SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K/A No. 1
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1994
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 No. 1-4748
RESORTS INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 59-0763055
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1133 Boardwalk, Atlantic City, New Jersey 08401
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 609-344-6000
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this amendment to be signed on its
behalf by the undersigned, thereunto duly authorized.
RESORTS INTERNATIONAL, INC.
(Registrant)
By /s/ Matthew B. Kearney
Matthew B. Kearney
Executive Vice
President - Finance
April 27, 1995
Total Number of Pages 14
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PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The directors of Resorts International, Inc. ("RII") are:
Director
Name Age Since
Merv Griffin 69 1988
Chairman of the Board of Directors
William J. Fallon 41 1994
Thomas E. Gallagher 50 1993
President and Chief Executive Officer
Jay M. Green 47 1994
Charles M. Masson 42 1994
Vincent J. Naimoli 57 1994
P u r s u ant to RII's Amended and Restated Certificate of
Incorporation, the total number of directors is fixed at six. Holders
of RII's Class B Redeemable Common Stock (the "Class B Stock") are
entitled to elect one-third of RII's Board of Directors (the "Class B
Directors") and under certain circumstances they would be entitled to
elect a majority of RII's Board of Directors. The remaining directors
are elected by holders of RII's common stock (the "RII Common Stock").
The Board of Directors is divided into three equal classes, Class I,
Class II, and Class III, which have staggered three year terms. Class
I directors are to serve for a term ending at the annual meeting to be
held in 1995, Class II directors are to serve for a term ending at the
annual meeting to be held in 1996, and Class III directors are to serve
for a term ending at the annual meeting to be held in 1997.
Notwithstanding the foregoing, each director shall serve until his
successor is elected and qualified or until his earlier death,
resignation or removal.
RII's present Board of Directors was appointed pursuant to a
joint plan of reorganization (the "Plan") effected by RII and certain
of its subsidiaries on May 3, 1994 (the "Effective Date"). Messrs.
Gallagher and Green compose Class I, Messrs. Fallon and Naimoli compose
Class II, and Messrs. Griffin and Masson compose Class III. Messrs.
Naimoli and Masson serve as Class B Directors. The directors serving
on the committees of the Board are as follows: Audit Committee -
Messrs. Green, Masson and Naimoli; Compensation/Option Committee -
Messrs. Fallon, Green, Masson and Naimoli; Executive Committee -
Messrs. Griffin, Gallagher and Masson; and Business Development and
Strategic Planning Committee - Messrs. Fallon, Gallagher and Masson.
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Pursuant to the Plan, Antonio C. Alvarez II, Warren Cowan, Joseph
G. Kordsmeier and Paul C. Sheeline resigned from RII's Board of
Directors as of the Effective Date.
The executive officers of RII are:
Executive
Name Age Officer Since
Merv Griffin 69 1988
Chairman of the Board of Directors
Thomas E. Gallagher 50 1995
President and Chief Executive Officer
Matthew B. Kearney 55 1982
Executive Vice President-Finance,
Chief Financial Officer and Treasurer
David G. Bowden 54 1979
Vice President-Controller, Chief
Accounting Officer, Secretary and
Assistant Treasurer
RII's officers serve at the pleasure of the Board of Directors.
Business Experience
The principal occupations and business experience for the last
five years or more of the directors and executive officers of RII are
as follows:
Merv Griffin - Chairman of the Board of RII since November 1988;
Chairman of Griffco Resorts Holding, Inc. ("Griffco," a company
which through September 1990 was owned by Mr. Griffin and from
November 1988 through September 1990 was RII's parent) from its
incorporation in May 1986 to September 1990; President of Griffco
from September 1988 to September 1990; Chairman of The Griffin
Group, Inc. ("Griffin Group"), a company controlled by Merv
Griffin, since its incorporation in September 1988; Chairman of
January Enterprises, Inc. ("January Enterprises"), a television
production and holding company doing business as Merv Griffin
Enterprises, from 1964 to May 1986, and Chief Executive Officer
from 1964 to March 1994; director of Hollywood Park Operating
Company from 1987 to June 1991; television and radio producer
since 1945. Mr. Griffin created and produced the nationally
s y ndicated television game shows, "Wheel of Fortune" and
"Jeopardy." For 21 years, through 1986, Mr. Griffin hosted "The
Merv Griffin Show," a nationally syndicated talk show. In 1986,
Mr. Griffin sold January Enterprises to The Coca Cola Company,
but he continues to act as Executive Producer of "Wheel of
Fortune" and "Jeopardy," now owned by Sony Pictures
Entertainment, Inc.
