PLAYERS INTERNATIONAL, INC.
1300 ATLANTIC AVENUE, SUITE 800
ATLANTIC CITY, NEW JERSEY 08401
------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
------------------------
TO BE HELD ON OCTOBER 16, 1997 AT 10:00 A.M.
AT THE RIVERPORT CASINO CENTER
777 CASINO CENTER DRIVE
MARYLAND HEIGHTS, MISSOURI
------------------------
The Annual Meeting of Stockholders (the "Meeting") of Players
International, Inc. (the "Company") will be held on Thursday,
October 16, 1997, at the Riverport Casino Center, 777 Casino
Center Drive, Maryland Heights, Missouri to elect ten directors
to hold office as specified in the proxy statement.
The close of business on Tuesday, August 19, 1997, has been
fixed as the record date for the Meeting. Only stockholders of
record as of the close of business on such date will be entitled
to notice of and to vote at the Meeting and any adjournments or
postponements thereof.
The enclosed proxy is solicited by the Board of Directors of
the Company. Reference is made to the attached proxy statement
for further information with respect to the business to be
transacted at the Meeting.
You are cordially invited to attend the Meeting. If you do not
expect to attend the Meeting in person, please mark, sign and
date the enclosed proxy and mail it promptly to the Secretary in
the enclosed envelope. The return of the enclosed proxy will not
affect your right to vote in person if you do attend the Meeting.
Peter J. Aranow
Secretary
Dated: August 27, 1997
<PAGE>
PLAYERS INTERNATIONAL, INC.
1300 ATLANTIC AVENUE, SUITE 800
ATLANTIC CITY, NEW JERSEY 08401
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON THURSDAY, OCTOBER 16, 1997
------------------------
GENERAL
This proxy statement is furnished in connection with the
solicitation of proxies by the Board of Directors of Players
International, Inc. (the "Company") for use at the Company's
Annual Meeting of Stockholders (the "Meeting") to be held on
Thursday, October 16, 1997 at 10:00 a.m. at the Riverport Casino
Center, 777 Casino Center Drive, Maryland Heights, Missouri, for
the purposes set forth in the foregoing notice. This proxy
statement, the foregoing notice and the enclosed proxy are being
sent to stockholders commencing on or about August 27,
1997.
The Board of Directors does not intend to bring any matters
before the Meeting except those indicated in this notice and does
not know of any matter that anyone else proposes to present for
action at the Meeting. If any other matters properly come before
the Meeting, however, the persons named in the enclosed proxy, or
their duly constituted substitutes acting at the Meeting, will be
authorized to vote or otherwise act thereon in accordance with
their judgment on such matters.
If the enclosed proxy is properly executed and returned prior
to voting at the Meeting, the shares represented thereby will be
voted in accordance with the instructions marked thereon. In the
absence of instructions, the shares will be voted "FOR" the
nominees of the Board of Directors in the election of directors.
Any proxy may be revoked at any time prior to its exercise by
notifying the Secretary of the Company in writing, by delivering
a duly executed proxy bearing a later date or by attending the
Meeting and voting in person.
CHANGES TO THE BOARD OF DIRECTORS
Effective February 20, 1997, Mr. Jay Green resigned from the
Board of Directors of the Company because of his other
professional and personal commitments. Mr. Thomas E. Gallagher
has informed the Company that he will not stand for re-election
to the Board of Directors. Effective July 1, 1997, Mr. Gallagher
became the Executive Vice President and General Counsel to Hilton
Hotels Corporation. The extent of Mr. Gallagher's new
professional commitments do not allow him sufficient time to
continue his services on the Company's Board of Directors.
The Board of Directors of the Company, at its meeting held
Thursday, August 7, 1997, voted to expand the Board of Directors from
nine members to ten effective as of the date of the Company's Annual Meeting
to be held October 16, 1997. At the August 7, 1997 meeting, the
Board of Directors also nominated Messrs. John Groom, Vincent J.
Naimoli and Alan R. Buggy for election to the Board of Directors
to fill the vacancies resulting from the resignation of Mr.
Green, the decision of Mr. Gallagher not to stand for re-election
and the creation of a new directorship. If elected, Messrs.
Groom, Naimoli and Buggy will serve as directors with the
remaining incumbent directors until the next annual meeting of
stockholders. See "Election of Directors."
<PAGE>
OUTSTANDING SHARES, VOTING RIGHTS
AND STOCKHOLDINGS OF CERTAIN PERSONS
At the close of business on Tuesday, August 19, 1997, the record date fixed
for the determination of stockholders entitled to notice of and
to vote at the Meeting, there were outstanding 32,563,312 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 Tuesday, August 19, 1997, will be entitled to vote at
the Meeting. 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.
Shares presented at the Meeting in person or by proxy but not
voted will nevertheless be counted for purposes of determining
the presence of a quorum. Accordingly, abstentions and broker non-
votes (i.e., shares as to which a broker or nominee has indicated
that it does not have discretionary authority to vote) on a
particular matter will be treated as shares that are present and
entitled to vote for purposes of determining the presence of a
quorum. Directors will be elected by a plurality of the votes
cast and, therefore, abstentions and broker non-votes will have
no impact on such vote. Each share of Common Stock is entitled to
one vote, without cumulation, on each matter to be voted upon at
the Meeting. All information concerning Common Stock presented
herein reflects the effects of a three-for-two Common Stock split
paid to stockholders of record as of May 8, 1995.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of the close of business on
August 19, 1997, certain information with respect to the
beneficial ownership of Common Stock: (i) by each director,
nominee and executive officer of the Company; (ii) by all
executive officers, nominees and directors, as a group; and (iii)
by 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 (the "Exchange Act"), of more than 5% of the
Common Stock. As noted below, certain ownership information is
presented as of December 31, 1996, 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>
NUMBER OF SHARES PERCENT OF CLASS
BENEFICIALLY OWNED BENEFICIALLY OWNED
NAME OF BENEFICIAL OWNER(1)
<S> <C> <C>
The Griffin Group, Inc...................... 4,267,350(2) 13.1%
Edward Fishman.............................. 1,701,843(3) 5.2%
Howard Goldberg............................. 880,380(4) 2.7%
John Groom.................................. 181,500(5) *
Peter J. Aranow............................. 310,000(6) *
Patrick Madamba, Jr......................... 6,000(7) *
Thomas Gallagher............................ 1,084,800(8) 3.3%
Lee Seidler................................. 179,000(9) *
Marshall S. Geller.......................... 195,377(10) *
Lawrence Cohen.............................. 232,350(11) *
Earl E. Webb................................ 11,250(12) *
Charles M. Masson........................... 11,250(13) *
Vincent J. Naimoli.......................... 0(14) *
Alan R. Buggy............................... 0(14) *
All directors, nominees and executive
officers as a group (13 persons)............ 4,793,750(15) 14.1%
Legg Mason, Inc............................. 2,521,500(16) 7.7%
Neuberger & Berman, LLC..................... 1,631,300(17) 5.0%
</TABLE>
- ------------------
* Less than 1%.
<PAGE>
(1) The address of The Griffin Group, Inc. ("Griffin Group") is
780 Third Avenue, Suite 1801, New York, New York 10017. The address for
Edward Fishman, Howard Goldberg, John Groom, Peter Aranow and
Patrick Madamba, Jr. is c/o Players International, Inc., 1300
Atlantic Avenue, Suite 800, Atlantic City, New Jersey 08401.
The address for Thomas Gallagher is c/o Hilton Hotels
Corporation, Legal Division, 9336 Pacific Center Drive, Beverly Hills,
CA 90210. The address for Lee Seidler is c/o Bear
Stearns & Co. Inc., 12th Floor -- Research, 245 Park Avenue, New
York, New York 10167. The address for Marshall Geller is c/o
Geller & Friend Capital Partners, Inc., 1875 Century Park East,
#2300, Los Angeles, California 90067. The address for Lawrence
Cohen is c/o The Griffin Group, Inc., 780 Third Avenue, Suite
1801, New York, New York 10017. The address for Earl E. Webb is
c/o LaSalle Partners Limited, 200 East Randolph Drive, Chicago,
Illinois 60601. The address for Charles M. Masson is 200 East
84th Street, New York, New York 10028. The address for Vincent J.
Naimoli is c/o Anchor Industries International, Inc., 2502 North
Rocky Point Drive, Suite 960, Tampa, Florida 33607-1421. The
address for Alan R. Buggy is c/o The Beverly Hilton Hotel, 9876
Wilshire Boulevard, Beverly Hills, California 90210. All of the
individuals named in the table, except John Groom, Peter J.
Aranow, Patrick Madamba, Jr., Vincent Naimoli and Alan R. Buggy
are directors of the Company as of August 18, 1997. The address for
Legg Mason is 111 South Calvert Street, Baltimore, Maryland
21202. The address for Neuberger & Berman, LLC is 605 Third
Avenue, New York, New York 10158-3698.
