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THE CLARIDGE HOTEL AND CASINO CORPORATION
INDIANA AVENUE AND THE BOARDWALK
ATLANTIC CITY, NEW JERSEY 08401
(609) 340-3400
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
JUNE 4, 1996
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The regular annual meeting of the shareholders of The Claridge Hotel and
Casino Corporation will be held on Tuesday, June 4, 1996, at 10:00 a.m.,
local time, at the Claridge Hotel and Casino, Indiana Avenue and the
Boardwalk, Atlantic City, New Jersey, for the following purposes and to
transact such other business as may properly be brought before the meeting:
(A) To elect eight Directors to the Board of Directors.
(B) To approve the appointment by the Corporation's Board of Directors
of KPMG Peat Marwick LLP, independent certified public accountants, as
auditors for the year 1996.
The Board of Directors has fixed the close of business on April 19, 1996,
as the record date for the Annual Meeting to determine the shareholders
entitled to notice of and to vote at the meeting and any adjournments
thereof.
PLEASE FILL IN, SIGN, DATE, AND RETURN THE ENCLOSED PROXY PROMPTLY.
By Order of the Board of Directors
Frank A. Bellis, Jr.
Secretary
April 26, 1996
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THE CLARIDGE HOTEL AND CASINO CORPORATION
INDIANA AVENUE AND THE BOARDWALK
ATLANTIC CITY, NEW JERSEY 08401
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PROXY STATEMENT
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April 26, 1996
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of The Claridge Hotel and Casino Corporation (the
"Corporation") of proxies for use at the Corporation's annual meeting of
shareholders to be held on June 4, 1996.
Any shareholder giving a proxy will have the right to revoke it at any
time prior to the time it is voted. A proxy may be revoked by written notice
to the Corporation, execution of a subsequent proxy, or attendance at the
annual meeting and voting in person. Attendance at the meeting will not
automatically revoke the proxy. All shares represented by effective proxies
will be voted at the meeting or any adjournment thereof.
The cost of soliciting proxies will be borne by the Corporation. In
addition to solicitation by mail, officers and employees of the Corporation
may solicit proxies by telephone or in person.
The Corporation's Annual Report on Form 10-K was mailed to each
shareholder on or about April 17, 1996. This Proxy Statement and form of
Proxy were first mailed to shareholders on or about April 26, 1996.
ITEM A. ELECTION OF DIRECTORS
Eight Directors are to be elected at the annual meeting to serve terms of
one year and until their respective successors have been elected. The
nominees for Director, all of whom are now serving as Directors of the
Corporation, are listed below, together with biographical information. All of
the Directors also serve as Directors of The Claridge at Park Place,
Incorporated ("New Claridge") and Claridge Gaming Incorporated, wholly-owned
subsidiaries of the Corporation. Claridge Gaming Incorporated, was formed on
March 16, 1994, for the purpose of exploring and developing gaming
opportunities in other jurisdictions. Mr. James O'Brien, who has served as
Director since 1988, has decided to retire effective with the expiration of
his current term and will not stand for reelection to the Corporation's Board
of Directors.
David W. Brenner, age 60. Mr. Brenner has served as a member of the Board
of Directors of the Corporation since February, 1991, and became Chairman of
the Board of Directors in August, 1993. He served as President of the
Philadelphia Sports Congress from January, 1987, to June, 1994. Mr. Brenner
served as Chairman of the Hospital and Higher Education Facilities Authority
of Philadelphia from January, 1986, to June, 1992. He also served as Director
of Commerce of the City of Philadelphia from January, 1984, to September,
1986, and as Director of Finance of the City of Philadelphia from April,
1991, to December, 1991. He was with the accounting firm of Arthur Young &
Company from 1957 to September, 1983. He was managing partner of the
Philadelphia office of Arthur Young from November, 1969, until March, 1980.
Robert M. Renneisen, age 49. Mr. Renneisen has served as President of the
Corporation since June, 1992, and as Chief Executive Officer of the Corporation
and New Claridge since July, 1993. From June, 1994, to present, Mr. Renneisen
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has also served as Vice Chairman of New Claridge. Mr. Renneisen was Executive
Vice President of the Corporation from June, 1991, to June, 1992. He served as
President of New Claridge from January, 1991, to June, 1994. He was Chief
Operating Officer of New Claridge from January, 1991, to July, 1993. Mr.