William J. Fallon - Executive Vice President of R.M. Bradley &
Co. Inc. ("Bradley"), a real estate brokerage and management
company,
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since March 1994; Senior Vice President of Bradley from 1988 to
March 1994; other positions with Bradley from 1979 to 1988; a
director of Massachusetts Certified Development Corporation, a
small business development company, since 1987; President of A.D.
Ventures, Inc., an asset development consulting company owned by
Mr. Fallon, since its formation in September 1994. A.D.
Ventures, Inc. has provided real estate consulting services to
Griffin Group.
Thomas E. Gallagher - RII's Board of Directors appointed Mr.
Gallagher President and Chief Executive Officer of RII effective
May 1, 1995. President and Chief Executive Officer of Griffin
Group since April 1992; a director of Players International,
Inc., a gaming company, since December 1992. For the preceding
15 years, Mr. Gallagher was a partner of the law firm of Gibson,
Dunn & Crutcher.
Jay M. Green - Executive Vice President-Chief Financial Officer
and Treasurer of Culbro Corporation ("Culbro"), a diversified
consumer and industrial products company since 1988; Chairman of
the Board of The Eli Witt Company, a Culbro subsidiary, since
February 1993; prior to 1988, Vice President and Controller of
Columbia Pictures Entertainment, Inc.
Charles M. Masson - Chairman of the Board of Directors of
Cadillac Fairview Corporation Limited, a property developer,
since September 1994; President of McCloud Partners, a private
advisory firm, since June 1993; a director of Salomon Brothers
Inc from 1991 through May 1993; Vice President of Salomon
Brothers Inc from 1983 through 1990.
Vincent J. Naimoli - Chairman, President and Chief Executive
Officer of Harvard Industries, Inc., a manufacturer of automotive
parts, since 1993; Chairman and Chief Executive Officer of
Doehler-Jarvis Corporation, a manufacturer of automotive parts,
since 1991; Chairman, President and Chief Executive Officer of
Ladish Company, Inc., a company involved in the aerospace
industry, since 1993; Managing General Partner of the Tampa Bay
Baseball Ownership Group since 1992; Chairman, President and
Chief Executive Officer of Anchor Industries International, Inc.,
a multi-industry operating, holding and financial services
company, since 1989; a director of Simplicity Pattern Company, a
manufacturer of home furnishings, since 1990; Chairman, President
and Chief Executive Officer of Anchor Glass Container Corporation
from 1983 through 1989.
Matthew B. Kearney - Executive Vice President-Finance of RII
since September 1993; Chief Financial Officer of RII since 1982;
Treasurer of RII since May 1993; Office of the President of RII
from November 1993 to March 1995; Vice President-Finance of RII
from 1982 through September 1993.
David G. Bowden - Vice President-Controller and Chief Accounting
Officer of RII since 1979; Secretary of RII since August 1994.
Thomas E. Gallagher, director since late 1993, filed his Initial
Statement of Beneficial Ownership of Securities on Form 3, reflecting
no RII securities owned, in July 1994.
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<TABLE>
ITEM 11. EXECUTIVE COMPENSATION
The following table (the "Summary Compensation Table") sets forth information concerning compensation earned by,
paid to or awarded to each individual serving as RII's Chief Executive Officer or acting in a similar capacity during
1994 and to each of the other executive officers of RII who were serving as executive officers at December 31, 1994
for services rendered in all capacities to RII and its subsidiaries.