(2) Based upon information contained in Amendment No. 3 to
Schedule 13D, dated January 31, 1997, as filed with the SEC.
The holdings do not include the holdings of Lawrence Cohen, President
and Chief Executive Officer of The Griffin Group.
(3) Includes 150,000 shares that are subject to options that are exercisable
within 60 days of August 19, 1997 ("currently exercisable") and
60,000 shares held in trust in the name of Edward Fishman's children.
(4) Includes 18,267 shares held in trust and in the name of Mr. Goldberg's
family members and 521,250 shares that are subject to currently
exercisable options.
(5) Includes 40,000 shares that are subject to currently exercisable options
and 10,000 shares held in trust for Mr. Groom's children.
(6) Includes 295,000 shares that are subject to currently
exercisable options.
(7) Includes 6,000 shares that are subject to currently exercisable
options.
(8) Includes 135,000 shares that are subject to currently
exercisable options.
(9) Includes 135,000 shares that are subject to currently exercisable
options. Does not include 5,000 shares subject to options to be
granted upon re-election, nor the vesting of 11,250 shares
subject to options which will vest upon re-election.
(10) Includes 152,877 shares that are subject to currently
exercisable options. Does not include 5,000 shares subject to
options to be granted upon re-election, nor the vesting of
11,250 shares subject to options which will vest upon re-election.
(11) Includes 11,250 shares that are subject to currently
exercisable options. Does not include 5,000 shares subject to
options to be granted upon re-election, nor the vesting of
11,250 shares subject to options which will vest upon re-election.
(12) Includes 11,250 shares that are subject to currently
exercisable options. Does not include 5,000 shares subject to
options to be granted upon re-election, nor the vesting of
11,250 shares subject to options which will vest upon re-election.
(13) Includes 11,250 shares that are subject to currently exercisable
options. Does not include 5,000 shares subject to options to be granted
upon re-election, nor the vesting of 11,250 shares subject to options
which will vest upon re-election.
(14) Does not include 22,500 shares subject to options to be
granted in the event of election, fifty percent (50%) of which
will immediately vest.
(15) Includes 1,468,877 shares that are subject to currently
exercisable options.
(16) Reflects holdings as of December 31, 1996 reported in
Schedule 13G filed with the SEC. The beneficial owner's address
is 111 South Calvert Street, Baltimore, Maryland 21202. Of the
shares listed, 2,400,000 shares are held by Legg Mason Special
Investment Trust, Inc., with Legg Mason Fund Advisor, Inc. having power
to dispose thereof. The remaining shares are held by various clients of
Legg Mason Managed Investment Portfolio and Legg Mason Capital Management,
Inc., which have power to dispose thereof.
(17) Reflects holdings as of December 31, 1996 reported in
Amendment No. 1 to Schedule 13G filed with the SEC. The
beneficial owner's address is 605 Third Avenue, New York, New York
10158-3698. Includes 49,000 shares subject to sole voting power, 1,545,000
shares subject to shared voting power and 1,631,000 shares subject to
sole dispositive power.
<PAGE>
ELECTION OF DIRECTORS
At the Meeting, the stockholders will elect ten (10) directors to
hold office, subject to the provisions of the Company's by-laws, until
the next Annual Meeting of Stockholders and until their
respective successors shall have been duly elected and qualified.
Unless contrary instructions are given, the shares represented by
the enclosed proxy will be voted "FOR" the election of the
nominees set forth below. Proxies cannot be voted for a greater
number of directors than the number of nominees named.
Stockholders are not entitled to vote cumulatively in electing
directors.
Each nominee has consented to being named in the proxy
statement and to serve if elected. However, if any nominee at the time of his
election is unable or unwilling to serve or is otherwise
unavailable for election, and as a result another nominee is
designated by the Board of Directors, the persons named in the
enclosed proxy, or their substitutes, will have discretion and
authority to vote or refrain from voting for such nominee in
accordance with their judgment.
Each Company director may be required to be licensed or qualified
to serve as a director of the Company by the gaming regulatory authorities
in the jurisdictions in which the Company does business. All
nominees, except Messrs. Groom, Naimoli and Buggy, are incumbent
directors who have already met these requirements with respect to
the Company. Messrs. Groom and Naimoli have been licensed or
otherwise approved to be involved in gaming companies by
regulators in one or more jurisdictions. In the event that any
regulatory authority having jurisdiction over the Company finds a
director unsuitable for directorship, the director shall become
ineligible to serve on the Board of Directors and a majority of
the remaining directors may appoint a qualified replacement to
serve as a director.
The nominees for election as directors, together with certain
information about them, are as follows:
<TABLE>
<CAPTION>
PRESENT POSITION
NAME WITH THE COMPANY SINCE AGE
---- ---------------- ----- ---
<S> <C> <C> <C>
Edward Fishman........ Chairman of the Board of Directors 1985 54
Howard Goldberg....... President, Chief Executive Officer
and Director 1986 52
John Groom(1)......... Executive Vice President and
Chief Operating Officer 1996 52
Marshall S. Geller(2) Director 1989 58
Lee Seidler(3)........ Director 1987 62
Charles Masson........ Director 1996 44
Earl Webb(2).......... Director 1996 41
Lawrence Cohen (2) (3) Director 1996 39
Vincent J. Naimoli (1) Nominated for Director -- 59
Alan R. Buggy(1)...... Nominated for Director -- 48
</TABLE>
- ------------------
(1) Nominated on August 7, 1997 for election to the Board of Directors.
(2) Member of the Compensation Committee, of which Mr. Webb is Chairman.
(3) Member of the Audit Committee, of which Mr. Seidler is Chairman.
EDWARD FISHMAN has served as Chairman of the Board of the
Company since 1985. He served as Chief Executive Officer from 1985 until
December, 1995 and served as President during May, 1993. Prior to
his retirement as an active Company employee in September, 1996,
his principal activities for the Company related to marketing,
long-range development and strategic planning. He has 18 years of
marketing experience in the casino industry and he has served as
a marketing and strategic planning consultant to casinos
throughout the world.
HOWARD GOLDBERG became President and Chief Operating Officer of the Company
in May, 1993, and then became Chief Executive Officer in
December, 1995. Prior to joining the Company, he was the managing
shareholder practicing law in the Atlantic City, New Jersey law
firm of Horn, Goldberg, Gorny, Plackter, Weiss & Perskie ("Horn,
Goldberg"), which 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's name remains a part of the firm name of Horn,
Goldberg, but he does not currently engage in any firmrelated
activities or matters. The amount of any payments due him from
the firm is not affected by or dependent upon fees paid by the
Company to Horn, Goldberg.
<PAGE>
JOHN GROOM joined the Company as Executive Vice President,
Operations in January, 1996 and became Chief Operating Officer of
the Company in September, 1996. From May, 1979 until January,
1995, Mr. Groom served in various executive management positions
within the Caesars organization at Caesars Atlantic City and
Caesars Palace Las Vegas.
MARSHALL S. GELLER is the Chairman, Chief Executive Officer and
founding partner of Geller & Friend Capital Partners, Inc., a
merchant banking investment company. He was formerly interim
President and Chief Operating Officer of the Company from
November, 1992, through April, 1993, and now serves as a member
of the Compensation Committee of the Company, of which he was
Chairman from September, 1995 to September, 1996. From 1991
through 1995, Mr. Geller was the Senior Managing Partner and
founder of Golenberg & Geller, Inc., a merchant banking
investment company. 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 a director, and was formerly the interim Co-
Chairman, of Hexcel Corporation. Mr. Geller is a director of
Value Vision International, Inc. and serves as Chairman of its
Investment Committee. He also serves on the Boards of Ballantyne
of Omaha, Inc. and Cabletel Communications Corporation.
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. Mr. Seidler is the Chairman of the
Company's Audit Committee. Mr. Seidler was a Professor of
Accounting and Price Waterhouse Professor of Auditing at New York
University from 1965 to 1985.
CHARLES M. MASSON is an independent consultant and has been
President of McCloud Partners, a private advisory firm in New
York City since 1993. He served as the Chairman of the Board of
Directors of Cadillac Fairview Corporation Limited, a real estate
management and development company from September, 1994 through
August, 1995, as a director of Salomon Brothers Inc from 1991
through May, 1993, and as Vice President of Salomon Brothers Inc
from 1990 through 1993. Mr. Masson served as a director of
Griffin Gaming & Entertainment, Inc. (formerly Resorts
International, Inc.) ("GG&E") from November, 1993 until December,
1996. Mr. Masson served as a director of Color Tile, Inc. from
August, 1996 until July, 1997.
EARL E. WEBB is the head of LaSalle Partners' Investment
Banking Group,which provides real estate acquisition, disposition and
financing services to clients that include domestic and foreign
corporations, pension funds, developers and financial
institutions. He serves on the Board of Directors of LaSalle
Partners and as a member of its Management Committee. Mr. Webb
serves as the Chairman of the Company's Compensation Committee.
