Form 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File No. 1-4748
Griffin Gaming & Entertainment, Inc.
(Exact name of registrant as specified in its charter)
Delaware 59-0763055
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1133 Boardwalk, Atlantic City, New Jersey 08401
(Address of principal executive offices) (Zip Code)
(609) 344-6000
(Registrant's telephone number,
including area code)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90
days.
Yes X No
Indicate by check mark whether the registrant has filed all documents
and reports required to be filed by Sections 12, 13 or 15(d) of the
Securities Exchange Act of 1934 subsequent to the distribution of
securities under a plan confirmed by a court.
Yes X No
Number of shares outstanding of each class of registrant's common
stock as of June 30, 1996: Common Stock - 7,941,035 shares and Class
B Redeemable Common Stock - 35,000 shares.
Exhibit Index is presented on page 19
Total number of pages 62
1<PAGE>
GRIFFIN GAMING & ENTERTAINMENT, INC.
FORM 10-Q
INDEX
Page Number
Part I. Financial Information
Item 1. Financial Statements
Consolidated Balance Sheets
at June 30, 1996 and
December 31, 1995 3
Consolidated Statements of
Operations for the Quarters
and Halves Ended June 30,
1996 and 1995 4
Consolidated Statements of
Cash Flows for the Halves
Ended June 30, 1996 and 1995 5
Notes to Consolidated
Financial Statements 6
Item 2. Management's Discussion and
Analysis of Financial
Condition and Results of
Operations 9
Part II. Other Information
Item 1. Legal Proceedings 14
Item 2. Changes in Securities 15
Item 4. Submission of Matters to a
Vote of Security Holders 15
Item 6. Exhibits and Reports on
Form 8-K 17
2<PAGE>
PART I. - FINANCIAL INFORMATION
Item 1. Financial Statements
GRIFFIN GAMING & ENTERTAINMENT, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In Thousands of Dollars, except par value)
June 30, December 31,
1996 1995
(Unaudited)
ASSETS
Current assets:
Cash (including cash equivalents
of $41,197 and $35,515) $ 56,329 $ 51,210
Restricted cash equivalents 4,454 4,362
Receivables, less allowance for
doubtful accounts of $3,306
and $3,570 7,794 7,910
Inventories 2,109 2,447
Prepaid expenses 6,637 6,615
Total current assets 77,323 72,544
Land held for investment,
development or resale 93,939 93,795
Property and equipment, net of
accumulated depreciation of $67,032
and $62,227 157,661 158,975
Deferred charges and other assets 13,671 13,137
$ 342,594 $ 338,451
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term
debt $ 613 $ 589
Accounts payable and accrued
liabilities 43,945 41,209
Total current liabilities 44,558 41,798
Long-term debt, net of unamortized
discounts 219,129 217,356
Deferred income taxes 53,275 53,350
Shareholders' equity:
Common Stock - $.01 par value 79 79
Class B Stock - $.01 par value
Capital in excess of par 129,572 129,572
Accumulated deficit (104,019) (103,704)
Total shareholders' equity 25,632 25,947
$ 342,594 $ 338,451
3<PAGE>
GRIFFIN GAMING & ENTERTAINMENT, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands, except per share data)
(Unaudited)
Quarter Ended Half Ended
June 30, June 30,
1996 1995 1996 1995
Revenues:
Casino $68,094 $68,514 $126,781 $130,632
Rooms 1,789 1,721 3,223 3,067
Food and beverage 3,414 2,867 6,126 5,897
Other casino/hotel
revenues 1,261 1,458 2,437 2,644
Real estate related 2,266 2,140 4,406 4,221
76,824 76,700 142,973 146,461
Expenses:
Casino 41,544 38,922 79,257 75,986
Rooms 949 907 1,985 1,882
Food and beverage 3,906 3,251 7,176 6,640
Other casino/hotel
operating expenses 7,969 8,489 16,722 17,121
Selling, general and
administrative 9,091 9,175 19,037 19,533
Depreciation 3,240 3,774 6,205 6,962
66,699 64,518 130,382 128,124
Earnings from operations 10,125 12,182 12,591 18,337
Other income (deductions):
Interest income 801 735 1,570 1,972
Interest expense, net (6,091) (6,308) (12,393) (12,599)
Amortization of debt
discounts (1,037) (913) (2,083) (1,994)
Net earnings (loss) $ 3,798 $ 5,696 $ (315) $ 5,716
Net earnings (loss) per
share - primary $ .43 $ .65 $(.04) $ .68
Weighted average number
of shares and equivalents 8,775 8,788 7,941 8,366
Net earnings (loss) per
share - fully diluted $ .43 $ .65 $(.04) $ .66
Weighted average number
of shares and equivalents 8,798 8,788 7,941 8,704
4<PAGE>
GRIFFIN GAMING & ENTERTAINMENT, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands of Dollars)
(Unaudited)
Half Ended
June 30,
1996 1995
Cash flows from operating activities:
Cash received from customers $ 142,653 $ 145,426
Cash paid to suppliers and employees (119,835) (114,173)
Cash flow from operations before
interest and income taxes 22,818 31,253
Interest received 1,528 1,931
Interest paid, net of amount
capitalized (12,345) (12,410)
Income taxes paid (79)
Net cash provided by operating
activities 11,922 20,774
Cash flows from investing activities:
Payments for property and equipment,
including capitalized interest and
property taxes (4,891) (14,713)
Payments for land held for
investment, development or resale (144)
Proceeds from sale of land held for
investment, development or resale 65
CRDA deposits and bond purchases (1,455) (1,420)
Net cash used in investing
activities (6,425) (16,133)
Cash flows from financing activities:
Proceeds from borrowing 1,815
Repayments of non-public debt (286) (47)
Proceeds from exercise of
stock options 17
Net cash provided by (used in)
financing activities (286) 1,785
Net increase in cash and cash
equivalents 5,211 6,426
Cash and cash equivalents at beginning
of period 55,572 40,891
Cash and cash equivalents at end of
period $ 60,783 $ 47,317
5<PAGE>
GRIFFIN GAMING & ENTERTAINMENT, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
A. General:
The accompanying consolidated interim financial statements, which
a r e u naudited, include the operations of Griffin Gaming &
Entertainment, Inc. ("GGE") and its subsidiaries. GGE was known as
Resorts International, Inc. until its name change, which was effective
June 30, 1995. "GGE" is used herein to refer to the corporation both
before and after its name change. The term "Company" as used herein
includes GGE and/or one or more of its subsidiaries, as the context
may require.
