(ii) the principal occupation or employment of each such nominee, (iii) the
number of shares of capital stock of the Company beneficially owned by each such
nominee and (iv) such other information concerning each such nominee as would be
required under the rules and regulations of the Securities and Exchange
Commission ("SEC") in a proxy statement soliciting proxies for the election of
such nominees. Such notice must also include a written consent to serve as a
director, if elected, executed by each such nominee.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" THE NOMINEES
LISTED ABOVE.
2
<PAGE> 5
DIRECTORS AND EXECUTIVE OFFICERS
The following tables set forth the names and ages of the directors and
executive officers of the Company, their respective positions and the expiration
dates of their respective terms as of April 9, 1999.
DIRECTORS AND EXECUTIVE OFFICERS
<TABLE>
<CAPTION>
Term as a
Director
Name Age Position(s) Held Expires
- - -----------------------------------------------------------------------------------------
<S> <C> <C> <C>
NOMINEES FOR RE-ELECTION
Jerry Herbst 60 Director, Vice President, Treasurer 1999
and Assistant Secretary
J. Tito Tiberti 53 Director, Vice President and Secretary 1999
Franklin Toti 60 Director and Vice President of Casino
Operations 1999
OTHER DIRECTORS
Michael J. Gaughan 56 Director, Chairman of the Board 2000
and Chief Executive Officer
Harlan D. Braaten 48 Director, President and Chief 2000
Operating Officer
Gage Parrish 45 Director, Vice President, Chief Financial 2000
Officer and Assistant Secretary
F. Michael Corrigan 63 Director 2001
Charles Silverman 66 Director 2001
Joseph Blasco 55 Director 2001
</TABLE>
MICHAEL J. GAUGHAN. Mr. Gaughan has been a director of the Company since
its formation in September 1995 and is the Chairman of the Board and Chief
Executive Officer of the Company. His current term as a director expires in
2000. He is also a director and Chairman of the Board and Chief Executive
Officer of Coast Hotels. Mr. Gaughan was a general partner of the Barbary Coast
Partnership from its inception in 1979 until January 1, 1996, the effective date
of the reorganization in which the Barbary Coast Partnership and the Gold Coast
Partnership consolidated with the Company and Coast Hotels (the
"Reorganization"). Mr. Gaughan served as the managing general partner of the
Gold Coast Partnership from its inception in December 1986 until the effective
date of the Reorganization. Mr. Gaughan and Mr. Herbst were the sole
stockholders of Gaughan-Herbst,
3
<PAGE> 6
Inc., which was the sole corporate general partner of the Gold Coast Partnership
prior to the Reorganization. Mr. Gaughan has been involved in the gaming
industry since 1960 and has been licensed as a casino operator since 1967.
HARLAN D. BRAATEN. Mr. Braaten joined the Company as the President, Chief
Financial Officer and a director in October 1995, and was appointed Chief
Operating Officer in February 1996. His current term as a director expires in
2000. Mr. Braaten is also the President and Chief Operating Officer of the
Company's wholly-owned subsidiary, Coast Hotels and Casinos, Inc. Prior to
joining the Company, Mr. Braaten was employed in various capacities, including
the general manager and, most recently, senior vice president, treasurer and
chief financial officer of Rio Hotel and Casino, Inc. in Las Vegas. From March
1989 to February 1991, Mr. Braaten was vice president, finance of MGM/Marina
Hotel and Casino in Las Vegas, Nevada. Prior thereto, from November 1983 to
March 1989, Mr. Braaten was property controller for Harrah's in Reno, Nevada.
Mr. Braaten has over 20 years of experience in the Nevada gaming industry.
JERRY HERBST. Mr. Herbst has been a director, Vice President, Treasurer
and Assistant Secretary of the Company since its formation in September 1995.