LAWRENCE COHEN has served as President and Chief Executive
Officer of the Griffin Group since July 1, 1997. From 1988 to
June, 1997, he served as Executive Vice President and Chief
Financial Officer of The Griffin Group. From 1986 to 1988, he was
Assistant Corporate Controller of Columbia Pictures
Entertainment, Inc. Prior to 1986, Mr. Cohen was with the
accounting firm of Paneth, Haber & Zimmerman. He also served as a Director of
Resorts International Hotel, Inc. from 1994 to December, 1996.
From 1994 until July, 1996, Mr. Cohen served as a Director of
Liberty Broadcasting, Inc., a privately held broadcasting
company. Mr. Cohen is a member of the Company's Audit and
Compensation Committees.
VINCENT J. NAIMOLI has served as Chairman, President and Chief
Executive Officer of Anchor Industries International, Inc., a
multi-industry, operating, holding and financial services company
since 1989 and as the Managing General Partner and Chief
Executive Officer of the Tampa Bay Devil Rays since 1995. Mr. Naimoli
served as a Director of GG&E from May 1994 to December 1996, as Chairman,
President and Chief Executive Officer of Doehler-Jarvis, Inc. from 1991 to
1995, a designer and manufacturer of precision aluminum castings, as Chairman,
President and Chief Executive Officer of Harvard Industries,
Inc., an automotive components company, from 1993 to 1997, and as
Chairman, President and Chief Executive Officer of Ladish
Company, Inc., a manufacturer of forged titanium and other metal
components, from 1993 to 1995. He serves on the Board of
Directors of Florida Progress Corporation, Russell-Stanley
Corporation and Simplicity Pattern Company, Inc.
<PAGE>
ALAN R. BUGGY has served as Managing Director of Price
Waterhouse since 1994. From 1990 to 1993, Mr. Buggy served as
Executive Chairman of ITC Entertainment Group. Mr. Buggy also served as
Managing Director of Samuel Montagu, Inc., a merchant banking firm, from
1983 to 1990. From 1982 to 1983, he served as Senior Vice
President of American Scandinavian Bank, managing the corporate
finance and treasury divisions.
COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS
The Board of Directors has permanent Audit and Compensation
Committees. The membership and chairmanship of each of these
Committees are determined from time to time by the Board of
Directors. However, only directors who are not employed by the
Company ("Non-employee Directors") may serve on the Audit
Committee and the Compensation Committee.
The Audit Committee held eleven meetings during the fiscal year ended March
31, 1997 ("Fiscal 1997") and the Compensation Committee held
eight meetings during Fiscal 1997. During the course of Fiscal
1997, the members of both Committees also held informal
discussions about Committee business.
The Audit Committee's functions include: providing an avenue of
communication among the Company's independent accountants, its
management and the Board of Directors; recommending independent
accountants and approving their compensation and services;
considering the audit scope and plan; reviewing with management
and the independent accountants the annual financial statements
and matters relating to the audit; reviewing other matters
relating to the Company's auditing procedures, and reviewing the
adequacy of various internal controls and procedures. The
Company's Internal Audit Department reports directly to the Audit
Committee. The Audit Committee continually reviews the plans,
scope and work of the Internal Audit Department.
The Compensation Committee's functions include: making
recommendations regarding all forms of compensation to be paid to
the executive officers; establishing goals for executive
compensation policies and monitoring the extent to which
performance by executive officers fulfills such goals; and
administering the Company's various stock option and stock
incentive plans, including the determination of awards to be made
under such plans.
The Board of Directors does not have a standing Nominating
Committee. The functions of a nominating committee are carried
out by the Board of Directors as a whole.
The Company's Board of Directors met eighteen times during
Fiscal 1997, including telephonic meetings. No member of the Board of
Directors participated in fewer than 75% of the aggregate of the
total number of meetings of the Board of Directors and the total
number of meetings held by all committees on which such director
served.
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following summary compensation table sets forth, for the
Company's last three fiscal years, the compensation paid by the
Company to: (i) the Company's Chief Executive Officer and the
other four most highly compensated executive officers as of March
31, 1997, (ii) Edward Fishman, who served as executive Chairman
of the Company through September 9, 1996 and (iii) David Fishman
and Steven P. Perskie, who served as executive officers of the
Company during a part of Fiscal 1997 (the individuals referred to
in clauses (i)-(iii) are collectively referred to herein as, the
"Named Executives"):
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
FISCAL
YEAR SECURITIES
NAME AND PRINCIPAL ENDING UNDERLYING ALL OTHER
POSITION MARCH 31, SALARY BONUS OPTIONS COMPENSATION
<S> <C> <C> <C> <C> <C>
Edward Fishman ...... 1997 $221,918(1) -- -- $2,000,000(2)
Chairman of the Board 1996 500,000 -- -- --
1995 500,000 -- 600,000(3) --
Howard Goldberg ..... 1997 $475,000 -- 600,000(4) --
President,
Chief Executive
Officer and Director 1996 500,000 -- -- --
1995 500,000 $250,000 600,000(3) --
Peter J. Aranow(5) .. 1997 $300,000 -- 150,000(6) --
Executive Vice
President-Finance
and Secretary 1996 350,000 -- 25,000(7) --
1995 300,000 $150,000 45,000(8) --
John Groom .......... 1997 $300,000 -- 100,000(9) --
Executive Vice
President, Chief
Operating Officer 1996 54,918(10) -- 100,000(11) --
1995 -- -- -- --
Patrick Madamba, Jr. 1997 $139,829 -- 15,000(12) --
Vice President
and General Counsel 1996 127,356 $ 25,000 7,500(13) --
1995 23,288(10) -- 15,000(14) --
David Fishman ...... 1997 221,918(1) -- -- $2,000,000(2)
Former Vice Chairman of
the Board and Director 1996 500,000 -- -- --
1995 500,000 -- 600,000(3) --
Steven P. Perskie.... 1997 $168,493(1) -- 50,000(15) $ 56,000(16)
Former Executive
Vice President,
General Counsel 1996 325,000 -- 25,000(17) --
and Director 1995 122,019(10) -- 150,000(18) --
Henry M. Applegate,
III(5) ..... ........ 1997 $200,000 -- 50,000(19) --
Sr. Vice President and
Chief Financial 1996 7,650(10) -- 50,000(20) --
Officer 1995 -- -- -- --
- --------
</TABLE>
(1) Reflects compensation through retirement date of September 9, 1996
for Edward and David Fishman and December 2, 1996 for Steven P. Perskie.
(2) Pursuant to their retirement agreements, Edward and David Fishman
each received $500,000 in cash in September, 1996 and elected in
March, 1997, to receive 301,884 shares each of Common Stock, with a market
value of $1,500,000 at such time, in lieu of their remaining cash
payments of $1,500,000 (see "Retirement, Employment and Change
of Control Agreements").
<PAGE>
(3) Includes 150,000 shares subject to options granted on April
14, 1994, with an exercise price of $11.50 per share and
450,000 shares subject to options granted on March 1, 1995,
with an exercise price of $16.50 per share. With respect to
each of Edward and David Fishman, 150,000 options to purchase
Common Stock at $11.50 per share and 90,000 options to purchase
Common Stock at $16.50 per share will remain outstanding for certain
specified periods following their retirement date of September 9, 1996,
and the remaining options depicted above expired unexercised.
Mr. Goldberg's options depicted above have been canceled. (see
"Compensation Committee Report on Repricing of Options" and "Retirement,
Employment and Change Of Control Agreements").
(4) Includes 375,000 shares subject to options granted on
September 19, 1996, with an exercise price of $7.70 per share.
These options vested upon their granting. Also, includes
225,000 shares subject to options granted on September 19,
1996, with an exercise price of $8.47 (see "Compensation
Committee Report on Repricing of Options"). These options vest
20% on the date of the grant and on each of the first through
fourth anniversaries of the date of the grant.
(5) Mr. Aranow became the Chief Financial Officer of the Company
effective August 15, 1997, following Mr. Henry M. Applegate's
resignation as Senior Vice President and Chief Financial
Officer of the Company.
(6) Includes 50,000 shares subject to options and 100,000 Stock
Appreciation Rights granted on September 19, 1996, with an
exercise price of $7.70 per share. The shares subject to
options vest 20% on the date of grant and on each of the first
through fourth anniversaries of the date of the grant.
(7) Includes 25,000 shares subject to options granted on
November 17, 1995 with an exercise price of $13.56 per share.
The options vest 20% on each of the first through fifth
anniversaries of the date of the grant.
(8) Includes 45,000 shares subject to options granted on April
14, 1994, with an exercise price of $11.50 per share. 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 the grant.
(9) Includes 100,000 shares subject to options granted on
September 19, 1996, with an exercise price of $7.00 per share.
The options vest 20% on each of the first through fifth
anniversaries of the date of the grant.
