<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 (S) 240.14a-11(c) or (S)240.14a-12
Greate Bay Casino Corporation
----------------------------------------------------
(Name of Registrant as Specified in its Charter)
Greate Bay Casino Corporation
----------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
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:
[ ] check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a) (2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount previously paid: _____________________________________________
2) Form, Schedule or Registration Statement No.:________________________
3) Filing Party:________________________________________________________
4) Date Filed:__________________________________________________________
<PAGE>
GREATE BAY CASINO CORPORATION
Two Galleria Tower, Suite 2200
13455 Noel Road, LB 48
Dallas, Texas 75240
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 20, 1997
To the Stockholders of
Greate Bay Casino Corporation
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Greate Bay
Casino Corporation (the "Company, and formerly known as Pratt Hotel
Corporation") will be held at the Sands Hotel and Casino, 136 South Kentucky
Avenue, in the City of Atlantic City, New Jersey on the 20th day of May 1997, at
10:00 a.m. (local time) for the following purposes:
1. To elect five (5) directors to hold office until their respective
successors have been duly elected and qualified.
2. To ratify the appointment of Arthur Andersen LLP as the independent public
accountants of the Company for fiscal year 1997.
3. To transact any and all other business that may properly come before the
meeting or any adjournment(s) thereof.
The Board of Directors has fixed the close of business on April 10, 1997, as
the Record Date for the determination of stockholders entitled to notice of and
to vote at the Annual Meeting or any adjournments(s) thereof. Only stockholders
of record at the close of business on the Record Date are entitled to notice of,
and to vote at, such meeting. The stock transfer books will not be closed. A
list of stockholders entitled to vote at the Annual Meeting will be available
for examination at the offices of the Company for 10 days prior to such meeting.
YOU ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING. HOWEVER, WHETHER OR
NOT YOU EXPECT TO ATTEND THE ANNUAL MEETING IN PERSON, YOU ARE URGED TO PROMPTLY
MARK, SIGN, DATE AND RETURN THE ACCOMPANYING FORM OF PROXY IN THE ENCLOSED,
SELF-ADDRESSED, STAMPED ENVELOPE SO THAT YOUR SHARES OF STOCK MAY BE REPRESENTED
AND VOTED IN ACCORDANCE WITH YOUR WISHES AND IN ORDER THAT THE PRESENCE OF A
QUORUM MAY BE ASSURED AT THE ANNUAL MEETING. YOUR PROXY WILL BE RETURNED TO YOU
IF YOU SHOULD BE PRESENT AT THE ANNUAL MEETING AND SHOULD REQUEST SUCH RETURN OR
IF YOU SHOULD REQUEST SUCH RETURN IN THE MANNER PROVIDED FOR REVOCATION OF
PROXIES ON THE INITIAL PAGE OF THE ENCLOSED PROXY STATEMENT. PROMPT RESPONSE BY
OUR STOCKHOLDERS WILL REDUCE THE TIME AND EXPENSE OF PROXY SOLICITATION.
BY ORDER OF THE BOARD OF DIRECTORS,
William D. Pratt, Secretary
Dallas, Texas
April 23, 1997
<PAGE>
GREATE BAY CASINO CORPORATION
Two Galleria Tower, Suite 2200
13455 Noel Road, LB 48
Dallas, Texas 75240
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 20, 1997
SOLICITATION AND REVOCATION OF PROXIES
This Proxy Statement and the accompanying Proxy are being mailed to the
stockholders of Greate Bay Casino Corporation (the "Company") on or about April
23, 1997, in connection with the solicitation of Proxies by the Board of
Directors of the Company to be voted at the Annual Meeting of Stockholders of
the Company to be held on May 20, 1997 (the "Annual Meeting"), at the time and
place and for the purposes set forth in the accompanying Notice of Annual
Meeting, and at any adjournment(s) thereof.
The accompanying form of Proxy is designed to permit each holder of the
Company's common stock, par value $.10 per share ("Common Stock"), to vote for
or withhold voting for any or all of the nominees for election as directors of
the Company listed under Proposal 1 and to authorize the proxies to vote in
their discretion with respect to any other proposal brought before the Annual
Meeting. When a stockholder's executed and dated proxy card specifies a choice
with respect to a voting matter, the shares will be voted accordingly. If no
such specifications are made, such Proxy will be voted by those persons named in
the Proxy at the Annual Meeting: FOR the election of the nominees specified
under the caption "Election of Directors" and FOR the ratification of Arthur
Andersen LLP as the Company's independent public accountants for fiscal year
1997.
The Company encourages the personal attendance of stockholders at its annual
meetings, and giving of a Proxy does not preclude the right to vote in person
should any stockholder giving the Proxy so desire. Any stockholder of the
Company giving a Proxy has the right to revoke his or her Proxy at any time
prior to the voting thereof either in person at the Annual Meeting or by giving
written notice to the Company addressed to Mr. William D. Pratt, Secretary,
Greate Bay Casino Corporation, Two Galleria Tower, Suite 2200, 13455 Noel Road,
LB 48, Dallas, Texas 75240; however, no such revocation shall be effective
until such notice of revocation has been received by the Company at or prior to
the Annual Meeting.
In addition to the solicitation of Proxies by use of the mail, officers and
regular employees of the Company may solicit the return of Proxies by personal
interview, telephone and telegraph. Such officers and employees will not be
additionally compensated, but will be reimbursed for out-of-pocket expenses.
Brokerage houses and other custodians, nominees and fiduciaries will be
requested to forward solicitation materials to the beneficial owners of stock.
The cost of preparing, printing, assembling, and mailing the Notice of Annual
Meeting, this Proxy Statement, the form of Proxy enclosed herewith, any
additional material, the cost of forwarding solicitation material to the
beneficial owners of stock, and other costs of solicitation are to be borne by
the Company.
1
<PAGE>
PURPOSES OF THE MEETING
At the Annual Meeting, the stockholders of the Company will consider and vote
on the following matters:
1. The election of five (5) directors to hold office until their respective
successors have been duly elected and qualified.
2. To ratify the appointment of Arthur Andersen LLP as the independent public
accountants of the Company for fiscal year 1997.
3. Such other and further business as may properly come before the meeting or
any adjournment(s) thereof.
VOTING RIGHTS AND PRINCIPAL STOCKHOLDERS
GENERAL
The Board of Directors of the Company has fixed the close of business on
April 10, 1997, as the record date (the "Record Date") for the Annual Meeting.