<CAPTION> Long Term
Compensation -
Number of
Securities
Name and Principal Annual Compensation Underlying Stock All Other
Position during 1994 Year Salary Bonus Options Granted Compensation
<S> <C> <C> <C> <C> <C>
Matthew B. Kearney 1994 $300,000 $325,000 (2) 200,000 $ 17,002 (5)
Office of the President, 1993 $281,712 $100,000 (3) $ 26,419
Executive Vice President-Finance 1992 $275,000 $125,000 (4) $ 16,074
and Chief Financial Officer
Christopher D. Whitney (1) 1994 $178,846 $125,000 (2) $233,550 (5)
Office of the President, 1993 $300,000 $100,000 (3) $ 13,379
Executive Vice President, 1992 $300,000 $125,000 (4) $ 14,592
and Chief of Staff
David G. Bowden 1994 $135,000 $ 70,000 (2) 35,000 $ 11,857 (5)
Vice President-Controller 1993 $135,000 $ 31,303
and Chief Accounting Officer 1992 $135,000 $ 40,000 (4) $ 8,126
___________
(1) Mr. Whitney resigned from all positions with RII and its subsidiaries as of July 31, 1994.
(2) Includes bonus in recognition of efforts relative to the reorganization of RII: Mr. Kearney - $125,000, Mr.
Whitney - $125,000 and Mr. Bowden - $50,000; and performance bonus for 1994: Mr. Kearney - $200,000 and Mr.
Bowden - $20,000.
(3) Represents bonus in recognition of efforts relative to the reorganization of RII.
(4) Represents performance bonus for 1992.
(5) Includes $222,306 lump sum termination benefit to Mr. Whitney; the cost of group life, health, and other
insurance coverage: Mr. Kearney - $11,228, Mr. Whitney - $7,667 and Mr. Bowden - $9,157; and the Company's
contribution to a defined contribution group retirement plan: Mr. Kearney - $5,774, Mr. Whitney - $3,577 and
Mr. Bowden - $2,700.
See also the description of the Griffin Services Agreement under "Compensation Committee Interlocks and Insider
Participation - Transactions with Management and Others - Griffin Services Agreement" below for a description of
compensation to Griffin Group for certain services rendered by Mr. Griffin.
</TABLE>
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<TABLE>
Grants in Last Fiscal Year
The following table sets forth the information concerning options to purchase shares of RII Common
Stock which were granted during 1994 to the individuals named in the Summary Compensation Table.
<CAPTION> Potential Realizable
Value at Assumed
Annual Rates of
Stock Price
Appreciation for
Option Term -
Individual Grants (1) 10 Years
Number of % of Total
Securities Options
Underlying Granted to
Options Employees Exercise Expiration
Name Granted in Fiscal Year Price Date 5% 10%
<S> <C> <C> <C> <C> <C> <C>
Matthew B. Kearney 200,000 20.0% $1.03125 8/1/04 $129,710 $328,709
David G. Bowden 35,000 3.5% $1.03125 8/1/04 $ 22,699 $ 57,524
(1) These options were granted on August 1, 1994, and are to vest 25% per year on the first four
anniversaries of the date granted.
</TABLE>
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Fiscal Year End Option Value Table
The following table sets forth information as of December 31,
1994, concerning the unexercised options held by executive officers
named in the Summary Compensation Table, none of whom exercised
options in 1994. No options held by those executive officers were
in-the-money at December 31, 1994. Options are "in-the-money" when
the fair market value of underlying common stock exceeds the exercise
price of the option. The exercisable options held by the named
executives have an exercise price of $1.875 per share. The
unexercisable options held by the named executives have an exercise
price of $1.03125 per share. The closing price of RII Common Stock on
December 31, 1994, was $.875 per share.
Number of Securities Underlying
Unexercised Options
at December 31, 1994
Name Exercisable Unexercisable
Matthew B. Kearney 87,500 200,000
David G. Bowden 25,000 35,000
Compensation of Directors
RII's non-employee directors are each entitled to receive $35,000
annually as compensation for serving as a director, $500 for each
Board meeting attended and $500 for each Committee meeting attended
when such Committee meeting is not held on the same day as a Board
meeting or another Committee meeting. Also, any non-employee director
who, upon the request of the Board or of the Chairman of a Committee
of the Board, performs services on behalf of RII or its subsidiaries
in addition to such director's preparation for and attendance at
meetings of the Board or its Committees is entitled to receive a per
diem fee of $1,250.
