<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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 240.14a-11(c) or 240.14a-12
THE CLARIDGE HOTEL AND CASINO CORPORATION
- -----------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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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):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
___________________________________________________________________________
2) Form, Schedule or Registration Statement No.:
___________________________________________________________________________
3) Filing Party:
___________________________________________________________________________
4) Date Filed:
___________________________________________________________________________
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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 8, 1999
-------------------------
The regular annual meeting of the shareholders of The Claridge Hotel and
Casino Corporation will be held on Tuesday, June 8, 1999, 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 four Directors to the Board of Directors.
(B) To approve the appointment by the Corporation's Board of Directors of
KPMG LLP, independent certified public accountants, as auditors for the
year 1999.
The Board of Directors has fixed the close of business on April 23, 1999,
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 23, 1999
<PAGE>
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 23, 1999
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 8, 1999.
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 9, 1999. This Proxy Statement and form of Proxy
were first mailed to shareholders on or about April 30, 1999.
ITEM A. ELECTION OF DIRECTORS
Four Directors are to be elected at the annual meeting to serve terms of
two years and until their respective successors have been elected. Messrs.
Brenner, Bybee, Renneisen and Sayers 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. Crawley, DeWitt and Montgomery, 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.
David W. Brenner, age 63. Mr. Brenner has served as a member of the Board
of Directors of the Corporation since February, 1991, and was Chairman of the
Board of Directors from August, 1993 to June, 1998. 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.
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Shannon L. Bybee, age 60. 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. 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 Officer of the Corporation and New Claridge, a position he 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.
Robert M. Renneisen, age 52. Mr. Renneisen has served as Chairman of the
Board of Directors since June, 1998, 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 June, 1998, Mr. Renneisen 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.
Mark H. Sayers, age 50. 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 53. 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.
Ned P. DeWitt, age 59. 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
February, 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.
James M. Montgomery, age 59. Mr. Montgomery has served as Vice Chairman of
the Board of Directors of the Corporation since June, 1998 and 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.
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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. James M. Montgomery, Vice Chairman of the Corporation's Board
of Directors, receives an annual retainer of $60,000. During 1998 James M.
Montgomery was paid an additional $9,000 for his work in developing a strategic
plan for the Corporation and Ned P. DeWitt was paid $3,000 for his work in
developing a strategic plan for the Corporation. Additionally, during 1998, the
firm of Houze, Shourds and Montgomery, Incorporated, of which James M.
Montgomery is President, was paid $48,600 for executive search services. During
1998, the firm of Crawley, Haskins and Rodgers, of which A. Bruce Crawley is
President and Director of Public Relations and Marketing, was paid $75,375 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 1998. Members of the Committee are Shannon L.
Bybee, Chairman, David W. Brenner, A. Bruce Crawley, and Ned P. DeWitt.
Human Resources and Compensation Committee -- The Human Resources and
Compensation Committee consists of three Directors. It is the responsibility of
the Human Resources and Compensation Committee to evaluate the performance of
the Chief Executive Officer and the compensation of executive officers of New
Claridge. The Committee met five times in 1998. Members of the Committee are A.
Bruce Crawley, Chairman, James M. Montgomery, and Mark H. Sayers.
Finance Committee -- The Finance Committee consists of three members. It
is the responsibility of the Finance Committee to review and evaluate the
Corporation's financial plans, indicators and performance. The committee met
once in 1998. Members of the Finance Committee are Mark H. Sayers, Chairman,
Shannon L. Bybee and Ned P. DeWitt.
Governance Committee -- The Governance Committee consists of three
Directors. It is the responsibility of the Governance Committee to evaluate
Board member performance, Board governance issues, Board composition and
organization. The Committee met once in 1998. Members of the Committee are
David W. Brenner, Chairman, Shannon L. Bybee and James M. Montgomery.
Attendance at Meetings -- During 1998, there were five regular meetings of
the Board of Directors and two 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 1998.
ITEM B. APPROVAL OF AUDITORS
Subject to the approval of the shareholders, the Board of Directors of the
Corporation has appointed KPMG 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 1999. The
shareholders will be asked at the meeting to approve the appointment. The firm
of KPMG LLP has audited the accounts of the Corporation since 1983. A
representative of KPMG 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 1998.
<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 1998 $ 330,000 $ -- $ 923 $217,881
Chairman/Chief 1997 330,865 -- -- 52,251
Executive Officer of 1996 326,540 -- 3,750 48,606
New Claridge
Albert T. Britton 1998 205,000 -- 1,284 53,816
President/Chief Operating 1997 205,306 -- -- 20,262
Officer of New Claridge 1996 201,146 -- 3,255 18,848
Jean I. Abbott 1998 171,469 -- 1,491 39,051
Executive Vice President 1997 163,066 -- -- 24,673
of Finance/Corporate Development 1996 161,865 -- 2,638 22,952
of New Claridge
Howard Klein 1998 160,500 -- -- --
Senior Vice President of 1997 162,607 -- -- --
Marketing of New Claridge 1996 159,288 -- -- --
Frank A. Bellis 1998 151,634 -- 1,466 --
Senior Vice President 1997 131,306 -- --
General Counsel of New Claridge 1996 129,454 -- 2,166 --
</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 agreement with its executive
officers, effective November 10, 1998. The agreements are for a term ending on
December 31, 2000 and may be extended upon specific action of the Board. In the
event that any of the executive officers are terminated without cause (as
defined), the executive officer is entitled to receive a termination payment in
an amount equal to 125% of his or her current base annual salary.