Only holders of record on the Record Date are entitled to notice of, and to vote
at, the Annual Meeting or any adjournment(s) thereof. On the Record Date there
were 5,186,627 shares of Common Stock issued and outstanding, all of which are
entitled to vote. The Common Stock is the only class of stock entitled to vote
at the Annual Meeting. Holders of the Company's Common Stock of record as of
the Record Date will be entitled to one (1) vote per share on all matters to be
acted upon at the Annual Meeting. The presence, in person or by proxy, of the
holders of a majority of the issued and outstanding shares of Common Stock
entitled to vote at the Annual Meeting or any adjournment(s) thereof is
necessary to constitute a quorum to transact business. In accordance with
Delaware law, a stockholder entitled to vote for the election of directors can
withhold authority to vote for certain nominees for director. Abstentions are
counted for purposes of determining a quorum to conduct business, but are
ignored in vote tabulation, thereby increasing the number of votes necessary to
effectuate any proposal. Broker "non-votes" (i.e., shares held in nominee name
by brokers on behalf of customers, which shares are not represented by proxy)
are not counted for purposes of the meeting.
All shares of Common Stock will vote as a single class. Neither the
Company's Certificate of Incorporation nor its Bylaws provide for cumulative
voting rights.
REGULATION
Holders of Common Stock may be subject to certain regulatory restrictions on
ownership. Holders are subject to the qualification provisions of the New
Jersey Casino Control Act (the "Casino Act") relating to financial sources and
may, in the sole discretion of the New Jersey Casino Control Commission with the
concurrence of the Division of Gaming Enforcement, be required to make filings,
submit to regulatory proceedings and qualify under the Casino Act. A holder of
Common Stock who cannot legally hold such shares, or who exposes the Company to
a risk of loss of a license or other regulatory risks, may be required to sell
his or her shares of Common Stock to a qualified buyer or to the Company at the
price prescribed by law or, if no price is prescribed, at the fair market value
(defined in the Company's Certificate of Incorporation).
2
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
Based on filings with the Securities and Exchange Commission, no persons,
other than certain directors of the Company, are known who beneficially owned
more than 5% of the outstanding Common Stock as of the Record Date.
SECURITY OWNERSHIP OF MANAGEMENT
The following information pertains to the Common Stock beneficially owned by
each director, nominee for director, each executive officer named under
"Remuneration of Directors and Executive Officers" and by all current directors
and officers of the Company as a group as of the Record Date:
<TABLE>
<CAPTION>
Shares of Percentage of
Common Stock Outstanding
Beneficially Common
Beneficial Owner Owned (a) Stock
- ------------------------------- ---------------- -------------
<S> <C> <C>
Jack E. Pratt.................. 464,905(b) 9.0%
Edward T. Pratt, Jr............ 154,091(c) 3.0%
William D. Pratt............... 791,128(d) 15.3%
Edward T. Pratt III............ 392,495(e) 7.6%
Edward D. Muir................. -- --
Bernard A. Capaldi, CPA........ -- --
Lawrence C. Cole............... -- --
Leonard M. DeAngelo............ 10,071 *
All directors and officers as
a group (11 individuals)..... 1,812,690 34.9%
</TABLE>
- --------------------------
* Less than 1%
(a) Except as otherwise described, each individual has the sole power to vote
and dispose of the Common Stock beneficially owned by him.
(b) Beneficial ownership is attributable to the following: (i) J. E. Pratt Co.
I, a Texas general partnership of which Mr. Pratt is the Managing General
Partner, owns 290,530 shares (5.8%) of the outstanding stock of the Company
and (ii) the W.D. Pratt Family Trust, for which Mr. Pratt is the managing
trustee, owns 168,501 shares (3.2%) of the outstanding stock of the Company.
(c) Beneficial ownership is attributable to E.T. Pratt Co. I, a Texas general
partnership of which Mr. Pratt is the Managing General Partner, which owns
149,056 shares (3%) of the outstanding stock of the Company.
(d) Beneficial ownership is attributable to the following: (i) W.D. Pratt Co.
I, a Texas general partnership of which Mr. Pratt is the Managing General
Partner, owns 34,200 shares, less than 1% of the outstanding stock of the
Company and (ii) the J.E. Pratt Family Trust, for which Mr. Pratt is the
managing trustee, owns 755,250 shares (14.9%) of the outstanding stock of
the Company.
(e) Beneficial ownership is attributable to the E. Pratt Family Trust, for which
Mr. Pratt is the Managing Trustee, which owns 335,962 (6.7%) of the
outstanding stock of the Company.
3
<PAGE>
ELECTION OF DIRECTORS
The Bylaws of the Company provide that the Board of Directors shall consist
of not fewer than three (3) nor more than nineteen (19) members (exclusive of
advisory directors) and that the number of directors, within such limits, shall
be determined by resolution of the Board of Directors at any meeting. By action
of the Board of Directors, the number of directors comprising the Board of
Directors has been set at five (5).
Unless otherwise directed on any duly executed and dated Proxy, it is the
intention of the persons named in such Proxy to nominate and to vote the shares
represented by such Proxy for the election of the nominees listed in the table
below for the office of director of the Company to hold office until their
respective successors have been duly elected and qualified:
<TABLE>
<CAPTION>
Year First
Became a
Name and Age Director Present Offices Held in the Company
------------ ---------- -----------------------------------
<S> <C> <C>
Bernard A. Capaldi, CPA (54) 1988 Director
Edward D. Muir (86) 1969 Director
Jack E. Pratt (70) 1969 Chairman of the Board, Chief
Executive Officer and Director
Edward T. Pratt, Jr. (73) 1969 Vice Chairman of the Board, Treasurer
and Director
William D. Pratt (68) 1969 Executive Vice President, General
Counsel, Secretary and Director
</TABLE>
The Board of Directors does not contemplate that any of the above-named
nominees for director will refuse or be unable to accept election as a director
of the Company, or be unable to serve as a director of the Company. Should any
of them become unavailable for nomination or election or refuse to be nominated
or to accept election as a director of the Company, then the person or persons
voting the Proxy will vote the shares represented by such Proxy for the election
of such other person or persons as may be nominated or designated by the Board
of Directors. Each nominee, so far as the Board can determine, is willing to
serve and intends to serve the entire term if elected. If elected as a director
of the Company, each director will hold office until his respective successor
has been duly elected and qualified.
