<PAGE>
================================================================================
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
Coast Resorts, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the 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)(4) 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 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------------
(5) Total fee paid:
-------------------------------------------------------------------------
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset 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:
-------------------------------------------------------------------------
<PAGE>
COAST RESORTS, INC.
4500 West Tropicana Avenue
Las Vegas, Nevada 89103
April 12, 2000
Dear (Name of Stockholder):
You are cordially invited to attend the 2000 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 17, 2000 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 I directors will be elected to serve until the
2003 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,
/s/ Michael J. Gaughan
Michael J. Gaughan
Chairman of the Board
and Chief Executive Officer
1
<PAGE>
COAST RESORTS, INC.
4500 West Tropicana Avenue
Las Vegas, Nevada 89103
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
April 12, 2000
The 2000 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 17, 2000, commencing at 10:00 a.m. (Pacific
Daylight Time) for the following purposes:
1. To elect three Class I directors to serve until the 2003 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 7, 2000. Accordingly, only stockholders of record as of the
close of business on April 7, 2000 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, 2000
2
<PAGE>
COAST RESORTS, INC.
4500 West Tropicana Avenue
Las Vegas, Nevada 89103
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
May 17, 2000
This Proxy Statement is first being mailed on or about April 12, 2000 to
stockholders of Coast Resorts, Inc., a Nevada corporation (the "Company"), of
record as of the close of business on April 7, 2000.
The enclosed Proxy is solicited on behalf of the Board of Directors (the
"Board") of the Company for use at the Company's 2000 Annual Meeting of
Stockholders (the "Annual Meeting") to be held on May 17, 2000 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 7, 2000 are
entitled to notice of and to vote at the Annual Meeting. On that date, there
were outstanding 1,478,977.94 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 2003 Annual
Meeting of Stockholders and until their successors are duly elected and
qualified. The Board has nominated the three current
3
<PAGE>
directors to stand for re-election at the Annual Meeting for the following
terms: Messrs. Michael J. Gaughan, Harlan D. Braaten and Gage Parrish, each of
whom will be designated as Class I directors with a term ending at the 2003
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.
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.
4
<PAGE>
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 12, 2000.
Directors and Executive Officers
Term as a
Director
Name Age Position(s) Held Expires
________________________________________________________________________________
Nominees for Re-election
------------------------
Michael J. Gaughan 57 Director, Chairman of the Board 2000
and Chief Executive Officer
Harlan D. Braaten 49 Director, President and Chief 2000
Operating Officer
Gage Parrish 46 Director, Vice President, Chief Financial 2000
Officer and Assistant Secretary
Other Directors
---------------
F. Michael Corrigan 64 Director 2001
Charles Silverman 67 Director 2001
Joseph Blasco 56 Director 2001
Jerry Herbst 61 Director, Vice President, Treasurer 2002
and Assistant Secretary
J. Tito Tiberti 54 Director, Vice President and Secretary 2002
Franklin Toti 61 Director and Vice President of Casino
Operations 2002
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
5
<PAGE>
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, 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 2002. 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 2002. He is also a director, 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 more than 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
more than 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 2002. 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 more than 35 years of experience in the gaming
industry.
6
<PAGE>
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 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 1999. During 1999, 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 three standing committees: the Compliance Committee, the
Audit Committee and the Compensation Committee.
The Compliance Committee was established in December, 1999. Its first
meeting will be in the year 2000.
The Audit Committee, which was established in March 1996, consists of
Messrs. Corrigan and Blasco. The Audit Committee held one meeting during the
year 1999. 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 1999. No member of the Committee is a former or current
officer or employee of the Company or
7
<PAGE>
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
Company during 1997, 1998 and 1999 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...................... 1999 $ 300,000 $ -- $ 4,000
Chairman of the Board and Chief 1998 300,000 -- 5,000
Executive Officer of Coast Hotels 1997 300,000 -- 4,750
Harlan D. Braaten....................... 1999 $ 275,000 $ 137,500 $ 3,150
President and Chief Operating 1998 250,000 125,000 5,000
Officer, Coast Hotels 1997 250,000 250,000(2) 4,750
Gage Parrish............................ 1999 $ 212,500 $ 15,000 $ 3,900
Vice President, Chief Financial Officer 1998 200,000 -- 5,000
and Assistant Secretary of the Company 1997 200,000 -- 4,750
</TABLE>
______________________________
(1) The amounts reflect matching contributions paid to our 401(k) Profit Sharing
Plan and Trust.
(2) Pursuant to his previous employment agreement, Mr. Braaten received a bonus
of $250,000 because Coast Resorts 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.
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 one-third of the shares on January 1, 2000 and will
vest as to the additional one-third of the shares on January 1, 2001. The
options expire on December 31, 2009.
8
<PAGE>
STOCK OPTIONS
Effective June 14, 1999, the Company issued options to purchase 5,000
shares of its common stock to its chief financial officer, who is also the chief
financial officer of Coast Hotels. The options vest in one-third increments on
June 14, 1999, June 14, 2000 and June 14, 2001. The exercise price of the
options is at $100 per share, which is equivalent to the estimated fair value of
the company's common stock at the grant date, as estimated by the Company from
recent sales of common stock between shareholders.
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. Bonuses awarded under the plan for the year ended December 31, 1999
were $197,500
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
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, 1999, we incurred expenses
payable to LVD of approximately $1.3 million. The terms on which such services
are provided are regulated by the Nevada Gaming Authorities.
