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SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
<TABLE>
<S> <C>
/X/ Preliminary Proxy Statement / / Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
RESORTS INTERNATIONAL, INC.
- --------------------------------------------------------------------------------
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
- --------------------------------------------------------------------------------
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
----------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
----------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
----------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
----------------------------------------------------------------------
(5) Total fee paid:
$125
----------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
----------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
SCHEDULE 14A
----------------------------------------------------------------------
(3) Filing Party:
RESORTS INTERNATIONAL, INC.
----------------------------------------------------------------------
(4) Date Filed:
May 4, 1995
----------------------------------------------------------------------
<PAGE> 2
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RESORTS INTERNATIONAL, INC.
1133 BOARDWALK
ATLANTIC CITY, NEW JERSEY 08401
ANNUAL MEETING - JUNE 27, 1995
To Our Shareholders:
You are cordially invited to attend the Annual Meeting of your
Company to be held at 10:00 a.m. on Tuesday, June 27, 1995 at Merv Griffin's
Resorts Casino Hotel, located at 1133 Boardwalk, Atlantic City, New Jersey
08401. Your Board of Directors and management look forward to greeting those
shareholders who are able to attend.
A report on the current affairs of the Company will be
presented at the meeting and shareholders will have an opportunity for
questions and comments. In addition, shareholders will be asked to consider
and vote upon proposals to elect two Class I directors, to approve a
one-for-five reverse stock split of the Common Stock, to approve an amendment
to the Company's Amended and Restated Certificate of Incorporation to change
the name of the Company to Griffin Gaming & Entertainment, Inc., to approve
certain amendments to the Company's 1994 Stock Option Plan and to ratify the
appointment of Ernst & Young LLP, independent public accountants, as the
Company's auditors for the current year.
In preparation for the meeting, we have enclosed a package
consisting of: (i) the Company's 1994 Annual Report; (ii) a proxy statement;
and (iii) a proxy card and a prepaid return envelope for voting your shares.
It is important that your shares be represented and voted at the meeting
whether or not you plan to attend. Please complete, sign, date and return the
enclosed proxy card at your earliest convenience.
We are grateful for your assistance and express our
appreciation in advance.
Sincerely yours,
MERV GRIFFIN THOMAS E. GALLAGHER
Chairman of the Board President and Chief
Executive Officer
<PAGE> 3
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RESORTS INTERNATIONAL, INC.
1133 BOARDWALK
ATLANTIC CITY, NEW JERSEY 08401
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE 27, 1995
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders
of RESORTS INTERNATIONAL, INC. (the "Company") will be held at Merv Griffin's
Resorts Casino Hotel, located at 1133 Boardwalk, Atlantic City, New Jersey
08401 on Tuesday, June 27, 1995 at 10:00 a.m., to consider and vote on:
1. The election of two Class I directors, each to hold
office until the 1998 Annual Meeting of Shareholders and until their
respective successors have been duly elected and qualified;
2. The approval of a one-for-five reverse stock split of
the Company's Common Stock, par value $.01 per share (the "RII Common
Stock"), whereby each outstanding share of RII Common Stock will be
reclassified into one-fifth of a new share of RII Common Stock;
3. The approval of an amendment to the Company's Amended
and Restated Certificate of Incorporation to change the name of the
Company to "Griffin Gaming & Entertainment, Inc.";
4. The approval of amendments to the Company's 1994
Stock Option Plan to permit the grant of Non-Qualified Stock Options
to directors of subsidiaries of the Company and to consultants and
others providing services to the Company and to increase the maximum
number of options that may be granted in any one year to Officer and
Key Employee Participants;
5. The ratification of the appointment of Ernst & Young
LLP, independent public accountants, as the Company's auditors for the
fiscal year ending December 31, 1995; and
<PAGE> 4
6. Such other matters as may properly come before the
Annual Meeting or any adjournment or adjournments thereof.
The Board of Directors has fixed the close of business on May
19, 1995 as the record date for determining the shareholders entitled to vote
at the Annual Meeting.
The presence, in person or by proxy, of the holders of at
least a majority of all outstanding shares of RII Common Stock is required to
constitute a quorum for the transaction of business at the Annual Meeting.
Accordingly, it is important that your shares be represented at the Annual
Meeting whether or not you plan to attend. The Board of Directors urges you to
complete, date, sign and return the enclosed proxy as soon as possible in the
enclosed envelope. You may revoke the proxy at any time prior to its exercise,
provided that you comply with the procedures set forth in the attached Proxy
Statement. If you attend the Annual Meeting, you may vote in person if you
wish.
By order of the Board of Directors,
David G. Bowden
Secretary
Atlantic City, New Jersey
May ___, 1995
IMPORTANT: PLEASE MAIL YOUR PROXY PROMPTLY IN THE ENCLOSED ENVELOPE.
THE MEETING DATE IS JUNE 27, 1995.
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PROXY STATEMENT
RESORTS INTERNATIONAL, INC.
ANNUAL MEETING OF SHAREHOLDERS
JUNE 27, 1995
GENERAL INFORMATION
This Proxy Statement and the accompanying 1994 Annual Report
(the "Annual Report") are furnished to you in connection with the solicitation
by the Board of Directors (the "Board") of Resorts International, Inc. (the
"Company") of proxies from holders of the Company's common stock, par value
$.01 per share (the "RII Common Stock"). The proxies will be voted at the
Annual Meeting of Shareholders to be held at Merv Griffin's Resorts Casino
Hotel, located at 1133 Boardwalk, Atlantic City, New Jersey 08401 on Tuesday,
June 27, 1995 at 10:00 a.m., and at any adjournment or adjournments thereof
(the "Annual Meeting").
The mailing address of the principal executive offices of the
Company is 1133 Boardwalk, Atlantic City, New Jersey 08401. The Company's
telephone number is (609) 344-6000. This Proxy Statement and the accompanying
proxy card (the "Proxy Card") are first being transmitted to shareholders of
the Company on or about May ___, 1995.
The Board has fixed the close of business on May 19, 1995 as
the record date (the "Record Date") for determining the holders of RII Common
Stock entitled to vote at the Annual Meeting. At the close of business on the
Record Date, an aggregate of ___________ shares of RII Common Stock were issued
and outstanding. Each share of RII Common Stock entitles its holder to one
vote on the election of directors and on each other matter to be voted upon at
the Annual Meeting. Holders of shares of the Company's Class B Redeemable
Common Stock, par value $.01 per share (the "Class B Stock"), will not be
entitled to vote at this year's Annual Meeting because the Class B Stock may be
voted only for the election of Class B Directors, none of whom are eligible for
election at this year's Annual Meeting, and for certain other limited matters,
none of which are under consideration at the Annual Meeting. The Company has
no other outstanding
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class of voting securities. The presence, in person or by proxy, of the
holders of a majority of the outstanding shares of RII Common Stock is required
to constitute a quorum for the transaction of business at the Annual Meeting.
Proxies will be solicited by mail. The Company also intends to make, through
bankers, brokers or other persons, a solicitation of beneficial holders of RII
Common Stock.
At the Annual Meeting, holders of RII Common Stock will be
asked to consider and vote upon: (i) the election of two Class I directors,
each to hold office until the 1998 Annual Meeting of Shareholders and until his
successor has been duly elected and qualified; (ii) the approval of a
one-for-five reverse stock split of the RII Common Stock, whereby each
outstanding share of RII Common Stock will be reclassified into one-fifth of a
new share of RII Common Stock (the "Reverse Stock Split"); (iii) the approval
of an amendment to the Company's Amended and Restated Certificate of
Incorporation (the "Restated Certificate") to change the name of the Company to
"Griffin Gaming & Entertainment, Inc."; (iv) amendments to the Company's 1994
Stock Option Plan (the "1994 Stock Option Plan") to permit the grant of
Non-Qualified Stock Options to directors of subsidiaries of the Company and to
consultants and others providing services to the Company and to increase the
maximum number of options that may be granted in any one year to Officer and
Key Employee Participants; and (v) the ratification of the appointment of Ernst
& Young LLP, independent public accountants, as the Company's auditors for the
fiscal year ending December 31, 1995. Election of Directors requires the vote
of a plurality of the shares of RII Common Stock represented at the Annual
Meeting. Proposals (ii) and (iii) require the affirmative vote of the holders
of a majority of the outstanding shares of RII Common Stock. Proposals (iv)
and (v) require a majority vote of the holders of shares of RII Common Stock
represented at the Annual Meeting. Holders of shares of RII Common Stock who
do not approve of the proposals will not be entitled to exercise any
dissenters' or appraisal rights. The Board knows of no matters to be brought
before the Annual Meeting other than those set forth above. Holders of shares
of RII Common Stock, however, also may be asked to consider and take action
with respect to such other matters as properly may come before the Annual
Meeting.
SOLICITATION AND REVOCATION
Proxies in the form of the enclosed Proxy Card are solicited
by, or on behalf of, the Board. The persons named in the Proxy Card have been
designated as proxies by the Board. Each such person is an officer of the
Company.
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Shares of RII Common Stock represented at the Annual Meeting
by a properly executed and returned Proxy Card will be voted at the Annual
Meeting in accordance with instructions noted thereon or, if no instructions
are noted, the proxy will be voted in favor of the proposals set forth in the
Notice of Annual Meeting of Shareholders. As to other business, if any, that
may properly come before the meeting, the persons named in the accompanying
Proxy Card will vote or refrain from voting thereon in their discretion.
A submitted proxy is revocable by a shareholder at any time
prior to its being voted, provided that such shareholder gives written notice
to the Secretary of the Company at or prior to the Annual Meeting that such
shareholder intends to vote in person or by submitting a subsequently dated
proxy. Attendance at the Annual Meeting by a shareholder who has given a proxy
in and of itself will not constitute a revocation of such proxy.
Proxies will be solicited initially by mail. Further
solicitation may be made by officers and regular employees of the Company
personally, by telephone or otherwise, but such persons will not be
specifically compensated for such services. The Company has retained [Chemical
Bank] to assist, if necessary, in the solicitation of proxies for a fee of
approximately $____________ plus reasonable out-of-pocket expenses. Banks,
brokers, nominees and other custodians and fiduciaries will be reimbursed for
their reasonable out-of-pocket expenses in forwarding solicitation material to
their principals, the beneficial owners of RII Common Stock. The costs of
soliciting proxies will be borne by the Company. It is expected that such
costs will be nominal.
Abstentions and broker non-votes are counted for purposes of
determining the presence or absence of a quorum for the transaction of
business. Abstentions are not considered as having voted for purposes of
determining the outcome of the election of directors, but are considered as a
vote "against" any other matter. Broker non-votes are not considered as having
voted for purposes of determining the outcome of a vote on any matter. In
accordance with the Company's Amended and Restated By-Laws and the Delaware
General Corporation Law, the Board will appoint two inspectors of election.
The inspectors will take charge of, and will count, the votes and ballots cast
at the Annual Meeting and will make a written report on their determination.
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OWNERSHIP OF VOTING SECURITIES BY 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 the Company to be holders of 5% or more of such RII Common Stock. The
Company is not aware of any holders of 5% or more of the Class B Stock.
Information as to the number of shares beneficially owned has been furnished by
the persons named in the table.
<TABLE>
<CAPTION>
NAME AND ADDRESS OF AMOUNT AND NATURE OF PERCENT OF CLASS - RII
BENEFICIAL OWNER BENEFICIAL OWNERSHIP COMMON STOCK
- ------------------- -------------------- ----------------------
<S> <C> <C>
Merv Griffin, Thomas E.
Gallagher and Lawrence
Cohen (1)(2) . . . . . . . . . . . . . . . . 15,890,192(1)(2) 35.82%
c/o The Griffin Group, Inc.
780 Third Avenue, Suite 1801
New York, New York 10017
</TABLE>
(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, as amended (the "Exchange Act").
According to the Schedule 13D (i) Mr. Griffin, Chairman of the Board
of Directors of the Company, individually and through his ownership
interest in Atlantic Resorts Holdings, Inc. ("ARH"), beneficially 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 the Company, 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 Resorts
International Hotel, Inc. ("RIH"), the Company's subsidiary which
owns and operates Merv Griffin's Resorts Casino Hotel in Atlantic
City, New Jersey (the "Resorts Casino Hotel"), and a director of
Resorts International Hotel Financing, Inc. ("RIHF"), also a
subsidiary of the Company, 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 The Griffin Group, Inc. ("Griffin Group") and ARH,
corporations controlled by Mr. Griffin. Messrs. Griffin, Gallagher
and Cohen may be deemed to be
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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 comprised of 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.
See "Griffin Services Agreement" under "Compensation of Directors and
Executive Officers - Compensation Committee Interlocks and Insider
Participation - Transactions with Management and Others".
(2) On March 27, 1995, the Compensation/Option Committee granted options
to purchase 500,000 and 75,000 shares of RII Common Stock to Mr.
Gallagher and Mr. Cohen, respectively, at an exercise price equal to
the average of the high and low sale prices of the RII Common Stock on
such date. Each grant is subject to the approval by the Company's
shareholders of certain amendments to the 1994 Stock Option Plan
necessary for the issuance of the options. These options are not
included in the amounts reported above; including these options, the
percentage of RII Common Stock beneficially owned would increase to
36.64%.
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 nominee, each executive officer named in the Summary
Compensation Table (see "Compensation of Directors and Executive Officers") and
by all directors and officers as a group. Except as noted below, each
director, nominee and executive officer has sole voting and investment power
over the shares shown.