His current term as a director expires in 1999. Mr. Herbst has been the
president of Terrible Herbst Oil Company, an owner and operator of gas stations
and car washes, since 1959. Mr. Herbst and Mr. Gaughan were the sole
stockholders of Gaughan-Herbst, Inc., which was the sole corporate general
partner of the Gold Coast Partnership prior to the formation of the Company. Mr.
Herbst has served as a member of the board of directors of Bank of
America--Nevada since 1977, of Nevada Power Company since 1990 and of Edelbrook
Corporation since 1994.
J. TITO TIBERTI. Mr. Tiberti has been a director, Vice President and
Secretary of the Company since its formation in September 1995. His current term
as a director expires in 1999. He is also a director and Vice President and
Secretary of Coast Hotels. Mr. Tiberti is the president, a director and a
stockholder of, and together with his immediate family, controls Tiberti
Construction, a construction company which served as the general contractor for
the construction of The Orleans and is also serving as general contractor for
the Suncoast. He has also served as managing general partner of The Tiberti
Company, a real estate rental and development company, since 1971. The Tiberti
Company is the lessor of the real property site for The Orleans. Mr. Tiberti has
been involved in the gaming industry for 19 years and was a general partner of
the Barbary Coast Partnership prior to the formation of the Company.
GAGE PARRISH. Mr. Parrish was named Vice President, Finance, Assistant
Secretary and a director of the Company and Coast Hotels in October 1995 and was
promoted to Chief Financial Officer in February 1996. His current term as a
director expires in 2000. Since 1986, he had been the Controller and Chief
Financial Officer of the Gold Coast Partnership prior to the formation of the
Company. From 1981 to 1986, Mr. Parrish served as Assistant Controller of the
Barbary Coast Partnership. Mr. Parrish is a certified public accountant and has
approximately 20 years of experience in the gaming industry.
FRANKLIN TOTI. Mr. Toti has been a director of the Company and Coast
Hotels since October 5, 1998. His current term expires in 1999. He has been Vice
President of Casino Operations for the Company since January 1, 1996. Mr. Toti
was a general partner and Casino Manager of the Barbary Coast Partnership from
its inception in 1979 until January 1, 1996, the effective date of the
reorganization. Mr. Toti has 38 years of experience in the gaming industry.
F. MICHAEL CORRIGAN. Mr. Corrigan was elected as a director of the Company
and Coast Hotels effective as of March 1, 1996. His current term as a director
expires in 2001. Since July 1989, Mr. Corrigan has served as the chief executive
officer of Corrigan Investments, Inc., which owns and manages real estate in
Nevada and Arizona. In addition, Mr. Corrigan is the Chief
4
<PAGE> 7
Executive Officer of Corstan, Inc., a mortgage banking company, and was
previously the owner, President and Chief Operating Officer of Stanwell
Mortgage, a Las Vegas mortgage company.
CHARLES SILVERMAN. Mr. Silverman was elected as a director of the Company
and Coast Hotels effective as of March 1, 1996. His current term as a director
expires in 2001. Mr. Silverman is the President and sole stockholder of
Yates-Silverman, Inc., which specializes in developing theme-oriented interiors
and exteriors and is a leading designer of hotels and casinos. Completed
projects of Yates-Silverman, Inc. include New York-New York, Excalibur, Circus
Circus, Luxor, the Trump Taj Mahal, Trump Castle and Atlantic City Showboat.
Yates-Silverman, Inc. also served as the primary designer for The Orleans and is
serving in the same capacity for the Suncoast. Mr. Silverman has served as the
president of Yates-Silverman, Inc. since its inception in 1971.
JOSEPH BLASCO. Mr. Blasco was elected as a director of the Company and
Coast Hotels effective as of December 16, 1996. His current term as a director
expires in 2001. Since 1984, Mr. Blasco has been a partner in the real estate
development partnership which developed the Spanish Trail community in Las
Vegas, a project which includes over 1,200 homes, a 27-hole golf course and a
country club. Mr. Blasco is currently the managing General Partner of United
Realty Investments, a real estate development and management company in Las
Vegas. He is also general partner in two real estate development partnerships,
Summer Trail LLC and Trop-Edmond Ltd.