No compensation was paid to Mr. Griffin for his services as a
director of RII in 1994. However, Griffin Group was compensated for
certain services provided by Mr. Griffin, including Mr. Griffin's
serving as Chairman of the Board of RII. See the description of the
Griffin Services Agreement under "Compensation Committee Interlocks
and Insider Participation - Transactions with Management and Others -
Griffin Services Agreement" below.
Messrs. Alvarez, Cowan, Kordsmeier and Sheeline received $10,750
each for their services as directors during 1994, which services
terminated as of the Effective Date. Messrs. Fallon, Green, Masson
a n d Naimoli received $35,834, $25,834, $25,834 and $25,834,
respectively, for their services during 1994, which services commenced
on the Effective Date. Mr. Fallon's compensation includes per diem
fees paid to him and his company, A.D. Ventures, Inc., for services on
behalf of RII in addition to preparation for and attendance at
meetings. Mr. Gallagher, who served as a director throughout the year
1994, received $39,500 for his services during 1994.
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Pursuant to RII's 1994 Stock Option Plan, on the date that a
director of RII commences service on the Stock Option Committee, such
Committee member automatically shall be granted a non-qualified option
to purchase 10,000 shares of RII Common Stock. One half of such
options are to be exercisable upon grant and the remainder are to
become exercisable on the first anniversary of the grant date.
Accordingly, Messrs. Fallon, Green, Masson and Naimoli were each
granted options on June 7, 1994 to purchase 10,000 shares of RII
Common Stock at $1.03125 per share.
In addition, see "ITEM 13. CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS - Transactions with Management and Others" for a
discussion of compensation to be paid for the services of Mr.
Gallagher in his capacity as President and Chief Executive Officer of
RII which services will commence on May 1, 1995. Also discussed are
stock options to purchase 500,000 shares of RII Common Stock granted
to Mr. Gallagher by the Board of Directors of RII, subject to approval
by RII's shareholders of certain amendments to RII's 1994 Stock Option
Plan.
Employment Contracts and Termination of Employment and Change in
Control Arrangements
Matthew B. Kearney. RII has an employment agreement with Mr.
Kearney, dated as of May 3, 1991, which was extended to May 1995. The
term of employment is to renew automatically for another year unless
either party to the agreement notifies the other that the term is not
to be renewed. Mr. Kearney's agreement, as amended, provides for an
annual salary of $300,000. If RII terminates the executive's
employment without cause, as defined, the executive will be entitled
to receive base salary payments through the end of his term of
employment. If such a termination of his employment follows a change
in control, as defined, the executive will receive a lump-sum payment
equal to the present value of such base salary payments.
Compensation Committee Interlocks and Insider Participation
Messrs. Fallon, Green, Masson and Naimoli have served as members
of the Compensation/Option Committee of the Board of Directors of RII
since the Effective Date. Messrs. Alvarez, Griffin and Sheeline
served as members of the Compensation Committee until the Effective
Date. Mr. Griffin also serves as an officer of RII.
Transactions with Management and Others
Griffin Services Agreement. In April 1993 RII and Resorts
International Hotel, Inc. ("RIH"), RII's subsidiary which owns and
operates Merv Griffin's Resorts Casino Hotel (the "Resorts Casino
Hotel") in Atlantic City, New Jersey, entered into a License and
S e r vices Agreement with Griffin Group (the "Griffin Services
Agreement") dated and effective as of September 17, 1992 to replace
the previous License and Services Agreement among RII, Merv Griffin
and Griffin Group upon its expiration. Pursuant to the Griffin
Services Agreement, Griffin Group granted RII and RIH a non-exclusive
license to use the name and likeness of Merv Griffin in certain
advertising media and
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limited merchandising for the sole purpose of advertising and
promoting the facilities and operations of RII and RIH. In connection
with such license, Griffin Group will not grant any similar license to
any casino/hotel located in Atlantic City during the term of the
Griffin Services Agreement, so long as RII and RIH own or operate
casino and hotel facilities there.