BUSINESS EXPERIENCE FOR PAST FIVE YEARS
The following information summarizes the business experience during at least
the past five years of each person nominated to be a director of the Company:
Mr. Bernard A. Capaldi is a certified public accountant and is a principal of
Capaldi, Reynolds & Associates, P.A., C.P.A.'s in New Jersey, and has held such
position since 1965. He is also the Chairman of the Board of Shore Memorial
Hospital's parent holding company.
Mr. Edward D. Muir is currently retired. He is a former Senior Vice
President of Rauscher Pierce Refsnes of San Antonio, Texas, an investment
banking firm, and was associated with Rauscher Pierce Refsnes in numerous
executive capacities for more than five years.
Mr. Jack E. Pratt has served as Chairman of the Board, a director and Chief
Executive Officer of the Company for more than five years.
4
<PAGE>
Mr. Edward T. Pratt, Jr. has served as Vice Chairman of the Board and a
director and executive officer of the Company for more than five years.
Mr. William D. Pratt has served as Executive Vice President, Secretary and a
director of the Company for more than five years. He also currently serves as
General Counsel and, prior to May 1995, served as General Counsel of the Company
for more than five years. Mr. Pratt also served as Vice President and Secretary
of Southmark San Juan, Inc. ("SSJ"), 46.3% of the stock of which was owned by a
subsidiary of the Company, at the time of the filing by SSJ on August 20, 1992
of a voluntary petition for reorganization under Chapter 11 of the Federal
Bankruptcy Code in the United States Bankruptcy Court for the Northern District
of Texas, Dallas Division. In November 1992, the reorganization plan was
confirmed by the Bankruptcy Court.
REQUIRED VOTE
Assuming the presence of a quorum, the affirmative vote of the holders of at
least a plurality of the issued and outstanding shares of Common Stock present,
in person or by proxy, at the Annual Meeting is necessary for the election of
directors.
RECOMMENDATION
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE ELECTION OF EACH
OF THE INDIVIDUALS NOMINATED FOR ELECTION AS A DIRECTOR.
BOARD MEETINGS AND COMMITTEES
Nonemployee directors of the Company received an annual fee of $25,000 for
service on the Board of Directors and $1,000 for each Board meeting attended
during 1996. The Board of Directors of the Company held four regularly
scheduled meetings during the year ended December 31, 1996. All directors
attended at least 75% of all meetings of the Board of Directors and committees
thereof for which they were eligible to serve.
The Board of Directors of the Company has Audit and Compensation Committees,
but does not have a standing nominating committee. Nonemployee members of the
Audit Committee receive an annual fee of $2,500 for service on the committee and
$500 for each committee meeting attended. No additional compensation or fees
are paid to directors for attending Compensation Committee meetings.
AUDIT COMMITTEE. The Audit Committee has the duty to (i) recommend annually
to the Board of Directors the independent public accountants to be engaged to
audit the books, records and accounts of the Company for the ensuing year; (ii)
arrange the details for the engagement of the independent public accountants,
including the remuneration to be paid; (iii) review with the Company's
independent public accountants, as well as the Company's controller and other
appropriate personnel, the Company's general policies and procedures with
respect to audits and accounting and financial controls and the general
accounting and reporting principles that should be applied in preparing the
Company's financial statements; (iv) meet with the independent public
accountants as required and review with them the Company's interim and year-end
financial statements, any certification, report or opinion that the independent
public accountants propose to render in connection with such statements, and any
other appropriate matter; and (v) make such reports and recommendations to the
Board of Directors in connection with the foregoing as it shall deem appropriate
or as the Board of Directors may request, and take such action thereon as the
Board of Directors may direct it to take. The Audit committee is comprised of
Messrs. Bernard A. Capaldi, Edward D. Muir and Edward T. Pratt, Jr. The Audit
committee met five times during 1996.
5
<PAGE>
COMPENSATION COMMITTEE. The Compensation Committee reviews the compensation
of the Company's executive officers. The Compensation Committee is comprised of
Messrs. Edward D. Muir, Bernard A. Capaldi and Jack E. Pratt. The Compensation
Committee met once during 1996. The report of the Compensation Committee
appears in this Proxy Statement under the heading "Remuneration of Directors and
Executive Officers."
FAMILY RELATIONSHIPS
Messrs. Jack E. Pratt, Edward T. Pratt, Jr. and William D. Pratt are brothers
(the "Pratt Brothers"). Mr. Edward T. Pratt III, President of the Company, is
the son of Mr. Edward T. Pratt, Jr. There is no other family relationship
between any of the directors and any executive officers of the Company or its
subsidiaries or affiliates.
CERTAIN RELATIONSHIPS
See "Transactions with Management" for certain transactions between directors
and the Company or its subsidiaries or affiliates.
MANAGEMENT
Certain information is set forth below concerning the executive officers and
certain key employees of the Company. For a discussion of other activities of
certain of the directors and officers and certain entities with which they are
affiliated, see "Transactions with Management."
<TABLE>
<CAPTION>
Name Age Position
---- --- --------
<S> <C> <C>
Jack E. Pratt........................... 70 Chairman of the Board, Chief
Executive Officer and Director
Edward T. Pratt, Jr..................... 73 Vice Chairman of the Board,
Treasurer and Director
William D. Pratt........................ 68 Executive Vice President, General
Counsel, Secretary and Director
Edward T. Pratt III..................... 41 President
Lawrence C. Cole........................ 50 Vice President of Management
Information Systems
Charles F. LaFrano III.................. 42 Vice President
Arthur Lewis............................ 67 Vice President of Corporate
Security and Governmental
Relations
Leonard M. DeAngelo..................... 45 President of Greate Bay Hotel and
Casino, Inc. ("GBHC"), a wholly
owned subsidiary of the Company
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Robert J. DeSalvio...................... 40 Executive Vice President of
Marketing of GBHC
John C. Hull............................ 58 Corporate Controller
</TABLE>
BUSINESS EXPERIENCE FOR PAST FIVE YEARS
See "Election of Directors -- Business Experience for Past Five Years" for
certain information with respect to Messrs. Jack E. Pratt, Edward T. Pratt, Jr.
and William D. Pratt.
Mr. Edward T. Pratt III was elected President and Chief Operating Officer of
the Company in November 1995. From May 1987 until November 1995, he served the
Company as Executive Vice President -- Development and Corporate Affairs. Mr.