W h i l e the accompanying interim financial information is
unaudited, management of the Company believes that all adjustments
necessary for a fair presentation of these interim results have been
made and all such adjustments are of a normal recurring nature.
The notes presented herein are intended to provide supplemental
disclosure of items of significance occurring subsequent to December
31, 1995 and should be read in conjunction with the Notes to
Consolidated Financial Statements contained in pages 41 through 60 of
GGE's Annual Report on Form 10-K for the year ended December 31, 1995.
B. Reverse Repurchase Agreements:
Cash equivalents at June 30, 1996 included reverse repurchase
agreements (federal government securities purchased under agreements
to resell those securities) with the institutions listed in the
following table under which the Company had not taken delivery of the
underlying securities. These agreements matured during the first week
of July 1996.
(In Thousands of Dollars)
Prudential Securities, Inc. $32,692
National Westminster Bank NJ $ 7,921
C. Complimentary Services:
The Consolidated Statements of Operations reflect each category
of operating revenues excluding the retail value of complimentary
services provided to casino patrons without charge. The retail value
of such complimentary services excluded from revenues amounted to
$7,143,000 and $6,968,000 for the second quarter of 1996 and 1995,
respectively, and $12,782,000 and $12,639,000 for the first half of
1996 and 1995, respectively. The rooms, food and beverage, and other
casino/hotel operations departments allocate a percentage of their
total operating expenses to the casino department for complimentary
services provided to casino patrons. These allocations do not
n e c essarily represent the incremental cost of providing such
complimentary services to casino
6<PAGE>
patrons. Amounts allocated to the casino department from the other
operating departments were as follows:
Quarter Ended Half Ended
June 30, June 30,
(In Thousands of Dollars) 1996 1995 1996 1995
Rooms $1,224 $1,248 $ 2,334 $ 2,299
Food and beverage 4,045 4,203 7,868 8,149
Other casino/hotel operations 1,527 1,397 2,845 2,715
Total allocated to casino $6,796 $6,848 $13,047 $13,163
D. Related Party Transactions:
Griffin Entertainment, Inc. ("GEI"), a subsidiary of GGE, was
formed in 1995 to pursue development and production activities
in the television, live entertainment and motion picture
industries. In March 1996, in order to enable the Company to
concentrate its efforts on expansion of its core gaming business,
the independent members of the Board of Directors of GGE
accepted an offer from The Griffin Group, Inc., a corporation
controlled by Merv Griffin, Chairman of the Board of GGE, to
purchase the assets and ongoing operations of GEI at a purchase price to
equal the amount of the Company's expenditures on these assets and
operations from their inception in September 1995 through the
consummation of the transaction. There were no revenues offsetting
these expenditures, which totaled approximately $340,000 through
April 30, 1996, the effective date of the sale.
E. Capitalized Interest and Real Estate Taxes
In the second quarter of 1996 the Company commenced the
capitalization of interest and real estate taxes on its expansion
project adjacent to Merv Griffin's Resorts Casino Hotel (the "Resorts
Casino Hotel") in Atlantic City, New Jersey. Interest expense
reported is net of $283,000 capitalized in the second quarter of 1996.
Real estate taxes of $144,000 were also capitalized in that period.
7<PAGE>
F. Statements of Cash Flows:
Supplemental disclosures required by Statement of Financial
Accounting Standards No. 95 "Statement of Cash Flows" are presented
below.
Half Ended
June 30,
(In Thousands of Dollars) 1996 1995
Reconciliation of net earnings (loss) to
net cash provided by operating
activities:
Net earnings (loss) $ (315) $ 5,716
Adjustments to reconcile net earnings
(loss) to net cash provided by
operating activities:
Depreciation 6,205 6,962
Amortization of debt discounts 2,083 1,994
Provision for doubtful receivables 255 500
Provision for discount on CRDA
obligations, net of amortization 723 654
Deferred tax benefit (75)
Gain on asset disposition (65)
Net increase in receivables (139) (1,599)
Net (increase) decrease in
inventories and prepaid expenses 316 (120)
Net decrease in deferred
charges and other assets 286 414
Net increase in accounts payable
and accrued liabilities 2,648 6,253
Net cash provided by operating activities $11,922 $20,774
Non-cash financing and investing
activities:
Exchange of real estate in Atlantic
City (at carrying value of property
exchanged) $ 1,501
Increase in liabilities for additions
to other assets $ 88 81
G. Commitments and Contingencies:
Casino Reinvestment Development Authority ("CRDA")
As previously reported, certain issues have been raised by the
CRDA and the State of New Jersey Department of the Treasury (the
"Treasury") concerning the satisfaction of investment obligations for
the years 1979 through 1983 by Resorts International Hotel, Inc.