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<TABLE>
<CAPTION>
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
---------------- --------- -------- --------- --------
<S> <C> <C> <C> <C>
Merv Griffin 14,359,021 (1) 33.06%
William J. Fallon 35,000 (2) .09%
Thomas E. Gallagher 1,249,628 (1) 3.09%
(3)
Jay M. Green 5,000 (4) .01%
Charles M. Masson 5,000 (4) .01%
Vincent J. Naimoli 5,000 (4) .01%
Matthew B. Kearney 87,500 (4) .22% 215 .61%
David G. Bowden 25,000 (4) .06%
Directors and
executive officers as
a group (8 persons) 15,771,149 (5) 35.63% 215 .61%
</TABLE>
(1) Messrs. Griffin and Gallagher, together with Lawrence Cohen, may be
deemed to be members of a "group" for purposes of Rule 13d-5(b)(1)
under the Exchange Act. As a group, Messrs. Griffin, Gallagher and
Cohen may be deemed to beneficially own an aggregate of 15,890,192
shares, or 35.82%, of the RII Common Stock. See notes (1) and (2) 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) On March 27, 1995, the Compensation/Option Committee granted options
to purchase 500,000 shares of RII Common Stock to Mr. Gallagher. This
grant is subject to the approval by the Company's shareholders of
certain amendments to the 1994 Stock Option Plan necessary for the
issuance of the options. These options are not included in the
amounts reported above; including these options, the percentage of RII
Common Stock beneficially owned by Mr. Gallagher would increase to
4.28%.
(4) 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.
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(5) Includes 4,433,507 shares issuable upon exercise of warrants 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 granted to Mr.
Gallagher (see note (3)) which are subject to shareholder approval of
amendments to the 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 36.35%. Amounts reported herein
also do not include shares beneficially owned by, or options subject
to shareholder approval of amendments to the 1994 Stock Option Plan
granted to, Lawrence Cohen. See note (1) hereto and note (2) to table
of "Security Ownership of Certain Beneficial Owners".
ELECTION OF DIRECTORS
The Restated Certificate provides for a Board of six
directors. The Company's current Board was appointed pursuant to a joint plan
of reorganization (the "1994 Plan") effected by the Company and certain of its
subsidiaries on May 3, 1994 (the "Effective Date"). The following six persons
are currently serving as directors of the Company: Merv Griffin, William J.
Fallon, Thomas E. Gallagher, Jay M. Green, Charles M. Masson and Vincent J.
Naimoli. The Company's Board of Directors is divided into three equal classes
which have staggered terms. Messrs. Gallagher and Green are serving as Class I
directors; their terms will expire at the Annual Meeting. Messrs. Fallon and
Naimoli are serving as Class II directors; their terms expire at the 1996
annual meeting of shareholders. Mr. Naimoli is a Class B Director. Messrs.
Griffin and Masson are serving as Class III directors; their terms will expire
at the 1997 annual meeting of shareholders. Mr. Masson is a Class B Director.
Notwithstanding the foregoing, each director serves until his or her successor
is elected and qualified or until his or her earlier death, resignation or
removal.
Pursuant to the 1994 Plan, Antonio C. Alvarez II, Warren
Cowan, Joseph G. Kordsmeier and Paul C. Sheeline resigned from the Board as of
the Effective Date.
Messrs. Gallagher and Green have been nominated for election
as Class I directors. The terms of the Class I directors elected at the Annual
Meeting will expire at the 1998 annual meeting of shareholders. The Company
has no reason to believe that either of the foregoing nominees is unavailable
or will not serve if elected, although in the unexpected event that either such
nominee should become unavailable to serve as a director, full discretion is
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reserved to the persons named as proxies to vote for such other persons as may
be nominated.
VOTE REQUIRED FOR ELECTION
The election of Mr. Gallagher and Mr. Green as directors of
the Company requires the affirmative vote of a plurality of the shares of RII
Common Stock represented at the Annual Meeting. Holders of Class B Stock do
not have the right to vote on the election of directors at the Annual Meeting.
THE BOARD RECOMMENDS THAT YOU VOTE FOR THE ELECTION OF MR.
GALLAGHER AND MR. GREEN TO BE DIRECTORS OF THE COMPANY.
NOMINEES TO BOARD OF DIRECTORS
The following information is provided with respect to each
nominee for election to the Board:
<TABLE>
<CAPTION>
NAME, AGE AND OTHER
POSITIONS AND OFFICES, IF TENURE AS DIRECTOR AND
ANY, WITH THE COMPANY BUSINESS EXPERIENCE
- --------------------------- ----------------------
<S> <C>
Thomas E. Gallagher, 50 Director of the Company since November, 1993;
President and Chief Executive Officer; President and Chief Executive Officer of the Company
Chairman, Executive Committee; Member, since May 1, 1995; President and Chief Executive
Business Development and Strategic Planning Officer of Griffin Group since April 1992; a director
Committee 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.
</TABLE>
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<TABLE>
<S> <C>
Jay M. Green, 48 Director of the Company since May 1994; Executive
Chairman, Audit Committee; Member, Vice President-Chief Financial Officer and Treasurer
Compensation/Option Committee 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.
</TABLE>
DIRECTORS NOT STANDING FOR ELECTION
The following information is provided with respect to the
directors of the Company who are not nominees for election to the Board at this
Annual Meeting and whose terms of office as directors will continue after the
Annual Meeting:
<TABLE>
<CAPTION>
NAME, AGE AND OTHER
POSITIONS AND OFFICES, IF TENURE AS DIRECTOR AND
ANY, WITH THE COMPANY BUSINESS EXPERIENCE
--------------------- -------------------
<S> <C>
Merv Griffin, 69 . . . . . . . . . . . . . . Chairman of the Board of the Company since November
Chairman of the Board of Directors; Member, 1988; Chairman of Griffco Resorts Holding, Inc.
Executive Committee ("Griffco", a company which through September 1990
was owned by Mr. Griffin and from November 1988
through September 1990 was the Company's parent) from
its incorporation in May 1986 to September 1990;
President of Griffco from September 1988 to September
1990; Chairman of Griffin Group 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
</TABLE>
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<TABLE>
<S> <C>
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
syndicated 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, 41 . . . . . . . . . . . . Director of the Company since May 1994; Executive
Chairman, Business Development and Strategic Vice President of R.M. Bradley & Co. Inc.
Planning Committee; Member, ("Bradley"), a real estate brokerage and management
Compensation/Option Committee company, 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
has provided real estate consulting services to
Griffin Group.
</TABLE>
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<TABLE>
<S> <C>
Charles M. Masson, 42 . . . . . . . . . . . . Director of the Company since May 1994; Chairman of
(Class B Director) the Board of Directors of Cadillac Fairview
Member, Executive Committee, Compensation/ Corporation Limited, a property developer, since
Option Committee, Audit Committee and September 1994; President of McCloud Partners, a
Business Development and Strategic Planning private advisory firm, since June 1993; a director of
Committee Salomon Brothers Inc from 1991 through May 1993; Vice
President of Salomon Brothers Inc from 1983 through
1990.
Vincent J. Naimoli, 57 . . . . . . . . . . . Director of the Company since May 1994; Chairman,
(Class B Director) President and Chief Executive Officer of Harvard
Chairman, Compensation/ Industries, Inc., a manufacturer of automotive parts,
Option Committee; Member, Audit Committee 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.
</TABLE>
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EXECUTIVE OFFICERS
The following information is provided with respect to the
executive officers of the Company who are not directors of the Company:
<TABLE>
<CAPTION>
OFFICES AND POSITIONS
NAME AND AGE WITH THE COMPANY
------------ ---------------------
<S> <C>
Matthew B. Kearney, 55 . . . . . . . . . . . Executive Vice President-Finance since September
1993; Chief Financial Officer since 1982; Treasurer
since May 1993; Office of the President from November
1993 to March 1995; and Vice President-Finance from
1982 through September 1993.
David G. Bowden, 54 . . . . . . . . . . . . . Vice President-Controller and Chief Accounting
Officer since 1979; and Secretary since August 1994.
</TABLE>
The Company's executive officers serve at the pleasure of the
Board.
BOARD MEETINGS
The Board held nine meetings in 1994. The Executive Committee
of the Board consists of Messrs. Gallagher(Chairman), Griffin and Masson. The
Board also has a standing Audit Committee, consisting of Messrs. Green
(Chairman), Masson and Naimoli; a standing Compensation/Option Committee,
consisting of Messrs. Naimoli (Chairman), Fallon, Green and Masson; and a
standing Business Development and Strategic Planning Committee consisting of
Messrs. Fallon (Chairman), Gallagher and Masson. The Audit Committee met two
times in 1994 and the Compensation Committee/Option met one time in 1994. The
Board does not have any nominating committee or committee performing similar
functions.
During the intervals between the meetings of the Board, the
Executive Committee may exercise all powers of the Board in the management of
the business, affairs and property of the Company, to the extent permitted by
Delaware law. Among the Audit Committee's responsibilities are: to recommend
to the Board the engagement or discharge of the Company's independent
accountants; to review with the Company's independent accountants the plan and
results of the annual audit engagement; to review the degree of independence of
the Company's independent accountants; to consider the range of audit and
non-audit fees; and to review the results
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of the Company's internal audit reports. The Compensation/Option Committee is
authorized to review salaries and compensation, including non-cash benefits, of
directors, officers and other employees of the Company, and to recommend to the
Board salaries and other forms of compensation and benefits as it deems
necessary. The Business Development and Strategic Planning Committee's
responsibilities include developing and monitoring the Company's strategic
goals.
No incumbent director of the Company attended fewer than 75%
of the aggregate number of meetings of the Board and committees of the Board
during 1994, or the portion thereof during which he served as a director or
committee member.
RELATED PARTY TRANSACTIONS AND RELATIONSHIPS
See "Compensation of Directors and Executive Officers -
Compensation Committee Interlocks and Insider Participation" for information
regarding certain relationships and related transactions involving directors
which serve or served on the Compensation/Option Committee of the Company's
Board.
Mr. Gallagher, a director of the Company since 1993, was
appointed President and Chief Executive Officer of the Company 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 the Company, the Board 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 Compensation/Option Committee granted options to
purchase 500,000 shares of RII Common Stock to Mr. Gallagher, subject to the
approval by the Company's shareholders of certain amendments to the 1994 Stock
Option Plan.
As noted above, Mr. Gallagher is a director and the President and
Chief Executive Officer of the Company and also serves as the President and
Chief Executive Officer of Griffin Group. See "Griffin Services Agreement" and
"Other Transactions" under "Compensation of Directors and Executive Officers -
Compensation Committee Interlocks and Insider Participation - Transactions with
Management and Others" for a discussion of payments made by the Company and RIH
to Griffin Group.
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Mr. Gallagher filed his Initial Statement of Beneficial Ownership
of Securities on Form 3, reflecting no securities of the Company owned, in July
1994.
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
The following table (the "Summary Compensation Table") sets
forth information concerning compensation earned by, paid to or awarded to each
individual serving as the Company's Chief Executive Officer or acting in a
similar capacity during 1994 and to each of the other executive officers of the
Company who were serving as executive officers at December 31, 1994 for
services rendered in all capacities to the Company and its subsidiaries.
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SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long Term
Compensation - Number
Annual Compensation of Securities
Name and Principal ------------------- 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, Executive Vice 1993 $281,712 $100,000 (3) $ 26,419
President-Finance and Chief Financial Officer 1992 $275,000 $125,000 (4) $ 16,074
Christopher D. Whitney (1) 1994 $178,846 $125,000 (2) $233,550 (5)
Office of the President, Executive Vice 1993 $300,000 $100,000 (3) $ 13,379
President and Chief of Staff 1992 $300,000 $125,000 (4) $ 14,592
David G. Bowden 1994 $135,000 $ 70,000 (2) 35,000 $ 11,857 (5)
Vice President-Controller and Chief Accounting 1993 $135,000 $ 31,303
Officer 1992 $135,000 $ 40,000 (4) $ 8,126
- ----------
</TABLE>
(1) Mr. Whitney resigned from all positions with the Company and its
subsidiaries as of July 31, 1994.
(2) Includes bonus in recognition of efforts relative to the reorganization
of the Company: 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 the Company.
(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.
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OPTION 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.
<TABLE>
<CAPTION>
Potential Realizable Value
at Assumed Annual Rates of
Stock Price Appreciation for
Individual Grants (1) Option Term - 10 Years
-------------------------------------------------------------------
Number of % of Total
Securities Options Granted
Underlying to Employees in Exercise Expiration
Name Options Granted 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
</TABLE>
(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.
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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.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES UNDERLYING
UNEXERCISED OPTIONS AT DECEMBER 31, 1994
----------------------------------------
NAME EXERCISABLE UNEXERCISABLE
---- ----------- -------------
<S> <C> <C>
Matthew B. Kearney 87,500 200,000
David G. Bowden 25,000 35,000
</TABLE>
COMPENSATION OF DIRECTORS
The Company'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 the Company 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 the Company 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 the Company. 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 and Naimoli
received $35,834, $25,834, $25,834 and $25,834, respectively, for their
services
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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 the Company 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.
Pursuant to the 1994 Stock Option Plan, on the date that a
director of the Company 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 "Election of Directors - Related Party
Transactions and Relationships" for a discussion of compensation to be paid for
the services of Mr. Gallagher in his capacity as President and Chief Executive
Officer of the Company which services commenced 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, subject to approval by the Company's shareholders of
the proposed amendments to the 1994 Stock Option Plan.
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND CHANGE IN CONTROL
ARRANGEMENTS
The Company has an employment agreement with Mr. Kearney,
dated as of May 3, 1991, which was extended to May 1996. Mr. Kearney's
agreement, as amended, provides for an annual salary of $300,000. If the
Company 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 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 the Company.
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TRANSACTIONS WITH MANAGEMENT AND OTHERS
Griffin Services Agreement. In April 1993 the Company and
RIH, the Company's subsidiary which owns and operates the Resorts Casino Hotel,
entered into a License and Services 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 the Company, Merv Griffin and
Griffin Group upon its expiration. Pursuant to the Griffin Services Agreement,
Griffin Group granted the Company and RIH a non-exclusive license to use the
name and likeness of Merv Griffin in certain advertising media and limited
merchandising for the sole purpose of advertising and promoting the facilities
and operations of the Company 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 the
Company and RIH own or operate casino and hotel facilities there.
Pursuant to the Griffin Services Agreement, Griffin Group
agreed to provide to the Company and RIH, for the term of the Griffin Services
Agreement, the non-exclusive services of Merv Griffin, subject to the
performance by the Company and RIH of their obligations under the Griffin
Services Agreement, (i) as Chairman of the Board of Directors of the Company,
(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 the Company
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 the
Company and RIH and Mr. Griffin ceasing to serve as Chairman of the Board of
the Company.
