SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A-1
(Mark One)
[ X ] Annual report pursuant to section 13 or 15(d) of the Securities
Exchange Act of 1934
For the fiscal year ended March 31, 1995
--------------
or
[ ] Transition report pursuant to section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from ___________ to ___________
Commission File Number 0-14897
PLAYERS INTERNATIONAL, INC.
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(Exact name of registrant as specified in its charter)
Nevada 96-41745832
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3900 Paradise Road, Suite 135
Las Vegas, Nevada 89109
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (702) 691-3300
----------------------------
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
Not Applicable
- ------------------- -----------------------------------------
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, par value $.005 per share
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days.
YES X NO
--- ---
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K [ ]
The aggregate market value of the voting stock held by non-affiliates of the
registrant was approximately $490 million at June 22, 1995. Such aggregate
market value was computed by reference to the closing price of the Common Stock
as reported on the Nasdaq National Market of The Nasdaq Stock Market on June 21,
1995. For purposes of making this calculation only, the registrant has defined
affiliates as including all directors and beneficial owners of more than ten
percent of the Common Stock of the Company.
The number of shares of the registrant's Common Stock outstanding as of June 22,
1995 was 29,757,904.
Documents incorporated by reference: None
PH02/81834.2
<PAGE>
TABLE OF CONTENTS
PART III.......................................................................
Item 10. Directors and Executive Officers of the Registrant.................
Item 11. Executive Compensation.............................................
Item 12. Security Ownership of Certain Beneficial Owners and Management.....
Item 13. Certain Relationships and Related Transactions.....................
Preliminary Note:
This Form 10-K/A-1 is being filed to report Part III information in
lieu of the incorporation of such information by reference to the Company's
definitive proxy material for its 1995 Annual Meeting of Stockholders.
PH02/81834.2
<PAGE>
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Information concerning directors and executive officers of Players
International, Inc. ("the Company"), as of August 11, 1995, is as follows:
<TABLE>
<CAPTION>
Director
Director Name Present Position(s) With The Company Since Age
- ------------- ------------------------------------ -------- ---
<S> <C> <C> <C>
Edward Fishman Chairman of the Board of Directors and Chief 1985 52
Executive Officer
David Fishman Vice Chairman of the Board of Directors 1985 47
Howard Goldberg President, Chief Operating Officer and Director 1986 50
Steven P. Perskie Executive Vice President, General Counsel and 1994 50
Director
Thomas E. Gallagher(1)(2) Director 1992 50
Marshall S. Geller(1)(2) Director 1989 56
Lee Seidler(1) Director 1987 60
</TABLE>
(1) Member of the Audit Committee, of which Mr. Seidler is Chairman.
(2) Member of the Compensation Committee, of which Mr. Gallagher is Chairman.
Edward Fishman has served as Chairman of the Board and Chief Executive
Officer of the Company since 1985 and served as President during May 1993. His
principal activities for the Company relate to marketing, long-range development
and strategic planning. He has 16 years of marketing experience in the casino
industry and he has served as a marketing consultant to Resorts International
Casino Hotel in Atlantic City and Harrah's East Hotel/Casino.
David Fishman has served as the Company's Vice Chairman of the Board since
1985 and he served as Secretary from 1985 until May 1993. His principal
activities for the Company relate to overall supervision of individual casino
development and operations.
Howard Goldberg became President of the Company in May 1993 and Chief
Operating Officer shortly thereafter. Mr. Goldberg's duties relate principally
to long-range development and strategic planning. Prior to joining the Company,
he was the managing shareholder practicing law in the Atlantic City, New Jersey
law firm of Horn, Goldberg, Gorny, Daniels, Plackter & Weiss ("Horn, Goldberg"),
which is outside general counsel to the Company and has represented the Company
since its inception. Since the advent of casino gaming in Atlantic City, Mr.
Goldberg specialized in representing casinos in New Jersey and other
jurisdictions for development and regulatory matters. Mr. Goldberg remains
associated with Horn, Goldberg, but he does not currently engage in any
firm-related activities other than on an occasional and incidental basis. The
amount of the payments due to him from the firm are not affected by fees paid by
the Company to the firm.