Directors of the Company who are also employees of the Company receive
no compensation for service on the Company's Board of Directors or its
committees. All other directors receive an annual director's fee of $24,000,
payable quarterly in arrears. Directors may also be reimbursed for out-of-pocket
expenses incurred in connection with attending Board of Director or committee
meetings.
BOARD OF DIRECTORS AND COMMITTEES TO THE BOARD
The Board of Directors held eight meetings during 1998. During 1998,
each director attended at least 75% of the aggregate number of meetings of the
Board and the respective Committees on which he served while a member thereof.
The Board of Directors has two standing committees: the Audit Committee and the
Compensation Committee. The Board does not have a Nominating Committee.
The Audit Committee, which was established in March 1996, consists of
Messrs. Corrigan and Blasco. The Audit Committee held one meeting during the
year 1998. The Audit Committee has responsibility for consulting with the
Company's officers regarding the appointment of independent public accountants
as auditors, discussing the scope of the auditor's examination and reviewing
annual financial statements, related party transactions, potential conflict
situations and corporate accounting policies.
The Compensation Committee, which was established in July 1996,
consists of Messrs. Corrigan, Silverman and Blasco. The Compensation Committee
held one meeting during the year 1997 and no meetings in 1998. No member of the
Committee is a former or current officer or employee of the Company or any of
its subsidiaries. The functions performed by the Compensation Committee include
oversight of executive compensation, review of the Company's overall
compensation programs, and administration of certain of the Company's incentive
compensation programs.
EXECUTIVE COMPENSATION AND OTHER INFORMATION
The following table sets forth all compensation earned by or paid by the
two affiliated partnerships that operated the Gold Coast and the Barbary Coast
prior to the reorganization and the
5
<PAGE> 8
Company during 1996, 1997 and 1998 to each executive officer (the "Named
Executive Officers") whose compensation exceeded $100,000 in all capacities in
which they served.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION
ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION(1)
- - --------------------------- ---- -------- -------- ---------------
<S> <C> <C> <C> <C>
Michael J. Gaughan.................................... 1998 $300,000 $ -- $ 5,000
Chairman of the Board and Chief 1997 300,000 -- 4,750
Executive Officer 1996 300,000 195,000 4,750
Harlan D. Braaten..................................... 1998 250,000 125,000 5,000
President and Chief Operating Officer (2) 1997 250,000 250,000(3) 4,750
1996 250,000 162,500 --
Gage Parrish.......................................... 1998 200,000 -- 5,000
Vice President, Chief Financial Officer 1997 200,000 -- 4,750
and Assistant Secretary(4) 1996 150,000 52,500 3,040
</TABLE>
- - --------------
(1) The amounts reflect matching contributions paid to the Company's 401(k)
Profit Sharing Plan and Trust.
(2) Mr. Braaten joined the Company in October 1995 as President and Chief
Financial Officer of the Company and Coast Hotels. Mr. Braaten was
appointed as Chief Operating Officer of the Company and Coast Hotels in
February 1996.
(3) Pursuant to his previous employment agreement, Mr. Braaten received a
bonus of $250,000 because the Company had not made a public offering of
its common stock by December 31, 1997. Mr. Braaten entered into a new
employment agreement effective as of January 1, 1999.
(4) Mr. Parrish served as Vice President, Finance and Controller of the
Company and Coast Hotels from September 1995 to February 1996, when Mr.
Parrish was named Chief Financial Officer of the Company and Coast
Resorts.
EMPLOYMENT AGREEMENT
Effective as of January 1, 1999, the Company entered into an employment
agreement with Harlan Braaten, President and Chief Operating Officer. The
agreement has a term of three years and provides for Mr. Braaten to receive a
base salary of $250,000 for the first year and $300,000 for the second and third
year. The agreement may be terminated upon 30 days notice by Mr. Braaten and at
any time by the Company. In addition, in the event of a termination of Mr.
