<PAGE>
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 16, 1998
-------------------------
The regular annual meeting of the shareholders of The Claridge Hotel and
Casino Corporation will be held on Tuesday, June 16, 1998, 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 three 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 1998.
The Board of Directors has fixed the close of business on April 24, 1998,
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 24, 1998
<PAGE>
THE CLARIDGE HOTEL AND CASINO CORPORATION
INDIANA AVENUE AND THE BOARDWALK
ATLANTIC CITY, NEW JERSEY 08401
-------------------------
PROXY STATEMENT
-------------------------
April 24, 1998
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 16, 1998.
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 8, 1998. This Proxy Statement and form of Proxy
were first mailed to shareholders on or about May 1, 1998.
ITEM A. ELECTION OF DIRECTORS
Three Directors are to be elected at the annual meeting to serve terms of
two years and until their respective successors have been elected. Messrs.
Crawley, DeWitt and Montgomery are nominated to serve for two-year terms
commencing on the date of the annual meeting. The nominees for Director, all of
whom are now serving as Directors of the Corporation, are listed below,
together with biographical information. Also listed below is biographical
information for Messrs. Brenner, Renneisen, Bybee and Sayers, who are now
serving as Directors of the Corporation. 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.
A. Bruce Crawley, age 52. Mr. Crawley has served as a member of the Board
of Directors of the Corporation since February, 1995. He currently serves as
President and Director of Public Relations and Marketing Services for Crawley,
Haskins & Rodgers, a Philadelphia based public relations and advertising firm.
Prior to establishing the firm of Crawley, Haskins & Rodgers in 1989, Mr.
Crawley was employed at First Pennsylvania Bank and First Pennsylvania
Corporation, where he served as Senior Vice President and Director of Public
and Investor Relations. He also served, from 1976 to 1979, as Vice President
and Director of Advertising for First Pennsylvania Bank and First Pennsylvania
Corporation.
James M. Montgomery, age 58. Mr. Montgomery has served as a member of the
Board of Directors of the Corporation since March, 1995. Since July, 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.
1
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Ned P. DeWitt, age 58. Mr. DeWitt has served as a member of the Board of
Directors of the Corporation since May, 1995. Since July, 1997, Mr. DeWitt has
been Chairman and Chief Executive Officer of U'Race Corporation., which
operates amateur auto racing entertainment facilities. Mr. DeWitt 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 January, 1997. From November, 1993, to August, 1994, he served as President
of SEGA 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 from December,
1986, to April, 1989. He also served, from 1973 through 1982, as President and
Chief Executive Officer of Six Flags Corporation.
David W. Brenner, age 62. 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 51. 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
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. 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 59. Mr. Bybee has served as a member of the Board of
Directors of the Corporation since July, 1988. He currently is Executive
Director and Associate Professor for Gaming Management, Law & Regulation, at
University of Nevada, Las Vegas. 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, 1998, to July,
1993, and from August, 1988, to October, 1988. In June, 1989, Mr. Bybee was
appointed to serve as the Chief Executive Oficer 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 47. 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.
2
<PAGE>
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. During 1997 Shannon L.
Bybee was paid an additional $15,000 for his attendance, as a representative of
the Finance Committee, at meetings with the Corporation's financial advisors
and legal counsel regarding the Corporation's financial situation. During 1997
Ned P. DeWitt was paid an additional $9,000 for his work in developing a
strategic plan for the Corporation. During 1997 the firm of Crawley, Haskins
and Rodgers, of which A. Bruce Crawley is President and Director of Public
Relations and Marketing, was paid $19,200 for public relations and marketing
research services provided to New Claridge.
Audit Committee -- The Audit Committee consists of four 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 1997. Members of the Committee are Shannon L.
Bybee, Chairman, 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 six 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 two times in 1997.
Members of the Committee are James M. Montgomery, Chairman, Ned P. DeWitt,
Shannon L. Bybee, A. Bruce Crawley, Mark H. Sayers, and David W. Brenner as an
Ex-Officio member.
Finance Committee -- The Finance Committee consists of five members. It is
the responsibility of the Finance Committee to evaluate the alternatives for
recapitalizing the Corporation. The committee met once in 1997. Members of the
Finance Committee are Mark H. Sayers, Chairman, Shannon L. Bybee, Ned P.