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 agreement
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 the Company'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
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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 the Company 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, the Company
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 1994 Plan, the Company 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 the Company's Board of Directors, the Company agreed to issue
1,940,000 shares of RII Common Stock to ARH, an affiliate of Griffin Group
through which Mr. Griffin holds certain securities of the Company, in
satisfaction of this final payment obligation. The closing price of RII Common
Stock on the date 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 the Company 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.
The Company 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 the Company or any
subsidiary thereof.
Pursuant to the Griffin Services Agreement, the Company 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.
The Company 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.
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Other Transactions. The Company 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 the Company and its
subsidiaries, for travel related to Company business.
In 1994 the Company 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 the Resorts Casino Hotel.
See also "Election of Directors - Related Party Transactions
and Relationships" for a discussion of compensation to be paid by the Company
for the services of Thomas E. Gallagher as President and Chief Executive
Officer of the Company.
Antonio C. Alvarez II, a shareholder of Alvarez & Marsal,
Inc., was a member of the Board of Directors of the Company from September 1990
until the Effective Date. In 1994 the Company paid Alvarez & Marsal, Inc.
$225,000 and issued 112,500 shares of the RII Common Stock as compensation for
financial advisory services rendered in connection with the reorganization of
the Company.
INDEBTEDNESS OF MANAGEMENT
Pursuant to the 1990 plan of reorganization (the "1990 Plan")
of the Company and certain of its subsidiaries, in September 1990, the Company
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. 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 canceled 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
the Company, Griffin Group repaid the remaining principal balance of $3,008,000
and accrued interest thereon.
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COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
This report was prepared on behalf of the various members of
the Board of Directors who participated in the executive compensation decisions
during the year ended December 31, 1994. Prior to May 3, 1994, the effective
date of the Company's reorganization, Merv Griffin, Antonio C. Alvarez II, and
Paul C. Sheeline served as the Compensation Committee. Subsequent to May 3,
1994, the members of the Compensation/Option Committee were Vincent J. Naimoli
(Chairman), Jay M. Green, Charles M. Masson and William J. Fallon. In summary,
and as indicated below, incentive compensation awarded to executive officers
was based upon individual performance, whether such individual performance was
related to specific tasks or to the Company's financial performance. Amounts
awarded are determined on a subjective basis, rather than calculated pursuant
to specific formulas, although certain financial targets are used to measure
the Company's financial performance.
BACKGROUND
In September 1990, the Company emerged from bankruptcy under
the 1990 Plan which 1990 Plan would have left the Company financially viable,
had the Company been able to (i) sell its Paradise Island operations and
properties at their then estimated value and (ii) generate substantial excess
cash flow from its operations and the contemplated sale of its non-operating
real estate in Atlantic City, New Jersey. The recession in the United States,
the acute competition in Atlantic City and The Bahamas, and the impact of the
conflict in the Persian Gulf in early 1991 and its effect on transportation and
tourism all adversely affected the Company's financial stability. In late 1991
the Company engaged financial advisers to assist it in the development and
analysis of financial alternatives as well as the development of a long-term
financial plan. The analysis indicated, among other things, that a total debt
restructuring was necessary and that the separation of the Paradise Island
operations from the rest of the Company was advantageous. Discussions
commenced with representatives of certain noteholders of the Company and in
December 1992 a preliminary agreement for the restructuring was reached. This
agreement became more complex when a prospective purchaser of the Paradise
Island operations was identified in the summer of 1993. The Company signed a
purchase agreement for the sale of the Paradise Island operations in October
1993, disseminated an "Information Statement/Prospectus for Solicitation of
Votes on Prepackaged Plan of Reorganization" in February 1994, filed the 1994
Plan of Reorganization with the Bankruptcy Court in March 1994 and emerged from
bankruptcy on May 3, 1994. As a result of the reorganization, the principal
amount of the Company's publicly
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held recourse debt was reduced from $518,000,000 to $160,000,000 and common
equity was diluted by only 40%.
BASE SALARY
Base salaries of executive officers did not change during
1994. The latest such change was in 1993 and resulted as the Company's former
President and Chief Executive Officer resigned in October 1993. The Company's
previous Board of Directors created an Office of the President and named
Christopher D. Whitney and Matthew B. Kearney as members of that office. At
that time Mr. Kearney's annual base salary was increased to $300,000, a 9%
increase, to equal that of Mr. Whitney's.
OTHER CASH COMPENSATION
In April 1994, after the 1994 Plan was confirmed and prior to
its effective date, the previous Board of Directors, recognizing that the
Company had successfully and expediently completed the bankruptcy process,
awarded cash bonuses of $125,000 to each member of the Office of the President
and $50,000 to David G. Bowden, the Company's Vice President - Controller.
In July 1994, Mr. Whitney resigned and was granted a lump sum
termination benefit as provided for in his employment agreement.
In March 1995, in recognition of (i) their continuing role in
the reorganization process, (ii) the 1994 financial performance of the Resorts
Casino Hotel, which was its best performance since 1987, and (iii) achieving
the 1994 target earnings before interest, taxes and depreciation, the
Compensation/Option Committee awarded Messrs. Kearney and Bowden cash bonuses
of $200,000 and $20,000, respectively.
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LONG-TERM INCENTIVE COMPENSATION
The 1994 Plan, effective May 3, 1994, included the adoption of
the 1994 Stock Option Plan, the purpose of which is to attract, retain and
motivate the officers, directors and key employees of the Company and the
officers and key employees of the Company's subsidiaries. With the
proliferation of gaming throughout the United States and in light of the fact
that the Company has been through the bankruptcy process twice in the last five
years, in August 1994 the Compensation/Option Committee granted to Messrs.
Kearney and Bowden options to purchase 200,000 and 35,000 shares, respectively,
of the RII Common Stock as long-term incentive compensation.
Member of Compensation Committee
for the period to May 3, 1994
Merv Griffin
Compensation/Option Committee
for the period from May 3, 1994
Vincent J. Naimoli, Chairman
William J. Fallon
Jay M. Green
Charles M. Masson
STOCK PRICE PERFORMANCE GRAPH
The following graph compares the cumulative total shareholder
return on RII Common Stock with that of the Dow Jones Equity Market Index and
the Dow Jones Industry Group Index for the Entertainment & Leisure - Casinos
industry group. The stock performance used herein is calculated by assuming
$100 was invested at September 17, 1990, the date RII Common Stock commenced
trading on a "when issued" basis following the Company's emergence from
bankruptcy under the 1990 Plan. The computation of cumulative total
shareholder performance assumes reinvestment of dividends; however, the Company
paid no dividends on the RII Common Stock during the periods presented.
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<TABLE>
<CAPTION>
SEPTEMBER DECEMBER 31,
17, ------------------------------------------------
1990 1990 1991 1992 1993 1994
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
RII Common Stock $100 $ 46 $ 92 $ 54 $100 $ 54
Dow Jones Equity
Market Index $100 $105 $139 $151 $166 $167
Dow Jones Industry
Group Index -
Casinos $100 $105 $161 $249 $380 $292
</TABLE>
[INSERT STOCK PRICE PERFORMANCE GRAPH.]
[DESCRIPTION OF STOCK PRICE PERFORMANCE GRAPH:
THE STOCK PRICE PERFORMANCE GRAPH ILLUSTRATES THE
DATA POINTS PRESENTED IN THE PRECEDING TABLE IN
LINEAR FORM FOR EACH OF (i) THE RII COMMON STOCK,
(ii) THE DOW JONES EQUITY MARKET INDEX AND (iii) THE
DOW JONES INDUSTRY GROUP INDEX-CASINOS]
REVERSE STOCK SPLIT
The Board unanimously has approved, and recommends to the
holders of the RII Common Stock that they approve, the Reverse Stock Split. If
approved by the shareholders, the Reverse Stock Split may be effected, as
described below.
The intent of the Reverse Stock Split is to reduce the number
of shares of RII Common Stock outstanding and to increase the marketability and
liquidity of the RII Common Stock. If the Reverse Stock Split is approved by
the holders of the RII Common Stock at the Annual Meeting, the Reverse Stock
Split will be effected unless there is a subsequent determination by the Board
that the Reverse Stock Split is not in the best interests of the Company and
its shareholders. Although the Board believes as of the date of this Proxy
Statement that the Reverse Stock Split is advisable, the Reverse Stock Split
may be abandoned by the Board at any time before, during or after the Annual
Meeting and prior to filing the proposed amendment to the Restated Certificate,
as set forth in Exhibit A to this Proxy Statement.
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The discussion of the Reverse Stock Split set forth below is
qualified in its entirety by reference to Exhibit A, which is incorporated
herein by reference.
PURPOSES OF THE REVERSE STOCK SPLIT
The principal purpose of the Reverse Stock Split is to reduce
the number of shares of RII Common Stock outstanding. The Board believes that
the total number of shares currently outstanding is disproportionately large
relative to the Company's present market capitalization due to the issuance of
additional shares of RII Common Stock in connection with the reorganization of
the Company in 1994.
The Board of Directors believes that a decrease in the number
of authorized and outstanding shares of RII Common Stock, without any material
alteration of the proportionate economic interest in the Company held by
individual shareholders, may increase the trading price of the outstanding
shares to a price more appropriate for an exchange-listed security, although no
assurance can be given that the market price of the RII Common Stock will rise
in proportion to the reduction in the number of outstanding shares resulting
from the Reverse Stock Split.
Additionally, the Board of Directors believes that the current
per share price of the RII Common Stock may limit the effective marketability
of the RII Common Stock because of the reluctance of many brokerage firms and
institutional investors to recommend lower-priced stocks to their clients or to
hold them in their own portfolios. Certain policies and practices of the
securities industry may tend to discourage individual brokers within those
firms from dealing in lower-priced stocks. Some of those policies and
practices involve time-consuming procedures that make the handling of
lower-priced stocks economically unattractive. The brokerage commission on a
sale of lower-priced stock may also represent a higher percentage of the sale
price than the brokerage commission on a higher-priced issue. Any reduction in
brokerage commissions resulting from the Reverse Stock Split may be offset,
however, in whole or in part, by increased brokerage commissions required to be
paid by shareholders selling "odd lots" created by the Reverse Stock Split.
The Board believes that the decrease in the number of shares
of RII Common Stock outstanding as a consequence of the proposed Reverse Stock
Split and the resulting anticipated increased price level will encourage
greater interest in the RII Common Stock by the financial community and the
investment public and possibly promote greater liquidity for the holders of the
RII Common Stock. It is possible, however, that liquidity could be affected
adversely by the reduced number of
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shares outstanding after the Reverse Stock Split. Although any increase in the
market price of the RII Common Stock resulting from the Reverse Stock Split may
be proportionately less than the decrease in the number of shares outstanding,
the proposed Reverse Stock Split could result in a market price for the shares
that would be high enough to overcome the reluctance, policies and practices of
brokerage houses and investors referred to above and to diminish the adverse
impact of correspondingly high trading commissions on the market for the
shares.
There can be no assurances, however, that the foregoing
effects will occur or that the market price of the RII Common Stock immediately
after implementation of the proposed Reverse Stock Split will be maintained for
any period of time, or that such market price will approximate five times the
market price before the proposed Reverse Stock Split.
EFFECT OF THE REVERSE STOCK SPLIT
If the Reverse Stock Split is approved by the holders of RII
Common Stock at the Annual Meeting, and unless there is a subsequent
determination by the Board of Directors that the Reverse Stock Split is not in
the best interests of the Company and its shareholders, an amendment to Article
IV of the Restated Certificate, in the form set forth in Exhibit A hereto,
would be filed with the Secretary of State of the State of Delaware on any date
(the "Reverse Split Date") selected by the Board on or prior to the Company's
next annual meeting of shareholders. The Reverse Stock Split would become
effective as of 5:00 p.m. on the date of such filing. Without any further
action on the part of the Company or the holders of the RII Common Stock, the
shares of RII Common Stock held by shareholders of record as of the Reverse
Split Date would be converted at 5:00 p.m. on the Reverse Split Date into the
right to receive an amount of whole shares of new RII Common Stock equal to the
number of their shares divided by five. The number of authorized shares of RII
Common Stock would be reduced from 100,000,000 to 20,000,000.
No fractional shares would be issued, and no such fractional
share interest would entitle the holder thereof to vote or to any rights of a
shareholder of the Company. In lieu of any such fractional shares, a
certificate or certificates evidencing the aggregate of all fractional shares
otherwise issuable (rounded, if necessary, to the next higher whole share) will
be issued to the Company's transfer agent, Chemical Bank (the "Exchange
Agent"), or its nominee, as agent for the accounts of all holders of shares of
RII Common Stock otherwise entitled to have a fraction of a share issued to
them in connection with the Reverse Stock Split. Sales of fractional interests
will be effected by the Exchange Agent as
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soon as practicable on the basis of prevailing market prices of the RII Common
Stock on the American Stock Exchange at the time of sale. After the Reverse
Split Date, the Exchange Agent will pay to such shareholders their pro rata
share of the net proceeds derived from the sale of their fractional interests
upon surrender of their stock certificates. The interest in the Company of any
holder of fewer than five shares of RII Common Stock prior to the Reverse Split
Date would thereby be terminated.
Approval of the Reverse Stock Split would not affect any
continuing shareholder's percentage ownership interest in the Company or
proportional voting power, except for minor differences resulting from the
payment in cash of fractional shares. The shares of RII Common Stock which
would be issued upon approval of the Reverse Stock Split would be fully paid
and nonassessable. The voting rights and other privileges of the continuing
holders of RII Common Stock would not be affected substantially by adoption of
the Reverse Stock Split or subsequent implementation thereof.
The par value of the RII Common Stock would remain at $0.01
per share following the Reverse Stock Split, and the number of shares of RII
Common Stock outstanding would be reduced. As a consequence, the aggregate par
value of the outstanding RII Common Stock would be reduced, while the aggregate
capital in excess of par value attributable to the outstanding RII Common Stock
for statutory and accounting purposes would be correspondingly increased.