Renneisen was Executive Vice President of New Claridge, responsible for
marketing and later casino operations from February, 1988, to January, 1991.
Prior to joining New Claridge, Mr. Renneisen served from January, 1987, to
December, 1987, as Vice President of Marketing of Treasure Island Hotel and
Casino in St. Maarten. From June, 1986, to May, 1987, he served as President of
Renneisen, Kincade & Associates, Incorporated, of Las Vegas, Nevada, a marketing
consulting firm. From February, 1985, to March, 1986, he was Senior Vice
President of Marketing at Caesars Palace, Las Vegas. He was Vice President of
Marketing of the Tropicana Hotel and Casino in Atlantic City from May, 1982, to
August, 1984.
Shannon L. Bybee, age 58. Mr. Bybee has served as a member of the Board of
Directors of the Corporation since July, 1988. He currently is Associate
Professor for Gaming Management, Law & Regulation, at University of Nevada
Las Vegas, where he occupies the Michael D. Rose Distinguished Chair in
Gaming, a position he has held since August, 1994. From July, 1993, to
August, 1994, he was President and Chief Operating Officer for United Gaming,
Incorporated. Mr. Bybee was the Corporation's Chairman of the Board from
November, 1988, to July, 1993, and from August, 1988, to October, 1988. In
June, 1989, Mr. Bybee was appointed to serve as the Chief Executive Officer
of the Corporation and New Claridge, a position held through July, 1993. From
1983 to 1987, he was Senior Vice President of Golden Nugget, Incorporated,
which operated the Golden Nugget Casino Hotel in Atlantic City. From 1981 to
1983, Mr. Bybee was President of GNAC Corporation, which operated the Golden
Nugget Casino Hotel in Atlantic City.
Mark H. Sayers, age 46. Mr. Sayers has served as a member of the Board of
Directors since February, 1990. Mr. Sayers has served as Vice President of
EMES Management Corporation, a real estate management and development
company, of New York, New York, since February, 1976.
A. Bruce Crawley, age 50. Mr. Crawley has served as a member of the Board
of Directors of the Corporation since March, 1995. He has served as President
and Chief Executive Officer of Crawley, Haskins & Rodgers, Philadelphia,
Pennsylvania, an independent public relations and advertising firm, since
1989. Mr. Crawley held various management positions with First Pennsylvania
Bank Corporation from 1967 to 1989, including Senior Vice President and
Director of Public and Investor Relations from 1985 to 1989.
James M. Montgomery, age 56. Mr. Montgomery has served as a member of the
Board of Directors of the Corporation since March, 1995. Since 1978, he has
served as President of Houze, Shourds, and Montgomery, Incorporated, a
management consulting firm located in Long Beach, California. Prior to 1978,
Mr. Montgomery held various managerial positions with Rohr Industries,
Incorporated, and Rockwell International.
Donald G. Drapkin, age 48. Mr. Drapkin has served as a member of the Board
of Directors of the Corporation since November, 1995. Mr. Drapkin has been
Vice Chairman of McAndrews & Forbes Holdings, Incorporated, from March, 1987,
to present. From 1979 to 1987, Mr. Drapkin was a partner with the law firm of
Skadden, Arps, Slate, Meagher & Flom.
Ned P. DeWitt, age 56. Mr. DeWitt has served as a member of the Board of
Directors of the Corporation since May, 1995. Mr. DeWitt has served as
President, Chief Executive Officer, and a member of the Board of Directors of
LBE Technologies, Incorporated, in Saratoga, California, from November, 1994, to
present. From November, 1993, to August, 1994, he served as President of SEGA
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Enterprises (USA) in Redwood City, California. Mr. DeWitt also served as
President of the Entertainment Group of Madison Square Garden from July, 1990,
to August, 1991, and as President of Source Service Group of Irving, Texas, from
December, 1986, to April, 1989. He also served, from 1973 through 1982, as
President and Chief Executive Officer of Six Flags Corporation.