Pratt served as co-chairman and co-chief executive officer of SSJ, at the time
of the filing on August 20, 1992 of its voluntary petition for reorganization
under Chapter 11 of the Federal Bankruptcy Code in the United States Bankruptcy
Court for the Northern District of Texas, Dallas Division. In November 1992,
the reorganization plan was confirmed by the Bankruptcy Court.
Mr. Lawrence C. Cole has served as Vice President of Management Information
Systems of the Company since December 1987 and of GBHC since January 1983. Mr.
Cole also serves as Chief Executive Officer and President of Advanced Casino
Systems Corporation ("ACSC"), a subsidiary of the Company, which licenses
software for automated casino accounting and control systems.
Mr. Charles F. LaFrano III is a certified public accountant and has served as
Vice President of the Company since September 1988. He also served as Corporate
Controller (Principal Accounting Officer) of the Company from September 1988
until November 1994.
Mr. Arthur Lewis has served as Vice President of Corporate Security and
Governmental Relations of the Company since December 1987 and of GBHC since
November 1982.
Mr. Leonard M. DeAngelo was named President of GBHC in November 1995. He
previously served as Senior Vice President of GBHC from March 1995 to November
1995 and as Vice President of Casino Operations of GBHC from February 1988 to
March 1995.
Mr. Robert J. DeSalvio was named Executive Vice President of Marketing of
GBHC in December 1995. He previously served as Senior Vice President of
Marketing of GBHC from September 1990 to December 1995.
Mr. John C. Hull has held his position with the Company and has served as
Corporate Controller and principal accounting officer of HCC since November
1994. Mr. Hull joined the Company in April 1994 and served as a financial
consultant to the Company from 1988 until April 1994 and as a financial
consultant to HCC from 1990 until April 1994. Mr. Hull served as Vice
President and Chief Financial Officer of SSJ at the time of its filing of its
voluntary petition for reorganization under Chapter 11 of the Federal Bankruptcy
Code in the U.S. Bankruptcy Court for the Northern District of Texas, Dallas
Division. In November 1992, the reorganization plan was confirmed by the
Bankruptcy Court.
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's directors, officers and certain stockholders to file with the
Securities and Exchange 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 the year ended December 31, 1996 and
through March 31, 1997 and Form 5 and amendments thereto furnished with respect
to the year ended December 31, 1996 the Company has
7
<PAGE>
determined that Messrs. Capaldi, LaFrano, Hull, Cole, DeAngelo and DeSalvio were
each late in the filing of an initial statement of beneficial ownership and
Messrs. Muir, LaFrano and Cole were late five times, seven times and seven
times, respectively, in the filing of statements of changes in beneficial
ownership, such filings relating to 20, nine and 12 transactions, respectively.
REMUNERATION OF DIRECTORS AND EXECUTIVE OFFICERS
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table provides certain summary information concerning
compensation paid or accrued by the Company, its subsidiaries and affiliates to
or on behalf of the Company's Chief Executive Officer and each of the four other
most highly compensated executive officers of the Company (determined as of the
end of the last fiscal year (hereafter referred to as the named executive
officers) for the fiscal years ended December 31, 1996, 1995 and 1994.
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG-TERM
--------------------------- COMPENSATION
OTHER ANNUAL AWARDS/ ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION (1) OPTIONS COMPENSATION (2)
- ------------------------------------- ------ -------- -------- ---------------- ------------ ----------------
<S> <C> <C> <C> <C> <C> <C>
Jack E. Pratt (3) 1996 $259,947 $ - $14,000 - $139,992
Chief Executive Officer and 1995 111,068 71,750 14,000 - 105,886
Chairman of the Board of the 1994 87,934 124,615 13,000 - 52,024
Company
Edward T. Pratt III(3) 1996 141,588 - - - 990
President and Chief Operating 1995 51,866 17,700 - - 990
Officer of the Company 1994 71,777 74,770 - - 529
Leonard M. DeAngelo 1996 482,258 - - - 1,980
President of GBHC 1995 284,772 75,000 - - 1,980
1994 223,920 - - - 2,100
Robert J. DeSalvio 1996 339,400 - - - 1,980
Executive Vice President of 1995 289,400 50,000 - - 1,980
Marketing of GBHC 1994 254,650 35,000 - - 2,100
Lawrence C. Cole (3) 1996 280,201 28,559 - - 1,848
Vice President of Management 1995 252,281 - - - 1,843
Information Systems of the Company 1994 190,758 - - - 1,716
</TABLE>
- -------------------------
(1) Represents directors' fees for service as a director to a subsidiary of the
Company.
(2) Includes matching contributions by the Company to The Hollywood Casino
Corporation and Subsidiaries Retirement Savings Plan on behalf of the named
executive officer. See also "Employee Retirement Savings Plan" below.
Amounts set forth for Jack E. Pratt and Edward T. Pratt, Jr. also include
pension benefit accruals on their behalf. See also "Employment Contracts"
below.
8
<PAGE>
(3) Amounts shown for Jack E. Pratt, Edward T. Pratt III and Lawrence C. Cole
represent payments by the Company and its subsidiaries for services on their
behalf. Messrs. Jack E. Pratt and Edward T. Pratt III concurrently hold
positions as officers of Hollywood Casino Corporation ("HCC"), which
reimburses the Company for services provided to HCC pursuant to intercompany
allocation agreements ratified by the respective Boards of Directors of the
Company and HCC. Prior to December 31, 1996, HCC owned approximately 80% of
the outstanding common stock of the Company; such stock was distributed to
HCC's shareholders on December 31, 1996. A portion of Mr. Lawrence C.
Cole's salary is billed to HCC based on projects performed on its behalf.
Additional compensation amounts earned by the Messrs. Pratt and Mr. Cole for
their services provided to HCC and paid by HCC are set forth in the
following tabulation:
<TABLE>
<CAPTION>
All Other
Salary Bonus Compensation
-------- -------- ------------
<S> <C> <C> <C>
Jack E. Pratt
1996 $386,823 $ - $139,992
1995 454,930 133,250 105,886
1994 442,263 25,385 53,528
Edward T. Pratt III
1996 $284,579 $ - $ 990
1995 274,031 100,300 990
1994 180,085 60,230 1,721
Lawrence C. Cole
1996 $ 18,406 $ - $ 132
1995 17,804 - 137
1994 59,381 - 534
</TABLE>
No grants of stock options under the Pratt Hotel Corporation 1990 Incentive
Stock Option Plan (the "Plan") were made to the named executive officers during
the most recent fiscal year.