Under Delaware law, the Board would have the authority, subject to certain
limitations, to transfer some or all of such capital in excess of par value
from capital to surplus, which could be distributed to shareholders as
dividends or used by the Company to repurchase outstanding stock. The Company
has no plans to reduce capital at this time.
The RII Common Stock is listed for trading on the American
Stock Exchange. The number of holders of the RII Common Stock on the Record
Date was ______. The Company does not currently anticipate that the Reverse
Stock Split would result in a reduction in the number of holders large enough
to jeopardize continued listing of the RII Common Stock on the American Stock
Exchange.
As of the Record Date, the number of issued and outstanding
shares of RII Common Stock was ____________. Based upon the Company's best
estimates, the aggregate number of shares of RII Common Stock that would be
issued and outstanding as a result of the Reverse Stock Split would be
____________, and ____________ shares would be authorized and unissued (after
the reservation of an additional ____________ shares of RII Common Stock for
issuance upon exercise of
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outstanding stock options under the Company's prior Senior Management Stock
Option Plan (the "1990 Stock Option Plan"), the 1994 Stock Option Plan and the
Griffin Warrant). Although the 1990 Stock Option Plan was terminated on the
Effective Date of the Company's reorganization in 1994, certain options granted
under the 1990 Stock Option Plan remain outstanding.
Pursuant to the terms of the 1994 Stock Option Plan, the total
number of shares reserved for grants and all options granted under the plan
would be reduced proportionately. All options granted under the 1990 Stock
Option Plan also would be reduced proportionately. The cash consideration
payable per share upon exercise of the options pursuant to these plans would be
increased proportionately. Similarly, total number of shares issuable upon
exercise of the Griffin Warrant would be decreased proportionately and the cash
consideration payable per share upon exercise of the Griffin Warrant would
increase proportionately.
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The following table illustrates the principal effects of the
proposed Reverse Stock Split, as of March 31, 1995:
<TABLE>
<CAPTION>
NUMBER OF SHARES PRIOR TO REVERSE AFTER REVERSE
OF RII COMMON STOCK: STOCK SPLIT STOCK SPLIT
-------------------- ----------- -----------
<S> <C> <C>
Authorized 100,000,000 20,000,000
Outstanding 39,694,172 7,938,834
Reserved for issuance upon 1,613,500 322,700
exercise of options granted (1) (1)
under the 1994 Stock Option Plan
Reserved for issuance upon 1,420,381 284,076
exercise of options granted
under the 1990 Stock Option Plan
Reserved for issuance upon 4,666,850 933,370
exercise of the Griffin Warrant
Reserved for issuance in 719,925 143,985
connection with future grants
under the 1994 Stock Option Plan
Available for future issuance by 51,885,172 10,377,035
action of the Board (after
giving effect to the
reservations above)
</TABLE>
(1) Includes options to purchase an aggregate of 575,000 shares (115,000
shares after the Reverse Stock Split) of RII Common Stock granted to
Messrs. Gallagher and Cohen subject to shareholder approval of
certain amendments to the 1994 Stock Option Plan.
EXCHANGE OF STOCK CERTIFICATES
If the Reverse Stock Split is consummated, as soon as
practicable after the Reverse Split Date the Company will send a letter of
transmittal to each shareholder of record on the Reverse Split Date for use in
transmitting certificates representing shares of RII Common Stock ("Old
Certificates") to the Exchange Agent. The letter of transmittal will contain
instructions for the surrender of Old Certificates to the Exchange Agent in
exchange for certificates representing the appropriate number of whole shares
of new RII Common Stock. No new certificates will be issued to a shareholder
until such shareholder has surrendered all Old Certificates together with
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a properly completed and executed letter of transmittal to the Exchange Agent.
Upon proper completion and execution of the letter of
transmittal and return thereof to the Exchange Agent, together with all Old
Certificates, shareholders will receive a new certificate or certificates
representing the number of whole shares of new RII Common Stock into which
their shares of RII Common Stock represented by the Old Certificates have been
converted as a result of the Reverse Stock Split. Until surrendered,
outstanding Old Certificates held by shareholders will be deemed for all
purposes to represent the number of whole shares of RII Common Stock to which
such shareholders are entitled as a result of the Reverse Stock Split.
Shareholders should not send their Old Certificates to the Exchange Agent until
they have received the letter of transmittal. Shares not presented for
surrender as soon as practicable after the letter of transmittal is sent shall
be exchanged at the first time they are presented for transfer.
No service charges will be payable by holders of shares of RII
Common Stock in connection with the exchange of certificates, all expenses of
which will be borne by the Company.
FEDERAL INCOME TAX CONSEQUENCES
The following is a summary of the material anticipated Federal
income tax consequences of the Reverse Stock Split to shareholders of the
Company. This summary is based on the Federal income tax laws now in effect
and as currently interpreted. It does not take into account possible changes
in such laws or interpretations, including amendments to applicable statutes,
regulations and proposed regulations or changes in judicial or administrative
rulings, some of which may have retroactive effect. This summary is provided
for general information only and does not purport to address all aspects of the
possible Federal income tax consequences of the Reverse Stock Split and is not
intended as tax advice to any person. In particular, and without limiting the
foregoing, this summary does not consider the Federal income tax consequences
to shareholders of the Company in light of their individual investment
circumstances or to holders subject to special treatment under the Federal
income tax laws (for example, life insurance companies, regulated investment
companies and foreign taxpayers). The summary does not discuss any consequence
of the Reverse Stock Split under any state, local or foreign tax laws.
No ruling from the Internal Revenue Service or opinion of
counsel will be obtained regarding the Federal income tax consequences to the
shareholders of the Company as
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a result of the Reverse Stock Split. ACCORDINGLY, EACH SHAREHOLDER IS
ENCOURAGED TO CONSULT HIS OR HER TAX ADVISOR REGARDING THE SPECIFIC TAX
CONSEQUENCES OF THE PROPOSED REVERSE STOCK SPLIT TO SUCH SHAREHOLDER, INCLUDING
THE APPLICATION AND EFFECT OF STATE, LOCAL AND FOREIGN INCOME AND OTHER TAX
LAWS.
The Company believes that the Reverse Stock Split would be a
tax-free recapitalization to the Company and its shareholders. If the Reverse
Stock Split qualifies as a recapitalization described in Section 368(a)(1)(E)
of the Internal Revenue Code of 1986, as amended (the "Code"), (i) no gain or
loss will be recognized by holders of RII Common Stock who exchange their RII
Common Stock for new RII Common Stock, except that holders of RII Common Stock
who receive cash proceeds from the sale of fractional shares of RII Common
Stock will recognize gain or loss equal to the difference, if any, between such
proceeds and the basis of their RII Common Stock allocated to their fractional
share interests, and such gain or loss, if any, will constitute capital gain or
loss if their fractional share interests are held as capital assets at the time
of their sale, (ii) the tax basis of the new RII Common Stock received by
holders of RII Common Stock will be the same as the tax basis of the RII Common
Stock exchanged therefor, less the tax basis allocated to fractional share
interests and (iii) the holding period of the new RII Common Stock in the hands
of holders of new RII Common Stock will include the holding period of their RII
Common Stock exchanged therefor, provided that such RII Common Stock was held
as a capital asset immediately prior to the exchange.
VOTE REQUIRED FOR APPROVAL
The approval of the Reverse Stock Split requires the
affirmative vote of a majority of the outstanding shares of RII Common Stock.
Holders of Class B Stock do not have the right to vote on the approval of the
Reverse Stock Split.
THE BOARD RECOMMENDS A VOTE FOR THE PROPOSED REVERSE STOCK
SPLIT.
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CHANGE OF THE NAME OF THE COMPANY
GENERAL
The Board unanimously has approved, and recommends to the
holders of RII Common Stock that they approve, an amendment to the Restated
Certificate that would amend Article I thereof to change the name of the
Company to "Griffin Gaming & Entertainment, Inc.".
The name "Resorts International, Inc." dates from the time
when the Company owned and operated resort facilities in The Bahamas as well as
casinos located in The Bahamas and in Atlantic City, New Jersey, and pre-dates
Merv Griffin's involvement with the Company. Since the sale of the Company's
Paradise Island properties located in The Bahamas in May 1994, the Company's
sole remaining casino has been Merv Griffin's Resorts Casino Hotel located in
Atlantic City, New Jersey. The Board has concluded that the name "Resorts
International, Inc." no longer aptly describes the scope of the Company's
business, and that the name "Griffin Gaming & Entertainment, Inc." would better
describe the Company's intention to expand and diversify its business in both
the gaming and entertainment industries, as well as to capitalize on the
advantages provided by Mr. Griffin's major role in the Company.
The change of name will not affect in any way the validity or
transferability of stock certificates currently outstanding, the capital
structure of the Company or the listing of any of its securities on the
American Stock Exchange, although a new stock exchange ticker symbol will be
adopted to reflect the Company's new name.
VOTE REQUIRED FOR APPROVAL
The affirmative vote of the holders of a majority of the
outstanding shares of RII Common Stock is required for approval of the
amendment to the Restated Certificate. If the amendment is approved by the
shareholders, the amendment will become effective upon filing with the
Secretary of State of the State of Delaware. Holders of Class B Stock do not
have the right to vote on the amendment.
THE BOARD RECOMMENDS A VOTE FOR THE PROPOSED AMENDMENT TO THE
RESTATED CERTIFICATE.
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AMENDMENTS TO 1994 STOCK OPTION PLAN
The Board unanimously has approved, and recommends to the
holders of RII Common Stock that they approve, amendments to the 1994 Stock
Option Plan to (i) permit the grant of non-qualified stock options to directors
of subsidiaries of the Company who are not also key employees, officers or
directors of the Company or key employees or officers of a subsidiary of the
Company and to consultants and others providing services to the Company and
(ii) increase the maximum number of options that may be granted to Officer and
Key Employee Participants in any one year (collectively, the "Proposed
Amendments").
The 1994 Stock Option Plan initially was adopted in 1994 to
afford certain of the Company's directors, officers and key employees, and the
officers and key employees of subsidiaries of the Company, an opportunity to
acquire a proprietary interest in the Company, and thus to create in such
persons an increased interest in, and a greater concern for the welfare of, the
Company and its subsidiaries.
OPTIONS AVAILABLE UNDER THE 1994 STOCK OPTION PLAN
The 1994 Stock Option Plan currently provides for the grant of
options to purchase not more than 2,333,425 shares of RII Common Stock (466,685
shares, giving effect to the Reverse Stock Split). As of March 31, 1995,
options to purchase an aggregate of 1,038,500 shares (207,700 shares, giving
effect to the Reverse Stock Split) of RII Common Stock had been granted under
the 1994 Stock Option Plan. Additionally, the Compensation/Option Committee
has granted options to purchase an aggregate of an additional 575,000 shares
(115,000 shares, giving effect to the Reverse Stock Split) of RII Common Stock,
consisting of options granted to Thomas E. Gallagher to purchase 500,000 shares
(100,000 shares, giving effect to the Reverse Stock Split) of RII Common Stock
and options granted to Lawrence Cohen to purchase 75,000 shares (15,000 shares,
giving effect to the Reverse Stock Split) of RII Common Stock, which grants are
subject to approval of the Proposed Amendments to the 1994 Stock Option Plan at
the Annual Meeting by the holders of RII Common Stock. Mr. Gallagher is a
Director and the President and Chief Executive Officer of the Company. Mr.
Cohen is a director of RIH and RIHF, subsidiaries of the Company. Messrs.
Gallagher and Cohen are officers and key employees of Griffin Group. See
"Election of Directors - Nominees to Board of Directors", "Election of
Directors - Related Party Transactions and Relationships" and "Compensation of
Directors and Executive Officers".
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New Plan Benefits
1994 Stock Option Plan
<TABLE>
<CAPTION>
NAME AND POSITION NUMBER OF OPTIONS
- ----------------- -----------------
<S> <C>
Thomas E. Gallagher 500,000 (100,000 after giving
President, Chief Executive effect to the Reverse
Officer and Director of the Stock Split)
Company
Lawrence Cohen 75,000 (15,000 after giving
Director of RIH and RIHF effect to the Reverse
Stock Split)
</TABLE>
After the grant of options to Messrs. Gallagher and Cohen described above,
options to purchase 719,925 shares of RII Common Stock (143,985 shares giving
effect to the Reverse Stock Split) would remain available under the 1994 Stock
Option Plan for future grants.
OTHER KEY PROVISIONS OF 1994 STOCK OPTION PLAN
The key provisions of the 1994 Stock Option Plan, as proposed
to be amended (and adjusting all share numbers to give effect to the Reverse
Stock Split), are set forth below.
FUNDING AND ELIGIBILITY
The 1994 Stock Option Plan is unfunded. The 1994 Stock Option
Plan is administered by a committee appointed by the Board (the "Option
Committee"). The Option Committee consists solely of "disinterested"
directors, as that term is defined for purposes of satisfying Rule 16b-3 of the
Exchange Act and of "outside directors", as that term is defined in Section
162(m) of the Code.
Grants may be made under the 1994 Stock Option Plan (i) to key
employees and officers of the Company or any of its subsidiaries who are
regularly employed on a salaried basis by the Company or any of its
subsidiaries (the "Officer and Key Employee Participants"), (ii) to directors
of the Company who do not serve on the Option Committee (the "Director
Participants"), (iii) to directors of the Company who serve on the Option
Committee or who have been named to serve on the Option Committee in the future
(the "Committee Participants"), (iv) to directors of any subsidiary of the
Company who are not also key employees, officers or directors of the Company or
key employees or officers of a subsidiary of the Company (the "Subsidiary
Director Participants") and (v) to consultants and others providing services to
the Company or any of its subsidiaries (the "Consultant Participants").
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Any stock option granted under the 1994 Stock Option Plan may
be a tax benefited incentive stock option (an "Incentive Stock Option") or a
non-qualified stock option that is not tax benefited (a "Non-Qualified Stock
Option"). However, Incentive Stock Options may be granted only to Officer and
Key Employee Participants.