ADDITIONAL INFORMATION CONCERNING BOARD OF DIRECTORS
Compensation of Directors -- Directors who are not employees of the
Corporation or New Claridge receive an annual retainer of $20,000 and a fee
of $1,200 for each meeting of the Board of Directors and for each Committee
meeting attended. David W. Brenner, Chairman of the Corporation's Board of
Directors, receives an annual retainer of $100,000. On June 5, 1995, all
Directors then serving were awarded Director Equity Units as described on
page 8.
Audit Committee -- The Audit Committee consists of five Directors who are
not employees of the Corporation. It is the responsibility of the Audit
Committee to review with the Corporation's independent auditors the
Corporation's financial statements and the scope and results of the annual
audit, to monitor the internal accounting controls and practices of the
Corporation, to review the Annual Report to shareholders, and to recommend
the appointment, subject to shareholder approval, of independent auditors.
The Committee met four times in 1995. Members of the Committee are Shannon L.
Bybee, Chairman, Mark H. Sayers, A. Bruce Crawley, James M. Montgomery, and
David W. Brenner as an Ex-Officio member.
Human Resources and Compensation Committee -- The Human Resources and
Compensation Committee consists of five Directors. It is the responsibility
of the Human Resources and Compensation Committee to evaluate the
compensation of executive officers of New Claridge. The Committee met five
times in 1995. Members of the Committee are James M. Montgomery, Chairman,
Ned P. DeWitt, Shannon L. Bybee, A. Bruce Crawley, and David W. Brenner as an
Ex-Officio member.
Attendance at Meetings -- During 1995, there were five regular meetings of
the Board of Directors and three telephonic meetings. All of the Directors
attended at least 75% of the meetings of the Board of Directors and any
Committee of which he was a member occurring in 1995.
ITEM B. APPROVAL OF AUDITORS
Subject to the approval of the shareholders, the Board of Directors of the
Corporation has appointed KPMG Peat Marwick LLP, independent certified public
accountants, to audit the annual consolidated financial statements of the
Corporation and its subsidiaries, New Claridge, and Claridge Gaming
Incorporated for 1996. The shareholders will be asked at the meeting to
approve the appointment. The firm of KPMG Peat Marwick LLP has audited the
accounts of the Corporation since 1983. A representative of KPMG Peat Marwick
LLP will be present at the meeting to make a statement, if such
representative so desires, and to respond to shareholders' questions.
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COMPENSATION OF EXECUTIVE OFFICERS
The following table sets forth information concerning the cash
compensation paid by New Claridge, the wholly-owned subsidiary of the
Corporation, for services rendered during the last three calendar years to
the Chief Executive Officer and the four most highly compensated executive
officers of New Claridge during 1995.
<TABLE>
<CAPTION>
Long-Term
Compensation
Annual Compensation Other Annual Awards (1) Other
------------------------------- Compensation Restricted Compensation
Name and Position Year Salary Bonus (2) Stock (3)
----------------------------- ------ ---------- ---------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Robert M. Renneisen 1995 $300,000 $150,000 $3,750 -- $45,215
Vice Chairman/Chief 1994 302,404 -- 3,954 13,696 42,061
Executive Officer of 1993 246,154 123,077 4,047 -- --
New Claridge
James W. O'Brien 1995 230,000 23,000 -- -- --
Former President/Chief 1994 110,962 10,000 -- -- --
Operating Officer of 1993 -- -- -- -- --
New Claridge
Albert T. Britton 1995 170,838 67,935 3,750 -- 17,533
President/Chief Operating 1994 166,154 -- 3,750 3,653 16,309
Officer of New Claridge 1993 150,000 45,000 3,375 -- --
Raymond A. Spera 1995 165,662 66,261 3,750 -- 17,533
Executive Vice President of 1994 161,731 6,500 3,750 3,653 16,309
Finance/Corporate Development 1993 150,000 50,000 3,375 -- 9,519
of New Claridge
Peter F. Tiano 1995 164,508 50,000 3,750 -- 38,151
Executive Vice President/ 1994 147,692 -- 3,668 3,653 35,490
General Manager of 1993 130,000 39,000 2,925 -- 6,750
New Claridge
</TABLE>
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(1) Number of shares awarded under the Long-Term Management Incentive Plan
described under "Management -- Compensation Plans." The shares are
subject to vesting provisions under the Plan. 25% of the shares awarded
under the Plan have vested. The Corporation does not believe the shares
have any value.