Thomas E. Gallagher has been President and Chief Executive Officer of The
Griffin Group since April 1992. For the preceding 15 years, he was a partner in
PH02/81834.2
<PAGE>
the law firm of Gibson, Dunn & Crutcher. Since November 1, 1993, he has served
as a director, and since May 1995, he has served as President and Chief
Executive Officer of Griffin Gaming & Entertainment, Inc. (formerly Resorts
International Inc.)
Marshall S. Geller is the Senior Managing Partner of M. Geller & Co., a
merchant banking investment company. From April 1993 through July 1995, Mr.
Geller was the Senior Managing Partner and founder of Golenberg & Geller, Inc.,
a merchant banking investment company. He served as the Company's interim
President from November 1992 through April 1993. Mr. Geller served as Vice
Chairman of Gruntal & Co., Inc., an investment banking firm, from 1988 to 1990.
From 1967 until 1988, he was a Senior Managing Director of Bear Stearns & Co.
Inc., an investment banking firm ("Bear Stearns"). He is currently interim
Co-Chairman of Hexcel Corporation and a director of Value Vision International,
Inc.
Lee Seidler is a private investor. He is affiliated with Bear, Stearns as
Managing Director Emeritus. From 1981 to 1989, he was a Senior Managing Director
of Bear Stearns. He is a director of Synthetic Industries, Inc., The Shubert
Organization, Inc. and The Shubert Foundation.
Steven P. Perskie joined the Company's Board of Directors and became a Vice
President and its General Counsel in May 1994 and became Executive Vice
President in March 1995. His responsibilities include the development of
opportunities for the Company in new and emerging gaming jurisdictions and
strategic planning. From 1990 to May 1994, he served as Chairman of the New
Jersey Casino Control Commission (the "NJCCC"). Prior to joining the NJCCC, he
served from January to October 1990 as Chief of Staff to Governor Jim Florio of
the State of New Jersey. From October 1989 to January 1990, he was the Director
of Transition for Governor-Elect Florio. For several years prior to October
1989, he was a presiding judge of the Superior Court in the State of New Jersey.
He also served from 1971 through 1982 in the New Jersey Legislature, first as a
member of the General Assembly and then as a member of the Senate. As a state
legislator, he was the author and principal sponsor of the New Jersey Casino
Control Act in 1977.
Peter J. Aranow joined the Company as an Executive Vice President in May
1993, and he became the Company's Chief Financial Officer and Secretary shortly
thereafter. From 1977 to May 1993, he was employed in the Investment Banking
Department of Bear, Stearns in progressively more responsible positions,
including Senior Managing Director. During his tenure with Bear, Stearns, one of
Mr. Aranow's areas of focus was the gaming industry.
Edward and David Fishman are brothers. Howard Goldberg and Lee Seidler are
brothers-in-law.
Section 16(a) of the Exchange Act requires the Company's executive officers
and directors and persons who own more than ten percent of a registered class of
the Company's equity securities (collectively, the "reporting persons") to file
reports of ownership and changes in ownership with the Securities and Exchange
Commission by the tenth day of the calendar month following the month of the
sale, and to furnish the Company with copies of these reports. Based on the
Company's review of the copies of these reports it has received, and written
representations, if any, received from reporting persons with respect to the
filing of such reports, the Company believes that all Section 16(a) filing
requirements applicable to the reporting persons for the period April 1, 1994 to
March 31, 1995 were made on a timely basis except that Marshall Geller, a
director of the Company, did not timely report his May 1995 sale of Common
Stock, which was reported on Form 4 in July 1995.