The Board believes that the eligibility of Subsidiary Director
Participants and Consultant Participants to receive Non-Qualified Stock Options
is consistent with the broad objectives of the 1994 Stock Option Plan. On
March 27, 1995, the Compensation/Option Committee granted a Non-Qualified Stock
Option for 15,000 shares of RII Common Stock at an exercise price equal to the
average of the high and low sales prices of the RII Common Stock on such date
to Lawrence Cohen. Mr. Cohen is a director of RIH and RIHF, but is neither a
key employee or officer of the Company or any of its subsidiaries. The grant
is subject to approval of the Proposed Amendments by the shareholders at the
Annual Meeting.
AWARDS TO OFFICER AND KEY EMPLOYEE PARTICIPANTS AND DIRECTOR
PARTICIPANTS.
Subject to the express requirements of the 1994 Stock Option
Plan, the terms of any and all awards granted to Officer and Key Employee
Participants and Director Participants will be determined by, and subject to
the conditions imposed by, the Option Committee, including provisions as to the
exercisability, expiration, termination or forfeiture of options.
The 1994 Stock Option Plan currently provides that the Company
may not grant to Officer and Key Employee Participants in any fiscal year
options cumulatively exercisable for more than 46,660 shares of RII Common
Stock. The Board proposes that the 1994 Stock Option Plan be amended to
increase the limit on annual option grants to 100,000 shares in order to
provide the Company with greater flexibility in attracting and rewarding
qualified executive officers and key employees. On March 27, 1995, the
Compensation/Option Committee granted a Non-Qualified Stock Option for 100,000
shares of RII Common Stock at an exercise price equal to the average of the
high and low sales prices of the RII Common Stock on such date to Thomas E.
Gallagher, who became President and Chief Executive Officer of the Company as
of May 1, 1995. The grant is subject to approval of the Proposed Amendments by
the shareholders at the Annual Meeting.
The 1994 Stock Option Plan authorizes the Option Committee to
grant to Officer and Key Employee Participants and Director Participants
options to purchase RII Common Stock at an amount not less than (i) the fair
market value per share
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of RII Common Stock at the time the options are awarded, or (ii) in the event
that such award is an Incentive Stock Option granted to a person who, at the
time such option is granted, owns shares of capital stock of the Company, or
any subsidiary corporation thereof, which possess more than 10% of the total
combined voting power of all classes of capital stock of the Company or of any
subsidiary of the Company (a "10% Owner"), 110% of the fair market value per
share of RII Common Stock at the time such Incentive Stock Option is awarded.
The fair market value of the RII Common Stock is deemed to be the average of
the high and low sale prices of the RII Common Stock on the date of grant of
such option, or if there are no sales on such date, the average closing bid and
asked prices.
Options granted under the 1994 Stock Option Plan to Officer
and Key Employee Participants expire one year after the optionee's death, one
year after termination of the optionee's employment because of disability,
immediately upon termination of the optionee's employment for "good cause" (as
defined in the 1994 Stock Option Plan) and three months after termination of an
optionee's employment for any other reason. Options granted to Director
Participants expire one year after an optionee's death, one year after
termination of the optionee's employment because of disability, and one year
after the optionee ceases to be a director. Notwithstanding the foregoing,
options granted to Officer and Key Employee Participants and Director
Participants expire ten years after the date of grant (five years in the case
of a 10% Owner), or at such earlier time as the Option Committee may provide.
AWARDS TO COMMITTEE PARTICIPANTS
Under the 1994 Stock Option Plan, on the date that a director
first commences service on the Option Committee, such director automatically
will be granted an option to purchase 2,000 shares (after giving effect to the
Reverse Stock Split) of RII Common Stock, half of which will be exercisable
upon grant and half of which will be exercisable upon the first anniversary of
the grant. During the term of the 1994 Stock Option Plan on the third business
day following the date of any annual meeting of the holders of the RII Common
Stock at which directors are elected, each person who is on such day serving on
the Option Committee or has been named to serve on the Option Committee
automatically will be granted an option to purchase 1,000 shares (after giving
effect to the Reverse Stock Split) of RII Common Stock, which option will be
fully exercisable upon grant. Options granted under the 1994 Stock Option Plan
to Committee Participants expire one year after an optionee's death or
cessation of service as a director. Notwithstanding the foregoing, in all
cases options granted to Committee Participants expire ten years after the date
of grant. The exercise price of such options equals the fair
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market value of the underlying shares of RII Common Stock as of the date such
options are granted.
AWARDS TO SUBSIDIARY DIRECTOR PARTICIPANTS AND CONSULTANT
PARTICIPANTS
Subject to the express requirements of the 1994 Stock Option
Plan, the terms of any and all awards granted to Subsidiary Director
Participants and Consultant Participants will be determined by, and subject to
the conditions imposed by, the Option Committee, including provisions as to the
exercisability, expiration, termination or forfeiture of options.
OTHER OPTION PROVISIONS
The 1994 Stock Option Plan provides that all options
immediately become fully exercisable upon a "change in control", as defined in
the 1994 Stock Option Plan. The 1994 Stock Option Plan deems a "change in
control" to have occurred if any corporation, person or group acquires a
majority of the RII Common Stock or a majority of the Company's outstanding
voting securities, or if within a two-year period a majority of the Company's
Board is replaced by persons who were not directors at the beginning of such
period and who were not nominated or ratified by at least two-thirds of the
directors who were directors at the beginning of such two-year period. For
purposes of the 1994 Stock Option Plan, the election of a majority of the Board
by the holders of the Class B Stock pursuant to the Restated Certificate will
not constitute such a "change of control".
No option granted under the 1994 Stock Option Plan may be
transferred other than by will or the laws of descent and distribution or,
except as to Incentive Stock Options, pursuant to a qualified domestic
relations order (as defined in the Code). Options may be exercised during the
recipient's lifetime only by the recipient or by his or her guardian or legal
representative.
An option under the 1994 Stock Option Plan may permit the
recipient to pay all or part of the purchase price of the shares issuable
pursuant thereto, or to pay all or part of such recipient's tax withholding
obligation with respect to such issuance, by delivering a sufficient amount of
shares of stock of the Company or by having such number of shares withheld from
the amount otherwise issuable upon exercise of the option (the fair market
value thereof being calculated as of the date next preceding the date of
exercise) or otherwise as the Option Committee may determine according to the
terms and conditions of the 1994 Stock Option Plan.
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The 1994 Stock Option Plan authorizes the Option Committee to
provide for arrangements under which brokers that are compensated by the
Company provide temporary financing to assist an optionee in paying the
exercise price of an option, such financing to be paid off by the sale of
shares issuable upon exercise of the option.
AMENDMENT AND TERMINATION
Under the 1994 Stock Option Plan, the Board is able to alter,
amend, suspend or terminate the 1994 Stock Option Plan, provided that no such
action may alter or impair any option granted to any optionee pursuant to the
1994 Stock Option Plan without the optionee's consent. Except as provided in
the 1994 Stock Option Plan, no amendment by the Board, unless taken with the
approval of the shareholders of the Company, may:
(1) materially increase the benefits accruing to
participants under the 1994 Stock Option Plan;
(2) increase the number of shares of RII Common Stock
which may be issued under the 1994 Stock Option Plan (except for
permitted adjustments pursuant to certain dilutive events);
(3) materially modify the requirements as to eligibility
for participation in the 1994 Stock Option Plan; or
(4) decrease the minimum exercise price of an Incentive
Stock Option.
FEDERAL INCOME TAX TREATMENT
The following is a brief description of the Federal income tax
treatment which generally will apply to benefits or awards ("Awards") made
under the 1994 Stock Option Plan, based on Federal income tax laws in effect on
the date hereof. The exact Federal income tax treatment of Awards will depend
on the specific nature of any such Award. BECAUSE THE FOLLOWING PROVIDES ONLY
A BRIEF SUMMARY OF THE GENERAL FEDERAL INCOME TAX RULES, INDIVIDUALS SHOULD NOT
RELY THEREON FOR INDIVIDUAL TAX ADVICE, AS EACH TAXPAYER SITUATION AND THE
CONSEQUENCES OF ANY PARTICULAR TRANSACTION WILL VARY DEPENDING UPON THE
SPECIFIC FACTS AND CIRCUMSTANCES INVOLVED. RATHER, EACH TAXPAYER IS ADVISED TO
CONSULT WITH HIS OR HER OWN TAX ADVISER FOR PARTICULAR FEDERAL, AS WELL AS
STATE AND LOCAL INCOME AND ANY OTHER TAX ADVICE.
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INCENTIVE STOCK OPTIONS
Pursuant to the 1994 Stock Option Plan, participants may be
granted options which are intended to qualify as Incentive Stock Options under
the provisions of section 422 of the Code. Generally, the optionee is not
taxed and the Company is not entitled to a deduction on the grant or the
exercise of an Incentive Stock Option. However, if the optionee disposes of
the shares acquired upon the exercise of an Incentive Stock Option at any time
within (i) one year after the date the shares are transferred to the optionee
pursuant to the exercise of such Incentive Stock Option or (ii) two years after
the date of grant of such Incentive Stock Option (a "disqualifying
disposition"), the optionee will recognize ordinary income in an amount equal
to the excess, if any, of the lesser of the amount realized on the date of such
disposition or the fair market value of the Company's stock on the date of
exercise, over the exercise price of such Incentive Stock Option (with any
remaining gain being taxed as a capital gain). In such an event, the Company
generally will be entitled to a deduction in an amount equal to the amount of
ordinary income recognized by such optionee. If the optionee does not dispose
of the option shares within the above described time limits, there will be no
ordinary income recognized upon any subsequent sale or other disposition of the
shares, but rather capital gain or loss will be recognized in an amount equal
to the difference between the amount realized on the sale or disposition and
the exercise price. The Company will not be entitled to any deduction in this
event. Finally, exercise of an Incentive Stock Option may result in
alternative minimum tax liability for the optionee. Any excess of the fair
market value of the stock on the date the Incentive Stock Option is exercised
over the option exercise price will be included in the calculation of the
optionee's alternative minimum taxable income, which may subject the optionee
to the alternative minimum tax at a rate of up to 28%. The portion of any such
alternative minimum tax attributable to the exercise of an Incentive Stock
Option can be credited against the optionee's regular tax liability in later
years to the extent that in any such year the optionee's regular tax liability
exceeds the alternative minimum tax.
NON-QUALIFIED STOCK OPTIONS
The grant of an option which does not qualify for treatment
as an Incentive Stock Option generally is not a taxable event for the optionee.
However, upon exercise, the optionee generally will recognize ordinary income
in an amount equal to the excess of the fair market value of the stock acquired
upon exercise (determined as of the date of exercise) over the exercise price
of such option, and the Company will generally be entitled to a deduction equal
to such amount.
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Upon the later disposition of the option shares acquired upon exercise,
appreciation (or depreciation) after the date of exercise will be treated as
capital gain (or loss) to the optionee and will have no tax effect as to the
Company.
SPECIAL RULES FOR SECTION 16 INSIDERS
If a Non-Qualified Stock Option has been held for less than
six months at the time of exercise, and the exercise price of the option is
equal to or less than the fair market value of the acquired shares at the time
of exercise, an officer, director or more than 10% shareholder of the Company
subject to the provisions of Section 16 of the Exchange Act (an "Insider") will
not be taxed until the earlier of (i) the expiration of the six-month holding
period beginning on the date of grant of the Non-Qualified Stock Option, or
(ii) the sale of the acquired shares, at which time the Insider will recognize
ordinary income in an amount equal to the excess, if any, of the then fair
market value of the acquired shares over the exercise price of the
Non-Qualified Stock Option. Alternatively, pursuant to Section 83(b) of the
Code, the Insider may elect within 30 days after exercise of the Non-Qualified
Stock Option to recognize ordinary income equal to the excess, if any, of the
fair market value of the RII Common Stock on the date of exercise over the
exercise price. The capital gains holding period for the acquired shares will
commence immediately following the date on which the optionee is required to
recognize ordinary income, and any appreciation (or depreciation) realized
following such date, will be taxed as a capital gain (or loss).
MISCELLANEOUS
Special rules apply in cases where the participant pays the
exercise or purchase price of awards or applicable withholding tax obligations
under the 1994 Stock Option Plan by delivering previously owned RII Common
Stock or by reducing the amount of shares or other property otherwise issuable
pursuant to the award. The surrender in the circumstances below or withholding
of such stock will be a taxable event, resulting in the recognition of gain or
loss. Such gain will be taxable as ordinary income if the stock surrendered or
withheld either (i) was acquired upon exercise of an Incentive Stock Option and
the surrender takes place within one year after the exercise or two years after
the date of grant of the Incentive Stock Option or (ii) is both subject to a
substantial risk of forfeiture and is not freely transferable for purposes of
Section 83 of the Code if the market value of such stock is in excess of the
amount paid for the stock and no election has been made under Section 83(b) of
the Code. In addition, shares withheld on the exercise of a Non-Qualified
Stock Option in order to pay tax withholding
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should result in tax on the withheld shares in an amount equal to the
difference between the fair market value of the shares (on the date of
exercise) and the exercise price.
Generally, the Company will receive a deduction equal to, and
will be required to withhold applicable taxes with respect to, any ordinary
income recognized by a participant in connection with awards made under the
1994 Stock Option Plan.
The 1994 Stock Option Plan is not a "qualified plan" within
the meaning of Section 401(a) of the Code and is not subject to the provisions
of the Employee Retirement Income Security Act of 1974, as amended ("ERISA").
Grants of options under the 1994 Stock Option Plan are
intended to qualify as "performance-based compensation" that is excluded from
the limitation on the deductibility of compensation paid to certain executive
officers under Section 162(m) of the Code.
Upon the accelerated exercisability of an option in connection
with a change in ownership or control of the Company, depending upon the
individual circumstances of the recipient participant, certain amounts with
respect to such awards may constitute "excess parachute payments" under the
golden parachute provisions of the Code. Pursuant to these provisions a
participant will be subject to a 20% excise tax on any "excess parachute
payment" and the Company will be denied any deduction with respect to such
excess parachute payment.