(2) Amounts reported in this column were paid pursuant to the Retirement
Savings Plan of New Claridge described under "Management -- Compensation
Plans."
(3) Amounts reported in this column for 1995 and 1994 represent amounts
accrued with respect to the Corporation's future liability pursuant to
the Corporation's Supplemental Executive Retirement Plan. The amounts
included in this column for Mr. Spera and Mr. Tiano with respect to 1993
represent compensation received for certain vacation time previously
earned and accrued but not taken. The amounts paid were determined at a
discounted rate.
New Claridge is a party to an employment agreement with Robert M. Renneisen
dated February 6, 1995, which is effective from January 1, 1994. The agreement
is for a term of three years and may be renewed and extended for consecutive
one-year renewal terms upon specific action by the Board of Directors. The
annual base salary under the agreement is $300,000. New Claridge's Board of
Directors may, from time to time, in their sole discretion, increase the base
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annual salary. In February, 1996, Mr. Renneisen's annual base salary was
increased to $330,000, payable in weekly installments. In the event that Mr.
Renneisen is terminated without cause (as defined), he is entitled to receive a
termination payment in an amount equal to 125% of his current base annual
salary.
New Claridge is also a party to employment agreements with Albert T.
Britton, Raymond A. Spera, and Peter F. Tiano, each dated February 6, 1995,
and effective from January 1, 1994. Each agreement is for a term of three
years and may be renewed and extended for consecutive one-year renewal terms
upon specific action by the Board of Directors. New Claridge's Board of
Directors may, from time to time, in their sole discretion, increase the base
annual salary. The annual base salaries for Messrs. Britton, Spera, and Tiano
under the agreements are $171,600, $166,400, and $166,400 respectively,
payable in weekly installments. In February, 1996, annual base salaries for
Messrs. Britton, Spera, and Tiano increased to $205,000, $182,600, and
$175,000 respectively, payable in weekly installments. In the event that any
of Messrs. Britton, Spera, or Tiano is terminated without cause (as defined),
each is entitled to receive a termination payment in an amount equal to 125%
of current base annual salary.
New Claridge is also party to an employment contract with Jean I. Abbott
dated January 1, 1996. The agreement is for a term of three years and may be
renewed and extended for consecutive one-year renewal terms upon specific
action by the Board of Directors. New Claridge's Board of Directors may, from
time to time in their sole discretion, increase the base salary. The annual
base salary under the agreement is $155,000. In February, 1996, Ms. Abbott's
annual base salary was increased to $162,760 payable in weekly installments.
In the event Ms. Abbott is terminated without cause (as defined), she is
entitled to receive a termination payment in an amount equal to 125% of her
current base salary.
COMPENSATION PLANS
The following plans are available to officers of New Claridge.
a. Senior Officer Medical Plan. New Claridge maintains a senior officer
medical plan under which eligibility is limited to officers and certain
employees of New Claridge. The plan covers medical expenses of the
participant (up to a maximum of $7,500 per year) not paid by New Claridge's
medical reimbursement plan, which is available to all employees not covered
by collective bargaining agreements.
b. Retirement Savings Plan. New Claridge employees participate in a
profit-sharing plan named the "Retirement Savings Plan." This plan is
intended to be qualified under Section 401(k) of the Internal Revenue Code of
1986, as amended. Under the Retirement Savings Plan, for up to the first 5%
of an employee's salary which is contributed at the direction of the employee
from amounts he or she would otherwise have received as current compensation,
New Claridge contributed an amount equal to 50% of the employee's
contribution in 1995 and will contribute 50% in 1996. Employees could
contribute a maximum of 15% of their base salary but not in excess of $9,240
for 1995 and may contribute up to $9,500 in 1996. An employee's account may
be paid out, at the employee's election, in one cash payment or in
installment payments over a ten-year period.
c. Incentive Compensation Plan. Under New Claridge's 1995 Incentive
Compensation Plan, key management personnel were eligible to receive bonuses
expressed as a percentage of base salary, depending upon the achievement of
specific financial objectives which were established at the beginning of the
plan year. New Claridge reserves the right to not pay bonuses to participants
if operating earnings do not meet minimum requirements. For the year ended
December 31, 1995, bonuses were awarded under this plan because New Claridge
succeeded in achieving the financial objectives for 1995. In addition,
certain key management personnel were also awarded discretionary bonuses.