(10) Represents fiscal year compensation following January 25,
1996 for John Groom, March 18, 1996 for Henry M. Applegate,
III, January 23, 1995 for Patrick Madamba, Jr. and May 2, 1994
for Steven P. Perskie, the dates when each became an employee
of the Company.
(11) Includes 100,000 shares subject to options granted on
January 24, 1996, with an exercise price of $9.25 per share.
The options vest 20% on each of the first through fifth
anniversaries of the date of the grant.
(12) Includes 15,000 shares subject to options granted on
September 19, 1996, with an exercise price of $7.70 per share.
The options vest 20% on date of the grant and on each of the
first through fourth anniversaries of the date of grant (see
"Compensation Committee Report on Repricing of Options").
(13) Includes 7,500 shares subject to options granted on November
17, 1995, with an exercise price of $13.56 per share. The
options have been canceled (see "Compensation Committee Report
on Repricing of Options").
(14) Includes 15,000 shares subject to options granted on January
23, 1995, with an exercise price of $13.96 per share. The
options have been canceled (see "Compensation Committee Report
on Repricing of Options").
(15) Includes 50,000 shares subject to options granted on
September 19, 1996, with an exercise price of $7.70 per share.
The options vest 20% on date of the grant and on each of the first
through fourth anniversaries of the date of the grant (see
"Compensation Committee Report on Repricing of Options").
(16) Pursuant to Mr. Perskie's retirement agreement, Mr. Perskie
received $48,000 in severance benefits in Fiscal 1997. An
additional $8,000 was received pursuant to his consulting
agreement. Under these agreements with the Company, Mr. Perskie
receives monthly payments of $8,000 and $2,000 respectively
through December, 1998.
(17) Includes 25,000 shares subject to options granted on
November 17, 1995, with an exercise price of $13.56 per share.
The options have been canceled (see "Compensation Committee
Report on Repricing of Options").
(18) Includes 150,000 shares subject to options granted on May 2,
1994, with an exercise price of $13.25 per share. The options
have been canceled (see "Compensation Committee Report on
Repricing of Options").
(19) Includes 50,000 shares subject to options granted on
September 19, 1996, with an exercise price of $7.00 per share.
The options vest 20% on each of the first through fifth
anniversaries of the date of the grant.
(20) Includes 50,000 shares subject to options granted on March
27, 1996, with an exercise price of $10.00 per share. The
options vest 20% on each of the first through fifth
anniversaries of the date of the grant.
No other annual compensation or long-term incentive plan payouts
were paid during the fiscal year ended March 31, 1997.
<PAGE>
STOCK OPTION GRANTS
The following table relates to options granted to the Named Executives
during the fiscal year ended March 31, 1997.
<TABLE>
<CAPTION>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS POTENTIAL REALIZABLE VALUE
AT ASSUMED ANNUAL
% OF TOTAL RATES OF
OPTIONS STOCK PRICE
GRANTED TO EXERCISE APPRECIATION
OPTIONS EMPLOYEES IN PRICE EXPIRATION
NAME GRANTED FISCAL YEAR PER SHARE DATE 5% 10%
<S> <C> <C> <C> <C> <C> <C>
Edward Fishman ........ -- -- -- -- -- --
Howard Goldberg .......375,000 27.34 $7.70 10/1/99 $156,143 $617,340
225,000 16.41 8.47 9/19/01 104,394 630,803
Peter J. Aranow ....... 50,000 3.65 $7.70 9/19/01 61,699 178,679
100,000 7.29 $7.70 9/19/01 123,397 357,357
John Groom ............100,000(1) 7.29 $7.00 9/19/02(1) 193,397 427,357
Henry M. Applegate,
III(2) 50,000(1) 3.65 $7.00 9/19/02(1) 96,699 213,679
Patrick Madamba, Jr. .. 15,000 1.09 $7.70 9/19/01 18,510 53,604
David Fishman ......... -- -- -- -- -- --
Steven P. Perskie ..... 50,000 3.65 $7.70 9/19/01 61,699 178,679
</TABLE>
- --------
(1) Options vest in 20% increments on each of the first through
fifth anniversaries of September 19, 1996. These options expire on
September 19, 2001, except for the final vested increment, which expires
one year following vesting, on September 19, 2002.
(2) Resigned effective August 15, 1997.
STOCK OPTION EXERCISES
The following table relates to options exercised during the fiscal year
ended March 31, 1997 and options outstanding at the year end.
<TABLE>
<CAPTION>
AGGREGATED OPTION EXERCISES IN LAST
FISCAL YEAR AND FISCAL YEAR END OPTION VALUE
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT IN-THE-MONEY OPTIONS
SHARES MARCH 31, 1997 AT MARCH 31, 1997(2)
ACQUIRED ON VALUE
NAME EXERCISE REALIZED(1) EXERCISABLE/UNEXERCISABLE
UNEXERCISABLE/EXERCISABLE
<S> <C> <C> <C> <C> <C><C>
Edward Fishman ........ 301,884 1,500,000 150,000 -- -- --
Howard Goldberg ....... -- -- 476,250 180,000 -- --
Peter J. Aranow ....... -- -- 258,000 187,000 -- --
John Groom ............ -- -- 20,000 180,000 -- --
Henry M. Applegate(3) . -- -- 10,000 90,000 -- --
Patrick Madamba, Jr. .. -- -- 3,000 12,000 -- --
David Fishman ....... . 301,884 1,500,000 465,000 -- -- --
Steven P. Perskie ..... -- -- 10,000 40,000 -- --
</TABLE>
- --------
<PAGE>
(1) See Note 2 to Summary Compensation Table.
(2) Based upon the aggregate sum of the positive difference
between the NASDAQ National Market closing quotation for the
Common Stock on March 31, 1997 and the exercise price for each
option, no outstanding options have inherent value.
(3) Resigned effective August 15, 1997.
RETIREMENT, EMPLOYMENT AND CHANGE OF CONTROL AGREEMENTS
Edward Fishman and David Fishman Agreements. On September 9,
1996, the Company announced senior management changes and an
expansion of its Board of Directors, and in connection therewith,
Edward Fishman and David Fishman (the "Fishmans") retired from
the Company and executed separate agreements which became
effective on September 9, 1996 (the "Retirement Agreements").
Each of the Retirement Agreements provide the Fishmans with
certain severance benefits that took into account both their
historic and potential future amounts of total compensation.
See Executive Compensation -- Summary Compensation Table.
The cash amounts associated therewith would be payable in four equal
installments of $500,000, less tax withholding, as of September 17, 1996
and on each of the three succeeding anniversaries (the "Installment
Payments"), subject to acceleration in certain events described
below. The Fishmans each received the first Installment Payment
of $500,000 in September, 1996. With regard to each of the
Fishmans, the Company accelerated the vesting of outstanding
options to purchase 90,000 shares of Company Common Stock at
$11.50 per share, which options were scheduled to vest in full on
April 14, 1997. The Company also agreed that Edward Fishman could
exercise currently exercisable options through September 9, 1997,
and that David Fishman could exercise currently exercisable
options for a one-year period following the cessation of
consulting services on March 11, 1997 pursuant to his Retirement
Agreement. The Retirement Agreements also provide for
continuation, at current cost levels, of long-term care insurance
and medical insurance through age 65, with any increases in
future premiums payable by each of the Fishmans.
The Retirement Agreements provide that, subject to the consent
of the Company, each of the Fishmans may request that all or any
unpaid Installment Payment which was due or scheduled to become due in the
future be paid currently in the form of shares of Common Stock if written
notice of such election was delivered to the Company (which, when
given, represented the ("Stock Election Date") and such election
were not revoked prior to the close of business on the fourth
trading day following the Stock Election Date (the "Stock Payment
Date"). Any payment so authorized by the Company in the form of
Common Stock (a "Stock Payment") would be based upon the
following fair market valuation methodology: the number of shares
issuable pursuant to a Stock Payment shall be determined based on
the average reported high and low trading prices of the Common
Stock for each of the five trading days beginning on the Stock
Election Date and ending on the Stock Payment Date, less
applicable tax withholding; and any Stock Payment which satisfied
part of, but not all of, the total aggregate outstanding
Installment Payment deemed to satisfy the Installment Payment
amounts in their reverse order of due date. In March, 1997 the
Fishmans each elected to receive 301,884 shares of Common Stock
in lieu of their remaining Installment Payments of $1,500,000.
The Fishmans have agreed to become subject to certain
confidentiality, non-solicitation and non-competition agreements,
as part of the Retirement Agreements, which prohibit: (i) the
misuse of Company confidential information; (ii) the
solicitation, hiring, or the encouragement of any solicitation or
hiring of any managerial or high-level Company employee for one
year following execution of the Retirement Agreements; and (iii)
competition with the Company within certain geographic limits for
one year following execution of the Retirement Agreements.