("RIH"), GGE's subsidiary which owns and operates Resorts Casino
Hotel. These matters were dormant for an extensive period of time
until late 1995 when the Company was contacted by the CRDA. CRDA
legal representatives have recently indicated that Treasury may take
a position that RIH owes
8<PAGE>
a d ditional investment alternative taxes including interest and
possibly penalties. If these issues are determined adversely, RIH
could be required to pay the relevant amount in cash. Management of
the Company intends to contest these issues and believes a negotiated
settlement with an insignificant monetary cost to the Company is
possible.
Litigation
GGE and certain of its subsidiaries are defendants in certain
litigation. In the opinion of management, based upon advice of
counsel, the aggregate liability, if any, arising from such litigation
w i ll not have a material adverse effect on the accompanying
consolidated financial statements.
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
FINANCIAL CONDITION
Liquidity
At June 30, 1996 the Company's working capital amounted to
$ 3 2 , 7 65,000, including unrestricted cash and equivalents of
$56,329,000. A significant portion of the unrestricted cash and
e q u i valents is required for day-to-day operations, including
approximately $10,000,000 of currency and coin on hand which amount
varies by days of the week, holidays and seasons, as well as
additional cash balances necessary to meet current working capital
needs.
Capital Expenditures and Resources
The Company continues the development of its expansion plans for
the 4.4 acre tract on the Boardwalk, adjacent to Resorts Casino Hotel.
The entire addition is anticipated to include up to 700 new hotel
rooms, 70,000 square feet of casino space and a 2,000 space parking
garage and transportation center. Subject to receipt of regulatory
approvals, the Company plans to break ground in the fall of 1996 on
the infrastructure necessary to support the full expansion. The first
phase of construction is expected to consist of 500 new hotel rooms,
50,000 square feet of casino floor space and the new garage.
C o nstruction costs for this phase are currently estimated at
approximately $200,000,000. Initial cash outlays are expected to be
from existing working capital and cash flow generated by operations
during the construction period. External sources of financing will
also be required. In this regard, the Company is exploring various
alternatives in both the public and private sectors.
During the first half of 1996 the Company's capital expenditures
included approximately $3,500,000 at Resorts Casino Hotel for computer
system upgrades, corridor carpeting and other maintenance projects.
9<PAGE>
Also during the first half of 1996 the Company expended
approximately $500,000 on the demolition of the Steeplechase Pier, an
ocean pier across the Boardwalk from Resorts Casino Hotel, which was
damaged beyond repair in a fire several years ago. The Company has
recently received permits to remove the remaining structure of the old
pier and to construct a new pier similar in size to the old one.
RESULTS OF OPERATIONS
Revenues
Revenues by geographic and business segment were as follows (in
thousands of dollars):
Quarter Ended Half Ended
June 30, June 30,
1996 1995 1996 1995
Casino/hotel - Atlantic
City, New Jersey:
Casino $68,094 $68,514 $126,781 $130,632
Rooms 1,789 1,721 3,223 3,067
Food and beverage 3,414 2,867 6,126 5,897
Other casino/hotel 1,261 1,458 2,437 2,644
74,558 74,560 138,567 142,240
Real estate related -
Atlantic City, New Jersey 2,266 2,140 4,406 4,221
Revenues from operations $76,824 $76,700 $142,973 $146,461
Second Quarter and First Half 1996 Compared to 1995
Casino/hotel - Atlantic City, New Jersey
Casino revenues were down $420,000 for the second quarter of 1996
and down $3,851,000 for the first half. Of the decrease for the half,
$3,448,000 was due to decreased slot win, which was down due to a
decrease in hold percentage (ratio of casino win to total amount
wagered for slots or total amount of chips purchased for table games)
while the amount wagered by patrons increased slightly. Table game
win was down by $339,000 as the effects of an increased hold
percentage were offset by a decrease in amounts wagered. Revenues
from poker, simulcasting and keno were also down slightly.
Two factors negatively affected the Company's performance in the
first half - heightened competition in the Atlantic City market for
patrons and severe weather conditions during the first quarter of
1996.
A s competition for patrons has intensified, promotions -
complimentary services (rooms, food and beverage provided to patrons
without charge), cash giveaways and events - have increased. In
recent quarters certain competitors have increased complimentaries and
cash
10<PAGE>
giveaways dramatically. Although the Company did increase its
promotions somewhat during the first quarter and more significantly
during the second quarter, it still has elected not to keep pace with
the industry's increased promotions due to the belief that the
resulting increase in gaming win would not be sufficient to justify
the incremental costs incurred. (In this regard, see "Casino/hotel -
Atlantic City, New Jersey" under "Contribution to Consolidated
Earnings (Loss)" for a discussion of RIH's increased costs of
promotions.) Consequently, the Company's market share of revenues has
suffered. Also, expansions at two competing Atlantic City properties
opened in May 1996 which, combined, added approximately 1,100 hotel
rooms and approximately 60,000 square feet of gaming space. Several
other companies have announced plans to expand existing or construct
new casino/hotels in Atlantic City. The Company can give no assurance
that the increased cost of obtaining gaming revenues will not continue
in future periods.
As noted above, the severe weather experienced during the first
quarter of 1996 adversely affected operations in that period as the
principal means of transportation to Atlantic City is by automobile or
bus. The impact of inclement weather is more severe on the Resorts
Casino Hotel than on competing properties which are more accessible
from main thoroughfares and which currently have more covered parking
and covered terminals for bus patrons.
Food and beverage revenues were up for the second quarter and
first half of 1996 due largely to a decrease in complimentary meals
served. Also, the number of patrons served at the Company's food and
beverage outlets increased for the second quarter of 1996.