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Mr. Renneisen was eligible for an incentive bonus up to 50% of his 1995
salary. The incentive bonus is based on performance and is issued at the sole
discretion of the outside members of the Board of Directors of the
Corporation and New Claridge. For 1995, Mr. Renneisen was awarded a bonus of
$150,000.
d. Long-Term Management Incentive Plan. In February, 1992, the
Corporation's Board of Directors adopted a Long-Term Management Incentive
Plan (the "Plan") in which certain key employees of the Corporation and/or
New Claridge participate. The Plan provides for the grant of the 273,938
shares of the Corporation's Class A Stock, which were held as treasury shares
of the Corporation ("Treasury Shares"), and for the issuance of 100 Equity
Units. The aggregate value of the 100 Equity Units is equal to 5.41 percent
of certain amounts, generally equal to the equity of the Claridge entities,
as further defined in the Plan. Specified portions of the awarded Treasury
Shares and Equity Units held by participants vest upon the attainment of
specific goals as described in the Plan. The Treasury Shares and Equity Units
fully vest upon a further restructuring or a change in control as defined in
the Plan. Payment with respect to the Equity Units will only be made (a) upon
the occurrence of a transaction in which substantially all of the assets and
business operations of the Claridge entities are transferred to one or more
entities in a merger, sale of assets, or other acquisition-type transaction,
(b) upon termination of employment of any participant in the Plan within one
year after any change of control of the Corporation occurs, as defined in the
Plan, or (c) if the Corporation pays dividends to its stockholders, if the
Partnership makes distributions to its partners, or if the Corporation or the
Partnership makes certain distributions under the Restructuring Agreement. A
participant is entitled to vote all awarded Treasury Shares whether or not
such shares are vested.
On June 5, 1995, the Corporation's Board of Directors amended the Plan by
creating 100 Additional Equity Units to be issued to certain key employees
and 100 Director Equity Units to be issued to the individual members of the
Board of Directors (the "Directors"). The aggregate value of the Additional
Equity Units is 5.59 percent and the aggregate value of the Director Equity
Units is 4 percent of certain amounts as further defined in the Plan. Vesting
of the Additional Equity Units occurs if a Transaction results in the
Claimholders of the Claridge receiving cash or marketable securities having a
certain value all as further defined and described in the Plan. Vesting of
the Director Equity Units occurs according to a vesting schedule stated in
the Plan and also is tied to the occurrence of a Transaction having a certain
value.
e. Supplemental Executive Retirement Plan. In February, 1995, New Claridge
adopted a Supplemental Executive Retirement Plan (the "SERP") to provide
extra and additional retirement income security benefits to certain key
management employees as an inducement for outstanding future services. The
SERP is an unfunded supplemental retirement plan. Participants under the SERP
are entitled to annual payments for a period of fifteen years commencing on
the later of the Participant's termination from service with New Claridge or
his or her early retirement date (as defined in the SERP) in an amount equal
to the unit value assigned to that Participant times the number of full years
of service of the Participant after January 1, 1994. The SERP provides for
commencement of payments on an earlier date in the event of the disability of
Participant or death of the Participant (in which case payments would be made
to a survivor). In addition, the SERP provides for forfeiture of benefits if
a Participant fails to comply with the noncompetition or nondisclosure
provisions set forth in his or her employment agreement with the Company or
assumes a position within the gaming industry in Atlantic City, New Jersey,
voluntarily terminates his or her employment before the completion of five
years of service or is terminated for cause (as defined in the SERP). The
SERP also provides for immediate payment of benefits in the event of a change
of control (as defined in the SERP) of New Claridge. Jean Abbott was added as
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a participant to the SERP effective January 1, 1996. The Participants in the
SERP and the value of their units and their designated early retirement ages
are set forth below:
Age Name of Participant Unit Value Early Retirement
----- ------------------- ------------ ----------------
49 Robert Renneisen $10,000 55
39 Albert Britton $ 6,000 55
39 Raymond Spera $ 6,000 55
60 Peter Tiano $ 6,000 63
40 Jean Abbott $ 6,000 55
REPORT ON EXECUTIVE COMPENSATION
This report is presented to describe the compensation policies applied by
the Human Resources and Compensation Committee (the "Committee") of the Board
of Directors with regard to the Corporation's executive officers, and the
basis for the compensation of the Chief Executive Officer of the Corporation,
for the year 1995. Robert Renneisen was Chief Executive Officer for 1995.