The base annual salaries under the agreements are currently as follows:
Robert M. Renneisen, Chief Executive Officer, $330,000; Albert T. Britton,
President/Chief Operating Officer, $205,000; Jean I. Abbott, Executive Vice
President Finance and Corporate Development, $175,000; Frank A. Bellis, Jr.,
Senior Vice President General Counsel, $160,000; John R. Ceresani, Vice
President Human Resources & Security, $106,000; Howard J. Klein, Senior Vice
President Marketing, $160,500; Glenn S. Lillie, Vice President Marketing
Communications, $125,000; Arthur M. Lucchesi, Vice President Information
Technology; $ 125,000; Laura L. Palazzo, Vice President - Controller, $106,000;
Roy A. Young, Senior Vice President Hotel Operations, $160,000.
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Additionally, in the event of a change of control (as defined) of the
Corporation and the subsequent termination of the executive officer's
employment consistent with the terms of the employment agreement, the
employment agreements provide for severance amounts equal to three times the
average of the executive officer's total compensation for the preceding five
years.
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 1998, Renneisen and Associates, Inc. was paid $25,970.
Additionally, during 1998, Renneisen and Associates, Inc. engaged with Nothaft
and Associates, Inc. to provide such services. Nothaft and Associates, Inc. was
paid $36,570 during 1998.
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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 employee's contribution from
January 1, 1998, through March 31, 1998, and an amount equal to 25% of the
employee's contribution from April 1, 1998 to December 31, 1998. Officers of
New Claridge were not eligible to receive the employer contribution during the
period January 1, 1998, through March 31, 1998. Employees could contribute a
maximum of 20% of their base salary but not in excess of $10,000 in 1998. 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. The Plan was
further amended, on November 10, 1998, to modify the terms by which the
Additional Equity Units and Director Equity Units will vest. The modification
adjusts the value that must be received by Claimholders of the Claridge
resulting from the occurrence of a Transaction, all as further defined and
described in the Plan.
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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 for Robert M. Renneisen and Albert T.
Britton, and after January 1, 1996 for Jean I. Abbott. 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.
Effective November 11, 1998, additional accumulation of SERP benefits
ceased. Participants remain entitled to only those SERP benefits accrued to
that date. The Participants in the SERP and the value of their units and their
designated early retirement ages are set forth below:
<TABLE>
<CAPTION>
Age Name of Participant Unit Value Units Accumulated Early Retirement
- ------ --------------------- ------------ ------------------- -----------------
<S> <C> <C> <C> <C>
52 Robert Renneisen $10,000 5 55
42 Albert Britton $ 6,000 5 55
43 Jean Abbott $ 6,000 3 55
</TABLE>
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 1998. Robert M. Renneisen was Chief Executive Officer for 1998.
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, 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
anticipated that future adjustments in the base salary for those persons would
generally be made only to reflect increases in the consumer price index and
changes in industry compensation levels. However, due to the financial
condition of
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the Corporation such increases have been limited to only those necessary to
retain personnel. No adjustments were made in base salaries in 1997 due to the
Corporation's financial situation and the need to limit expenses. In 1998 six
of the nine officers received base salary increases. Only two officers will
receive base salary increases in 1999. Robert M. Renneisen and Albert T.
Britton have not received a base salary increase since 1996.
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 1998, given the Corporation's financial
situation, no bonus plan was established.
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.
For 1998, the Committee reviewed the compensation of the Chief Executive
Officer, taking into account his base salary, bonus history and the
Corporation's financial situation. Based on these factors, the Committee
determined that no change would be made to the base salary of the Chief
Executive Officer.
During 1998, the Committee did award additional Equity Units under the
Corporation's Long-Term Management Incentive Plan (the "Plan") as amended.
Equity Units that had been forfeited by terminated officers were redistributed
among current officers. 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.
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One of the objectives of the Corporation's Board of Directors is to
refinance and restructure the ownership of the corporation. In order to
encourage the achievement of this objective, during 1998, the Committee
modified the terms of the Plan, under which the Additional Equity Units and
Director Equity Units are paid, to reduce the value of the amount that must be
paid to Claimholders to trigger vesting. At the same time accumulations under
the SERP ceased and all officers were provided with employment agreements,
which included change of control provisions.
The Corporation does not have a stock option plan.
The Human Resources and
Compensation Committee
A. Bruce Crawley, Chairman
James M. Montgomery
Mark H. Sayers
Compensation Committee Interlocks and Insider Participation
The members of the Compensation Committee are A. Bruce Crawley, Chairman,
James M. Montgomery and Mark H. Sayers. There is no insider participation on
the Compensation Committee 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 23, 1999, will be entitled to vote at the meeting. The
Corporation had outstanding on April 23, 1999, 5,062,500, 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 to be elected.
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 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.
9
<PAGE>
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.
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 76,703 1.52%
New Claridge
Albert T. Britton ..................... President/Chief Operating Officer of New 39,173 .77%
Claridge
Jean I. Abbott ........................ Executive Vice President of Finance and 27,393 .54%
Corporate Development of New Claridge
Directors and Officers as a Group ..... 130,669 2.58%
</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 2000 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, 2000, 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 23, 1999
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 8, 1999
The undersigned hereby appoints Robert M. Renneisen and James M.
Montgomery, 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 8, 1999 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 four (4) candidates to the Board of Directors for a
two (2) year term:
FOR WITHHELD
David W. Brenner [ ] [ ]
Shannon L. Bybee [ ] [ ]
Robert M. Renneisen [ ] [ ]
Mark Sayers [ ] [ ]
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 1999.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
----------------------------------
(Signature of shareholder)
----------------------------------
(Signature of joint owner, if any)
Date________________________, 1999
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