Pursuant to the Griffin Services Agreement, Griffin Group agreed
to provide to RII and RIH, for the term of the Griffin Services
Agreement, the non-exclusive services of Merv Griffin, subject to the
performance by RII and RIH of their obligations under the Griffin
Services Agreement, (i) as Chairman of the Board of Directors of RII,
(ii) as host, producer, presenter and featured performer relative to
certain shows to be presented at the Resorts Casino Hotel, (iii) as
consultant and marketing adviser, (iv) in certain capacities, as
spokesperson for RII and RIH and (v) as participant in certain radio,
television and print advertisements.
The Griffin Services Agreement is to continue in force until
September 17, 1997 and provides for earlier termination under certain
circumstances including, among others, a change of control (as
defined) of RII and RIH and Mr. Griffin ceasing to serve as Chairman
of the Board of RII.
The Griffin Services Agreement provides for compensation to
Griffin Group in the following annual amounts over the five year term:
$2,000,000; $2,100,000; $2,205,000; $2,310,000 and $2,425,000. The
a g r eement called for a payment of $4,100,000, upon signing,
representing compensation for the first two years of services.
Thereafter, the agreement called for annual payments on September 17,
each representing a prepayment for the year ending two years hence.
In lieu of paying in cash, at RII's option, it could satisfy its
obligation to make any of the payments required under the Griffin
Services Agreement by reducing the amount of the Group Note described
below under "Indebtedness of Management." In the event of an early
termination of the Griffin Services Agreement, and depending on the
circumstances of such early termination, all or a portion of the
compensation paid to Griffin Group in respect of the period subsequent
to the date of termination may be required to be repaid to RII and
RIH.
RIH made the $4,100,000 payment for the first two years under the
Griffin Services Agreement in April 1993. In September 1993, RII
satisfied the obligation to make the $2,205,000 payment for the year
ending September 16, 1995 by reducing the Group Note by that amount.
In May 1994, as contemplated in the Plan, RII satisfied the $2,310,000
obligation to Griffin Group for the fourth year of the Griffin
Services Agreement by reducing the principal amount of the Group Note
in an equal amount. The final payment required under the agreement,
$2,425,000, was to be due in September 1995. On August 1, 1994,
following review and approval by the independent members of RII's
Board of Directors, RII agreed to issue 1,940,000 shares of RII Common
Stock to Atlantic Resorts Holdings, Inc. ("ARH"), an affiliate of
Griffin Group through which Mr. Griffin holds certain securities of
RII, in satisfaction of this final payment obligation. The closing
price of RII Common Stock on the date
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of the agreement was $1.0625 per share. The shares are not registered
under the Securities Act of 1933 and are restricted securities.
As additional compensation provided for in the Griffin Services
Agreement, on the Effective Date RII issued to ARH, as assignee from
Griffin Group, a warrant to purchase 4,666,850 shares of RII Common
Stock at $1.20 per share (the "Griffin Warrant"). The Griffin Warrant
is exercisable through May 3, 1998.
RII and RIH also have agreed to indemnify Merv Griffin and
Griffin Group for certain costs and liabilities arising in connection
with the Griffin Services Agreement or Merv Griffin's services, or
the service of any employee of Griffin Group, as a director or officer
of RII or any subsidiary thereof.
Pursuant to the Griffin Services Agreement, RII and RIH have
agreed to maintain comprehensive public liability, personal injury and
umbrella insurance coverage in specified amounts for both Griffin
Group and Merv Griffin, individually.
RII and RIH also have agreed to reimburse Griffin Group for
certain expenses incurred by Griffin Group and Merv Griffin in
connection with the license and services agreed to under the Griffin
Services Agreement.
Other Transactions. RII and its subsidiaries reimbursed Griffin
Group $296,000 for charter air services rendered in 1994 to Mr.
Griffin as well as other directors and officers of RII and its
subsidiaries for travel related to company business.