PH02/81834.2
<PAGE>
ITEM 11. EXECUTIVE COMPENSATION
Summary Compensation Table
The following summary compensation table sets forth, for the Company's last
three fiscal years, the cash compensation paid by the Company, as well as
certain other compensation paid or accrued for those years, to Edward Fishman,
the Company's Chief Executive Officer, and to each of the Company's other four
most highly compensated executive officers for the fiscal year ended March 31,
1995 (collectively, the "Named Executives"):
<TABLE>
<CAPTION>
Summary Compensation Table
Annual Compensation Long-Term Compensation
------------------------------------------ -----------------------------------------------
Fiscal Year Restricted Securities
Name and Principal Ended Other Annual Stock Underlying All Other
Position March 31, Salary Bonus Compensation Awards Options Compensation
- ------------------- ----------- ------ ----- ------------ ---------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Edward Fishman 1995 $500,000 $250,000 -- -- 600,000(1) --
Chairman of the 1994 325,000 437,500 -- -- -- $5,175
Board, Chief 1993 226,993 100,000 -- -- 112,500(2) 6,900
Executive Officer
and Director
David Fishman 1995 $500,000 $250,000 -- -- 600,000(1) $13,400(3)
Vice Chairman of 1994 325,000 437,500 -- -- -- 3,645
the Board 1993 226,993 200,000 -- -- 337,500(2)(4) 3,457
and Director
Howard Goldberg 1995 $500,000 $250,000 $ -- -- 600,000(1) $6,088(3)
President,Chief 1994 283,214(5) 437,500 5,500(6) $887,500(7) 431,250(8) 3,595
Operating 1993 -- -- 16,000(6) -- 56,250(2) --
Officer and
Director
Peter J. Aranow 1995 $300,000 $150,000 -- -- 45,000(9) $4,404(3)
Executive Vice 1994 170,470(5) 250,000 -- $177,500(10) 225,000(11) 3,705
President and 1993 -- -- -- -- --
Chief Financial
Officer
PH02/81834.2
<PAGE>
Steven P. Perskie 1995 $122,019(5) $150,000 -- -- 150,000(12) $6,079(3)
Executive Vice 1994 -- -- -- -- -- --
President, General 1993 -- -- -- -- -- --
Counsel and
Director
</TABLE>
(1) Includes 150,000 shares subject to options granted on April 14, 1994, with
an exercise price of $11.50 and 450,000 shares subject to options granted
on March 1, 1995, with an exercise price of $16.50. See "Stock Option
Grants."
(2) Exercisability of options for 112,500 shares to the Messrs. Fishman and
options for 56,250 shares to Mr. Goldberg were conditioned on the Company
meeting earnings goals for Fiscal 1993. The goals were not met and such
options lapsed without becoming exercisable.
(3) Represents the following life insurance premium payments made by the
Company during Fiscal 1995 with respect to policies for which the
beneficiary is not the Company: David Fishman ($2,900); Howard Goldberg
($3,595); and Peter Aranow ($2,519). Also includes $10,500 in perquisites
for Mr. David Fishman, $2,493 in additional disability income protection
for Mr. Goldberg, $1,885 in additional disability income protection for Mr.
Aranow and $6,079 in reimbursed COBRA payments for Mr. Perskie.
(4) Includes 225,000 shares subject to options granted on February 17, 1993
with an exercise price of $6.25, 100% vesting immediately. Also includes
112,500 shares subject to options granted for Fiscal 1993 that lapsed. See
Note 3.
(5) Represents compensation from May 19, 1993 for Howard Goldberg, May 26, 1993
for Peter Aranow and May 2, 1994 for Steven Perskie, the dates when they
became officers.
(6) Represents directors fees before Mr. Goldberg became an officer.
(7) Represents restricted stock grant of 75,000 shares of Common Stock that
were awarded to Mr. Goldberg upon his joining the Company as an officer,
valued at $11.83 per share, the fair market value of the shares on the date
of his award.
(8) Includes 375,000 shares subject to options granted on May 19, 1993 with an
exercise price of $11.83. The options vest at 18,750 shares per month
during the first year and 6,250 per month in the second and third years.
Also includes 56,250 shares subject to options granted while a non-employee
director. The latter options are exercisable at $6.25 per share and their
exercisability was conditioned on the Company meeting certain earnings
goals for fiscal 1994 that were met.
(9) Includes 45,000 shares subject to options granted on April 14, 1994, with
an exercise price of $11.50. The options vest 20% on each of the first and
second anniversaries of the date of the grant, respectively, and the
remaining 60% of the options vest on the third anniversary of the date of
grant.
(10) Represents restricted stock grant of 15,000 shares of Common Stock that
were awarded to Mr. Aranow upon his joining the Company as an officer,
valued at $11.83 per share, the fair market value of the shares on the date
of his award.
(11) Granted options to purchase 225,000 shares on May 26, 1993 with an exercise
price of $11.83. The options vest in equal monthly installments over 36
months.
(12) Includes 150,000 shares subject to options granted on May 2, 1994, with an
exercise price of $13.25. The options vest 20% on each of the first and
second anniversaries of the date of the grant, respectively, and the
remaining 60% of the options vest on the third anniversary of the date of
grant.