TEXT OF PROPOSED AMENDMENTS
Exhibit B to this Proxy Statement sets forth the revised
content of those paragraphs of the 1994 Stock Option Plan that are being
amended pursuant to the Proposed Amendments.
VOTE REQUIRED FOR APPROVAL
The affirmative vote of the holders of a majority of the
shares of RII Common Stock represented at the Annual Meeting is required for
approval of the Proposed Amendments. If the amendments are approved by the
shareholders, they will become effective immediately. Holders of Class B Stock
do not have the right to vote on the amendments to the 1994 Stock Option Plan.
THE BOARD RECOMMENDS A VOTE FOR THE PROPOSED AMENDMENTS TO THE
1994 STOCK OPTION PLAN.
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RATIFICATION OF APPOINTMENT OF AUDITORS
The independent public accountants selected by the Board for
the Company's fiscal year ending December 31, 1995 are Ernst & Young LLP. This
selection is being presented to the holders of RII Common Stock for
ratification. Ernst & Young LLP has served the Company in that capacity since
the fiscal year ended December 31, 1988. Representatives of that firm are
expected to be present at the Annual Meeting. These representatives will be
given an opportunity, if they desire to do so, to make a statement to the
shareholders at the Annual Meeting, and they are expected to be available to
respond to appropriate questions from holders of RII Common Stock.
VOTE REQUIRED FOR APPROVAL
The affirmative vote of the holders of a majority of the
shares of RII Common Stock represented at the Annual Meeting is required for
ratification of the selection of Ernst & Young LLP as the independent public
accountants of the Company. If the selection of Ernst & Young LLP is not
ratified by the holders of the RII Common Stock, the Board will consider such
fact in determining whether to retain Ernst & Young LLP or to appoint other
independent public accountants.
THE BOARD RECOMMENDS A VOTE FOR THE RATIFICATION OF THE
SELECTION OF ERNST & YOUNG LLP AS THE INDEPENDENT PUBLIC ACCOUNTANTS OF THE
COMPANY.
OTHER MATTERS
EXHIBITS TO THE FORM 10-K
The Company will furnish, upon payment of a reasonable fee to
cover reproduction and mailing expenses, a copy of all exhibits to the
Company's Form 10-K Annual Report for 1994. The exhibits may be obtained by
mailing a written request therefor to David G. Bowden, Secretary, Resorts
International, Inc., 1133 Boardwalk, Atlantic City, New Jersey 08401.
SHAREHOLDER PROPOSALS FOR THE 1996 ANNUAL MEETING
Shareholder proposals intended to be presented for inclusion
in the Company's Proxy Statement and form of proxy for the next annual meeting,
scheduled to be held in 1996, must be received in writing by the Secretary of
the Company not later than January 23, 1996 in order for such proposals to
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be considered for inclusion in the Company's Proxy Statement and form of proxy
for the 1996 annual meeting.
Holders of RII Common Stock are urged to complete, sign and
date the accompanying Proxy Card and return it in the enclosed envelope. No
postage is necessary if the Proxy Card is mailed in the United States.
By order of the Board of Directors,
David G. Bowden
Secretary
Atlantic City, New Jersey
May__, 1995
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EXHIBIT A
FORM OF AMENDMENT TO
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
A. AMENDMENT TO ARTICLE I
Article I of the Company's Amended and Restated Certificate of
Incorporation shall be amended by amending the first sentence thereof to read
in its entirety as follows:
"The name of the Corporation is "Griffin Gaming & Entertainment,
Inc."."
B. AMENDMENT TO ARTICLE IV
Article IV of the Company's Amended and Restated Certificate
of Incorporation shall be amended by:
(i) Amending the first sentence of Paragraph A thereof to
read in its entirety as follows:
"The total number of shares of capital stock of all classifications
which the Corporation shall have authority to issue is 30,120,000
consisting of (i) 10,000,000 shares of Preferred Stock, par value $.01
per share (the "Preferred Stock"), and (ii) 20,120,000 shares of
common stock, consisting of 20,000,000 shares of Common Stock, par
value $.01 per share (the "Common Stock"), and 120,000 shares of Class
B Common Stock, par value $.01 per share (the "Class B Common Stock",
and collectively with the Common Stock, the "RII Common Stock")."; and
(ii) Adding the following Paragraph G, which will be
modified to insert the date of filing in the blank:
"G. Reverse Stock Split. At 5:00 p.m., New York City time, on
___________, 1995 (the "Reverse Split Date"), each share of Common
Stock issued and outstanding immediately prior to the Reverse Split
Date (referred to in this Paragraph G as the "Old Common Stock")
automatically and without any action on the part of the holder thereof
will be reclassified and changed into one-fifth of a share of Common
Stock, par value $0.01 per share (referred to in this Paragraph G as
the "New Common Stock", which
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is the Common Stock authorized under Paragraph A of this Article IV),
subject to the treatment of fractional share interests as described
below. Each holder of a certificate or certificates that immediately
prior to the Reverse Split Date represented outstanding shares of Old
Common Stock (the "Old Certificates") will be entitled to receive,
upon surrender of such Old Certificates to the Company's exchange
agent (the "Exchange Agent") for cancellation, a certificate or
certificates (the "New Certificate", whether one or more) representing
the number of whole shares of the New Common Stock into which and for
which the shares of the Old Common Stock formerly represented by such
Old Certificates so surrendered are reclassified under the terms
hereof. From and after the Reverse Split Date, Old Certificates shall
represent only the right to receive New Certificates (and, where
applicable, cash in lieu of fractional shares, as provided below)
pursuant to the provisions hereof. No certificates or scrip
representing fractional share interests in New Common Stock will be
issued, and no such fractional share interest will entitle the holder
thereof to vote, or to any rights of a shareholder of the Company. In
lieu of any such fractional shares of New Common Stock, a certificate
or certificates evidencing the aggregate of all fractional shares
otherwise issuable (rounded, if necessary, to the next higher whole
share) shall be issued to the Company's Exchange Agent, or its
nominee, as agent for the accounts of all holders of shares of Old
Common Stock otherwise entitled to have a fraction of a share of New
Common Stock issued to them. Sales of fractional interests of New
Common Stock shall be effected by the Exchange Agent as soon as
practicable on the basis of prevailing market prices of the New Common
Stock on the American Stock Exchange at the time of sale. After the
Reverse Split Date, the Exchange Agent will pay to such stockholders
their pro rata share of the net proceeds derived from the sale of
their fractional interests in the New Common Stock upon surrender of
their Old Certificates. If more than one Old Certificate shall be
surrendered at one time for the account of the same stockholder, the
number of full shares of New Common Stock for which New Certificates
shall be issued shall be computed on the basis of the aggregate number
of shares represented by the Old Certificates so surrendered. In the
event that the Company's Exchange Agent determines that a holder of
Old Certificates has not tendered all his certificates for exchange,
the Exchange Agent shall carry forward any fractional
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share until all certificates of that holder have been presented for
exchange such that payment for fractional shares to any one person
shall not exceed the value of four-fifths of one share of New Common
Stock. The Old Certificates surrendered for exchange shall be
properly endorsed and otherwise in proper form for transfer, and the
person or persons requesting such exchange shall affix any requisite
stock transfer tax stamps to the Old Certificates surrendered, or
provide funds for their purchase, or establish to the satisfaction of
the Exchange Agent that such taxes are not payable. From and after
the Reverse Split Date the amount of capital represented by the shares
of the New Common Stock into which and for which the shares of the Old
Common Stock are reclassified under the terms hereof shall be the same
as the amount of capital represented by the shares of Old Common Stock
so reclassified, until thereafter reduced or increased in accordance
with applicable law.
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EXHIBIT B
FORM OF AMENDMENTS
TO
1994 STOCK OPTION PLAN
Set forth below is the revised text of the provisions of the
1994 Stock Option effected by the Proposed Amendments. Certain other
non-material conforming changes would also be made to the 1994 Stock Option
Plan.
A. SECTION 4- ELIGIBILITY AND BASES OF PARTICIPATION
"Grants under the Plan (i) may be made, pursuant to Section 6,
to key employees and officers of RII or any subsidiary thereof who are
regularly employed on a salaried basis by RII or any subsidiary thereof and who
are so employed on the date of such grant (the "Officer and Key Employee
Participants"), (ii) may be made, pursuant to Section 6, to directors of RII,
other than Committee Participants (as defined below), who are not employees and
who are retained in such capacity on the date of such grant (the "Director
Participants"), (iii) may be made, pursuant to Section 7, to individuals who
serve on the Committee or have been named to serve on the Committee in the
future (the "Committee Participants"), and (iv) may be made, pursuant to
Section 8, to directors of any subsidiary of RII and to consultants and others
providing services to RII or any subsidiary thereof (the "Subsidiary and
Consultant Participants").
The Officer and Key Employee Participants and the Director
Participants collectively are referred to as the "Grant Participants."
B. SECTION 6(C)- STOCK OPTIONS FOR GRANT PARTICIPANTS- LIMIT ON ANNUAL
OPTION GRANTS
"No Officer and Key Employee Participant may be granted in any
fiscal year Participant Options under the Plan cumulatively exercisable for
more than 500,000 shares of Common Stock."
C. SECTION 8- STOCK OPTIONS FOR SUBSIDIARY AND CONSULTANT PARTICIPANTS
"The Committee shall have the authority, in its sole
discretion, to grant Non-Qualified Options to Subsidiary and Consultant
Participants (any such options, the "S&C Options") during the period beginning
on the Effective Date and ending on the Termination Date. As a condition to
the granting of any S&C Option, the Committee shall require that the person
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receiving such S&C Option agree not to sell or otherwise dispose of such S&C
Option, any Common Stock acquired pursuant to such S&C Option or any other
"derivative security" (as defined by Rule 16a-1(c) under the Exchange Act) for
a period of six months following the later of (A) the date of the grant of such
S&C Option or (B) the date when the exercise price of such S&C Option is fixed
if such exercise price is not fixed at the date of grant of such S&C Option.
The terms and conditions of the S&C Options shall be determined from time to
time by the Committee."
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APPENDIX A
[APPENDIX TO FILING. NOT DISTRIBUTED TO SHAREHOLDERS]
RESORTS INTERNATIONAL, INC.
1994 STOCK OPTION PLAN
(AS AMENDED ON JUNE ___, 1995)
1. Purpose
Resorts International, Inc., a Delaware corporation ("RII"), by means
of this Stock Option Plan (the "Plan"), desires to afford certain of its
directors, officers, key employees, consultants and others providing services
to RII, and the directors, officers and key employees of, and consultants and
others providing services to, any subsidiary thereof now existing or hereafter
formed or acquired, an opportunity to acquire a proprietary interest in RII,
and thus to create in such persons an increased interest in and a greater
concern for the welfare of RII and any subsidiary. As used in the Plan, the
term "subsidiary" shall mean any entity in which RII, directly or indirectly,
owns a controlling interest.
The stock options described in Sections 6 and 7 (the "Options"), and
the shares of common stock, $.01 par value per share, of RII (the "Common
Stock") acquired pursuant to the exercise of such Options are a matter of
separate inducement and are not in lieu of any salary or other compensation for
services.
The Options granted under Section 6 are intended to be either
incentive stock options ("Incentive Options") within the meaning of Section 422
of the Internal Revenue Code of 1986, as amended (the "Code"), or options that
do not meet the requirements for Incentive Options ("Non-Qualified Options"),
but RII makes no warranty as to the qualification of any Option as an Incentive
Option.
2. Administration
The Plan shall be administered by the Option Committee, or any
successor thereto, of the Board of Directors of RII or by such other committee
as determined by the Board (the "Committee"). The Committee shall consist of
not less than two members of the Board of Directors of RII, each of whom shall
qualify as a "disinterested person" to administer the Plan within the meaning
of Rule 16b-3, as amended, or other applicable rules under Section 16(b) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and each of
whom shall qualify as an "outside director" within the meaning of Section
162(m) of the Code. The Committee shall administer the Plan so as to conform
at all times with the provisions of Section 16(b) of the Exchange Act and Rule
16b-3 promulgated thereunder. A majority of the Committee shall constitute a
quorum, and subject to the provisions of Section 5 the acts of a majority of
the members present at any meeting at which a quorum is present, or acts
approved unanimously in writing by the Committee, shall be the acts of the
Committee.
The Committee may delegate to one or more of its members, or to one or
more agents, such administrative duties as it may deem advisable, and the
Committee or any person to whom it has delegated duties as aforesaid may employ
one or more persons to render advice with respect to any responsibility the
Committee or such person may have under the Plan. The Committee may employ
attorneys, consultants, accountants, or other persons and the Committee, RII
and its officers and directors shall be entitled to rely upon the advice,
opinions or valuations of any such persons. All actions taken and all
interpretations and determinations made by the Committee in good faith shall be
final and
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binding upon all persons who have received grants under the Plan, RII and all
other interested persons. No member or agent of the Committee shall be
personally liable for any action, determination or interpretation made in good
faith with respect to the Plan and all members and agents of the Committee
shall be fully protected by RII in respect of any such action, determination or
interpretation.
3. Shares Available
Subject to the adjustments provided in Section 10, the maximum
aggregate number of shares of Common Stock which may be purchased pursuant to
the exercise of Options granted under the Plan shall not exceed 2,333,425
shares of Common Stock. If, for any reason, any shares as to which Options
have been granted cease to be subject to purchase thereunder, including without
limitation the expiration of such Options, the termination of such Options
prior to exercise or the forfeiture of such Options, such shares thereafter
shall be available for grants to such individual or other individuals under the
Plan unless such shares, if so made available, would not be exempt under
Section 16(b) of the Exchange Act pursuant to Rule 16b-3. Options granted
under the Plan may be fulfilled in accordance with the terms of the Plan with
either authorized and unissued shares of Common Stock or issued shares of such
Common Stock held in RII's treasury or both, at the discretion of RII.