Braaten's employment other than for failure to comply with Nevada gaming
regulations, failure to perform his duties, medical incapacity or his arrest on
a felony offense, Mr. Braaten will be entitled to receive a severance payment in
the amount of $300,000 plus any pro rata bonus payment and unvested stock
options to which he is entitled. Pursuant to the arrangement, the Company
granted Mr. Braaten options to purchase 30,415 shares of Coast Resorts, Inc. for
$100 per share. The option vested as to one-third of the shares on the grant
date, January 1, 1999, and will vest with respect to half of the remaining
shares, on each of the first and second anniversaries of the grant date.
BONUS PLANS
In 1996, the Company established a bonus plan designed to reward executive
officers and other key employees for their contributions to the Company's
business objectives and operating results. Bonuses may be awarded in the
discretion of the Board of Directors based upon achievement of financial targets
established by the Board of Directors on an annual basis, and generally will be
equal to a percentage of the recipient's base salary, depending on the target
achieved.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
6
<PAGE> 9
We maintain numerous racetrack dissemination contracts with Las Vegas
Dissemination Company, Inc. ("LVD"). Michael J. Gaughan's son is the president
and sole stockholder of LVD. LVD provides certain dissemination and pari-mutuel
services to The Orleans, the Gold Coast and the Barbary Coast. LVD has been
granted a license by the Nevada Gaming Authorities to disseminate live racing
for those events and tracks for which it contracts and has been granted the
exclusive right to disseminate all pari-mutuel services and race wire services
in the State of Nevada. Under these dissemination contracts, we pay to LVD an
average of 3% of the wagers accepted for races held at the racetracks covered by
the respective contracts. We also pay to LVD a monthly fee for race wire
services. For the fiscal year ended December 31, 1998, we incurred expenses
payable to LVD of approximately $3.1 million. The terms on which such services
are provided are regulated by the Nevada Gaming Authorities.
Tiberti Construction served as the general contractor for the original
construction of the Gold Coast and for certain expansions thereof, and for the
original construction of the Barbary Coast and all expansions thereof. Tiberti
Construction was also the general contractor for the original construction of
The Orleans, and the expansions in 1997, 1998 and 1999. J. Tito Tiberti owns
approximately 6% of the outstanding common stock of the Company, and is a
director, Vice President and Secretary of the Company and Coast Hotels. Mr.
Tiberti is the president, a director and stockholder of, and together with his
immediate family members, controls Tiberti Construction. For the year ended
December 31, 1998, we incurred expenses payable to Tiberti Construction of
approximately $3.7, million.
We have entered into a ground lease with The Tiberti Company, a Nevada
general partnership, with respect to the real property on which The Orleans is
located. Mr. Tiberti, a director and stockholder of the Company and a director
of Coast Resorts, is the managing partner of The Tiberti Company. For the fiscal
year ended December 31 1998, we paid rental expenses to The Tiberti Company of
approximately $2.4 million.
Michael J. Gaughan, Franklin Toti and Leo Lewis are the owners of LGT
Advertising, which serves as our advertising agency. LGT Advertising purchases
advertising for our casinos from third parties and passes any discounts directly
through to us. LGT Advertising receives no compensation or profit for such
activities, and invoices us for actual costs incurred. LGT Advertising uses our
facilities and employees in rendering its services, but does not pay any
compensation to us for such use. None of Messrs. Gaughan, Toti or Lewis receives
any compensation from LGT Advertising. Advertising expenses amounted to
approximately $6.0 million for the year ended December 31, 1998.
We have purchased certain of our equipment and inventory for our
respective operations from RJS Inc., a Nevada corporation that is owned by
Michael J. Gaughan's father and Steven Delmont, our restaurant manager. RJS
invoices us for actual costs incurred. For the fiscal year ended December 31,
1998, we incurred expenses payable to RJS of approximately $829,000.