The Company has entered into employment agreements with three executives,
Howard A. Goldberg, Peter J. Aranow and Patrick Madamba, Jr.
("Employment Agreements"). The Company has entered into a change
of control agreement with John Groom.
<PAGE>
Employment Agreements for Howard A. Goldberg and Peter J.
Aranow. In 1996, the Company entered into new Employment Agreements with
Howard A. Goldberg and Peter J. Aranow to replace their 1993 agreements.
Mr. Goldberg's Employment Agreement extends to September 30,
1999, and Mr. Aranow's Employment Agreement extends to September
30, 1998. During the terms of the respective Employment
Agreements, Mr. Goldberg will serve as Chief Executive Officer of
the Company, and Mr. Aranow will serve as Executive Vice
President -- Finance and Treasurer of the Company. Mr. Goldberg's base
compensation will be not less than $450,000 per year. Mr. Aranow's base
compensation will be not less than $300,000 per year for the period through
March 31, 1997 and $250,000 for the balance of the term of the Employment
Agreement. The Board may grant discretionary bonuses and stock-based
compensation. The executives, their spouses and dependents will be provided
with welfare and retirement benefit coverages pursuant to the Employment
Agreements.
If the Company terminates an executive's employment without
cause (as defined in the applicable Employment Agreement), for a
reason other than death or disability, or in the event of
constructive termination (as defined in the applicable Employment
Agreement), the executive will be entitled to receive
severance compensation upon his execution of a release of the
Company as to all matters arising in connection with his
employment and termination. If the Employment Agreement expires
at the end of its present term or at the expiration of any
renewal and the Company has not given six months prior notice of
its intention not to renew, the executive will receive severance
compensation upon execution of a release of the Company. The
severance compensation payable upon expiration of Mr. Goldberg's
Employment Agreement on September 30, 1999, or Mr. Aranow's
Employment Agreement on September 30, 1998, will consist of
continued base compensation for a period of six months less the
number of months of non-renewal notice provided by the Company.
The severance compensation payable in the other circumstances
described above will consist of continued base compensation and
performance bonuses for a period of 12 months following his
termination of employment or, if longer, to the end of the term
of the Employment Agreement. The executive may elect to have the
present value of the base compensation payments paid in a lump
sum after his termination of employment. In addition, the
executive will immediately vest in all stock options previously
granted to him and may exercise the options for 12 months
following his date of termination, but in no event beyond the
expiration of the option term; provided, however, that such
accelerated vesting and continued exercisability shall not apply
to the Non-Qualified Stock Option and Stock Appreciation Rights
granted to Mr. Aranow on September 19, 1996. The executive will
continue to participate in the Company's applicable employee
benefit programs during the period for which he receives
severance compensation (without regard to whether payments are
made in a lump sum), unless the Company provides him with a
payment equal to the cost of such coverage.
If a change of control occurs and the Company terminates the
executive's employment without cause (including constructive
termination), or, in the case of Mr. Goldberg, if the executive
terminates employment within 180 days following a change of
control because there has been a change of circumstances with the
Company that affects his position or responsibilities such that
he is no longer able to discharge his duties and responsibilities
effectively, the executive will be entitled to receive severance
compensation. In addition, if a change of control occurs and the
executive's employment is terminated without cause (including
constructive termination) within six months before the change of
control, the executive will be entitled to receive severance
compensation. As severance compensation under this paragraph, the
executive will receive a lump sum payment equal to the present
value of the base compensation that would be due him for a period
of 36 months following his termination of employment, based on
his average annual base compensation for the 36-month period
preceding his termination, and a lump sum payment equal to the
present value of the aggregate performance bonuses that he
received for the 36-month period preceding his termination (or,
in the case of Mr. Goldberg, if greater, 150% of the largest
performance bonus paid to him during the 36-month period). The
executive will immediately vest in all stock options previously
granted to him and may exercise the options for 12 months
following his date of termination, but in no event beyond the
expiration of the option term. The executive will continue to
participate in the Company's applicable employee benefit programs
during the period for which he receives severance compensation
(without regard to whether payments are made in a lump sum),
unless the Company provides him with a payment equal to the cost
of such coverage.
<PAGE>
The benefits provided under the Employment Agreements in the
event of a change of control are limited by the Internal Revenue Code
parachute provisions. If and to the extent that the benefits to
be provided under the Agreements are considered "excess parachute
payments" under section 280G of the Internal Revenue Code, the
benefits will be reduced to the maximum amount that may be paid
under section 280G without resulting in the imposition of
penalties on "excess parachute payments."
For purposes of the Employment Agreements, the occurrence of
any of the following events will be considered a change in
control: (i) any person (except The Griffin Group, Inc., Company
management as of the effective date of the Agreements, the
Company or any employee benefit plan of the Company), shall become the
beneficial owner of 30% or more of the Company's voting stock;
(ii) consummation by the Company of a merger or similar transaction with
respect to which the persons who were the beneficial owners of the
Company's voting stock immediately before the transaction do not, following
the transaction, beneficially own more than 50% of the then
outstanding shares of voting stock in substantially the same
proportion as their ownership before the transaction; (iii) a
complete liquidation or dissolution of the Company; (iv) a sale
or other disposition of all or substantially all the assets of
the Company other than to a corporation with respect to which,
following such sale or disposition, more than 50% of the voting
stock is owned beneficially by the persons who were the
beneficial owners of the Company's voting stock immediately
before such sale or disposition in substantially the same
proportion as their ownership before the sale or disposition; (v)
individuals who, as of the beginning of any 24-month period,
constitute the Board (the "Incumbent Board") cease for any reason
to constitute at least a majority of the Board, provided that any
individual who becomes a director after the beginning of such
period and whose election or nomination was approved by a vote of
at least a majority of the directors then comprising the
Incumbent Board shall be considered as though such individual
were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office
is in connection with an actual or threatened Board election
contest; or (vi) a "change in control" (as defined in the form of
indenture governing any indebtedness of the Company) shall have
occurred.
If the Company terminates the executive's employment because of
the termination of his license to take part in the casino and
gaming business in any state in which the Company conducts
business, the executive will receive continued base compensation
for six months after his termination (or 12 months if the loss of
license was not the result of an activity that the executive knew
or should have known would result in the loss of his license).
If the executive dies, his base compensation will continue to
be paid for three months following the month of his death. If the
executive is disabled, he will be entitled to benefits payable
under applicable plans of the Company. In the event of death or
disability, the Company will also pay a proportionate portion of
any performance bonus for the year in which his death or
disability occurs or, if performance results are not available,
the applicable portion of the performance bonus paid to the
executive for the prior year.
If the executive voluntarily terminates employment or the
Company terminates his employment for cause, the executive will be
prohibited from engaging in competition with the Company for one
year following such termination. If the executive is terminated
on any other basis resulting in payments under the Employment
Agreement (without regard to whether the payments are made in a
lump sum), the executive will be prohibited from engaging in
competition with the Company for a period equal to the payment
period.
Employment Agreement for Patrick Madamba, Jr. In 1997, the
Company entered into a new Employment Agreement with Patrick
Madamba, Jr. to replace his 1995 agreement. Mr. Madamba's
Employment Agreement extends to January 22, 1999. During the term
of the Employment Agreement, Mr. Madamba will serve as Vice
President and General Counsel of the Company. Mr. Madamba's base
compensation will be not less than $150,000 per year for the
period commencing January 23, 1997 through January 22, 1999. The
Board may grant discretionary bonuses and stock-based
compensation. The executive and his spouse and dependents will be
provided with welfare and retirement benefit coverages pursuant
to the Employment Agreement.
If the Company terminates the executive's employment without
cause (as defined in the Employment Agreement), for a reason other than
death or disability, or in the event of constructive termination
(as defined in the Employment Agreement), the executive will be
entitled to receive severance compensation consisting of
continued base compensation through the end of the term of the
Employment Agreement, payable in a lump sum.
<PAGE>
If a change of control occurs and the Company terminates the
executive's employment without cause (including constructive
termination) within two years after the change of control or
within six months before the change of control, the executive
will be entitled to receive severance compensation. As severance
compensation, the executive will receive a lump sum payment equal
to the present value of the base compensation that would be due
him for a period of 36 months following his termination of employment,
based on his average annual base compensation for the
36-month period preceding his termination, and a lump sum payment
equal to the present value of the aggregate performance bonuses
that he received for the 36-month period preceding his
termination. The executive will immediately vest in all stock
options previously granted to him and may exercise the options
for 12 months following his date of termination, but in no event
beyond the expiration of the option term. The executive will
continue to participate in the Company's applicable employee
benefit programs during the period for which he receives
severance compensation (without regard to whether payments are
made in a lump sum), unless the Company provides him with a
payment equal to the cost of such coverage. "Change of control"
has the meaning described in the section above entitled
"Employment Agreements for Howard A. Goldberg and Peter J.