No other annual compensation or long-term incentive plan payouts were paid
during the fiscal year ending March 31, 1995.
PH02/81834.2
<PAGE>
Stock Option Grants
The following table relates to options granted to the Named Executives
during the fiscal year ended March 31, 1995.
Option Grants In Last Fiscal Year
<TABLE>
<CAPTION>
Potential
Realizable Value
Individual Grants at Assumed Annual
----------------------------------------------------------- Rates of
% of Total Stock Price
Options Appreciation for
Granted to Exercise Option Terms
Options Employees Price Expiration ---------------------------
Name Granted in Fiscal Year Per Share Date 5% 10%
- ---- ------- -------------- --------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
Edward Fishman.............. 150,000(1)(2) 6.6% $11.50 4/14/99 $476,586 $1,053,130
450,000(3) 19.9% $16.50 3/31/01(3) 2,184,613 4,868,122
David Fishman............... 150,000(1)(2) 6.6% $11.50 4/14/99 476,586 1,053,130
450,000(3) 19.9% $16.50 3/31/01(3) 2,184,613 4,868,122
Howard Goldberg............. 150,000(1)(2) 6.6% $11.50 4/14/99 476,586 1,053,130
450,000(3) 19.9% $16.50 3/31/01(3) 2,184,613 4,868,122
Peter J. Aranow............. 45,000(1)(2) 2.0% $11.50 4/14/99 142,976 315,939
Steven P. Perskie........... 150,000(1)(4) 6.6% $13.25 5/2/99 549,110 1,213,389
</TABLE>
(1) Options vest in 20%, 20% and 60% increments on the first, second and third
anniversaries of the date of grant.
(2) Options were granted on April 14, 1994.
(3) Options vest in 20% increments on each of the first through fifth
anniversaries of March 31, 1995. These options expire on March 31, 2000,
except for the final vested increment, which expires one year following
vesting, on March 31, 2001.
(4) Options were granted on May 2, 1994.
Stock Option Exercises
The following table relates to options exercised during the year ended
March 31, 1995, and options outstanding at the year end. The table does not
include warrants which were acquired in a 1992 private placement on the same
terms as were paid by other unaffiliated investors.
PH02/81834.2
<PAGE>
Aggregated Option Exercises In Last
Fiscal Year And Fiscal Year End Option Value
<TABLE>
<CAPTION>
Number of Value of Unexercised
Unexercised Options In-the-Money Options
at March 31, 1995 at March 31, 1995(2)
----------------------------- ------------------------------
Shares
Acquired Value
Name on Exercise Realized(1) Exercisable Unexercisable Exercisable Unexercisable
---- ----------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Edward Fishman........ -- -- -- 600,000 -- $2,149,980
David Fishman......... -- -- 225,000 600,000 $2,831,243 $2,149,980
Howard Goldberg....... 22,500 $283,125 388,751 687,499 $3,537,807 $2,762,470
Peter J. Aranow....... -- -- 137,501 132,499 $962,502 $942,489
Steven P. Perskie..... -- -- -- 150,000 -- $837,495
</TABLE>
(1) Based upon the difference between the Nasdaq National Market closing
quotation for the Common Stock and the exercise price on the date of
exercise multiplied by the number of shares acquired upon exercise.
(2) Based upon the aggregate sum of the positive difference between the Nasdaq
National Market closing quotation for the Common Stock on March 31, 1995
and the exercise price for each option.
Employment Agreements
Mr. Goldberg has an employment agreement with the Company for a three year
term ending May 19, 1996, to serve as President and Chief Operating Officer. His
annual contractual base compensation is at least $400,000, including a
guaranteed bonus of $75,000, provided that his annual base compensation shall
not be less than the amount granted to the Messrs. Edward or David Fishman. He
is entitled to performance bonuses in accordance with a specified formula. In
the event of his death, his estate is entitled to an additional three months of
his base compensation as well as other amounts earned under bonus and other
arrangements to the date of his death. In the event of a termination or
constructive termination without cause (as those terms are defined in the
agreement), he will be entitled to receive, among other benefits, base
compensation and continued performance bonuses for a period to the end of the
agreement term or 12 months, whichever is longer, which amounts may be payable
in a lump sum discounted to present value. If Mr. Goldberg's employment
terminates on a change in control of the Company (as defined in the agreement)
he will be entitled to the present value of similar benefits payable as a lump
sum. The agreement also provides for certain life and disability insurance
coverage as well as other fringe benefits. Under the terms of this agreement,
upon joining the Company, Mr. Goldberg received an award of 75,000 shares of the
Company's Common Stock and a five-year option for 375,000 shares becoming
exercisable in installments at $11.83 per share.