While the Committee is in the process of adopting a modified approach to
executive compensation for 1996 and future years, the description below
applies to the approach taken with respect to executive compensation for
1995.
In the first several months of each year, the Committee reviews the
compensation of each executive officer of the Corporation or its subsidiary.
This review includes salary for the prior two years and the management
recommendation as to salary for the following year. It is the objective of
the Committee in setting the base salary for the officers to attract and
retain experienced, competent personnel. The Committee places particular
emphasis on this objective because of the intense competition within the
gaming industry for managerial employees. With this objective in mind,
through 1992 the Committee had recommended increases in the base salaries of
the executive officers of the Corporation and its subsidiary so that their
base salaries were at least within the lower range of base compensation paid
by other casino companies in Atlantic City. The primary reason for targeting
the lower range of other casino companies was to recognize the relatively
smaller size of the Corporation in relation to its competitors. However, it
is essential that the Corporation's officers be as competent as those of its
competitors. Having previously set the base salaries of the executive
officers at that level, the Committee anticipates that future adjustments in
the base salary for those persons will generally be made only to reflect
increases in the consumer price index and changes in industry compensation
levels, and adjustments were made in base salaries in 1995 on this basis.
Having established what the Committee believes to be the appropriate level
for the base salary of the officers of the Corporation and its subsidiary, the
Committee believes that any significant adjustment to the compensation of the
officers should be in the form of bonuses, and the bonuses should be based
largely upon the performance of the Corporation. For this purpose, the officers
are entitled to bonuses on the basis of a bonus plan that compares the
performance of the Corporation during the bonus year to a business plan
established by the management of the Corporation for that year. The business
plan upon which the bonus is based is developed by the management of the
Corporation with the oversight of the Committee, which typically approves the
business plan in December of each year. As previously indicated, bonuses are
determined largely on the basis of performance as compared to the business plan
so that in years, such as 1991, when the Corporation fails to achieve its profit
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plan, no bonuses are paid even if the reason for the failure to achieve the plan
was largely beyond the control of the Corporation's management (such as occurred
in 1991 with the Gulf War and the beginning of the economic downturn).
Similarly, no bonuses were paid under the incentive plan for 1994, because the
Corporation failed to achieve the business plan (which in part may have been
attributed to bad weather during the winter of 1993-1994).
In addition to bonuses under the bonus plan, the Committee retains the
discretion to pay the Corporation's senior officers bonuses that are
different than what would otherwise be dictated by the bonus plan. For this
purpose, the Committee, in addition to considering the performance of the
Corporation against the business plan, also considers various qualitative
factors including the success in retaining competent personnel, favorable
relationships with the New Jersey Casino Control Commission, efforts and
accomplishments in achieving the Corporation's long-term restructuring
objectives, success in dealing with the various regulatory requirements and
the New Jersey Casino Control Act, and efforts in exploring expansion
opportunities, none of which was considered determinative by the Committee.