Aranow." The benefits provided under the Employment Agreement in
the event of a change of control are limited by the Internal
Revenue Code parachute provisions, as described in the section
above entitled "Employment Agreements for Howard A. Goldberg and
Peter J. Aranow."
If the executive voluntarily terminates employment with the Company (unless
he terminates employment after the expiration of the term of the
Employment Agreement because of the Company's failure to renew
the Agreement on at least as favorable terms as the current
Agreement), or if the Company terminates the executive's
employment for cause, the executive is prohibited from engaging
in competition with the Company for one year following such
termination.
Change of Control Agreement. The Company has entered into a
change of control agreement ("Agreement") with John Groom that will provide
severance benefits in the event Mr. Groom's employment is
terminated as a result of a change of control of the Company. If
the Company terminates Mr. Groom's employment other than for
cause (as defined in the Agreement) within two years after a
change of control or within six months before a change in
control, or if Mr. Groom terminates employment for good reason
(as defined in the Agreement) within such period, Mr. Groom will
be entitled to receive severance benefits. The severance benefits
include a lump sum payment equal to the present value of Mr.
Groom's base compensation that would be due to him for a period
of 36 months following his termination of employment, based upon
his average annual base compensation for the 36-month period
preceding his termination, and a lump sum payment equal to the
present value of the aggregate performance bonuses that Mr. Groom
received for the 36-month period preceding his termination. In
addition, Mr. Groom will continue to participate in the Company's
applicable employee benefit programs during the period for which
he receives severance benefits, unless the Company provides Mr.
Groom with a payment equal to the cost of such coverage. The
benefits under the Agreement are limited, however, by the
Internal Revenue Code parachute provisions, as described in the
section above entitled "Employment Agreements for Howard A.
Goldberg and Peter J. Aranow."
For purposes of the Agreement, the occurrence of any of the
change of control events described above under "Employment Agreements for
Howard A. Goldberg and Peter J. Aranow" will be considered a
change of control, unless the Board determines otherwise before
the event occurs. An event may be considered a
change of control for purposes of other plans or agreements of
the Company without being considered a change of control for
purposes of the Agreement.
Upon execution, the Agreement will continue through December
31, 1998; provided that if a change of control occurs during the
term of the Agreement, the Agreement will automatically continue
in effect for 24 months after the month in which the change of
control occurs.
<PAGE>
STOCK PERFORMANCE GRAPH
The following graph and table compare the yearly percentage
change in the cumulative total stockholder return on the
Company's Common Stock during the five years ended March 31, 1997
with the cumulative return on the Dow Jones Casinos Index ("DJ
Casinos Index") and the Standard & Poor's 500 Stock Index ("S&P
500").
The following table illustrates various returns for the
Company's Common Stock, the S&P 500 and the DJ Casinos Index,
assuming $100 was invested in the Company's Common Stock on March
31, 1992 in each of the foregoing indices and assumes the
reinvestment of any dividends (no dividends have been paid on the
Company's Common Stock).
<TABLE>
3/92 3/93 3/94 3/95 3/96 3/97
<S> <C> <C> <C> <C> <C> <C>
Players International, Inc ............. 100 350 638 869 439 225
S&P...................................... 100 115 117 135 179 214
DJ Casinos.............................. 100 138 172 197 247 190
</TABLE>
<PAGE>
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
INTRODUCTION
Pursuant to SEC rules, the Compensation Committee of the Board
of Directors has prepared the following report for inclusion in
this proxy statement addressing the Company's executive
compensation policies for Fiscal 1997. The Compensation Committee
is comprised of non-employee members of the Board of Directors.
Following the Company's Annual Meeting each year, the Board of
Directors traditionally holds a reorganizational meeting to,
among other things, appoint committee members to serve until the
next Annual Meeting. Following the Company's 1995 Annual Meeting
on September 12, 1995, the Board of Directors held a
reorganizational meeting, at which time three non-employee
members were appointed to the Compensation Committee: Marshall Geller
(Chairman), Thomas E. Gallagher and Lee Seidler. On September 4,
1996, Marshall Geller resigned as Chairman, but continued to
serve as a member. Mr. Gallagher was then appointed to serve as
Chairman of the Compensation Committee. Following the Company's
1996 Annual Meeting on November 14, 1996, the Compensation
Committee was again reconstituted in connection with the Board of
Director's annual reorganizational meeting. Since November 14,
1996, the Compensation Committee has been comprised of three non-
employee directors of the Company: Earl Webb (Chairman), Lawrence
Cohen and Marshall Geller. See "Compensation Committee Interlocks
and Insider Participation."
COMPENSATION POLICIES
The Company's executive compensation for its executive officers consists
currently of the following major components: base salary,
performance bonuses and stock options.
The Company's compensation policies for its executive officers
and other senior managers are intended to further the interests
of the Company and its stockholders by encouraging the growth of
its business and its earnings on a stable and consistent basis
through securing, retaining and motivating management employees
of high caliber who possess skills useful to the development and
growth of the Company. The Compensation Committee periodically
reviews the compensation paid to the Company's executive officers
to ensure that the actual compensation paid continues to further
the goals of the Company's compensation policy. The Company also
periodically assesses the compensation paid to its executive
officers and other senior managers in order to maximize the
extent to which compensation may be deducted, for tax purposes,
in accordance with Section 162(m) of the Internal Revenue Code of
1986, as amended.
The Compensation Committee seeks to compensate the Company's
executive officers and other senior managers in a fashion that
will attract, retain, motivate and appropriately reward
individuals for their respective contributions to the Company.
Historically, the Company maintained similar base compensation
for certain of its executive officers, Edward Fishman, David
Fishman and Howard Goldberg, in recognition of the fact that, as
a development oriented business, each of these executives
contributed his own area of expertise to the Company. In
September, 1996, however, the Company shifted its focus from a
development oriented company to an operating oriented company.
The retirement of two executive officers, Edward Fishman and
David Fishman, coincided with this change in orientation of the
Company. In connection with their retirement, the Company
provided Edward and David Fishman with certain severance benefits
that took into account both their historic and potential future
amounts of total compensation. See "Executive Compensation --
Summary Compensation Table" and "Retirement, Employment and
Change of Control Agreements."
<PAGE>
The retirement of these two executive officers, the change in
orientation of the Company, the evolution and maturation of the gaming
industry from one of rapid growth and expansion to one of more
modest growth and intense competition, and other factors resulted
in the commencement of a thorough review of the Company's
executive compensation policies. The Compensation Committee,
during Fiscal 1997, retained Towers Perrin, a nationally
recognized compensation consulting firm, to review the Company's
executive compensation policies. The Compensation Committee
anticipates that Towers Perrin will complete its review during
the second quarter of fiscal 1998. Towers Perrin is reviewing each major
component of the Company's overall executive
compensation packages, i.e. base salary, performance bonuses and
stock options, to determine whether these components and the
actual compensation to be paid to the Company's executive
officers require adjustment. Towers Perrin is to provide
recommendations to the Compensation Committee regarding both the
criteria to be used in fashioning compensation packages for the
Company's executive officers on a going forward basis and actual
compensation to be paid. Towers Perrin's review
includes an examination of the methodology used by the Company in
fashioning executive compensation packages relative to other
gaming companies, salary comparables and other pertinent
information. Based upon Towers Perrin's recommendations, the
Compensation Committee intends to make changes to the Company's
executive compensation policies, as necessary, to ensure that the
Company's executive officers' interests continue to be aligned
with those of stockholders.
BASE COMPENSATION
The base compensation paid to the Company's executive officers
is influenced significantly by the need to attract and retain
management employees with high levels of expertise. This requires
the Company to compete with other companies, some with greater
resources or locations perceived to be more desirable for
relocation than those of the Company, for the availability and
services of a limited pool of experienced and skilled managers.
As employment opportunities have increased within the gaming
industry, the demand for senior managers has often exceeded the
supply of available skilled personnel.
In addition to the retention of Towers Perrin, the Compensation
Committee has continued to review publicly available information in the
casino industry to determine the level of base compensation
necessary to remain competitive and to accomplish the goal of
attracting and retaining high caliber executive officers and
other senior managers. In the opinion of the Compensation
Committee, the levels of base compensation paid to the Company's
executive officers is in the middle range of base compensation
paid in the casino industry in light of the fact that each of the
Company's executive officers is eligible to receive a
discretionary performance bonus.
PERFORMANCE BONUSES
The Company uses performance bonuses in its executive
compensation packages to recognize the achievement of certain goals by the
Company as a whole and to reward extraordinary performance by individual
executives. In keeping with the Company's philosophy to award
executives for the impact that their decisions have on the
Company's and its subsidiaries' financial operations, the
Company's policy has been to make a distinction in how it awards
bonus compensation to its executive officers and to other members
of its senior management staff. Performance bonus payments
granted to the Company's executive officers have generally been
linked to the net income earned by the Company as a whole as well
as other objective and subjective criteria, including specific
goals established by the Company for its executive officers.