Mr. Aranow has an employment agreement with the Company for a three-year
term ending May 26, 1996, to serve as Executive Vice President and Chief
Financial Officer. His initial annual contractual base compensation is $200,000,
which increases by $50,000 in the second and third years, in addition to which
he is entitled to a $50,000 annual guaranteed bonus. He is entitled to a minimum
annual performance bonus in accordance with a specified formula. Mr. Aranow's
agreement has provisions comparable to Mr. Goldberg's agreement for benefits on
death, termination or constructive termination without cause and termination
after a change in control of the Company. Under the terms of the agreement, upon
joining the Company Mr. Aranow received an award of 15,000 shares of the
Company's Common Stock and a five-year option for 225,000 shares exercisable in
installments at $11.83 per share.
Mr. Perskie has an employment agreement with the Company for a three-year
term ending May 1, 1997, to serve as Executive Vice President and General
PH02/81834.2
<PAGE>
Counsel. His initial annual contractual salary is $135,000, with
minimum increases of $50,000 in the second and third years. Under the terms of
the agreement, upon joining the Company he received a five-year option to
purchase 150,000 shares, exercisable in installments at $13.25 per share.
Each of the three executive employment agreements referred to above
contains certain restrictions on competitive activities after the termination of
employment.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
OUTSTANDING SHARES, VOTING RIGHTS
AND STOCKHOLDINGS OF CERTAIN PERSONS
Outstanding Shares and Voting Rights
At the close of business on July 19, 1995, the record date fixed for the
determination of stockholders entitled to notice of and to vote at the Meeting,
there were outstanding approximately 29,787,300 shares of the Company's common
stock, par value $.005 per share (the "Common Stock"), the only class of voting
securities outstanding. Only the record holders of such Common Stock as of the
close of business on July 19, 1995 will be entitled to vote. The presence at the
Meeting, in person or by proxy, of stockholders entitled to cast a majority of
the votes that all stockholders are entitled to cast will constitute a quorum.
Each share of Common Stock is entitled to one vote, without cumulation, on each
matter to be voted upon at the Meeting.
Security Ownership of Certain Beneficial Owners And Management
The following table sets forth, as of the close of business on July 28,
1995, certain information with respect to the beneficial ownership of Common
Stock of each director of the Company and by all officers and directors as a
group, as well as the holdings of each stockholder who was known to the Company
to be the beneficial owner, as defined in Rule 13d-3 under the Securities
Exchange Act of 1934, of more than 5% of the Common Stock. Information also is
presented regarding institutional beneficial ownership of more than 5% of the
Common Stock as of December 31, 1994, the last date for reporting significant
ownership positions by certain institutions under Securities and Exchange
Commission ("SEC") rules. Each of the persons listed below has sole voting and
investment power with respect to such shares, unless otherwise indicated.
<TABLE>
<CAPTION>
Name of Beneficial Number of Shares Percent of Class
Owner(1) Beneficially Owned Beneficially Owned
- ------------------ ------------------ ------------------
<S> <C> <C>
The Griffin Group, Inc. 4,267,350(2) 13.6%
Edward Fishman 1,379,959(3) 4.6
David Fishman 856,672(4) 2.9
Thomas E. Gallagher 949,800(5) 3.2
Howard Goldberg 739,330(6) 2.4
Marshall Geller 119,127(7) *
Steven P. Perskie 30,000(8) *
Lee Seidler 138,750(9) *
PH02/81834.2
<PAGE>
Peter J. Aranow 199,000(10) *
All directors and executive officers as a group 4,412,638(11) 14.1
(8 persons)
FMR Corp. and Affiliates 2,176,500(12) 7.3
Putnam Investments, Inc. and Affiliates 1,520,955(13) 5.1
Chancellor Capital Management, Inc.
Chancellor Trust Company 1,375,050(14) 4.6
</TABLE>
- ------------------------------
* Less than 1%.