The Committee made its decision regarding the 1995 compensation of the
Chief Executive Officer of the Corporation on the basis of the policies and
objectives set forth above. Based on a review of the base salaries of chief
executive officers of other casinos in Atlantic City, the Committee
determined that at a base salary of $300,000, Mr. Renneisen would receive a
base salary that could be considered comparable to the base salaries of chief
executives of other Atlantic City casinos, but that was clearly at the low
end of the range of such salaries. Mr. Renneisen received a bonus for 1995 of
$150,000, which was paid in February, 1996. This bonus was awarded on the
basis of the Corporation's achievement of its business plan for 1995 as well
as achievement of certain strategic objectives such as negotiating the
acquisition of an option to purchase the Webb Payment.
During 1995, the Committee awarded additional Equity Units under the
Corporation's Long-Term Management Incentive Plan (the "Plan") as amended.
Key management employees of the Corporation previously received awards under
the Plan in 1992 and 1994. As described elsewhere in this Proxy Statement,
the Plan provides for the vesting of units granted to key management
employees upon the achievement of certain long-term restructuring objectives
of the Corporation and bases the timing and amount of payment with respect of
those units upon the value received upon achievement of those objectives. The
Committee does not consider the grants made to the key management employees
under the Plan in determining the base salary and bonus amounts for those
employees because the Committee does not consider the Plan to provide current
compensation to those employees. Instead, the Committee considers the Plan to
be key to the Committee's objective of retaining its top managerial employees
while providing them with an added incentive to achieve the Corporation's
long-term restructuring objectives by holding out the possibility of
significant compensation if those objectives are achieved. The Committee
believes that this Plan ties the long-term interests of these key management
employee participants directly to the long-term interests of the
Corporation's shareholders.
As described above, certain key management employees of New Claridge were
awarded units under the SERP. The SERP is designed to provide an inducement
for those employees to provide outstanding future service.
The Corporation does not have a stock option plan.
James M. Montgomery, Chairman
David W. Brenner
Shannon L. Bybee
A. Bruce Crawley
Ned P. DeWitt
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COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Compensation Committee are James M. Montgomery,
Chairman, Shannon L. Bybee, A. Bruce Crawley, Ned P. DeWitt, and David W.
Brenner. There is no insider participation on the Compensation Committee,
except that David W. Brenner is the Chairman of the Board of Directors of the
Company, and there is no interlock between any Compensation Committee member
or executive officer of the Corporation, on the one hand, and the
compensation committees of other companies on the other hand.
UNAVAILABILITY OF COMPARATIVE INFORMATION
The Corporation has not included in this Proxy Statement a chart comparing
the performance of the price of its shares to the performance of the Standard
& Poor's 500 Stock Index and an index of gaming industry stocks because there
has not been, to the knowledge of the Corporation, any trading in the
Corporation's shares since the private placement of the shares in 1983. In
addition, the Corporation believes that the Corporation's shares do not have
any value. However, as may be noted from the Corporation's financial
statements, the shareholders' equity of the Corporation has increased
significantly over the last several years. Under the terms of the
Restructuring Agreement entered into by the Corporation in October, 1988, the
Corporation is not permitted to make any payment to the shareholders of the
Corporation, as such, until payment in full is made on the "Webb Payment"
(which amounts to $20 million plus 15% interest per annum), with
corresponding payments made to Releasing Investors as provided under the
terms of the Restructuring Agreement. As a result of the requirement to make
these payments, the Corporation believes, based on its estimate of the
current value of the Claridge, that it is unlikely that any amounts will be
available for distribution on its shares of common stock.
VOTING
Shareholders of record on the books of the Corporation at 4:00 P.M.
E.D.T., April 19, 1996, will be entitled to vote at the meeting. The
Corporation had outstanding on April 19, 1996, 5,046,064 shares of Common
Stock, par value $.001 per share. Each share entitles the holder to one vote
on each matter submitted to a vote at the meeting, and to cast one vote for
or against each Director.
The shares represented by proxies will be voted as directed in the
proxies. In the absence of specific direction, the shares represented by the
proxies will be voted FOR the election as Directors of the nominees named in
this Proxy Statement and FOR approval of the appointment of KPMG Peat Marwick
LLP as Auditors. In the event any nominee for Director is unable to serve,
which is not now contemplated, the proxies may or may not be voted for a
substitute nominee.