Michael J. Gaughan is the majority stockholder of Nevada Wallboards, Inc.,
a Nevada corporation ("Nevada Wallboards"), which prints wallboards and parlay
cards for the use in our race and sports books. Mr. Gaughan receives no
compensation from Nevada Wallboards. We expect to continue to purchase
wallboards and parlay cards from Nevada Wallboards. For the fiscal year ended
December 31, 1998, we incurred expenses payable to Nevada Wallboards of
approximately $186,000.
Charles Silverman, a director of the Company and Coast Hotels, is the
president of Yates-Silverman, Inc., which served as the designer of The Orleans
and is serving as the designer for the Suncoast. For the fiscal year ended
December 31, 1998, we incurred expenses payable to Yates-Silverman of
approximately $500,000.
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<PAGE> 10
The Company expects to promote The Orleans by advertising The Orleans name
on a NASCAR race car operated by Brendan Gaughan on the Winston West Circuit.
The Company expects to spend approximately $300,000 in connection with this
promotion. Brendan Gaughan is the son of Michael J. Gaughan.
The foregoing transactions are believed to have been on terms no less
favorable to us than could have been obtained from unaffiliated third parties
and were approved by a majority of our disinterested directors. Any future
transactions between us and our officers, directors, principal stockholders or
affiliates will be on terms no less favorable to us than may be obtained from
unaffiliated third parties, and will be approved by a majority of our
disinterested directors.
COMPLIANCE WITH SECTION 16(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
Rules adopted by the SEC under Section 16(a) of the Securities Exchange
Act of 1934 (the "Exchange Act") require the Company's officers and directors,
and persons who own more than ten percent of the issued and outstanding shares
of the Company's equity securities, to file reports of their ownership, and
changes in ownership, of such securities with the SEC on SEC Forms 3, 4 or 5, as
appropriate. Such persons are required by the SEC's regulations to furnish the
Company with copies of all forms they file pursuant to Section 16(a).
Based solely upon a review of Forms 3, 4 and 5 and amendments thereto
furnished to the Company during its most recent fiscal year, and any written
representations provided to it, the Company believes that each of the officers,
directors, and owners of more than 10% of the outstanding Common Stock of the
Company are in compliance with Section 16(a) of the Securities Exchange Act of
1934 for the year 1998.
8
<PAGE> 11
BENEFICIAL OWNERSHIP OF SHARES
The following table sets forth certain information regarding the beneficial
ownership of the common stock of the Company as of April 9, 1999 (i) each person
who, to the Company's knowledge, owns more than 5% of the outstanding common
stock, (ii) each director of the Company, (iii) each other person named in the
Summary Compensation Table above and (iv) all directors and executive officers
of the Company as a group.
<TABLE>
<CAPTION>
NUMBER OF
NAME(1) SHARES PERCENTAGE
- - ------- ------ ----------
<S> <C> <C>
Michael J. Gaughan 452,103.97 30.1%
Jerry Herbst 265,388.08 17.8%
Jimma Lee Beam 104,529.41 7.0%
Franklin Toti 99,776.47 6.7%
J. Tito Tiberti 95,151.47 6.4%
Harlan D. Braaten (2) 10,138.33 *
F. Michael Corrigan 5,263.24 *
Joseph Blasco 500 *
Charles Silverman 500 *
Gage Parrish --- ---
All directors and executive officers as a group 928,821.56 61.9%
(9 persons)
</TABLE>
- - ------------------------------------
* Less than one percent
(1) The address of Messrs. Gaughan and Toti is 4500 West Tropicana Avenue, Las
Vegas, Nevada 89103. The address of Mr. Herbst is 5195 Las Vegas Boulevard
South, Las Vegas, Nevada 89119. The address of Mr. Tiberti is 1806 South
Industrial Road, Las Vegas, Nevada 89102. The address of Ms. Beam is 2409
Windjammer Way, Las Vegas, Nevada 89107. The address of Mr. Corrigan is 4100
West Flamingo Road, Las Vegas, Nevada 89103.