(1) The address of The Griffin Group, Inc. ("The Griffin Group") is 780 Third
Avenue, Suite 1801, New York, New York 10017. The address of Edward Fishman
and David Fishman is 3900 Paradise Road, Suite 135, Las Vegas, Nevada
89109. The addresses of Thomas Gallagher is c/o The Griffin Group, 9860
Wilshire Boulevard, Suite 33, Beverly Hills, California 90210. The address
of Howard Goldberg and Steven Perskie is c/o Players International, Inc.,
1300 Atlantic Avenue, Suite 203, Atlantic City, New Jersey 08402. The
address of Marshall Geller is c/o M. Geller & Co., 1875 Century Park East,
#1770, Los Angeles, California 90067. The address of Lee Seidler is c/o
Bear Stearns & Co. Inc., 245 Park Avenue, New York, New York 10041. The
address of Peter J. Aranow is c/o Players International, Inc., 3900
Paradise Road, Suite 135, Las Vegas, Nevada 89109. All of the individuals
named in the table, except Peter J. Aranow, are directors of the Company.
(2) Includes 1,680,000 shares that are subject to license warrants that were
issued pursuant to a License and Service Agreement (the "License Warrants")
and that are exercisable within 60 days of July 28, 1995 ("currently
exercisable"). The holdings do not include the holdings of Mr. Gallagher
(President of The Griffin Group and a director of the Company) but include
131,000 shares and 105,000 shares subject to License Warrants that are
owned by another executive of The Griffin Group who is not otherwise
associated with the Company.
(3) Includes 30,000 shares that are subject to currently exercisable options.
(4) Includes 255,000 shares that are subject to currently exercisable options.
(5) Includes 78,750 shares that are subject to currently exercisable options
and 236,250 shares subject to currently exercisable warrants.
(6) Includes 48,267 shares held in trust and in the name of Mr. Goldberg's
children and father-in-law and 456,250 shares that are subject to currently
exercisable options.
(7) Includes 96,627 shares subject to currently exercisable options.
(8) Consists of 30,000 shares subject to currently exercisable options.
(9) Includes 78,750 shares that are subject to currently exercisable options.
(10) Includes 184,000 shares subject to currently exercisable options.
(11) Includes 1,445,627 shares that are subject to currently exercisable options
and warrants.
(12) Reflects holdings reported in Schedule 13G as of December 31, 1994.
Includes 14,550 shares subject to sole voting power and 2,176,500 shares
subject to sole dispositive power. The beneficial owner's address is 1582
Devonshire Street, Boston, Massachusetts 02109. Edward C. Johnson 3d,
Chairman of FMR Corp., has reported beneficial ownership of the shares
reported herein, as well.
PH02/81834.2
<PAGE>
(13) Reflects holdings reported in Schedule 13G as of December 13, 1994. The
beneficial owner's address is One Post Office Square, Boston, Massachusetts
02109. Beneficial ownership of the shares listed herein consists
exclusively of shared voting and dispositive power.
(14) Reflects holdings reported in Schedule 13G as of December 13, 1994. The
beneficial owners' address is 1166 Avenue of the Americas, New York, New
York 10036.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Griffin Group License Agreement
The Company and The Griffin Group entered into a License and Services
Agreement (the "Griffin License") on December 8, 1992, which was modified in
June 1993, under which the Company has the right to use the name and likeness of
Mr. Griffin in television, radio, outdoor media and print advertisements. The
Griffin License covers all Company riverboat and dockside casinos. Mr. Griffin
also agreed to serve as the spokesperson for the Company's casinos and to render
other marketing and consulting services, including personal appearances and
participation in events.
The Company has the exclusive right to Mr. Griffin's services and the use
of his name and likeness in the riverboat and dockside casino industry, except
that he reserves the right to represent casinos that are part of Griffin Gaming
& Entertainment, Inc. (formerly known as Resorts International, Inc., "GG&E").
Mr. Griffin's only current commitment to GG&E relates to its land based casino
in Atlantic City, New Jersey, although GG&E is believed to be examining the
possibility of acquiring or developing casinos at one or more locations. Mr.
Griffin is Chairman of the Board and a significant stockholder of GG&E.