11<PAGE>
Contribution to Consolidated Earnings (Loss)
Results by geographic and business segment were as follows (in
thousands of dollars):
Quarter Ended Half Ended
June 30, June 30,
1996 1995 1996 1995
Casino/hotel - Atlantic
City, New Jersey $ 5,821 $ 7,440 $ 5,404 $ 10,259
Real estate related -
Atlantic City, New Jersey 2,696 2,232 4,694 4,072
Other segments,
principally GEI 264 129
Management fees, net of
corporate expense 1,344 2,510 2,364 4,006
Earnings from operations 10,125 12,182 12,591 18,337
Other income (deductions):
Interest income 801 735 1,570 1,972
Interest expense, net (6,091) (6,308) (12,393) (12,599)
Amortization of debt
discounts (1,037) (913) (2,083) (1,994)
Net earnings (loss) $ 3,798 $ 5,696 $ (315) $ 5,716
Second Quarter and First Half 1996 Compared to 1995
Casino/hotel - Atlantic City, New Jersey
For the second quarter of 1996 casino, hotel and related
operating results decreased by $1,619,000 due to a net increase in
operating expenses. The most significant variances in operating
expenses were increases in casino promotional costs ($3,000,000) and
payroll and related costs ($500,000) and decreases in the accrual for
performance incentive bonuses ($500,000) and depreciation expense
($500,000). Casino promotional costs increased primarily due to an
increase in the amount of cash giveaways to bus patrons, as both the
cash giveaway per person and the number of bus passengers increased.
Payroll and related costs increased primarily due to increased cost of
union and other benefits.
For the first half of 1996 casino, hotel and related operating
results decreased by $4,855,000 due to a combination of the decreased
revenues discussed above and a net increase in operating expenses.
The most significant variances in operating expenses were increases in
casino promotional costs ($3,900,000) and payroll and related expenses
($900,000) and decreases in the accrual for performance incentive
bonuses ($1,200,000) and depreciation expense ($800,000). Casino
promotional costs increased primarily due to bus cash giveaways as the
cash giveaway per person increased, though the number of bus
passengers
12<PAGE>
was down slightly. The increase in payroll and related costs for the
half was due to increased salary and wage rates, although the average
number of employees was down slightly for the period, and, to a lesser
extent, increased cost of union benefits.
Real Estate Related
This segment includes real estate related revenues, lease
payments under a 99-year net lease of approximately 10 acres of
Boardwalk property in Atlantic City (the "Showboat Lease"), net of the
cost of carrying the Company's non-operating real estate. Lease
payments received under the Showboat Lease are passed-through (subject
to certain adjustments) as interest to holders of GGE's First Mortgage
Non-Recourse Pass-Through Notes due June 30, 2000 (the "Showboat
Notes"). Thus, the casino/hotel operations do not fund the interest
on the Showboat Notes.
The lease payments under the Showboat Lease are adjusted
annually, as of April 1, for changes in the consumer price index. For
the lease year commencing April 1, 1996 annual lease payments
increased from $8,560,000 to $8,805,000.
Also affecting the comparison of real estate related results
presented were credits of $660,000 and $400,000 recorded in the second
quarter of 1996 and 1995, respectively, for refunds of prior years'
real estate taxes due to reduced assessments. The Company does not
expect such refunds to continue in the future.
Other Segments, Principally GEI
See Note D of Notes to Consolidated Financial Statements for a
discussion of the sale of GEI, which was effective April 30, 1996.
Management Fees, Net of Corporate Expense
This segment includes credits for management fees which GGE
charges RIH based on three percent of its gross revenues. The
corresponding charge is included in the Atlantic City casino/hotel
segment. Management fees charged to RIH, amounted to $2,451,000 and
$2,446,000 for the second quarter of 1996 and 1995, respectively, and
$4,540,000 and $4,646,000 for the first half of 1996 and 1995,
respectively.
Corporate expense for the second quarter and first half of 1995
i n c ludes a credit of $1,000,000 from a favorable litigation
settlement.
T h e Environmental Protection Agency ("EPA") has named a
predecessor to GGE as a potentially responsible party in the Bay Drum
hazardous waste site (the "Site") in Tampa, Florida which the EPA has
listed on the National Priorities List. No formal action has
commenced against GGE and GGE intends to dispute any claims of this
nature, if asserted. Although it may ultimately be determined that
GGE is one of several hundred parties that are jointly and severally
liable for the costs of Site remediation and for damages to natural
resources at the Site caused by hazardous wastes, the extent of such
liability, if any, cannot be determined at this time.
13<PAGE>
PART II. - OTHER INFORMATION
Item 1. Legal Proceedings
The following is an update of the status of certain litigation
which was previously described in "Item 3. Legal Proceedings" of GGE's
Annual Report on Form 10-K for the year ended December 31, 1995 and in
"Item 1. Legal Proceedings" of GGE's Quarterly Report on Form 10-Q
for the quarter ended March 31, 1996.
U.S. District Court / U.S. Bankruptcy Court Action - GGE v.
Lowenschuss
As previously reported, in 1989 GGE filed an action to recover
sums paid to the defendant, as trustee for two Individual Retirement
Accounts and the Fred Lowenschuss Associates Pension Plan (the
"Pension Plan"), which was transferred to the U.S. Bankruptcy Court
for the District of New Jersey (the "NJ Bankruptcy Court") in
connection with the Company's former bankruptcy case commenced there
in 1989. On March 8, 1996 Fred Lowenschuss, as trustee of various
Lowenschuss children's trusts (the "Trusts"), and Laurance
Lowenschuss, as trustee for the Pension Plan, filed a counterclaim
and a third party claim against GGE and First Interstate Trust
Company, in the NJ Bankruptcy Court alleging that the Pension Plan and
Trusts timely surrendered certain securities for exchange under the
Company's 1990 plan of reorganization and that those securities were
wrongfully dishonored and returned. The Company replied to the
counterclaims in April 1996 and denied the allegations.