In 1994 RII and RIH incurred charges from unaffiliated parties of
$394,000 in producing the live television broadcast of "Merv Griffin's
New Year's Eve Special" from Resorts Casino Hotel.
S e e also "ITEM 13. CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS - Transactions with Management and Others" for a
discussion of compensation to be paid by RII for the services of
Thomas E. Gallagher as President and Chief Executive Officer of RII.
Antonio C. Alvarez II, a shareholder of Alvarez & Marsal, Inc.,
was a member of the Board of Directors of RII from September 1990
until the Effective Date. In 1994 RII paid Alvarez & Marsal, Inc.
$225,000 and issued 112,500 shares of RII Common Stock as compensation
for financial advisory services rendered in connection with the
reorganization of RII.
Indebtedness of Management
Pursuant to the 1990 plan of reorganization of RII and certain of
its subsidiaries, in September 1990, RII received $12,345,000 in cash
and an $11,000,000 promissory note (the "Griffin Note") from Merv
Griffin for 4,400,000 shares of RII Common Stock purchased by him. In
April 1993, in accordance with the Griffin Services Agreement
described above under "Transactions with Management and Others -
Griffin Services Agreement," simultaneous with RIH's payment to
Griffin Group of $4,100,000 for the first two years of service under
the agreement, Mr.
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Griffin made a partial payment of principal and interest in the amount
of $4,100,000 on the Griffin Note. This resulted in a remaining
balance of $7,523,333. The Griffin Note was then cancelled and a new
note from Griffin Group (the "Group Note") in the amount of $7,523,333
was substituted therefor. The Group Note was payable on demand and
bore interest at the rate of 3% per year. Merv Griffin personally
guaranteed payment of the Group Note. As noted above, the balance of
the Group Note was reduced by $2,205,000 in September 1993 and by
$2,310,000 in May 1994 in satisfaction of fees due to Griffin Group
under the Griffin Services Agreement. Also in May 1994, as part of
the reorganization of RII, Griffin Group repaid the remaining
principal balance of $3,008,000 and accrued interest thereon.
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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
Security Ownership of Certain Beneficial Owners
The following table sets forth information as to the beneficial
ownership of RII Common Stock as of March 31, 1995, by persons known
by RII to be holders of 5% or more of such common stock. RII is not
aware of any holders of 5% or more of Class B Stock. Information as
to the number of shares beneficially owned has been furnished by the
persons named in the table.
Amount and Percent of
Nature of Class -
Name and Address of Beneficial RII Common
Beneficial Owner Ownership Stock
Merv Griffin, Thomas E.
Gallagher and Lawrence Cohen (1) 15,890,192 (1) 35.82%
c/o The Griffin Group, Inc.
780 Third Avenue, Suite 1801
New York, NY 10017
(1) This information was obtained from a Schedule 13D filed with the
Securities Exchange Commission on January 6, 1995, pursuant to
the Securities Exchange Act of 1934. According to the Schedule
13D (i) Mr. Griffin, Chairman of the Board of Directors of RII,
i n d ividually and through his ownership interest in ARH,
b e neficially owns 14,359,021 shares of RII Common Stock,
including 3,733,479 shares issuable upon exercise of warrants;
(ii) Thomas E. Gallagher, a director of RII, individually
beneficially owns 1,249,628 shares of RII Common Stock, including
700,028 shares issuable upon exercise of warrants and (iii)
Lawrence Cohen, a director of RIH, individually beneficially owns
281,543 shares of RII Common Stock, including 233,343 shares
issuable upon exercise of warrants. Messrs. Gallagher and Cohen
are executive officers of Griffin Group and ARH, corporations
controlled by Mr. Griffin. Messrs. Griffin, Gallagher and Cohen
may be deemed to be members of a "group" for purposes of Rule
13d-5(b)(1) and each may be deemed to be the beneficial owner of
shares owned by the other two members of the group. The amount
reported here represents holdings by the group comprising Messrs.
Griffin, Gallagher and Cohen. The shares issuable upon exercise
of warrants included herein, a total of 4,666,850 shares,
represent the Griffin Warrant, portions of which were sold to
Messrs. Gallagher and Cohen by ARH in September 1994.