OPTION EXERCISES AND HOLDINGS
No options were exercised by the named executive officers under the Plan
during the last fiscal year and no unexercised options were held by the named
executive officers as of the end of the fiscal year.
EMPLOYMENT CONTRACTS
Jack E. Pratt, Chairman of the Board and Chief Executive Officer of the
Company, Edward T. Pratt, Jr., Vice Chairman of the Board and Treasurer of the
Company, and William D. Pratt, Executive Vice President, Secretary and General
Counsel of the Company, are under employment contracts with HCC and have
provided services to the Company pursuant to intercompany allocation agreements
ratified by the respective Boards of Directors of the Company and HCC. Their
employment contracts were executed during October 1989 and originally expired on
December 31, 1994, but have subsequently been extended by amendment through
December 31, 2000 with respect to Jack E. Pratt and to December 31, 1999 with
respect to Edward T. Pratt, Jr. and William D. Pratt. Services to the Company
will continue to be provided pursuant to intercompany allocation agreements so
long as the Pratt Brothers remain officers of the Company. The terms of the
contracts may be extended again by mutual agreement of the parties and the
extended term, or any further extension thereof, will be followed immediately by
a four-year period as consultants to HCC. Upon expiration of the consulting
term, each of the Pratt Brothers will be entitled
9
<PAGE>
to receive a lifetime pension benefit and his designated beneficiary is entitled
to receive a death benefit, throughout the term of the employment, consulting
and pension benefit periods.
The terms of the employment contracts provide for an annual base salary in
the first year for Jack E. Pratt, Edward T. Pratt, Jr. and William D. Pratt of
$350,000, $223,000 and $191,000, respectively, subject to annual review and
increase by the Compensation Committee of the Board of Directors. Compensation
under the consulting and pension benefit provisions of the employment contracts
of each of the Pratt Brothers will be 75% of the average of his three highest
annual salaries during the employment term of the contract. The death benefit
is derived by multiplying a Pratt Brother's highest annual salary during his
employment term by 50% and such benefit will be paid annually to his designated
beneficiary for a period of ten years after his death. The estimated annual
pension benefit payable to Jack E. Pratt, Edward T. Pratt, Jr. and William D.
Pratt by HCC is currently $464,000, $234,000 and $208,000, respectively.
Edward T. Pratt III, President and Chief Operating Officer of the Company, is
under an employment contract with HCC dated as of May 1, 1996 and has provided
services to the Company pursuant to intercompany allocation agreements ratified
by the respective Boards of Directors of the Company and HCC. The employment
contract is for a term expiring on April 30, 2000 unless sooner terminated by
either party. The terms of Mr. Pratt's agreement provide for a minimum annual
base salary effective January 1, 1996 of $425,000, subject to annual review and
increase by the Compensation Committee of the Board of Directors of HCC.
Leonard M. DeAngelo, President of GBHC, serves under an employment contract,
as amended on November 17, 1995, in such capacity continuing through November
16, 1998, unless sooner terminated by one of the respective parties. The terms
of Mr. DeAngelo's amended contract provides for a minimum annual base salary of
$450,000, subject to annual increases of five percent. On January 10, 1997, Mr.
DeAngelo voluntarily delayed his annual salary increase until after the July 15,
1997 semiannual principal and interest payment with respect to GBHC's first
mortgage indebtedness.
Robert J. DeSalvio, Executive Vice President of Marketing of GBHC, serves
under an employment contract dated as of December 1, 1995 in such capacity
continuing through November 30, 1998 with automatic one-year extensions
thereafter unless sooner terminated by one of the respective parties. The terms
of Mr. DeSalvio's contract provide for a minimum annual base salary of $325,000,
subject to annual review and increase by GBHC.
Lawrence C. Cole, Vice President of Management Information Systems of the
Company serves under an employment contract, as amended on January 1, 1996, with
a wholly owned subsidiary of the Company in such capacity continuing through
December 31, 1998 unless sooner terminated by one of the respective parties.
The terms of Mr. Cole's amended contract provides for a minimum annual base
salary of $275,000 subject to annual increases based on changes in the Consumer
Price Index, as defined in the employment contract, together with incentive
bonuses based on operating results. Obligations of the subsidiary under the
employment contract are guaranteed by GBHC.
INCENTIVE STOCK OPTION PLAN
The 1990 Incentive Stock Option Plan. On March 22, 1990, the Company adopted
------------------------------------
the Pratt Hotel Corporation 1990 Incentive Stock Option Plan (the "Plan"). The
Plan provides for the granting of incentive stock options that are intended to
qualify for special tax treatment under the Internal Revenue Code (the "Code").
The shares to be offered under the Plan consist of shares (whether authorized
and unissued or issued and reacquired) of the Common Stock. Options for no more
than 102,092 shares of the Common Stock may be granted under the Plan.
10
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The Plan is administered by the Compensation Committee of the Board of
Directors (the "Board") of the Company. Subject to the terms of the Plan, the
Compensation Committee may from time to time determine those key employees who
shall be granted stock options under the Plan, the number of shares to be
subject to such options and interpret and establish and amend rules and
regulations relating to the Plan. Only key employees of the Company or any of
its subsidiaries are eligible to participate in the Plan. Incentive stock
options granted under the Plan are exercisable for a term ending five years from
the date of grant.
The exercise of options is subject to a $100,000 calendar-year limit for each
option holder based on the fair market value of the Common Stock at the time the
option was granted. Options not exercised in earlier periods shall be
accumulated and available for exercise in later periods. Options may be
exercised only as to full shares of Common Stock. Upon termination of an
optionee's employment with the Company for any reason, including death or
disability, his or her options will immediately expire.
The Compensation Committee may provide for the exercise of options
immediately or in installments, and upon such other terms, conditions and
restrictions as it may determine, including granting the Company the right to
repurchase shares issued upon the exercise of options. The Plan provides that
if any person or group (other than Pratt Brothers) becomes the beneficial owner
of more than 51% of the Common Stock (other than by merger, consolidation or
purchase from the Company), the Company's right to repurchase a former
employee's shares shall terminate.