(2) Reflects shares that may be purchased upon exercise of a stock option.
Pursuant to his employment agreement, Mr. Braaten was granted an option to
purchase 30,415 shares of Coast Resorts, Inc. for $100 per share. One third
of the options vested on the grant date (January 1, 1999), one third vest
January 1, 2000 and the remaining third vest on January 1, 2001.
There is no public market for the Company's common stock.
ANNUAL REPORT
The Annual Report of the Company for the fiscal year ended December 31,
1998, including the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1998, without the exhibits thereto, was on April 12, 1999,
mailed to stockholders of record at the close of business on April 9, 1999.
The company will provide a copy of the Annual Report and of the exhibits to
its Annual Report on Form 10-K for the fiscal year ended December 31, 1998 upon
the written request of any
9
<PAGE> 12
beneficial owner of the Company's securities as of the record date for the
Annual Meeting and reimbursement of the Company's reasonable expenses. Such
request should be addressed to Gage Parrish, Vice President and Chief Financial
Officer, 4500 West Tropicana Avenue, Las Vegas, Nevada 89103.
COMPENSATION COMMITTEE REPORT
The Compensation Committee of the Board of Directors was appointed in June
1996. For compensation decisions pertaining to 1998 and thereafter, the
Compensation Committee has reviewed and will review and recommend compensation
levels for executive officers of the Company and oversee and administer the
Company's executive compensation programs. The Compensation Committee
recommends, and the Board of Directors determines compensation levels for the
executive officers of the Company. All members of the Compensation Committee are
outside directors, who are not eligible to participate in any of the
compensation programs that the Committee oversees.
The Company's executive compensation plans are designed to attract, retain,
motivate and appropriately reward individuals who are responsible for the
Company's short and long-term profitability, growth and return to stockholders.
Compensation for the Company's executive officers generally consists of salary
and an annual bonus. In some cases, stock options are also awarded.
Executive officers also participate in a 401(k) plan, a medical plan and
other benefit plans available to employees generally.
Pay levels for executives generally are based on the level of
responsibility, scope and complexity of the executive's position relative to
other senior management positions internally and at other competitive gaming
companies.
The determination of salary increases, annual bonus awards and long-term
incentive awards is expected to be reviewed annually based on the performance of
the Company. Also factored into these decisions will be each executive's
individual performance and contribution to the Company's future positioning.
Although the components of compensation (salary, annual bonuses and long-term
incentive awards) will be reviewed separately, compensation decisions are based
on a review of the total compensation level awarded compared to other executives
with similar gaming companies. In establishing 1998 compensation for the named
executive officers, the Board of Directors took into account the compensation
paid to Messrs. Gaughan, Braaten and Parrish and the levels of compensation paid
to executives in the gaming industry generally.
For the year 1999 the Board determined that compensation levels for key
executives would remain the same as that for 1998 with bonuses to be awarded at
the end of the year based on achievement by the Company of targeted performance
criteria.
By the Compensation Committee
Charles Silverman
F. Michael Corrigan
Joseph Blasco
STOCKHOLDER PROPOSALS FOR 2000 ANNUAL MEETING
Any eligible stockholder (as defined below) of the Company wishing to have
a proposal considered for inclusion in the Company's 2000 proxy solicitation
material must set forth such proposal in writing and file it with the Secretary
of the Company on or before December 14, 1999.
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The Board will review any proposals from eligible stockholders which it receives
by that date and will determine whether any such proposals will be included in
its 2000 proxy solicitation materials. Any eligible stockholder is one who is
the record or beneficial owner of at least 1% or $1,000 in market value of
securities entitled to be voted on the proposal at that annual meeting and has
held such securities for at least one year and who shall continue to own such
securities through the date on which the annual meeting is held.