Bonus compensation awarded to the Company's other senior
management personnel has generally been more closely aligned with
the operating performance of the specific operating entity or
subsidiary for which the individual primarily works and is based
upon performance criteria related to that entity, usually
measured at least in part by its operating earnings. For Fiscal
1997, while certain senior managers at the subsidiary level were
paid performance bonuses, no performance bonuses were paid to the
Company's executive officers in view of the Company's net
corporate earnings during the fiscal year and other performance
criteria.
STOCK OPTIONS
The third component of the Company's compensation package
consists of the granting of stock options. Historically, the
Company has relied heavily upon the grant of stock options as
part of its executive compensation policy. The Company believes
that the granting of stock options encourages its officers to
achieve long-term goals and objectives that are consistent with
results that benefit the Company's stockholders. In addition, in
view of the entrepreneurial opportunities available to individual
executives in the casino industry, the Company believes that the
grant of an equity stake in the Company, in the form of stock options, is
important in attracting and retaining key executives. The issuance of stock
options has historically been used by the Company as a tool to
compete with other casino companies of greater size and resources
for the services of a limited pool of experienced and skilled
managers.
<PAGE>
On September 19, 1996, the Compensation Committee of the Board of Directors
authorized an option repricing and exchange program concerning
certain outstanding stock options of its executive officers and
certain other senior managers who are critical to the Company's
future success in order to provide a meaningful long-term
incentive compensation opportunity in light of the trading prices
for the Common Stock at that time. In order to align incentive
compensation opportunities with stockholders' interests, the
Company also awarded stock options to certain other executive
officers of the Company who were not eligible to participate in
the option repricing and exchange program. See "Executive
Compensation -- Summary Compensation Table." The continued
volatility of the trading prices for the Common Stock subsequent
to the implementation of the option repricing and exchange program has,
however, adversely impacted the achievement of the goals
underlying the program. Accordingly, the Compensation Committee
has requested Towers Perrin to make specific recommendations to
address this issue.
COMPENSATION AWARDED TO THE CHIEF EXECUTIVE OFFICER
In December, 1995, Howard Goldberg became Chief Executive
Officer of the Company. During Fiscal 1997, in connection with
the Company's shift in focus from a development oriented company
to an operating oriented company, Mr. Goldberg was given specific
responsibilities with respect to streamlining operations and
disposing of unnecessary development-related and under performing
assets. The Company entered into a new Employment Agreement with
Mr. Goldberg which establishes a minimum base compensation level
of $450,000 on an annualized basis. See "Retirement, Employment
and Change of Control Agreements." This minimum base compensation
represents a $50,000 reduction in salary for Mr. Goldberg on an
annualized basis. Mr. Goldberg's salary was reduced with the
understanding that the performance bonus and stock option
components of his compensation package would be reviewed
annually. For Fiscal 1997, Mr. Goldberg received base
compensation of $475,000 (a portion of which was paid at a base
compensation level of $500,000 while the remaining portion was
paid at the reduced base compensation level of $450,000). No
bonus or other form of incentive compensation was paid to the
Company's executive officers, including Mr. Goldberg, during
Fiscal 1997.
THE COMPENSATION COMMITTEE
Earl Webb, Chairman
Marshall Geller
Lawrence Cohen
<PAGE>
TEN YEAR OPTION REPRICING TABLE
The following table sets forth certain information concerning
the repricing of stock options in Fiscal 1997 with respect to
certain of the Company's Named Executives. The following
represents the only repricing of options effected by the Company
during the past ten years:
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES MARKET PRICE EXERCISE
UNDERLYING OF STOCK AT PRICE AT NEW LENGTH OF
OPTIONS TIME OF TIME OF EXERCISE ORIGINAL
NAME DATE REPRICED REPRICING REPRICING PRICE OPTION TERM
REMAINING
AT DATE OF
REPRICING
<S> <C> <C> <C> <C> <C> <C>
Howard Goldberg 9/19/96 375,000 7.00 11.83 7.70 1.67 years
9/19/96 225,000(1) 7.00 15.25(1) 8.47 (1)
Patrick Madamba 9/19/96 15,000(2) 7.00 13.83(2) 7.70 (2)
Steven P. Perskie 9/19/96 50,000(3) 7.00 13.29(3) 7.70 (3)
</TABLE>
- --------
(1) In return for the options described above, Mr. Goldberg
surrendered options to purchase (i) 150,000 shares of Common Stock at an
exercise price of $11.50 per share (scheduled to expire on April 14, 1999)
and (ii) 450,000 shares of Common Stock at an exercise price of $16.50
per share (80% of which were scheduled to expire on March 31, 2000 and
20% of which were scheduled to expire on March 31, 2001). The
$15.25 value described above represents the weighted average
exercise price of the surrendered options.
(2) In return for the options described above, Mr. Madamba
surrendered options to purchase (i) 7,500 shares of Common
Stock at $13.56 per share (80% of which were scheduled to expire on
November 17, 2000 and 20% of which were scheduled to expire on November
17, 2001) and (ii) 15,000 shares of Common Stock at $13.96 per share
(which were scheduled to expire on January 23, 2000). The $13.83 value
described above represents the weighted average exercise price
of the surrendered options.
(3) In return for the options described above, Mr. Perskie
surrendered options to purchase (i) 150,000 shares of Common
Stock at $13.25 per share (which were scheduled to expire on
May 2, 1999 and (ii) 25,000 shares of Common Stock at $13.56
per share (80% of which were scheduled to expire on November
17, 2000 and 20% of which were scheduled to expire on November
17, 2001). The $13.29 value described above represents the
weighted average exercise price of the surrendered options.
COMPENSATION COMMITTEE REPORT ON REPRICING OF OPTIONS
On September 19, 1996, the Compensation Committee of the Board of Directors
authorized an option repricing and exchange program concerning certain
outstanding stock options of executive officers and certain other senior
managers who are critical to the Company's future success in
order to provide a meaningful long-term incentive compensation
opportunity in light of the trading prices for the Common Stock
at that time. Certain of the Company's outstanding stock options
at such time had exercise prices that were substantially above
the then current market price of the Common Stock. The
Compensation Committee concluded that these stock options, which
are an important element in the Company's incentive compensation
program, no longer provided sufficient incentives to the
Company's executive officers and certain other senior managers
nor adequately encouraged them to remain with the Company.
The repricing program was approved on September 19, 1996 at
exercise prices equal to at least a ten percent (10%) premium
above the then-prevailing price of Common Stock ($7.70 per share,
based upon the September 19, 1996 closing quotation of $7.00 for
Common Stock on the NASDAQ National Market). The Compensation
Committee believed that the option repricing and exchange program
was in the best interests of the Company and its stockholders.
Accordingly, on September 19, 1996, the Compensation Committee
determined to offer to certain senior managers of the Company and certain
Named Executives the opportunity to exchange previously granted
options to purchase 1,442,900 options with an average exercise
price of $13.59 per share for replacement options to purchase
842,300 shares with an average exercise price of $7.91 per share.
Excluding Named Executives, the Company permitted senior managers
to exchange an aggregate of 270,400 stock options with exercise
prices ranging from $11.17 to $19.75 per share for an aggregate
of 177,300 stock options with an exercise price of $7.70 per share.
<PAGE>
Among the Named Executives, the Compensation Committee
authorized Howard Goldberg to exchange stock options to purchase
375,000 shares of Common Stock at an exercise price of $11.83 per
share for 375,000 stock options with an exercise price per share
of $7.70 and stock options to purchase 600,000 shares of Common
Stock at a weighted average exercise price of $15.25 per share
for options to purchase 225,000 shares of Common Stock at $8.47
per share; Patrick Madamba, Jr. to exchange stock options to
purchase 22,500 shares of Common Stock at a weighted average
exercise price of $13.83 per share for options to purchase 15,000
shares of Common Stock at $7.70 per share; and Steven P. Perskie,
former Executive Vice President, General Counsel to exchange
options to purchase 175,000 shares of Common Stock at a weighted
average exercise price of $13.29 per share for options to
purchase 50,000 shares of Common Stock at an exercise price of
$7.70 per share. All optionees holding such previously granted
options, including the Named Executive Officers, accepted the
offer to exchange their options. The replacement options provide
for the purchase of substantially fewer number of shares of
Common Stock than the options that were replaced.
In determining to make the option replacement offer to certain
employees,the Compensation Committee balanced the importance of providing
meaningful incentives to employees in order to advance
stockholder value and the need to retain employees through an
attractive compensation program versus the fairness of such
replacement in relation to the Company's other stockholders. The
Compensation Committee concluded that replacement awards, which
resulted in substantially fewer options outstanding, reduced
stockholder dilution while permitting the Company to provide
meaningful incentives to its employees. The continued volatility
of the trading prices for the Common Stock subsequent to the
implementation of the option repricing and exchange program has,
however, adversely impacted the achievement of the goal of
aligning the incentive compensation opportunities of the
Company's executive officers with stockholders' interests.