Assuming the presence of a quorum, the affirmative vote of a majority of
the shares of stock represented at the meeting is required for the election
of Directors and approval of the appointment of Auditors.
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Set forth in the table below is information regarding the ownership of
shares of the Corporation's common stock by directors and certain executive
officers of the Corporation and/or New Claridge, and the directors and
executive officers of the Corporation and/or New Claridge as a group:
<TABLE>
<CAPTION>
No. of Percent of
Name Title Shares Owned Class
------------------ ------------------------------------------- -------------- ------------
<S> <C> <C> <C>
Robert M. Renneisen..... Vice Chairman/Chief Executive Officer of
New Claridge 73,962 1.47%
James W. O'Brien ...... Former President/Chief Operating Officer of
New Claridge -0- -0-
Albert T. Britton ..... President/Chief Operating Officer of New
Claridge 36,526 .72%
Raymond A. Spera ...... Executive Vice President of Finance and
Corporate Development of New Claridge 36,526 .72%
Peter F. Tiano ........ Executive Vice President/General Manager
of New Claridge 36,526 .72%
Directors and Officers as a Group ................................. 257,502 5.10%
</TABLE>
All of the shares shown in this table are owned by directors or executive
officers of the Corporation and/or New Claridge under the Long-Term Incentive
Plan described above. Shares of the common stock were granted under the Plan
subject to certain vesting provisions, and as of the date hereof, 25% of such
shares have vested. Recipients of such awards are permitted, however, to vote
all shares granted to the recipients whether or not vesting has occurred.
------
SHAREHOLDER PROPOSALS
Any shareholder proposal intended to be presented at the 1997 annual
meeting of the Corporation's shareholders must be received at the principal
executive offices of the Corporation, Indiana Avenue and the Boardwalk,
Atlantic City, New Jersey 08401, by December 26, 1996, in order to be
considered for inclusion in the Corporation's proxy materials relating to
that meeting.
------
As of the date of this Proxy Statement, management knows of no matters to be
brought before the meeting other than the matters referred to in this Proxy
Statement. If, however, further business is presented, the proxy holders will
act in accordance with their best judgment.
By order of the Board of Directors
Frank A. Bellis, Jr.
Secretary
April 26, 1996
10
<PAGE>
PROXY PROXY
THE CLARIDGE HOTEL AND CASINO CORPORATION
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
ANNUAL MEETING OF SHAREHOLDERS ON JUNE 4, 1996
The undersigned hereby appoints David W. Brenner and Robert M. Renneisen, and
each of them, the proxies of the undersigned with full power of substitution
of each of them, to vote all shares of The Claridge Hotel and Casino
Corporation (the "Corporation") which the undersigned is entitled to vote at
the Annual Meeting of the Shareholders of the Corporation to be held at The
Claridge Hotel and Casino, Indiana Avenue and the Boardwalk, Atlantic City,
New Jersey, on June 4, 1996 at 10:00 a.m. and any adjournment thereof.
Unless otherwise specified in the squares provided, the undersigned's vote
will be FOR each candidate for Board of Directors and FOR Item 2, and in the
discretion of the proxies, on such other matters as may properly be brought
before the meeting.
1. To elect the following eight (8) candidates to the Board of Directors:
FOR WITHHOLD
David W. Brenner / / / /
Shannon L. Bybee / / / /
A. Bruce Crawley / / / /
Ned P. DeWitt / / / /
Donald G. Drapkin / / / /
James M. Montgomery / / / /
Robert M. Renneisen / / / /
Mark H. Sayers / / / /
<PAGE>
2. To approve the appointment by the Corporation's Board of Directors of KPMG
Peat Marwick, independent certified public accountants, as auditors for
the year 1996.
FOR / / AGAINST / / ABSTAIN / /
---------------------------------------
(Signature of shareholder)
---------------------------------------
(Signature of joint owner, if any)
Date , 1996
-----------------------------
Please sign exactly as your name appears
on the label. When signing as attorney,
executor, administrator, trustee or
guardian, please give your full title as
such.
PLEASE SIGN AND RETURN AS SOON AS POSSIBLE IN ENCLOSED ENVELOPE.
NO POSTAGE IS REQUIRED.