In connection with this litigation, Laurance Lowenschuss, as
trustee for the Pension Plan, and Fred Lowenschuss, as trustee of the
Trusts and as custodian, filed an action in May 1996 against GGE for
preliminary and permanent injunctive relief. The Lowenschusses sought
an order from the U.S. Bankruptcy Court for the District of Delaware
(the "Delaware Bankruptcy Court") to extend the post-confirmation bar
date of the Joint Plan of Reorganization of GGE confirmed in 1994 (the
" 1 9 9 4 Plan") and to secure the return of certain escrowed
distributions to holders of Old Series Notes (as defined in the 1994
Plan). On May 9, 1996, the Delaware Bankruptcy Court entered an
order, to which the parties had stipulated, extending the Lowenschuss'
date of surrender for Old Series Notes through November 10, 1996; any
funds held in escrow under the 1994 Plan will not be distributed
before that date.
As previously reported, the U.S. Bankruptcy Court for the
District of Nevada (the "Nevada Bankruptcy Court") confirmed Fred
Lowenschuss' plan of reorganization in October 1993. GGE appealed
certain portions of the confirmation order and other orders of the
Nevada Bankruptcy Court. In June 1994, the U.S. District Court for
the District of Nevada (the "Nevada District Court") granted GGE's
appeal in all respects. In October 1995, the U.S. Court of Appeals
for the Ninth Circuit affirmed the Nevada District Court's ruling in
all respects and in November 1995 that court denied Fred Lowenschuss'
petition for rehearing. On June 10, 1996, the United States Supreme
Court denied Fred Lowenschuss' petition for a writ of certiorari.
14<PAGE>
U.S. Bankruptcy Court Action - Rogers
As previously reported, plaintiff Rogers filed a Complaint in
Adversary Proceeding in the NJ Bankruptcy Court which alleged that the
Company did not comply with its 1990 plan of reorganization in
relation to the repayment by Merv Griffin of his $11,000,000
promissory note. The complaint further alleges that the Company
violated the court order approving the 1990 plan of reorganization by
filing a pre-packaged plan of reorganization in another district. The
Company had filed a motion to dismiss the proceeding before the NJ
Bankruptcy Court. The hearing for that motion was held on April 29,
1996. On June 12, 1996 the Court dismissed the second claim. The
Court declined to dismiss the claim regarding compliance with the
repayment obligation on the basis that an issue of fact existed on
whether Rogers received notice of the 1994 bankruptcy filing in
Delaware. Discovery is proceeding.
Item 2. Changes in Securities
Increase in Authorized Shares of Common Stock
At the annual meeting held on May 10, 1996, GGE's shareholders
approved an amendment to GGE's Restated Certificate of Incorporation,
which amendment increased the number of authorized shares of Common
Stock of GGE (the "Common Stock") from 20,000,000 to 100,000,000
shares. A copy of GGE's Restated Certificate of Incorporation, as
amended and further restated, is included as an exhibit hereto.
Amendment to 1994 Stock Option Plan
At the annual meeting held on May 10, 1996, GGE's shareholders
approved an amendment to GGE's 1994 Stock Option Plan, which amendment
increased the maximum number of shares of Common Stock that may be
issued under that plan from 466,685 to 966,685 shares. A copy of
GGE's 1994 Stock Option Plan as amended is included as an exhibit
hereto.
Item 4. Submission of Matters to a Vote of Security Holders
GGE held its annual meeting of shareholders on May 10, 1996, at
which meeting the following actions were taken by holders of Common
Stock:
(i) William J. Fallon was elected to serve as a director.
(ii) An amendment to GGE's Restated Certificate of
Incorporation, which increased the number of authorized shares of
Common Stock from 20,000,000 to 100,000,000 shares, was approved.
(iii) An amendment to GGE's 1994 Stock Option Plan, which
increased the maximum aggregate number of shares of Common Stock
issuable upon the exercise of options granted under that plan from
466,685 shares to 966,685 shares, was approved.
15<PAGE>
(iv) The appointment of Ernst & Young LLP as the Company's
independent auditors for the fiscal year ending December 31, 1996 was
ratified.
Also at the annual meeting, holders of GGE's class B redeemable
common stock (the "Class B Stock") elected Vincent J. Naimoli to serve
as a Class B Director. Holders of Class B Stock were not entitled to
vote on any other matter.
The other four members of GGE's Board of Directors, Merv Griffin,
Charles M. Masson (Class B Director), Thomas E. Gallagher and Jay M.
Green, continue to serve as directors.
A tabulation of votes on each of the matters voted on at the
annual meeting is presented below.
Votes Votes Absten- Broker
FOR AGAINST tions Non-Votes
COMMON STOCK VOTES:
Election of William J.
Fallon 6,401,588 194,747
Increase in authorized
shares 5,895,316 577,760 123,259
Amendment to 1994
Stock Option Plan 3,560,505 505,506 132,765 2,397,559
Ratification of
independent auditors 6,422,510 42,463 131,362
CLASS B STOCK VOTES:
Election of Vincent J.
Naimoli 15,907 2
16<PAGE>
Item 6. Exhibits and Reports on Form 8-K
a. Exhibits
The following Part I exhibits are filed herewith:
Exhibit
Number Exhibit
(11) Statement re computation of per share data
(27)(a) Financial data schedule as of June 30, 1996
(27)(b) Restated financial data schedule as of June 30, 1995
The following Part II exhibits are filed herewith:
Exhibit
Number Exhibit
(3)(a) Restated Certificate of Incorporation of GGE
(3)(b) Amended and Restated By-Laws of GGE
(4) GGE 1994 Stock Option Plan (as amended on May 10, 1996)
b. Reports on Form 8-K
No Current Report on Form 8-K was filed by GGE covering an event
during the second quarter of 1996. No amendments to previously filed
Forms 8-K were filed during the second quarter of 1996.