As consideration for the license, the Company issued warrants to The
Griffin Group covering 2,100,000 shares of the Company's Common Stock,
exercisable at $2.67 per share (the "License Warrants"). The License Warrants
vest and become exercisable to the extent of 525,000 shares on the commencement
of each year of the term of the Griffin License, and they expire on December 31,
1996.
The Griffin Group will be entitled to a minimum fee of $50,000 per year for
each Company riverboat casino, except that such fee does not apply to the
Company's riverboat at Metropolis, Illinois and the Company's original Lake
Charles, Louisiana riverboat during the initial four-year term of the Griffin
License. The Griffin Group also will be entitled to compensation for each
casino, except at the Company's Metropolis riverboat and the Company's original
Lake Charles riverboat during the initial four-year term of the Griffin License,
based upon a percentage of earnings per fiscal year before depreciation,
interest and taxes ("EBDIT") of that riverboat casino complex (as defined), in
the following cumulative amounts: to the extent that EBDIT per complex is $15
million or less, the payment is two-thirds of 1% of EBDIT (against which any
minimum of $50,000 payment for the particular riverboat will be credited); to
the extent that EBDIT per complex is more than $15 million but no more than $30
million, the additional payment is 1% of EBDIT in excess of $15 million; and to
the extent that EBDIT per complex is more than $30 million, the additional
payments will be 1 1/2% of EBDIT in excess of $30 million. It is also entitled
to reimbursement of certain expenses and indemnification against certain claims.
As of August 11, 1995, the Company has not paid any cash compensation to The
Griffin Group under this arrangement. The Company and The Griffin Group are
negotiating the terms of the EBDIT-based license fee applicable to the Company's
Star riverboat, which opened in Lake Charles in April 1995, and the Players
Island Resort, a land-based facility in Mesquite, Nevada which opened in June
1995.
Mr. Griffin will be entitled to additional compensation, as negotiated in
good faith, if he hosts, produces or performs in any shows at a Company casino.
PH02/81834.2
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The Company has the option to renew the Griffin License indefinitely from
year-to-year after expiration of the initial term on December 31, 1996. If Mr.
Griffin dies or becomes disabled, the compensation of The Griffin Group remains
unchanged for the balance of the then current term. If the Company elects to
renew the agreement thereafter, then the compensation the Company will be
required to pay is only a $50,000 annual fee per complex, but not the
EBDIT-based fee. The Griffin Group may terminate the Griffin License (i) if the
Company commits certain improprieties, (ii) as a result of defaults under the
Griffin License or (iii) as a result of a "Change in Control" (as defined) of
the Company. The Company has certain limited rights to terminate the Griffin
License.
During Fiscal 1994, the Company paid $75,000 and gave options to purchase
15,000 shares exercisable at $13.25 per share to a hotel consultant who
introduced the Company to the possibility of developing a riverboat casino
complex in Lake Charles adjacent to the Downtowner Hotel (now known as the
Players Hotel) and who assisted the Company in negotiating and evaluating the
option agreement for its Lake Charles site. Subsequent to performing his
introductory services, the consultant became an officer of The Griffin Group.
The Company and a subsidiary completed a private placement of units of
securities in June 1992 in connection with the financing of the riverboat casino
at Metropolis, Illinois. The units consisted of exchangeable debentures of the
Company's Metropolis riverboat operating subsidiary (the "Debentures," issued in
two series, the "Series A Debentures" and the "Series B Debentures") and
warrants to purchase shares of the Company's Common Stock. The Debentures were
exchangeable into shares of the Company's Common Stock at the rate of 417 shares
of Common Stock per $1,000 principal amount of Debentures (approximately $2.46
principal amount of Debentures per share of Common Stock). As a result of the
Debentures being called for redemption, all of the Debentures were exchanged for
an aggregate of 2,082,705 shares of the Company's Common Stock on or shortly
before the redemption date of June 28, 1993. The warrants issued by the Company
permitted the purchase of shares of the Company's Common Stock at $2.46 per
share prior to the date the Metropolis riverboat casino commenced operations and
thereafter at $3.00 per share. The warrants expired February 23, 1995.
The purchase price per unit as well as the features of the Debentures and
the warrants were determined in the first instance pursuant to arms-length
negotiations between the Company and The Griffin Group, which purchased all
$2,250,000 principal amount of Series A Debentures that were issued and also
warrants to purchase 2,922,000 shares of Common Stock for an aggregate purchase
price of $2,250,000. Prior to its purchase in the private placement, The Griffin
Group was not a substantial investor in the Company, did not have a
representative on the Company's Board of Directors and had not entered into the
Griffin License. Warrants were issued in the units with Series A Debentures to
The Griffin Group at the rate of approximately one warrant to purchase 1,299
shares for each $1,000 principal amount of Debentures.