EMPLOYEE RETIREMENT SAVINGS PLAN
On January 1, 1989, the Company adopted GBHC's qualified defined contribution
plan for the benefit of all of the Company's employees who satisfy certain
eligibility requirements. GBHC had adopted this plan for the benefit of its
eligible employees in November 1984. Upon adoption by the Company, the former
plan changed its name to The Hollywood Casino Corporation and Subsidiaries
Retirement Savings Plan (the "Savings Plan"). The Savings Plan is qualified
under the requirements of section 401(k) of the Code allowing participating
employees to benefit from the tax deferral opportunities provided therein. All
employees of the Company who have completed one year of service, as defined, and
who have attained the age of 21, are eligible to participate in the Savings
Plan.
The Savings Plan provides for a matching contribution by the Company based
upon certain criteria, including levels of participation by the Company's
employees. The Company accrued matching contributions totaling approximately
$1.1 million for the year ended December 31, 1996.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee of the Board of Directors of the Company is
comprised of Messrs. Edward D. Muir, Bernard A. Capaldi and Jack E. Pratt.
Neither Mr. Muir nor Mr. Capaldi is a former or current officer or employee of
the Company or any of its subsidiaries. Jack E. Pratt serves as an executive
officer and director of the Company and HCC and serves on the Compensation
Committee of HCC.
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REPORT OF THE COMPENSATION COMMITTEE
As members of the Compensation Committee, it is our duty to administer the
Company's various incentive plans, including its incentive stock option plan,
and to review compensation levels of members of management, to evaluate the
performance of management and to consider management succession and related
matters. The Compensation Committee reviews with the Board in detail all
aspects of compensation for all executive officers.
The compensation policy of the Company, which is endorsed by the Compensation
Committee, is that the annual compensation of each officer has been established
to reward long-term strategic management and the enhancement of stockholder
value, as well as to attract and retain key executives critical to the long-term
success of the Company. Such compensation relates to and must be contingent
upon the contributions, responsibilities and relative position in the Company of
each individual officer, as well as the relative performance of the Company.
The Compensation Committee has also taken into consideration competition within
the rapidly expanding gaming industry for experienced personnel as well as other
subjective considerations in its deliberations regarding executive compensation.
Prior to 1996, Mr. Jack E. Pratt, Chairman of the Board and Chief Executive
Officer of the Company, served the Company under an employment agreement with
the Company dated as of September 21, 1989, as amended (the "Employment
Agreement"), described in the Company's Form 10-K for the fiscal year ended
December 31, 1996. In addition, Mr. Pratt provided services to HCC through an
intercompany overhead allocation arrangement (the "Overhead Allocation
Arrangement") previously approved by the Boards of Directors of the Company and
HCC.
Effective as of January 1, 1996, HCC assumed the obligations of the Company
under the Employment Agreement and Mr. Pratt continued to provide services to
HCC and the Company which allocated the cost of such services pursuant to the
Overhead Allocation Arrangement.
Effective as of January 1, 1997, and in light of the spin-off by HCC of the
Company and its subsidiaries on December 31, 1996, HCC intends to enter into
services agreements with subsidiaries of the Company. Pursuant to the
Employment Agreement and the services agreements, Mr. Pratt will continue to
provide services to HCC and the Company which will allocate the cost of such
services pursuant to the services agreements. Furthermore, effective as of
January 1, 1997, HCC extended the term of the Employment Agreement with Mr.
Pratt to December 31, 2000.
In light of previous decisions of the Board of Directors of HCC and its
Compensation Committee, the minimum annual base salary of Mr. Pratt under the
Employment Agreement was set at $645,000 effective as of January 1, 1996. In
accordance with the terms of the Overhead Allocation Agreement, the Company's
portion of such minimum annual base salary during 1996 was $259,947. Due to the
recent performance of the Company, there were no adjustments to the annual base
salary of or bonuses paid to Mr. Pratt in the fiscal year 1996 and there have
been no adjustments to the annual base salary of or bonuses paid to Mr. Pratt
thus far in the fiscal year 1997.
This report and the accompanying stock price performance graph are provided
for general informational purposes only pursuant to regulations under the
Securities Exchange Act of 1934. No information contained in this report or the
accompanying graph shall be deemed to be filed in whole or in part for purposes
under the Securities Act of 1933 or the Securities Exchange Act of 1934, or
incorporated by reference into any filing made thereunder.
Compensation Committee
Jack E. Pratt
Bernard A. Capaldi
Edward D. Muir
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STOCK PRICE PERFORMANCE
The graph set forth below compares the stock price performance of the Company
with those of the Dow Jones Equity Market Index and the Dow Jones Index for the
Casino Industry for the previous five years. The Company has not paid dividends
over such period of time; however, the comparative equity market and industry
data assumes reinvestment of dividends. The stock price performance shown below
may not be indicative of future stock price performance. (Table substituted for
graph).
Greate Bay Casino Corporation
Stock Price Performance
(January 2, 1992 = 100)
<TABLE>
<CAPTION>
Greate Bay
Equity Casino Casino
Date Index Index Corporation
------------------ ------ ------ -----------
<S> <C> <C> <C>
January 2, 1992 100.0 100.0 100.0
March 31, 1992 97.9 119.8 140.0
June 30, 1992 99.3 107.0 140.0
September 30, 1992 102.8 133.5 120.0
December 31, 1992 108.6 156.0 64.0
March 31, 1993 113.5 165.5 236.0
June 30, 1993 114.0 201.7 348.0
September 30, 1993 117.1 262.1 148.0
December 31, 1993 119.4 238.1 188.0
March 31, 1994 114.9 206.4 136.0
June 30, 1994 115.1 157.9 128.0
September 30, 1994 120.5 177.3 196.0
December 30, 1994 120.3 182.8 132.0
March 31, 1995 132.0 236.5 132.0
June 30, 1995 144.8 264.5 132.0
September 29, 1995 157.0 254.9 152.0
December 29, 1995 166.3 242.5 72.0
March 29, 1996 175.6 295.6 92.0
June 28, 1996 184.1 344.3 252.0
September 30, 1996 190.2 286.2 116.0
December 31, 1996 205.5 264.5 56.0
</TABLE>
13
<PAGE>
TRANSACTIONS WITH MANAGEMENT
HOLLYWOOD CASINO CORPORATION. During 1990, Hollywood Casino Corporation
("HCC"), a corporation then wholly owned by the Pratt Family, acquired
approximately $38.8 million of unsecured notes (the "PCPI Notes") issued by PCPI
Funding Corp., a subsidiary of the Company. As part of a refinancing in
February 1994 of virtually all of the Company's casino-related outstanding debt,
a newly formed subsidiary of the Company issued approximately $40.5 million
discounted principal amount of new deferred interest notes (the "PPI Funding
Notes") in exchange for the $38.8 million principal amount of PCPI Notes held by
HCC. The increased principal amount of the new notes included a call premium on
the exchange ($1.7 million) equal to 4 1/2% of the principal amount of PCPI
Notes exchanged; such premium was paid to all third parties holding PCPI Notes.