SOLICITATION OF PROXIES
The cost of this solicitation shall be borne by the Company. Proxies may be
solicited by mail, telephone, or telegraph, or personally by directors, officers
and regular employees of the Company, none of whom will receive any special
compensation for such services. The Company will reimburse persons holding stock
in their name or in the names of their nominees for reasonable expenses of
forwarding proxy materials to their principals.
OTHER BUSINESS
The Board does not know of any other business which will be presented for
consideration at the Annual Meeting. If any other business properly comes before
the Annual Meeting or at any adjournment(s) or postponement(s) thereof, the
proxy holders will vote in regard thereto according to their discretion insofar
as such proxies are not limited to the contrary. Pursuant to the Company's
Bylaws, in order to present business at the Annual Meeting other than that
proposed by the Board, a stockholder must give written notice to the Secretary
of the Company not later than sixty days in advance of the Annual Meeting. Any
such notice must set forth as to each matter the stockholder proposes to bring
before the meeting: (i) the reasons for conducting such business at the meeting,
(ii) the name and address, as they appear on the Company's books and records, of
the stockholder proposing such business, (iii) the class and number of shares of
the Company beneficially owned by the stockholder and (iv) any material interest
of the stockholder in such business.
By Order of the Board of Directors
/s/ J. TITO TIBERTI
------------------------------
J. Tito Tiberti
Secretary
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PROXY
COAST RESORTS, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE
1999 ANNUAL MEETING OF STOCKHOLDERS
The undersigned hereby constitutes and appoints Michael J. Gaughan,
Harlan D. Braaten, and J. Tito Tiberti, and each or any of them (and, if two or
more of them act hereunder, by action of a majority of them), attorneys and
proxies with full power of substitution, to represent the undersigned and to
vote all shares of Common Stock, $.01 par value, of Coast Resorts, Inc. (the
Company), that the undersigned would be entitled to vote if personally present
at the 1999 Annual Meeting of Stockholders of the Company to be held at 10:00
a.m. (Pacific Daylight Time) at The Orleans Hotel and Casino, 4500 West
Tropicana Avenue, Las Vegas, Nevada 89103, on Wednesday, May 12, 1999, and at
any and all adjournments or postponements thereof (the "Meeting"), as herein
specified (or, if no direction is given, FOR the nominees named below) and in
such proxyholder's discretion upon any other matter that may properly come
before the Meeting.
A. ELECTION OF DIRECTORS
CLASS III (for election to serve until the 2002 Annual Meeting of
Stockholders and until their successors are elected and have
qualified): JERRRY HERBST, J. TITO TIBERTI, FRANKIN TOTI
_____ FOR all nominees listed above (except as marked to the contrary above):
-or-
_____ WITHHOLD AUTHORITY to vote for all nominees listed above.
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE
THAT NOMINEE'S NAME IN THE LISTS ABOVE.
B. IN THE DISCRETION OF THE PROXYHOLDERS with respect to any other matter
which may properly come before the Meeting. The Board of Directors is
not aware of any other matters that will be presented at the meeting.
THE SHARES VOTED BY THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN
THE MANNER INSTRUCTED HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO INSTRUCTIONS
ARE GIVEN, THIS PROXY WILL BE VOTED "FOR" THE NOMINEES LISTED ABOVE.
IMPORTANT: Please sign your name or names exactly as they appear on this Proxy.
When signing as attorney, executor or administrator, trustee or guardian, please
give your full title as such. If shares are held jointly, EACH holder should
sign.
-----------------------------------
Signature
-----------------------------------
Signature
DATE:________________________________, 1999.
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, YOU ARE URGED TO SIGN AND RETURN
THIS PROXY, WHICH MAY BE REVOKED AT ANY TIME PRIOR TO ITS USE.