4. Eligibility and Bases of Participation
Grants under the Plan (i) may be made, pursuant to Section 6, to key
employees and officers of RII or any subsidiary thereof who are regularly
employed on a salaried basis by RII or any subsidiary thereof and who are so
employed on the date of such grant (the "Officer and Key Employee
Participants"), (ii) may be made, pursuant to Section 6, to directors of RII,
other than Committee Participants (as defined below), who are not employees and
who are retained in such capacity on the date of such grant (the "Director
Participants"), (iii) may be made, pursuant to Section 7, to individuals who
serve on the Committee or have been named to serve on the Committee in the
future (the "Committee Participants"), and (iv) may be made, pursuant to
Section 8, to directors of any subsidiary of RII and to consultants and others
providing services to RII or any subsidiary thereof (the "Subsidiary and
Consultant Participants").
The Officer and Key Employee Participants and the Director
Participants collectively are referred to as the "Grant Participants".
5. Authority of Committee
Subject to and not inconsistent with the express provisions of the
Plan and the Code, the Committee shall have plenary authority, in its sole
discretion, to:
a. other than with respect to Committee Participants, determine
the persons to whom Options shall be granted, the time when
such Options shall be granted, the number of Options, the
purchase price or exercise price of each Option, the
restrictions to be applicable to Options and the other terms
and provisions thereof (which need not be identical);
b. provide an arrangement through registered broker-dealers
whereby temporary financing may be made available to an
optionee by the broker-dealer, under the rules and regulations
of the Federal Reserve Board,
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for the purpose of assisting the optionee in the exercise of
an Option, such authority to include the payment by RII of the
commissions, fees and charges of the broker-dealer;
c. establish procedures for an optionee to pay the exercise price
of an Option in whole or in part by delivering that number of
shares owned by such optionee or by withholding from the
shares otherwise issuable upon the exercise of the Option that
number of shares having a Fair Market Value on the date
preceding the date of exercise which shall equal the Option
exercise price for the number of shares of Common Stock as to
which the optionee desires to exercise the Option;
d. establish procedures for the collection of any taxes required
by any government to be withheld or otherwise deducted and
paid by RII or any subsidiary in respect of the issuance or
disposition of Common Stock acquired pursuant to the exercise
of an Option granted hereunder, which procedures may include
payment in whole or in part through the delivery of shares of
Common Stock owned by the optionee or withholding from the
shares otherwise issuable upon exercise of the Option, valued
on the basis of the Fair Market Value on the date preceding
such exercise;
e. prescribe, amend, modify and rescind rules and regulations
relating to the Plan;
f. make all determinations specified in or permitted by the Plan
or deemed necessary or desirable for its administration or for
the conduct of the Committee's business; and
g. establish any procedures determined to be appropriate in
discharging its responsibilities under the Plan.
6. Stock Options for Grant Participants
The Committee shall have the authority, in its sole discretion, to
grant Incentive Options or Non-Qualified Options or both Incentive Options and
Non-Qualified Options to Grant Participants (any such Options, the "Participant
Options") during the period beginning on May 3, 1994 (the "Effective Date") and
ending May 3, 2004 (the "Termination Date"). Notwithstanding anything contained
herein to the contrary, Incentive Options may be granted only to Officer and
Key Employee Participants. As a condition to the granting of any Participant
Option, the Committee shall require that the person receiving such Participant
Option agree not to sell or otherwise dispose of such Participant Option, any
Common Stock acquired pursuant to such Participant Option or any other
"derivative security" (as defined by Rule 16a-1(c) under the Exchange Act) for
a period of six months following the later of (A) the date of the grant of such
Participant Option or (B) the date when the exercise price of such Participant
Option is fixed if such exercise price is not fixed at the date of grant of
such Participant Option. The terms and conditions of the Participant Options
shall be determined from time to time by the Committee; provided, however, that
the Participant Options granted under the Plan shall be subject to the
following:
a. Exercise Price. The exercise price for each share of Common
Stock purchasable under any Participant Option granted
hereunder shall be such
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amount as the Committee, in its best judgment, shall determine
to be not less than 100% of the Fair Market Value per share at
the date the Participant Option is granted; provided, however,
that in the case of an Incentive Option granted to a person
who, at the time such Incentive Option is granted, owns shares
of capital stock of RII, or of any subsidiary of RII, having
more than 10% of the total combined voting power of all
classes of shares of capital stock of RII or of such
subsidiary, the exercise price for each share shall be not
less than 110% of the Fair Market Value per share (as
determined by the Committee) at the date the Incentive Option
is granted. In determining the stock ownership of a person
for purposes of this Section 6, the rules of Section 424(d) of
the Code shall be applied and the Committee may rely on
representations of fact made to it by such person and believed
by it to be true. The exercise price of the Participant
Options will be subject to adjustment in accordance with the
provisions of Section 10.
b. Payment. The exercise price per share of Common Stock with
respect to each Participant Option shall be payable at the
time the Participant Option is exercised. Such price shall be
payable in cash, which may be paid by wire transfer in
immediately available funds, by check, by a commitment by a
broker-dealer to pay to RII that portion of any sale proceeds
receivable by the optionee upon exercise of a Participant
Option or by any other instrument acceptable to RII or, in the
discretion of the Committee, by delivery to RII of shares of
Common Stock or by any other method permitted pursuant to
Section 5. Shares delivered to or withheld by RII in payment
of the exercise price shall be valued at the Fair Market Value
of the Common Stock on the day preceding the date of the
exercise of the Participant Option.
c. Limit On Annual Option Grants. No Officer and Key Employee
Participant may be granted in any fiscal year Participant
Options under the Plan cumulatively exercisable for more than
500,000 shares of Common Stock.
d. Continuation of Employment. Notwithstanding anything else
contained herein, each Option granted to an Officer and Key
Employee Participant by its terms shall require the optionee
to remain in the continuous employ of RII or any subsidiary
thereof for at least six months (or three months in case of an
Incentive Option or such other time period as may apply
pursuant to Section 6.f. or 6.g.) from the date of grant of
the Option, before the right to exercise any part of the
Option will accrue.
e. Exercisability of Participant Options. Subject to this
Section 6 and Section 9, each Participant Option shall vest
and become exercisable on the dates and in the amounts set
forth in the particular stock option agreement between RII and
the optionee, provided, however, that a Participant Option
shall expire not later than ten years from the date such
Option is granted; and provided, further, however, that in the
case of an Incentive Option granted to a person who, at the
time such Incentive Option is granted, owns shares of capital
stock of RII, or of any subsidiary of RII, having more than
10% of the total combined voting power of all classes of
shares of capital stock of RII or of such subsidiary, such
Incentive Option shall expire not later than five years from
the date such Incentive Option is granted. The
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right to purchase shares shall be cumulative so that when the
right to purchase any shares has accrued such shares or any
part thereof may be purchased at any time thereafter until the
expiration or termination of the Participant Option.
f. Death. In the event of the death of an optionee, all
Participant Options held by such optionee on the date of such
death shall vest in full and become immediately exercisable.
Upon such death, the legal representative of such optionee, or
such person who acquired such Participant Options by bequest
or inheritance or by reason of the death of the optionee,
shall have the right for one year after the date of death (but
not after the expiration or termination of the Participant
Options), to exercise such optionee's Participant Options with
respect to all or any part of the shares of Common Stock
subject thereto.
g. Disability. If the employment of an optionee is terminated
because of Disability (as defined in Section 12), all
Participant Options held by such optionee on the date of such
termination shall vest in full and become immediately
exercisable. Such optionee shall have the right for one year
after the date of such termination (but not after the
expiration or termination of the Participant Options), to
exercise such optionee's Participant Options with respect to
all or any part of the shares of Common Stock subject thereto.
h. Retirement. In the event the employment of an Officer and Key
Employee Participant is terminated by reason of the Retirement
(as defined in Section 12) of the optionee, all Participant
Options held by such optionee on the date of such termination
shall vest in full and become immediately exercisable. Such
optionee shall have the right for three months after the date
of such termination (but not after the expiration or
termination of the Participant Options), to exercise such
optionee's Participant Options with respect to all or any part
of the shares of Common Stock subject thereto, except that if
such optionee at the time of Retirement serves as a director
of RII such options shall remain exercisable as provided in
Section 6.j. The Committee, in its discretion, shall determine
whether an optionee's employment was terminated by reason of
Retirement and whether such optionee is entitled to the
treatment afforded by this subsection h.
i. Other Termination or For Cause. If the employment of an
Officer and Key Employee Participant is terminated for any
reason other than those specified in subsections f., g. and h.
of this Section 6, such optionee shall have the right for
three months after the date of such termination (but not after
the expiration or termination of the Participant Options), to
exercise such optionee's Participant Options with respect to
all or any part of the shares of Common Stock which such
optionee was entitled to purchase immediately prior to the
time of such termination, except that if such optionee at the
time of such termination serves as a director of RII such
options shall remain exercisable as provided in Section 6.j
and if such optionee's employment was terminated by RII or any
subsidiary for good cause, such optionee immediately shall
forfeit all rights under his or her Participant Options except
as to the shares of Common Stock already purchased. For the
purposes of the Plan, the term "for good cause" shall mean:
(a) with
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respect to an optionee who is a party to a written employment
agreement with RII or any subsidiary which contains a
definition of "for good cause" or "for cause" (or words of
like import) for purposes of termination of employment
thereunder by RII or any subsidiary thereof, "for good cause"
or "for cause" as defined therein; or (b) in all other cases
as determined, in its sole discretion, by the Committee or the
Board of Directors: (i) the wanton or willful commission by an
optionee of an act, or the wanton or willful omission or
failure to act, that causes substantial damage (by reason,
without limitation, of financial exposure or loss or damage to
reputation or goodwill) to RII or any subsidiary; (ii) the
commission by the optionee of an act of fraud, intentional
misrepresentation, embezzlement, misappropriation or
conversion in the performance of such optionee's duties on
behalf of RII or any subsidiary; (iii) conviction of the
optionee for commission of a felony; or (iv) the continuing
failure of an optionee to perform the material duties of such
optionee to RII or any subsidiary.
j. Cessation of Directorship. In the event a Grant Participant
shall cease to be a director of RII, such optionee shall have
the right for one year after the date of such cessation (but
not after the expiration or termination of the Participant
Options), to exercise such optionee's Participant Options with
respect to all or any part of the shares of Common Stock
subject thereto.
k. Maximum Exercise. To the extent the aggregate Fair Market
Value of Common Stock (determined at the time of the grant)
with respect to which Incentive Options are exercisable for
the first time by an optionee during any calendar year under
all plans of RII or any subsidiary, exceeds $100,000, or such
other amount as may be prescribed under Section 422 of the
Code or applicable regulations or rulings from time to time,
the excess thereof shall be treated as Non-Qualified Options
and not as Incentive Options.
7. Stock Option Grants to Committee Participants
During the term of the Plan, on the date that a director of RII
commences service on the Committee (which in the case of the initial members of
the Committee shall be deemed to be at least twenty trading days following the
Effective Date), such Committee Participant automatically shall be granted a
Non-Qualified Option to purchase 10,000 shares of Common Stock, which
Non-Qualified Option except as otherwise provided in this Section 7 or Section
9 shall be exercisable upon grant as to 50% of the shares covered thereby and
shall be exercisable as to the remaining 50% of the shares covered thereby on
the first anniversary of being granted. During the term of the Plan on the
third business day following the date of any annual meeting of the holders of
the Common Stock at which directors are elected, each person who on such day is
a Committee Participant automatically shall be granted a Non-Qualified Option
to purchase 5,000 shares of Common Stock, which Non-Qualified Option, except as
otherwise provided in this Section 7 or Section 9, shall be fully exercisable
upon grant as to all of the shares covered thereby. A Non-Qualified Option
granted to a Committee Participant pursuant to this Section 7 is referred to as
an "Committee Option". If, on any date upon which Committee Options are to be
granted hereunder, the number of shares of Common Stock remaining available for
issuance under the Plan is insufficient for the grant of the total number of
Committee Options to all Committee Participants otherwise entitled thereto
pursuant to this Section 7, each Committee Participant shall receive Committee
Options to purchase a
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proportionate number of the available number of shares remaining (rounded down
to the greatest number of whole shares of Common Stock available). As a
condition to the granting of any Committee Option, the person receiving such
Committee Option shall agree not to sell or otherwise dispose of such Committee
Option, any Common Stock acquired pursuant to such Committee Option or any
other "derivative security" (as defined in Rule 16a-1(c) under the Exchange
Act) for a period of six months following the later of (A) the date of the
grant of such Committee Option or (B) the date when the exercise price of such
Committee Option is fixed if such exercise price is not fixed at the date of
grant of such Option. The terms and conditions of the Committee Options shall
be as follows:
a. Option Price. The exercise price of each share of Common
Stock purchasable under any Committee Options shall be such
amount as the Committee, in its best judgment, shall determine
to be 100% of the Fair Market Value per share at the date the
Committee Option is granted.
b. Payment. The exercise price per share of Common Stock with
respect to each Committee Option and any withholding tax due
in connection with such exercise may be paid by any of the
methods described under Sections 6.b. and 5.d., respectively,
unless RII at the time is prohibited from purchasing or
acquiring shares of its Common Stock.
c. Exercisability. Notwithstanding anything to the contrary in
the Plan, no Committee Option shall be exercisable after the
earlier of (i) the expiration of ten years from the date such
Committee Option is granted and (ii) one year after such
Committee Participant ceases for any reason to be a director
of RII. The right to purchase shares under any Committee
Option shall be cumulative so that when the right to purchase
any shares has accrued such shares or any part thereof may be
purchased at any time thereafter until the expiration or
termination of the Committee Option.
d. Death. In the event of the death of any Committee
Participant, all Committee Options held by such Committee
Participant on the date of death shall vest in full and become
immediately exercisable. Upon such death, the estate of the
Committee Participant shall have the right for one year after
the date of death (but not after the expiration or termination
of such Committee Options), to exercise such Committee
Participant's Committee Options with respect to all or
any-part of the shares of Common Stock subject thereto.
e. Amendment. The provisions of this Section 7 shall not be
amended more than one time in any six month period, other than
to comport with the amendments to the Code, the Employee
Retirement Income Security Act of 1974, as amended, or the
rules and regulations thereunder.