In March 1995, RII's Board of Directors approved the grant of
options to purchase 500,000 and 75,000 shares of RII Common Stock
to Mr. Gallagher and Mr. Cohen, respectively, subject to the
approval by RII's shareholders of certain amendments to RII's
1994 Stock Option Plan. Such plan amendments are necessary in
order to allow for the granting of these options. These options
are not included in the amounts reported above; including these
options, the percent of RII Common Stock beneficially owned would
increase to 36.64%.
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Security Ownership of Management
The following table sets forth information as to the beneficial
ownership of RII Common Stock and Class B Stock as of March 31, 1995
by each director, each executive officer named in the Summary
Compensation Table and by all directors and executive officers as a
group. Except as noted below, each director and executive officer has
sole voting and investment power over the shares shown.
RII Common Stock Class B Stock
Amount and Amount and
Nature of Nature of
Name of Beneficial Percent Beneficial Percent
Beneficial Owner Ownership of Class Ownership of Class
Merv Griffin 15,890,192 (1) 35.82%
William J. Fallon 35,000 (2) .09%
Thomas E. Gallagher 15,890,192 (1) 35.82%
Jay M. Green 5,000 (3) .01%
Charles M. Masson 5,000 (3) .01%
Vincent J. Naimoli 5,000 (3) .01%
Matthew B. Kearney 87,500 (3) .22% 215 .61%
David G. Bowden 25,000 (3) .06%
Directors and
executive officers
as a group
(8 persons) 16,052,692 (4) 36.08% 215 .61%
(1) See note (1) to table of "Security Ownership of Certain
Beneficial Owners."
(2) Includes 5,000 shares which are issuable upon exercise of stock
options. Related percentage shown gives effect to the exercise
of all such options. Also includes 5,000 shares held by Mr.
Fallon's spouse in her Individual Retirement Account, as to which
Mr. Fallon disclaims any beneficial ownership.
(3) Ownership represents shares issuable upon exercise of stock
options. Related percentage shown gives effect to the exercise
of all such options. Mr. Green exercised his options in April
1995.
(4) Includes 4,666,850 shares issuable upon exercise of the Griffin
Warrant and 132,500 shares issuable upon exercise of stock
options. Related percentage shown gives effect to the exercise
of all such options and warrants. Amounts reported herein
exclude the options
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granted to Messrs. Gallagher and Cohen (see note (1)) which are
subject to shareholder approval of amendments to RII's 1994 Stock
Option Plan. Including these options, the percent of RII Common
Stock owned by directors and executive officers as a group would
increase to 36.89%.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
See "ITEM 11. EXECUTIVE COMPENSATION - Compensation Committee
Interlocks and Insider Participation" for information regarding
certain relationships and related transactions involving directors
which serve or served on the Compensation Committee of RII's Board of
Directors.
Transactions with Management and Others
Mr. Gallagher, a director of RII since 1993, was appointed
President and Chief Executive Officer of RII effective May 1, 1995.
Mr. Gallagher has been the President and Chief Executive Officer of
Griffin Group since April 1992. In connection with Mr. Gallagher's
appointment as President and Chief Executive Officer of RII, the Board
of Directors of RII has agreed to pay $300,000 per year for his
services in this capacity. Such payment is to be made to Griffin
Group where Mr. Gallagher remains President and Chief Executive
Officer.
In addition, the Board of Directors of RII approved the grant of
options to purchase 500,000 shares of RII Common Stock to Mr.
Gallagher, subject to the approval by RII's shareholders of certain
amendments to RII's 1994 Stock Option Plan.
Certain Business Relationships
As noted above, Mr. Gallagher is a director of RII and also
serves as the President and Chief Executive Officer of Griffin Group.
See "Griffin Services Agreement" and "Other Transactions" under "ITEM
11. EXECUTIVE COMPENSATION - Compensation Committee Interlocks and
Insider Participation - Transactions with Management and Others" for a
discussion of payments made by RII and RIH to Griffin Group.
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