Interest expense accreted with respect to the PPI Funding Notes for the year
ended December 31, 1996 amounted to $7.3 million.
Since May 1992, the Company and its subsidiaries have borrowed funds from HCC
for various purposes. As of December 31, 1996, the outstanding balance on such
borrowings was $7.8 million and, under certain conditions, the Company and its
subsidiaries may obtain additional loans from HCC. Of the amounts borrowed, $1
million, which is not due until April 1, 1998, is classified as noncurrent and
$250,000 is due on demand, or if no demand is made, on April 1, 1998. Such
borrowings from HCC bear interest at the rate of 14% per annum, payable
semiannually. The remaining $6.5 million was borrowed from HCC during 1996 on a
demand basis with interest at the rate of 13 3/4% per annum payable quarterly
commencing October 1, 1996. Payment of interest on borrowings from HCC is
subject to the approval of New Jersey gaming authorities.
In connection with the February 1994 refinancing of virtually all of the
Company's casino-related indebtedness, a newly formed subsidiary of the Company
borrowed $15 million from HCC to be used in connection with an expansion of the
Sands Hotel and Casino. The debt accrued interest at the rate of 14 5/8% per
annum and was scheduled for repayment in February 2005. As of December 31,
1996, the entire $15 million principal amount of such notes together with all
accrued interest have been assigned or otherwise contributed to the Company by
HCC.
Interest expense on borrowings from HCC as described in the preceding two
paragraphs amounted to $2.3 million for the year ended December 31, 1996.
Interest payable to HCC in connection with remaining outstanding borrowings
amounted to $94,000 at December 31, 1996.
Hollywood Casino - Aurora, Inc. ("HCA"), a wholly owned subsidiary of HCC,
was organized for the purpose of developing and owning a riverboat gaming
facility in Aurora, Illinois, (the "Aurora Casino") which commenced operations
on June 17, 1993. A wholly owned subsidiary of the Company receives, pursuant
to a services agreement, a base services fee equal to 5% of operating revenues
(as defined in the agreement) subject to a maximum of $5.5 million annually, and
an incentive fee equal to 10% of gross operating profit (as defined in the
agreement to generally include all revenues, less expenses other than
depreciation, interest, amortization and taxes). Such fees totaled
approximately $9.4 million during 1996 of which unpaid base services and
incentive fees of $2.1 million were owed to the subsidiary of the Company at
December 31, 1996.
Subject to regulatory approval and effective as of April 1, 1997, the
subsidiary of the Company will sell its general partnership interest in the
limited partnership which holds the management contract on the Aurora Casino to
a subsidiary of HCC. The general partner receives 99% of the first $84,000 of
net income earned by the partnership each month and 1% of any income earned
above such amount. The subsidiary of the Company will receive from HCC a five-
year note in the original amount of $3.8 million, $7.6 million principal amount
of PPI Funding Notes (see above) and the assignment of certain accrued interest
receivable in exchange for the general partnership interest.
14
<PAGE>
HWCC - Tunica, Inc. ("HCT"), a wholly owned subsidiary of HCC, completed
construction of a dockside gaming facility in Tunica County, Mississippi (the
"Tunica Casino") which commenced operations in August 1994. Pursuant to a ten-
year consulting agreement with HCT, a subsidiary of the Company receives monthly
consulting fees of $100,000.
HCC was obligated during 1996 under the terms of an administrative services
agreement to pay the Company $50,000 per month in connection with certain shared
administrative costs. In addition, the Company and its subsidiaries share
certain general and administrative costs with HCC. Net allocated costs and fees
charged to HCC by the Company amounted to $2.5 million during the year ended
December 31, 1996. A payable in the amount of $203,000 in connection with such
allocated costs and fees was due to HCC at December 31, 1996.
Various subsidiaries of the Company provide certain marketing and other
administrative services to casino facilities owned by HCC. The HCC facilities
are billed for such services at either the direct or allocated cost of providing
the services. Such charges amounted to approximately $1.7 million for the year
ended December 31, 1996.
A subsidiary of the Company also provides computer-related services to the
HCC-owned casino facilities. The subsidiary has an agreement with one casino
facility which expired on December 31, 1996 and has been renewed through
December 31, 1999; such agreement provides for the sale of computer hardware and
information systems equipment and the licensing of software necessary to operate
the facility. The casino pays prices and fees in amounts and on terms and
conditions that the subsidiary provides to unrelated third parties as well as a
fixed license and consulting fee of $30,000 per month ($33,600 effective January
1, 1997). The subsidiary is also reimbursed for its direct costs and expenses
incurred under this agreement. Total charges under the agreement amounted to
$511,000 for the year ended December 31, 1996. The GBCC subsidiary also
provides similar services and hardware to another HCC-owned casino facility
which it charges for direct costs and expenses. Such charges amounted to
$229,000 for the year ended December 31, 1996.
On October 16, 1995, HCC assumed the employment contracts of each of the
Pratt Brothers, including the outstanding obligations of the Company for the
pension and death benefit payments to be made to the Pratt Brothers. As
consideration for the assumption, the Company incurred a non-interest bearing
payable to HCC in the amount of approximately $4.3 million, representing the net
present value of the outstanding obligations as of such date. On December 31,
1996, such payable was eliminated by means of a capital contribution to the
Company from HCC.
DFW NORTH. Prior to sale of the property in September 1996, the Company
operated the Holiday Inn located at the north entrance of the Dallas/Fort Worth
International Airport ("DFW North") which was owned by Metroplex Hotel Limited
("Metroplex"), a limited partnership owned by Jack E. Pratt and Edward T. Pratt,
Jr., each as 30% general and limited partners, William D. Pratt as a 10% general
and limited partner and the Estate of Crystal A. Pratt, the former wife of Jack
E. Pratt, as a 30% limited partner. During the year ended December 31, 1996,
the Company made capital expenditures under the hotel operating agreement
totaling approximately $1.8 million toward property improvements. The Company
was also obligated by the operating agreement to make minimum payments equal to
principal and interest payments on the indebtedness incurred by Metroplex to
purchase DFW North.