8. Stock Options for Subsidiary and Consultant Participants
The Committee shall have the authority, in its sole discretion, to
grant Non-Qualified Options to Subsidiary and Consultant Participants (any such
options, the "S&C Options") during the period beginning on the Effective Date
and ending on the Termination Date. As a condition to the granting of any S&C
Option, the Committee shall require that the person receiving such S&C Option
agree not to sell or otherwise dispose of such S&C Option, any Common Stock
acquired pursuant to such S&C Option or any other "derivative security" (as
defined by Rule 16a-1(c) under the Exchange Act) for a period of
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<PAGE> 61
six months following the later of (A) the date of the grant of such S&C Option
or (B) the date when the exercise price of such S&C Option is fixed if such
exercise price is not fixed at the date of grant of such S&C Option. The terms
and conditions of the S&C Options shall be determined from time to time by the
Committee.
9. Change of Control
Notwithstanding any provision herein to the contrary, upon the
occurrence of an event constituting a Change of Control (as defined in Section
12), all Options granted under the Plan immediately shall become fully
exercisable.
10. Adjustment of Shares
In the event the outstanding shares of Common Stock shall be increased
or decreased or changed into or exchanged for a different number or kind of
shares of stock or other securities of RII or another corporation by reason of
any consolidation, merger, combination, liquidation, reorganization,
recapitalization, stock dividend, stock split, split-up, split-off, spin-off,
combination of shares, exchange of shares or other like change in capital
structure of RII, the number or kind of shares or interests subject to an
Option and the per share price or value thereof shall be appropriately adjusted
by the Committee at the time of such event, provided that each optionee's
position with respect to the Option and the per share price or value thereof,
as a result of such adjustment, shall not be worse than it had been immediately
prior to such event. Any fractional shares or interests resulting from such
adjustment shall be eliminated. Notwithstanding the foregoing, (i) each such
adjustment with respect to an Incentive Option shall comply with the rules of
Section 424(a) of the Code and (ii) in no event shall any adjustment be made
that would render any Incentive Option other than an "incentive stock option"
for purposes of Section 422 of the Code. In addition, in such event the Board
of Directors of RII shall appropriately adjust the number of shares of Common
Stock for which Options may be granted under the Plan.
11. Miscellaneous Provisions
a. Assignment or Transfer. No grant of any "derivative security"
(as defined by Rule 16a-l(c) under the Exchange Act) made
under the Plan and no rights or interests therein shall be
assignable or transferable by an optionee except by will or
the laws of descent and distribution or, except as to
Incentive Options, pursuant to a qualified domestic relations
order as defined in the Code. During the lifetime of an
optionee, Options granted hereunder shall be exercisable only
by the optionee or the optionee's guardian or legal
representative.
b. Investment Representation. If a registration statement under
the Securities Act of 1933, as amended (the "Securities Act"),
with respect to the Common Stock issuable upon exercise of an
Option is not in effect at the time such Option is exercised,
RII may require, for the sole purpose of complying with the
Securities Act, that prior to delivering such Common Stock to
the exercising optionee such optionee must deliver to the
Secretary of RII a written statement (i) representing that
such Common Stock is being acquired for investment only and
not with a view to the resale or distribution thereof; (ii)
acknowledging that such Common Stock may not be sold unless
registered for sale under the Securities Act or pursuant to an
exemption
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<PAGE> 62
from such registration and (iii) agreeing that the
certificates representing such Common Stock shall bear a
legend to the foregoing effect.
c. Costs and Expenses. The costs and expenses of administering
the Plan shall be borne by RII and shall not be charged
against any Option nor to any person receiving an Option.
d. Funding of Plan. The Plan shall be unfunded. RII shall not be
required to make any segregation of assets to assure the
satisfaction of any Option under the Plan.
e. Other Incentive Plans. The adoption of the Plan does not
preclude the adoption by appropriate means of any other
incentive plan for employees.
f. Effect on Employment. Nothing contained in the Plan or any
agreement related hereto or referred to herein shall affect,
or be construed as affecting, the terms of employment of any
Grant Participants except to the extent specifically provided
herein or therein. Nothing contained in the Plan or any
agreement related hereto or referred to herein shall impose,
or be construed as imposing, an obligation on (i) RII or any
subsidiary to continue the employment of any Grant Participant
or (ii) any Grant Participant to remain in the employ of RII
or any subsidiary.
g. Termination or Suspension of the Plan. The Board of Directors
may at any time suspend or terminate the Plan. The Plan,
unless sooner terminated under Section 13 of the Plan or by
action of the Board of Directors, shall terminate at the close
of business on the Termination Date. Options may not be
granted while the Plan is suspended or after it is terminated.
Rights and obligations under any Option granted while the Plan
is in effect shall not be altered or impaired by suspension or
termination of the Plan, except with the consent of the person
to whom the Option was granted. The power of the Committee to
construe and administer any Option granted prior to the
termination or suspension of the Plan nevertheless shall
continue after such termination or during such suspension.
h. Savings Provision. With respect to persons subject to Section
16 of the Exchange Act, the transactions under the Plan are
intended to comply with all applicable conditions of Rule
16b-3 or its successors under the Exchange Act. To the extent
any provision of the Plan or action by the Committee fails so
to comply, it shall be deemed null and void to the extent
permitted by law.
i. Governing Law. The Plan, such Options as may be granted
hereunder and all related matters shall be governed by and
construed and enforced in accordance with the laws of the
State of Delaware.
j. Partial Invalidity. The invalidity or illegality of any
provision herein shall not be deemed to affect the validity of
any other provision.
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12. Definitions
a. "Fair Market Value", as it relates to the Common Stock, shall
mean the average of the high and low sale prices of such
Common Stock on the date such determination is required
herein, or if there were no sales on such date, the average
closing bid and asked prices, as reported on the national
securities exchange on which RII's Common Stock is listed or
in the absence of such listing on the Nasdaq National Market
or if such Common Stock is not at the time listed on a
national securities exchange or traded on the Nasdaq National
Market, the value of such Common Stock on such date as
determined in good faith by the Committee.
b. "Disability" shall have the meaning set forth in Section
22(c)(3) of the Code.
c. "Change of Control" shall be deemed to have occurred if,
subsequent to the Effective Date of this Plan, (A) any
"person" (as such term is defined in Section 13(d) of the
Exchange Act) becomes the beneficial owner, directly or
indirectly, of either (x) a majority of the Common Stock or
(y) securities of RII representing a majority of the combined
voting power of RII's then outstanding voting securities, or
(B) during any period of two consecutive years, individuals
who at the beginning of such period constitute the Board of
Directors of RII, at any time after the beginning of such
period, for any reason, cease to constitute a majority of the
Board of Directors of RII unless the election of each new
director was nominated or ratified by at least two-thirds of
the directors still in office who were directors at the
beginning of such two year period; provided, however, that in
the case of Director Participants and Committee Participants,
the failure of a Director Participant or Committee Participant
nominated for reelection by management to be re-elected in a
contested proxy contest also shall constitute a Change of
Control as to such Director Participant or Committee
Participant. For the purposes of the Plan, a Class B
Triggering Event (as defined in RII's Form S-4, Registration
No. 33-50733, filed with the Securities and Exchange
Commission) shall not constitute a Change of Control.
d. "Retirement" shall mean the date upon which a Grant
Participant, having attained an age of not less than 59-1/2 or
such other age as may be determined by the Committee in its
sole discretion, terminates his employment with RII or any
subsidiary, provided that such Grant Participant has been
employed by RII or any subsidiary.
13. Amendment of Plan
The Board of Directors of RII shall have the right to amend, modify,
suspend or terminate the Plan at any time, provided that no amendment shall be
made without stockholder approval which shall (i) increase the total number of
shares of the Common Stock of RII which may be issued and sold pursuant to
Options granted under the Plan (except for increases due to adjustments in
accordance with Section 10), (ii) materially increase the benefits accruing to
participants under the Plan, (iii) decrease the minimum exercise price in the
case of an Incentive Option or (iv) materially modify the provisions of the
Plan relating to eligibility with respect to Options. In no event may the Plan
be amended in any way that would retroactively impair the Committee's
discretion. The
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<PAGE> 64
Board of Directors shall be authorized to amend the Plan and the Options
granted thereunder (A) to quality such Options as "incentive stock options"
within the meaning of Section 422 of the Code or (B) to comply with Rule 16b-3
(or any successor rule) under the Exchange Act. No amendment, modification,
suspension or termination of the Plan, without the consent of the holder
thereof shall adversely alter or impair any Options previously granted under
the Plan.
14. Effective Date
The Plan shall become effective at 9:00 A.M., Atlantic City, New
Jersey time, on the Effective Date, the Plan having been, and having been
deemed to be, approved by a vote of the stockholders of RII by written consent
within 12 months before the Effective Date pursuant to section 6.6 of the Joint
Plan of Reorganization under Chapter 11 of the Bankruptcy Code Proposed by
Resorts International, Inc., GGRI, Inc., Resorts International Hotel, Inc.,
Resorts International Hotel Financing, Inc., and P.I. Resorts Limited, as
modified, and confirmed by order, entered April 22, 1994, of the United States
Bankruptcy Court for the District of Delaware. Subject to the preceding
sentence and the right of the Board of Directors to terminate the Plan at any
time pursuant to Section 13 hereof, the Plan shall remain in effect until the
earlier of (i) the date that Options covering all shares of Common Stock
issuable under the Plan have been granted or (ii) the Termination Date.
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APPENDIX B
[APPENDIX TO FILING. FORM OF PROXY TO BE DISTRIBUTED TO SHAREHOLDERS.]
RESORTS INTERNATIONAL, INC.
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
JUNE 27, 1995
The undersigned hereby appoints Matthew B. Kearney and David
G. Bowden, or either of them, each with full power of substitution, as the
proxies of the undersigned and hereby authorizes them to represent and to vote
as designated on the reverse side all shares of the common stock, par value
$.01 per share (the "RII Common Stock"), of Resorts International, Inc. (the
"Company") that the undersigned would be entitled to vote if personally present
at the Annual Meeting of Shareholders of the Company to be held on June 27,
1995 and at any adjournment or adjournments thereof.
_________________________________________________
THIS PROXY IS SOLICITED ON BEHALF OF THE DIRECTORS OF THE COMPANY
THIS PROXY, WHEN PROPERLY RECEIVED, WILL BE VOTED IN THE MANNER INDICATED
HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO INSTRUCTION IS GIVEN, THIS PROXY
WILL BE VOTED FOR THE ELECTION OF DIRECTORS AND FOR PROPOSALS NO. 2, 3, 4 AND
5, AND IN ACCORDANCE WITH THE DISCRETION OF THE PROXIES ON SUCH OTHER BUSINESS
AS MAY PROPERLY COME BEFORE THE MEETING.
IMPORTANT - PLEASE SIGN AND DATE THE OTHER SIDE AND RETURN PROMPTLY
(CONTINUED ON REVERSE SIDE)
<PAGE> 66
RESORTS INTERNATIONAL, INC.
<TABLE>
<C> <C> <C> <C> <C>
[ ] ___________________ ______________
ACCOUNT NUMBER COMMON
1. ELECTION OF DIRECTORS: NOMINEES: THOMAS E. GALLAGHER
JAY M. GREEN
FOR ALL NOMINEES LISTED WITHHOLD AUTHORITY (INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL
(EXCEPT AS MARKED TO THE TO VOTE FOR ALL NOMINEES NOMINEE, WRITE THAT NOMINEE'S NAME ON THE LINE PROVIDED BELOW)
CONTRARY) LISTED
[ ] [ ] __________________________________________________________________
2. PROPOSAL TO APPROVE A ONE-FOR-FIVE REVERSE STOCK SPLIT OF THE RII COMMON STOCK.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
3. PROPOSAL TO APPROVE AN AMENDMENT TO THE COMPANY'S AMENDED AND RESTATED CERTIFICATE OF INCORPORATION TO CHANGE THE NAME OF THE
COMPANY TO "GRIFFIN GAMING & ENTERTAINMENT, INC.".
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
4. PROPOSAL TO APPROVE AMENDMENTS TO THE COMPANY'S 1994 STOCK OPTION PLAN TO PERMIT THE GRANT OF NON-QUALIFIED STOCK OPTIONS TO
DIRECTORS OF SUBSIDIARIES OF THE COMPANY AND TO CONSULTANTS AND OTHERS PROVIDING SERVICES TO THE COMPANY AND TO INCREASE THE
MAXIMUM NUMBER OF OPTIONS THAT MAY BE GRANTED TO OFFICER AND KEY EMPLOYEE PARTICIPANTS IN ANY ONE YEAR.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
5. PROPOSAL TO RATIFY THE SELECTION OF ERNST & YOUNG AS THE COMPANY'S INDEPENDENT PUBLIC ACCOUNTANTS FOR THE FISCAL YEAR ENDING
DECEMBER 31, 1995.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
6. IN THEIR DISCRETION TO VOTE ON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENT OR ADJOURNMENTS
THEREOF.
</TABLE>
<PAGE> 67
WHEN SIGNING AS ATTORNEY, EXECUTOR, ADMINISTRATOR, TRUSTEE OR GUARDIAN, PLEASE
GIVE FULL TITLE AS SUCH. IF A CORPORATION, PLEASE SIGN IN FULL CORPORATE NAME
BY PRESIDENT OR SUCH OTHER AUTHORIZED OFFICER. IF A PARTNERSHIP, PLEASE SIGN
IN FULL PARTNERSHIP NAME BY AUTHORIZED PERSON.
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, YOU ARE URGED TO EXECUTE AND
RETURN THIS PROXY, WHICH MAY BE REVOKED AT ANY TIME PRIOR TO ITS USE.
____________________________________ DATE:______________, 1995
(SIGNATURE OF SHAREHOLDER)
____________________________________ DATE:______________, 1995
(SIGNATURE OF ADDITIONAL SHAREHOLDER)
PLEASE SIGN YOUR NAME EXACTLY AS IT APPEARS HEREON AND DATE AND RETURN THIS
PROXY IN THE REPLY ENVELOPE PROVIDED. IF YOU RECEIVE MORE THAN ONE PROXY CARD,
PLEASE SIGN AND RETURN ALL CARDS RECEIVED.
3