17<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
GRIFFIN GAMING & ENTERTAINMENT, INC.
(Registrant)
/s/ Matthew B. Kearney
Matthew B. Kearney
Executive Vice President - Finance
(Authorized Officer of Registrant
and Chief Financial Officer)
Date: August 7, 1996
18<PAGE>
GRIFFIN GAMING & ENTERTAINMENT, INC.
Form 10-Q for the quarterly period
ended June 30, 1996
EXHIBIT INDEX
Exhibit Reference to Previous
Filing
Number Exhibit or Page Number in Form 10-Q
(3)(a) Restated Certificate of
Incorporation of GGE Page 20.
(3)(b) Amended and Restated
By-Laws of GGE Page 34.
(4) GGE 1994 Stock Option
Plan (as amended on
May 10, 1996) Page 46.
(11) Statement re computation
of per share data Page 60.
(27)(a) Financial data schedule
as of June 30, 1996 Page 61.
(27)(b) Restated financial data
schedule as of June 30,
1995 Page 62.
19<PAGE>
EXHIBIT (3)(a)
RESTATED CERTIFICATE OF INCORPORATION
OF
GRIFFIN GAMING & ENTERTAINMENT, INC.
We, Matthew B. Kearney, Executive Vice President-Finance and
Treasurer and David G. Bowden, Vice President-Controller and
Secretary, of Griffin Gaming & Entertainment, Inc., a corporation
e x i sting under the laws of the State of Delaware (the
"Corporation"), do hereby certify that:
ONE: The name of the Corporation is "Griffin Gaming &
Entertainment, Inc."; the Corporation was formerly known as
"Resorts International, Inc." and was formed under the name "Mary
Carter Paint Co.".
TWO: The original Certificate of Incorporation of the
Corporation was filed in the office of the Secretary of State of
the State of Delaware on the 24th day of October, 1958.
THREE: This Restated Certificate of Incorporation was duly
adopted by the Board of Directors of the Corporation in
accordance with Section 245 of the General Corporation Law of the
State of Delaware. This Restated Certificate of Incorporation
only restates and integrates and does not further amend the
provisions of the Certificate of Incorporation of the Corporation
a s theretofore amended or supplemented, and there is no
discrepancy between those provisions and the provisions of this
Restated Certificate of Incorporation.
FOUR: This Restated Certificate of Incorporation has been
duly executed and acknowledged by the officers of the Corporation
i n accordance with Sections 245 and 103 of the General
Corporation Law of the State of Delaware.
FIVE: The text of the Certificate of Incorporation of the
Corporation is hereby restated, in its entirety, to read as
follows:
ARTICLE I
NAME
T h e name of the Corporation is "Griffin Gaming &
Entertainment, Inc.".
20<PAGE>
ARTICLE II
ADDRESS
The address of the Corporation's registered office in the
State of Delaware is 1013 Centre Road, City of Wilmington, County
of New Castle, and the name of its registered agent at such
address is United States Corporation Company.
ARTICLE III
PURPOSE
The purpose of the Corporation is to engage in any lawful
act or activity for which corporations may be organized under the
General Corporation Law of Delaware.
ARTICLE IV
CAPITALIZATION
A. Authorization; Transfer Restrictions. The total number
of shares of capital stock of all classifications which the
C o rporation shall have authority to issue is 110,120,000
consisting of (i) 10,000,000 shares of Preferred Stock, par value
$.01 per share (the "Preferred Stock"), and (ii) 100,120,000
shares of common stock, consisting of 100,000,000 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 Stock", and collectively with the Common Stock, the
"GGE Common Stock"). Each share of Class B Stock shall be issued
in connection with and upon the issuance of each $1,000 in
principal amount of Junior Notes (as defined in Article IX
hereof), whether upon original issuance of the Junior Notes or
upon surrender for transfer or exchange of any outstanding Junior
Notes or pursuant to the interest payment provisions thereof, and
may not be transferred separately from such principal amount of
Junior Notes.
The shares of Preferred Stock may be issued from time to
time in one or more series. The Board of Directors hereby is
vested with authority from time to time to issue the Preferred
Stock as Preferred Stock of any series. In connection with the
creation of each such series of Preferred Stock, the Board of
Directors hereby is vested with authority to fix by resolution or
resolutions the designations and the powers, preferences and
relative, participating, optional or other special rights, and
qualifications, limitations or restrictions thereof, of such
series, to the full extent now or hereafter permitted by the laws
of the State of Delaware, including without limitation the
dividend rate, conversion or exchange rights, redemption price
and
21<PAGE>
liquidating preference of any series of Preferred Stock, and to
fix the number of shares constituting any such series, and to
increase or decrease the number of shares of any such series (but
not below the number of shares thereof outstanding); provided,
however, that no shares of Preferred Stock may be designated or
issued with any rights to vote together with the holders of the
Class B Stock for any purpose. In case the number of shares of
any such series shall be so decreased, the shares constituting
such decrease shall resume the status which they had prior to the
adoption of the resolution or resolutions originally fixing the
number of shares of such series.
B. Voting and Quorum.
1. Each holder of GGE Common Stock entitled to vote
shall have one vote for each share thereof held. Except for the
election of Class B Directors (as defined in Article IX hereof),
the holders of the Common Stock shall be entitled to vote on all
matters on which stockholders are entitled to vote. Except as
may be prescribed by Delaware law, the holders of the Class B
Stock shall not be entitled to vote on any matter except that the
holders of the Class B Stock are entitled to vote separately as a
class on the following matters: (a) the election of Class B
Directors; (b) to the extent required under Delaware law, any
amendment to the last sentence of the first paragraph of
Paragraph (A) of Article IV hereof; the proviso in the second
paragraph of Paragraph (A) of Article IV hereof; Paragraphs
(B)(1), (C)(2), (D) or (E) of Article IV hereof; Paragraphs (A),
(B)(3), (B)(4), (B)(5) or (E)(2) of Article VII hereof; or
Paragraph (A) of Article IX hereof; (c) any amendment to the last
sentence of Section 3 of Article II of the By-Laws of the
Corporation; (d) any amendment to the second sentence of Section
7 of Article III of the By-Laws of the Corporation; or (e) any
amendment to the last sentence of Section 8 of Article III of the
By-Laws of the Corporation.