During February 1994, the Company purchased such underlying indebtedness with
a principal balance of approximately $13.8 million from third parties at a cost
of $6.8 million ($1 million of which was paid during 1993), with funds borrowed
from HCC, and subject to third party indebtedness amounting to $2.7 million.
Payments under the hotel operating agreement, net of debt service receipts,
amounted to $398,000 during the year ended December 31, 1996. Payments from
Metroplex, included interest at the rate of 9 1/2% per annum. Upon the sale of
the hotel by Metroplex, the Company received proceeds
15
<PAGE>
sufficient to repay the third party indebtedness of $1.9 million, recover its
$6.8 million acquisition cost of the underlying indebtedness, recover $2.6
million of its total investment in property improvements and receive additional
cash of approximately $770,000.
APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
Upon the recommendation of the Audit Committee and subject to ratification by
the stockholders at the Annual Meeting, the Board of Directors has appointed
Arthur Andersen LLP ("Andersen") to serve as the independent public accountants
of the Company for its fiscal year ending December 31, 1997. Andersen, which has
served as the independent public accountants of the Company since 1981, follows
a policy of rotating the engagement partner every seven years. Other partners
and non-partner personnel are rotated on a periodic basis. Representatives of
Andersen are expected to be present at the Annual Meeting to make a statement or
to respond to questions. If the appointment of Andersen is not ratified by the
stockholders, the Board of Directors will appoint other independent public
accountants based upon the recommendation of the Audit Committee.
The affirmative vote of a majority of the votes cast on this proposal shall
constitute ratification of the appointment of Andersen.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE RATIFICATION OF THE
APPOINTMENT OF ARTHUR ANDERSEN LLP AS INDEPENDENT PUBLIC ACCOUNTANTS FOR FISCAL
YEAR 1997.
OTHER BUSINESS
The Board of Directors knows of no other business that may properly be, or
that is likely to be, brought before the Annual Meeting. If, however, any other
business should properly be presented to the Annual Meeting, the persons named
in the accompanying Proxy will vote the Proxy as in their discretion they may
deem desirable.
STOCKHOLDER PROPOSALS
Pursuant to Rule 14a-8 under the Securities Exchange Act of 1934, as amended,
stockholders may present proposals for inclusion in the Company's proxy
statement for consideration at its Annual Meeting of Stockholders by submitting
proposals to the Company in a timely manner. In order to be so included for the
1997 Annual Meeting, stockholder proposals must be received by the Company by
January 9, 1998, and must otherwise comply with the requirements of Rule 14a-8.
16
<PAGE>
COPIES OF THE ANNUAL REPORT ON FORM 10-K
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
The Annual Report on Form 10-K covering the Company's year ended December 31,
1996, including audited financial statements, is enclosed herewith. The Form
10-K does not form any part of the materials for the solicitation of Proxies.
The enclosed Form 10-K does not include all exhibits required to be filed with
the Securities and Exchange Commission. However, these exhibits are listed in
Part III of the enclosed Form 10-K, and the Company will furnish, for a minimal
charge, any such exhibit to each stockholder upon written request. Written
requests for exhibits should be directed to Investor Relations, Greate Bay
Casino Corporation, Two Galleria Tower, Suite 2200, 13455 Noel Road, LB 48,
Dallas, Texas 75240.
BY ORDER OF THE BOARD OF DIRECTORS
William D. Pratt, Secretary
April 23, 1997
Dallas, Texas
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. STOCKHOLDERS WHO DO NOT
EXPECT TO ATTEND THE ANNUAL MEETING AND WISH THEIR STOCK TO BE VOTED ARE URGED
TO DATE, SIGN AND RETURN THE ACCOMPANYING PROXY IN THE ENCLOSED SELF-ADDRESSED
ENVELOPE. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES.
17
<PAGE>
GREATE BAY CASINO CORPORATION
Two Galleria Tower, Suite 2200
13455 Noel Road, LB 48
Dallas, Texas 75240
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints William D. Pratt and Edward T. Pratt Jr. as
proxies, with the power to appoint their substitute, and hereby authorizes them
to represent and vote as designated below, all of the shares of the Common Stock
of Greate Bay Casino Corporation (the "Company") held of record by the
undersigned on April 10, 1997, at the Annual Meeting of Stockholders to be held
on May 20, 1997, or any adjournment(s) thereof.
1. PROPOSAL TO ELECT AS DIRECTORS OF THE COMPANY THE FOLLOWING PERSONS TO HOLD
OFFICE UNTIL THE 1998 ANNUAL MEETING OF STOCKHOLDERS OR UNTIL THEIR
SUCCESSORS HAVE BEEN DULY ELECTED AND QUALIFIED.
FOR ALL nominees listed below WITHHOLD AUTHORITY
(except as marked to the to vote for all
--- ---
contrary below) nominees below.
Bernard A. Capaldi, Edward D. Muir, Jack E. Pratt,
Edward T. Pratt, Jr. and William D. Pratt
(INSTRUCTION: To withhold authority to vote for any individual nominee, write
that nominee's name in the space provided below.)
2. PROPOSAL TO RATIFY THE APPOINTMENT OF ARTHUR ANDERSEN LLP AS INDEPENDENT
PUBLIC ACCOUNTANTS FOR FISCAL YEAR 1997.
FOR AGAINST ABSTAIN
--- --- ---
- --------------------------------------------------------------------------------
(please sign on the other side)
================================================================================
3. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER
BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING.
This Proxy, when properly executed, will be voted in the manner directed herein
by the undersigned stockholder(s). IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR THE ELECTION OF THE NOMINEES UNDER PROPOSAL 1 AND FOR THE RATIFICATION
OF INDEPENDENT PUBLIC ACCOUNTANTS UNDER PROPOSAL 2.
Dated: , 1997
---------------
----------------------------
Signature
----------------------------
Signature if Held Jointly
Please execute this Proxy as your name appears hereon. When shares are held by
joint tenants, both should sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as such. If a
corporation, please sign in full name by the president or other authorized
officer. If a partnership, please sign in partnership name by authorized
person.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY USING THE ENCLOSED
ENVELOPE.