Tiberti Construction serves as the general contractor for the construction
of the Suncoast Hotel and Casino and was 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 1997, 1998 and 1999 expansions. J. Tito Tiberti owns
approximately 6.4% of the outstanding common stock of Coast Resorts, and is a
director, Vice President and Secretary of Coast Hotels and Coast Resorts. Mr.
Tiberti is the president, a director and stockholder of, and together with his
immediate family members, controls Tiberti Construction. For the fiscal year
ended December 31, 1999, we incurred expenses payable to Tiberti Construction of
approximately $27.9 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 of Coast Hotels and a director and stockholder
of Coast Resorts, is the managing partner of The Tiberti Company. For the fiscal
year ended December 31, 1999, we paid rental expenses to The Tiberti Company of
approximately $2.4 million.
Michael J. Gaughan and Franklin Toti are owners of LGT Advertising, which
serves as our advertising agency. LGT Advertising purchases advertising for our
casinos from third parties and
9
<PAGE>
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. Messrs. Gaughan
and Toti receive no compensation from LGT Advertising. Advertising expenses
amounted to approximately $5.4 million for the fiscal year ended December 31,
1999.
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, 1999, we incurred
expenses payable to RJS of approximately $2.1 million.
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, 1999, we incurred expenses payable to Nevada Wallboards of
approximately $180,000.
Charles Silverman, a director of Coast Hotels and Coast Resorts, 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, 1999, we incurred expenses payable to Yates-Silverman of
approximately $721,000.
Coast Hotels promotes The Orleans by advertising The Orleans name on NASCAR
vehicles operated by Orleans Motorsports, Inc. a Nevada corporation. In 1999, we
spent approximately $300,000 in connection with this promotion. Brendan Gaughan,
the son of Michael J. Gaughan, is the main driver employed by Orleans
Motorsports.
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 1999.
BENEFICIAL OWNERSHIP OF SHARES
10
<PAGE>
The following table sets forth certain information regarding the beneficial
ownership of the common stock of the Company as of April 7, 2000 (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>
Name/(1)/ Number of Percentage
- --------- ---------- ----------
Shares
------
<S> <C> <C>
Michael J. Gaughan 452,103.97 30.57 %
Jerry Herbst 265,488.08 17.95 %
Jimma Lee Beam 104,529.41 6.99 %
Franklin Toti 99,776.47 6.75 %
J. Tito Tiberti 94,551.47 6.39 %
Harlan D. Braaten(2) 20,276.66 1.4 %
F. Michael Corrigan 5,263.24 *
Joseph Blasco 500 *
Charles Silverman 500 *
Gage Parrish (3) 3333.33 *
All directors and executive officers as a group 941,793.1 62.7 %
(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.
/(3)/ Reflects shares that may be purchased upon exercise of a stock option. Mr.
Parrish was granted an option to purchase 5000 shares of Coast Resorts,
Inc. for $100 per share. One third of the options vested on the grant date
(June 14, 1999), one third vest on June 14, 2000, and the remaining third
vest on June 14, 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,
1999, including the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1999, without the exhibits thereto, on April 12, 2000, was
mailed to stockholders of record at the close of business on April 7, 2000.
11
<PAGE>
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, 1999 upon
the written request of any 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. 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 1999 compensation for the named
executive officers, the Board of Directors took into account the compensation
paid to Messrs. Gaughan, Braaten and Parrish in 1998, the levels of compensation
paid to executives in the gaming industry generally, and the performance of the
Company in the year 1999. During the year 1999 the net revenues of the Company
increased from $332,363,000 to $362,531,000 and the net income, before
extraordinary items, increased from $7,987,000 to $21,222,000. EBITDA increased
from $64,008,000 in 1998 to $77,992,000 in 1999, an increase of approximately 21
%. Based upon this performance, and in Mr. Braaten's case under the terms of his
employment contract, Mr. Braaten received a bonus of $137,500 and Mr. Parrish
received a bonus of $15,000. While the Compensation Committee believed that Mr.
Gaughan was entitled to a bonus for the year 1999 in an amount at least equal to
the bonus paid to Mr. Braaten, Mr. Gaughan indicated to the Compensation
Committee and the Board of Directors that he did not wish to receive a bonus for
the year 1999.
For the year 2000 the Board, based on the recommendation of the
Compensation Committee, determined that the base compensation levels for key
executives would remain the same as that for 1999 with bonuses to be awarded at
the end of the year based on achievement by the Company of
12
<PAGE>
targeted performance criteria.
By the Compensation Committee
Charles Silverman
F. Michael Corrigan
Joseph Blasco
STOCKHOLDER PROPOSALS FOR 2001 ANNUAL MEETING
Any eligible stockholder (as defined below) of the Company wishing to have
a proposal considered for inclusion in the Company's 2001 proxy solicitation
material must set forth such proposal in writing and file it with the Secretary
of the Company on or before December 14, 2000. 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 2001 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
J. Tito Tiberti
Secretary
13
<PAGE>
PROXY
COAST RESORTS, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE
2000 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 2000 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 17, 2000, 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 I (for election to serve until the 2003 Annual Meeting of Stockholders
and until their successors are elected and have qualified): MICHAEL J.
GAUGHAN, HARLAN D. BRAATEN, and GAGE PARRISH.
____ 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:____________________________________________, 2000.
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.
14