2. A t a ny meeting of the stockholders of the
Corporation at which the holders of any class of GGE Common Stock
are entitled to vote, the presence, in person or by proxy, of the
holders of a majority of the outstanding shares of such class
shall constitute a quorum of the class entitled to vote of such
class. No action may be taken by any class of GGE Common Stock
at a meeting at which a quorum of such class is not present,
except a vote to adjourn such meeting.
C. Dividends.
1. The Board of Directors of the Corporation may cause
dividends to be paid to the holders of shares of Common Stock
from time to time out of funds legally available therefor. When
and as dividends are declared, they may be payable in cash, in
property or in shares of Common Stock.
22<PAGE>
2. Holders of Class B Stock are not entitled to the
payment of dividends, except that in the event of an interest
payment on the Junior Notes which is paid in Additional Junior
Notes (as defined in Article IX hereof), holders shall be
entitled to, and there shall be declared and paid, a stock
dividend such that one share of Class B Stock shall be issued in
respect of each $1,000 in principal amount of Additional Junior
Notes.
D. Mandatory Redemption of Class B Stock. Upon the payment
in full of any Junior Note, or the redemption, or cancellation
following purchase thereof, of each $1,000 principal amount of
Junior Notes, the Corporation shall redeem the share of Class B
Stock issued in respect of such Junior Note at a redemption price
of $.01 per share (adjusted to reflect stock splits and stock
combinations since the original date of issuance).
E. L i quidation. In the event of any voluntary or
involuntary liquidation, dissolution or winding up of the affairs
of the Corporation, the holders of GGE Common Stock then
outstanding shall be entitled to receive ratably, in accordance
with the number of shares held by each holder, out of the assets
of the Corporation legally available for distribution to its
stockholders, $.01 per share (adjusted to reflect stock splits
and stock combinations since the original date of issuance).
After the payment in full of the amount described in the
immediately preceding sentence to the holders of GGE Common
Stock, the holders of Common Stock shall be entitled to share
ratably, in accordance with the number of shares held by each
holder, in all the remaining assets of the Corporation available
for distribution and the holders of Class B Stock shall not be
entitled to share in the distribution of such remaining assets.
F. No Nonvoting Stock. No nonvoting equity securities of
the Corporation shall be issued. This provision is included in
this Restated Certificate of Incorporation in compliance with
section 1123 of the United States Bankruptcy Code, 11 U.S.C.
Section 1123, and shall have no further force and effect beyond
that required by said section and for so long as said section is
in effect and applicable to the Corporation.
ARTICLE V
INDEMNIFICATION
A. Elimination of Certain Liability of Directors. A
director of the Corporation shall not be personally liable to the
Corporation or its stockholders for monetary damages for breach
of fiduciary duty as a director except for liability (i) for any
breach of the director's duty of loyalty to the Corporation or
its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of
law,
23<PAGE>
(iii) under Section 174 of the Delaware General Corporation Law,
or (iv) for any transaction from which the director derived an
improper personal benefit. If the Delaware General Corporation
Law is amended after the Effective Date (as defined in Article IX
hereof) to authorize corporate action further eliminating or
limiting the personal liability of directors, then the liability
of a director of the Corporation shall be eliminated or limited
t o the fullest extent permitted by the Delaware General
Corporation Law, as so amended. Any repeal or modification of
this Section by the stockholders of the Corporation shall be
prospective only and shall not adversely affect any right or
protection of a director of the Corporation existing at the time
of such repeal or modification.
B. Actions, Suits or Proceedings Other than by or in the
Right of the Corporation. The Corporation shall indemnify any
person who was or is a party or is threatened to be made a party
t o any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the
Corporation) by reason of the fact that he is or was or has
agreed to become a director or officer of the Corporation, or is
or was serving or has agreed to serve at the request of the
Corporation as a director or officer of another corporation,
partnership, joint venture, trust or other enterprise, or by
reason of any action alleged to have been taken or omitted in
such capacity, against costs, charges, expenses (including
attorneys fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by him or on his behalf in
connection with such action, suit or proceeding and any appeal
therefrom, if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests
of the Corporation. The termination of any action, suit or
proceeding by judgment, order, settlement, conviction or upon a
plea of nolo contendere or its equivalent shall not, of itself,
create a presumption that the person did not act in good faith
and in a manner which he reasonably believed to be in or not
opposed to the best interests of the Corporation.
C. Actions or Suits by or in the Right of the Corporation.
The Corporation shall indemnify any person who was or is a party
or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the Corporation to
procure a judgment in its favor by reason of the fact that he is
or was or has agreed to become a director or officer of the
Corporation, or is or was serving or has agreed to serve at the
request of the Corporation as a director or officer of another
c o r p oration, partnership, joint venture, trust or other
enterprise, or by reason of any action alleged to have been taken
or omitted in such capacity, against costs, charges and expenses
(including attorneys' fees) actually and reasonably incurred by
him or on his behalf in connection with the defense or settlement
of such action or suit and any appeal therefrom, if he acted in
good faith and in a manner he reasonably believed to be in or not
opposed to the best
24<PAGE>
interests of the Corporation except that no indemnification shall
be made in respect of any claim, issue or matter as to which such
person shall have been adjudged to be liable to the Corporation
unless and only to the extent that the Court of Chancery of
Delaware or the court in which such action or suit was brought
shall determine upon application that, despite the adjudication
of such liability but in view of all the circumstances of the
case, such person is fairly and reasonably entitled to indemnity
for such costs, charges and expenses which the Court of Chancery
or such other court shall deem proper.