The remainder of the purchasers in the June 1992 private placement
purchased Series B Debentures and warrants for a total consideration of
$3,565,000. The Series B Debentures were substantially identical to the Series A
Debentures. Investors in the units containing Series B Debentures received
warrants to purchase approximately 342 shares (as compared to warrants to
purchase 1,299 shares issued to The Griffin Group) for each $1,000 principal
amount of Debentures. Each of Edward Fishman, David Fishman, Stanley Harfenist
(a former officer and director of the Company), Howard Goldberg (who was then a
director but not an officer of the Company), Stanley Fishman (a former director
of the Company) and Bruce Allbright (a former director of the Company) purchased
$100,000 principal amount of Series B Debentures and received warrants to
purchase 51,294 shares of Common Stock. Messrs. Marshall Geller, Harvey Goldberg
(a former officer of the Company) and Peter Aranow (who was not then a Company
officer) purchased $350,000, $50,000 and $50,000 principal amount of Series B
Debentures, respectively, and received warrants to purchase 179,529, 25,467 and
25,647 shares, respectively. The total investment by current and former Company
directors and officers was $1,050,000. Other investors who were not directors or
officers of the Company (some of whom were related to one or more current or
former directors or officers) purchased units identical to those purchased by
the directors and officers for the same consideration per unit paid by the
directors and officers.
PH02/81834.2
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Transactions With MII
During the year ended March 31, 1995, the Company purchased approximately
$306,000 of merchandise from Marketing Innovations International, Inc. ("MII").
Edward and David Fishman, along with their brother, Stanley Fishman (who
resigned as a director of the Company effective March 31, 1994), own a majority
of the common stock of MII. The Company expects to continue to purchase
merchandise from MII. In the opinion of the Company, the merchandise purchased
from MII is at prices comparable to that which could have been obtained from
unaffiliated vendors for comparable merchandise.
Legal Fees
The law firm of Horn, Goldberg, Gorny, Daniels, Plackter & Weiss performed
legal services for the Company during Fiscal 1995 for which it was paid fees in
the aggregate amount of $1,293,000. Mr. Howard Goldberg was an active member of
the firm through May 1993, when he became President of the Company. Mr. Goldberg
remains associated with Horn, Goldberg, but he does not currently engage in any
firm-related activities other than on an occasional and incidental basis. The
amount of the payments due to him from the firm are not affected by fees paid by
the Company to the firm. The Company believes that the fees paid to the firm for
the foregoing legal services were no less favorable to the Company than the fees
that could have been obtained from unaffiliated parties for comparable services.
Consulting Arrangement with Mr. Seidler
Mr. Seidler was engaged to render special services to assist the Company in
obtaining one or more gaming licenses in the State of Florida. Under such
arrangement, the Company agreed to pay a retainer of $10,000 per month from
February through September 1994, after which the Company exercised its option to
discontinue the monthly retainer. The Company paid Mr. Seidler a total of
$70,000 under the arrangement. If Mr. Seidler had obtained Florida gaming
licenses as a result of such efforts, he would have been entitled to five-year
options to purchase 150,000 shares of the Company's Common Stock exercisable at
the fair market value of the stock on the option issuance date ("Consulting
Options"). Mr. Seidler's right to receive Consulting Options for Florida
development projects has terminated. However, the Board of Directors of the
Company has approved an arrangement with Mr. Seidler for consulting services to
assist the Company in obtaining a gaming license in Canada. Under such
arrangement, the Company would pay Mr. Seidler $250,000 for the receipt of a
Canadian gaming license and would pay $100,000 per year thereafter for each year
that the Company is involved in the ownership or management of such casino.
PH02/81834.2
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
PLAYERS INTERNATIONAL, INC.
Date: July 28, 1995 By: /s/ Peter J. Aranow
_________________________________
Peter J. Aranow
Executive Vice President
Chief Financial Officer
and Secretary
By: /s/ Stephen Radusch
_________________________________
Stephen Radusch
Controller
<PAGE>