DeWitt, Robert M. Renneisen and David W. Brenner as Ex-officio member.
Attendance at Meetings -- During 1997, 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 1997.
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 1998. 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.
3
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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 1997.
<TABLE>
<CAPTION>
Annual Compensation Other Annual Other
--------------------------------- Compensation Compensation
Name and Position Year Salary Bonus (1) (2)
- ----------------- ---- ------ ----- --- ---
<S> <C> <C> <C> <C> <C>
Robert M. Renneisen 1997 $330,865 $ -- $ -- $52,251
Vice Chairman/Chief 1996 326,540 -- 3,750 48,606
Executive Officer of 1995 300,000 150,000 3,750 45,215
New Claridge
Albert T. Britton 1997 205,306 -- -- 20,262
President/Chief Operating 1996 201,146 -- 3,255 18,848
Officer of New Claridge 1995 170,838 67,935 3,750 17,533
Raymond A. Spera 1997 185,409 -- -- --
Former Executive Vice President 1996 180,731 -- 2,938 18,848
of Finance/Corporate Development 1995 165,662 66,261 3,750 17,533
of New Claridge
Jean I. Abbott 1997 163,066 -- -- 24,673
Executive Vice President 1996 161,865 -- 2,638 22,952
of Finance/Corporate Development 1995 120,146 47,991 2,852 --
of New Claridge
Howard Klein 1997 162,607 -- -- --
Senior Vice President of 1996 167,395 -- -- --
Marketing of New Claridge 1995 27,988 -- -- --
</TABLE>
- ------------
(1) Amounts reported in this column were paid pursuant to the Retirement
Savings Plan of New Claridge described under "Compensation Plans --
Retirement Savings Plan."
(2) Amounts reported in this column represent amounts accrued with respect to
the Corporation's future liability pursuant to the Corporation's
Supplemental Executive Retirement Plan.
New Claridge is a party to employment agreements with Robert M. Renneisen
and Albert T. Britton effective January 1, 1997. The agreements are for a term
of two years and may be renewed and extended for consecutive one-year renewal
terms upon specific action by the Board. The annual base salaries under the
agreements are currently as follows: Mr. Renneisen, $330,000 and Mr. Britton,
$205,000.
New Claridge is also a party to employment agreements with Jean I. Abbott,
Howard Klein, and Frank A. Bellis effective November 1, 1996. The agreements
are for a term commencing November 1, 1996, and terminating December 31, 1998.
Thereafter, the agreements may be renewed and extended for consecutive one-year
renewal terms upon specific action by the Board. The annual base salaries under
the agreements are currently as follows: Ms. Abbott, $175,000; Mr. Klein,
$160,500; and Mr. Bellis, $160,000.
New Claridge's Board may, from time to time in their sole discretion,
increase the base salaries. In the event any of the above executives are
terminated without cause (as defined), the executive is entitled to receive a
termination payment in an amount equal to 125% of his or her current base
annual salary.
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<PAGE>
Effective February 1, 1997, the Board further amended the employment
agreements of Mr. Renneisen, Mr. Britton, Ms. Abbott, and Mr. Bellis to provide
for certain severance payments in the event of a change of control (as defined)
of the Corporation and subsequent termination of the executive's employment
consistent with the terms of the amended employment agreement. The severance
amounts payable to these executives in these circumstances is as follows: Mr.
Renneisen, $1,000,000; Mr. Britton, $500,000; Ms. Abbott, $400,000; and Mr.
Bellis, $325,000. These severance amounts are in lieu of amounts due under the
executive's employment agreement, the Supplemental Executive Retirement Plan
and the Long Term Management Incentive Plan.
Effective February 1, 1997, New Claridge also entered employment
agreements with John Ceresani, Vice President of Human Resources; Glenn Lillie,
Vice President of Marketing Communications; Arthur Lucchesi, Vice President of
MIS and Laura Palazzo, Vice President and Corporate Controller. These
agreements are for a term commencing February 1, 1997, and terminating December
31, 1998. Thereafter, the agreements may be renewed and extended for
consecutive one (1) year renewal terms upon specific action by the Board. The
annual base salaries under the agreements are currently as follows: Mr.
Ceresani, $102,000; Mr. Lillie, $125,000; Mr. Lucchesi, $125,000 and Ms.