Accordingly, the Compensation Committee has requested Towers
Perrin to make specific recommendations regarding a further
realignment of incentive compensation opportunities.
THE COMPENSATION COMMITTEE
Earl Webb, Chairman
Marshall Geller
Lawrence Cohen
COMPENSATION OF DIRECTORS
Effective October 1, 1996, the Company amended its compensation
package for directors who were not also full-time employees of the Company
("Non-employee Directors") and established a reduced annual
compensation rate of $25,000 (versus $40,000), payable in
quarterly installments (the "Annual Fee"); established a policy
whereby Committee Chairs received a fee of $5,000 (the "Committee
Chair Fee"); awarded a fair market value stock option grant for
22,500 shares on the date of the grant (October 1, 1996) to the
Non-employee Directors (Messrs. Cohen, Gallagher, Geller, Masson,
Seidler and Webb) reduced the size of stock option awards (the
"Annual Grant") from 22,500 to 5,000 options; and reset the award
date for Annual Grants to the date of election of directors at
the Annual Meeting of Stockholders commencing with the 1997
Annual Meeting of Stockholders. The Company also established in
its stock-based compensation program for Non-employee Directors
an initial grant of 22,500 stock options exercisable at a price
equal to the fair market value per share of Common Stock on the
date of grant for each director joining the Board. Fifty percent
(50%) of the October 1, 1996, option grant vested as of the date
of the grant, with the balance vesting upon the first re-election
to the Board after completion of the first full year of service
as a Director. Future Annual Grants will be immediately
exercisable as of the date of the grant. In addition, directors
are paid an attendance fee of $1,000 for actual attendance at
Board or Committee meetings and $250 for attendance by telephone
at any such meetings. Fees for Committee meetings are limited to
one fee per day, in addition to any fee for attendance at a Board
meeting on that day. The Company reimburses the directors for
reasonable expenses incurred in attending Board of Committee
meetings.
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
On December 31, 1996, a license (the "Griffin License") expired
between the Company and The Griffin Group, a company controlled
by Mr. Merv Griffin, a major stockholder of the Company, under
which Mr. Griffin acted as the public representative for all of
the Company's riverboat and dockside casinos. In addition, Mr.
Griffin provided other services, principally of a promotional
nature. The Company's right to Mr. Griffin's services was
exclusive in the riverboat and dockside casino industry, with
certain exceptions related to Mr. Griffin's other casino
interests.
In consideration of Mr. Griffin's services under the Griffin
License, the Company, in 1992, issued to The Griffin Group
warrants to purchase 2.1 million shares of Common Stock at an exercise
price of $2.67 per share (on a split-adjusted basis). The warrants were
exercised in November and December, 1996. In addition, the Griffin License
required the Company to pay annual fees to The Griffin Group for
each riverboat casino facility tied to the respective casino's
fiscal year earnings before depreciation, interest and taxes
("EBDIT") for the year. The fee was not payable with respect to
the Metropolis facility and the Company's original riverboat at
the Lake Charles facility, the Players Lake Charles Riverboat,
through December 31, 1996. The Griffin Group was also entitled to
reimbursement of certain expenses and indemnification against
certain claims. Mr. Griffin was also entitled to additional
compensation, as negotiated in good faith, if he hosted, produced
or performed in any shows at a Company casino.
Subsequent to the end of fiscal year 1996, the Company and The
Griffin Group entered into an agreement to modify the Griffin License to
reflect the extension of its terms to the Company's second
riverboat casino in Lake Charles, the Star Riverboat, and its
land-based casino in Mesquite effective as of the opening of each
facility. The EBDIT fees that would have been payable with
respect to these two additional facilities were replaced with one
lump-sum payment of $300,000 for Mr. Griffin's services at these
facilities through the period ending December 31, 1996.
CERTAIN TRANSACTIONS
During the year ended March 31, 1997, the Company purchased
approximately $312,000 in 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. In the opinion of the Company, the merchandise
purchased from MII, was acquired in arms-length transactions at
prices comparable to that which could have been obtained from
unaffiliated vendors for comparable merchandise.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
Ernst & Young LLP was the Company's independent public
accountant with respect to the consolidated financial statements of the
Company and its subsidiaries during Fiscal 1997. A representative of
Ernst & Young LLP is expected to be present at the Meeting and
will have the opportunity to make a statement if the
representative desires to do so. The representative is also
expected to be available to respond to appropriate questions of
stockholders.
STOCKHOLDER PROPOSALS
All proposals that any stockholder of the Company desires to
present at the Annual Meeting of Stockholders in 1998 and to have
included in the next Board of Directors' proxy statement and form
of proxy relating to that meeting must be received by the Company
no later than June 30, 1998.
<PAGE>
COST OF SOLICITATION OF PROXIES
The Company will bear the cost of the solicitation of the Board
of Directors' proxies for the Meeting, including the cost of
preparing and distributing material, the handling and tabulation
of proxies received and charges of brokerage houses and other
institutions in forwarding such documents to beneficial owners.
In addition to the mailing of proxy material, solicitation may be
made in person or by telephone or telegraph by directors,
officers or regular employees of the Company, or by other persons
who may be engaged to perform soliciting activities.
ANNUAL REPORT ON FORM 10-K
THE COMPANY WILL PROVIDE WITHOUT CHARGE TO EACH PERSON
SOLICITED BY THIS PROXY STATEMENT, ON THE WRITTEN REQUEST OF SUCH PERSON,
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K, INCLUDING THE FINANCIAL
STATEMENTS AND SCHEDULES THERETO, AS FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION FOR ITS MOST RECENT FISCAL YEAR. SUCH WRITTEN REQUESTS
SHOULD BE DIRECTED TO INVESTOR RELATIONS DEPARTMENT, C/O PLAYERS
SERVICES, INC., 1300 ATLANTIC AVENUE, SUITE 800, ATLANTIC CITY, NEW JERSEY
08401.
<PAGE>
PROXY
PLAYERS INTERNATIONAL, INC.
1300 ATLANTIC AVENUE, SUITE 800, ATLANTIC CITY, NEW JERSEY 08401
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned stockholder of PLAYERS INTERNATIONAL, INC. (the
"Company") hereby appoints HOWARD GOLDBERG, PETER ARANOW and
PATRICK MADAMBA, JR., and each of them acting individually, as
the attorney and proxy of the undersigned, with the powers the
undersigned would possess if personally present, and with full
power of substitution, to vote all shares of Common Stock of the
Company at the Annual Meeting of Stockholders of the Company to
be held on October 16, 1997 at 10:00 a.m. at the Riverport Casino
Center, 777 Casino Center Drive, Maryland Heights, Missouri, and
any adjournment or postponement thereof, upon all subjects that
may properly come before the Meeting, including the matters
described in the Proxy Statement furnished herewith, subject to
any directions indicated below.
PROPOSAL 1 -- ELECTION OF DIRECTORS:
/ / FOR all ten nominees listed below.
/ / WITHHOLD AUTHORITY to vote for all ten nominees for director listed below.
/ / FOR all ten nominees for director listed below, except
WITHHOLD AUTHORITY
to vote for the nominee(s) whose name(s) is(are) lined through.
Nominees: Edward Fishman, Howard A. Goldberg, John Groom, Marshall S.
Geller, Lee Seidler, Lawrence Cohen, Earl E. Webb, Charles M.
Masson, Vincent J. Naimoli and Alan R. Buggy.
<PAGE>
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER
DIRECTED BY THE UNDERSIGNED STOCKHOLDER(S). IF NO DIRECTION IS
MADE, THIS PROXY WILL BE VOTED "FOR" THE NOMINEES OF THE BOARD OF DIRECTORS IN
THE ELECTION OF DIRECTORS. THIS PROXY ALSO DELEGATES DISCRETIONARY
AUTHORITY TO VOTE WITH RESPECT TO ANY OTHER BUSINESS WHICH MAY
PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENT OR POSTPONEMENT THEREOF.
THE UNDERSIGNED HEREBY ACKNOWLEDGES RECEIPT OF THE NOTICE OF
ANNUAL MEETING, THE PROXY STATEMENT FURNISHED IN CONNECTION
THEREWITH AND THE ANNUAL REPORT AND HEREBY RATIFIES ALL THAT THE
SAID ATTORNEYS AND PROXIES MAY DO BY VIRTUE HEREOF.
Dated: _____________________ , 1997
(Complete Date)
___________________________________
(Stockholder's Signature)
___________________________________
(Stockholder's Signature)
NOTE: Please mark, date and sign this proxy card and return it in the
enclosed envelope. Please sign as your name appears below. If shares are
registered in more than one name, all owners should sign. If signing in a
fiduciary or representative capacity, please give full title and attach
evidence of authority. Corporations please sign with full corporate name
by a duly authorized officer and affix corporate seal.