Palazzo, $102,000. New Claridge's Board may, from time to time, in their sole
discretion increase the base salaries. In the event any of the above executives
are terminated without cause (as defined), the executive is entitled to receive
a termination payment in an amount equal to 100% of his or her current base
annual salary.
Mr. Spera terminated his employment with New Claridge on September 9,
1997. In consideration for an Agreement and General Release, New Claridge
agreed to pay Mr. Spera's salary for twenty-four months on a weekly basis
through February 13, 1998 with the balance paid in full on that date. New
Claridge also agreed to pay Mr. Spera's salary for an additional six months if
he has not secured full-time employment by September, 1999. Mr. Spera agreed to
forfeit his rights under the Supplemental Executive Retirement Plan.
New Claridge, from time to time, utilizes the services of Renneisen and
Associates, Inc., a special events planning and decorating firm. Robert
Renneisen's spouse, Susan, is president and sole owner of Renneisen and
Associates, Inc. During 1997, Renneisen and Associates, Inc. was paid $57,520.
Additonally, during 1997, Renneisen and Associates, Inc. engaged with Nothaft
and Associates, Inc. to provide such services. Nothaft and Associates, Inc. was
paid $23,505 during 1997.
5
<PAGE>
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 20% of the employees contribution from
January 1, 1997, through December 31, 1997. Officers of New Claridge were not
eligible to receive the employer contribution during 1997. Effective April 1,
1998, the employer's contribution increased to an amount equal to 25% of the
employee's contribution, for up to the first 5% of an employee's salary, and
officers of New Claridge will be eligible to receive the employer's
contribution. Employees could contribute a maximum of 20% of their base salary
but not in excess of $9,500 in 1997. 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. 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 Atlantic City Boardwalk
Associates, L.P. ("the Partnership") makes distributions to its partners, or if
the Corporation or the Partnership makes certain distributions under the
Corporation's 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.
6
<PAGE>
d. 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. 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
--- ------------------- ---------- ----------------
51 Robert Renneisen $10,000 55
41 Albert Britton $ 6,000 55
42 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 1997. Robert M. Renneisen was Chief Executive Officer for 1997.
In the first several months of each year, the Committee reviews the
compensation of each executive officer of the Corporation and 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, 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. No adjustments were made in base
salaries in 1997 due to the Corporation's financial situation and the need to
limit expenses.
7
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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
have been entitled to bonuses on the basis of a bonus plan that has in the past
compared 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 Board of Directors and 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 when the Corporation fails
to achieve its profit 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. No bonuses were paid under the 1996 incentive plan because the
Corporation failed to achieve its business plan. Given the Corporation's
financial results for 1996 and the Corporation's financial situation, the
Committee determined that the 1996 base salaries for executive officers of the
Corporation and its subsidiary would remain in effect for 1997 and no bonus
plan was established for 1997.
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 are considered
determinative by the Committee.
During 1997, the Committee did not award any 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, 1994, and 1995. 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.
8
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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
Mark H. Sayers
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, Mark H. Sayers,
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. 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 24, 1998, will be entitled to vote at the meeting. The
Corporation had outstanding on April 24, 1998, 4,970,730 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.
9
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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 73,962 1.47%
New Claridge
Albert T. Britton ........... President/Chief Operating Officer of New 36,526 .72%
Claridge
Jean I. Abbott .............. Executive Vice President of Finance and 8,218 .16%
Corporate Development of New Claridge
Directors and Officers as a Group ...................................... 159,796 3.16%
</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. To
the Corporation's knowledge, no person owns beneficially or of record 5% or
more of the Corporation's outstanding common stock.
-------------------------
Shareholder Proposals
Any shareholder proposal intended to be presented at the 1999 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 January 1, 1999, 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 24, 1998
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 16, 1998
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 Casino Hotel, Indiana Avenue and the Boardwalk, Atlantic City, New
Jersey, on June 16, 1998 at 10:00AM 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 three (3) candidates to the Board of Directors for a
two (2) year term:
FOR WITHHELD
A. Bruce Crawley [ ] [ ]
Ned P. DeWitt [ ] [ ]
James M. Montgomery [ ] [ ]
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 1998.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
----------------------------------
(Signature of shareholder)
----------------------------------
(Signature of joint owner, if any)
Date ______________________, 1998
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