D. Indemnification for Costs, Charges and Expenses of
Successful Party. Notwithstanding the other provisions of this
Article V, to the extent that a director or officer of the
Corporation has been successful on the merits or otherwise,
including, without limitation, the dismissal of an action without
prejudice, in defense of any action, suit or proceeding referred
to in Sections A and B of this Article V, or in defense of any
claim, issue or matter therein, he shall be indemnified against
all costs, charges and expenses (including attorneys' fees)
actually and reasonably incurred by him or on his behalf in
connection therewith.
E. D e t ermination of Right to Indemnification. Any
indemnification under Sections A and B of this Article V (unless
ordered by a court) shall be paid by the Corporation unless a
determination is made (i) by a majority of the members of the
Board of Directors who were not parties to such action, suit or
proceeding even if less than a quorum, or (ii) if such a majority
of the disinterested members of the Board of Directors so direct,
by independent legal counsel in a written opinion, or (iii) by
the stockholders, that indemnification of the director or officer
is not proper in the circumstances because he has not met the
applicable standard of conduct set forth in Sections A and B of
this Article V.
F. Advance of Costs, Charges and Expenses. Costs, charges
and expenses (including attorneys' fees) incurred by a person
referred to in Sections A or B of this Article V in defending any
civil, criminal, administrative or investigative action, suit or
proceeding shall be paid by the Corporation in advance of the
final disposition of such action, suit or proceeding; provided,
however, that the payment of such costs, charges and expenses
(including attorneys' fees) incurred by a director or officer in
advance of the final disposition of such action, suit or
proceeding shall be made only upon receipt of an undertaking by
or on behalf of the director or officer to repay all amounts so
advanced in the event that it shall ultimately be determined that
such director or officer is not entitled to be indemnified by the
Corporation as authorized in this Article V. Such costs, charges
and expenses (including attorneys' fees) incurred by other
employees and agents may be so paid upon such terms and
conditions, if any, as the
25<PAGE>
majority of the Board of Directors deems appropriate. The
majority of the Board of Directors may, in the manner set forth
above, and upon approval of such director, officer, employer,
employee or agent of the Corporation, authorize the Corporation's
counsel to represent such person, in any action, suit or
proceeding, whether or not the Corporation is a party to such
action, suit or proceeding.
G. Procedure for Indemnification. Any indemnification
under Sections B, C and D, or advance of costs, charges and
expenses (including attorneys' fees) under Section F of this
Article V, shall be made promptly, and in any event within 60
days, upon the written request of the director or officer. The
right to indemnification or advances as granted by this Article V
shall be enforceable by the director or officer in any court of
competent jurisdiction, if the Corporation denies such request,
in whole or in part, or if no disposition thereof is made within
60 days. Such person's costs and expenses (including attorneys'
fees) incurred in connection with successfully establishing his
right to indemnification, in whole or in part, in any such action
shall also be indemnified by the Corporation. It shall be a
defense to any such action that the claimant has not met the
standard of conduct set forth in Sections B or C of this Article
V, but the burden of proving such defense shall be on the
Corporation. Neither the failure of the Corporation (including
its Board of Directors, its independent legal counsel and its
s t ockholders) to have made a determination prior to the
commencement of such action that indemnification of the claimant
is proper in the circumstances because he has met the applicable
standard of conduct set forth in Sections B or C of this Article
V, nor the fact that there has been an actual determination by
t h e Corporation (including its Board of Directors, its
independent legal counsel and its stockholders) that the claimant
has not met such applicable standard of conduct, shall be a
defense to the action or create a presumption that the claimant
has not met the applicable standard of conduct.
H. Other Rights: Continuation of Right to Indemnification.
The indemnification provided by this Article V shall not be
deemed exclusive of any other rights to which any director,
officer, employee or agent seeking indemnification may be
entitled under any law (common or statutory), agreement, vote of
stockholders or disinterested directors or otherwise, both as to
action in his official capacity and as to action in another
capacity while holding office or while employed by or acting as
agent for the Corporation, and shall continue as to a person who
has ceased to be a director, officer, employee or agent, and
shall inure to the benefit of the estate, heirs, executors and
administrators of such person. All rights to indemnification
under this Article V shall be deemed to be a contract between the
Corporation and each director, officer, employee or agent of the
Corporation who serves or served in such capacity at any time
while this Article V is in effect. Any repeal or modification of
this Article V or any repeal
26<PAGE>
or modification of relevant provisions of the General Corporation
Law of the State of Delaware or any other applicable laws shall
not in any way diminish any rights to indemnification of such
director, officer, employee or agent or the obligations of the
Corporation arising hereunder. This Article V shall be binding
upon any successor corporation to this Corporation, whether by
way of acquisition, merger, consolidation or otherwise.
I. Insurance. The Corporation shall purchase and maintain
insurance on behalf of any person who is or was or has agreed to
become a director, officer, employee or agent of the Corporation,
or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise against any
liability asserted against him and incurred by him or on his
behalf in any such capacity, or arising out of his status as
such, whether or not the corporation would have the power to
indemnify him against such liability under the provisions of this
Article V, provided, however, that such insurance is available on
reasonable and acceptable terms, which determination shall be
made by a vote of a majority of the Board of Directors.
J. Savings Clause. If this Article V or any portion hereof
shall be invalidated on any ground by any court of competent
j u risdiction, then the Corporation (i) shall nevertheless
indemnify each director and officer of the Corporation, and (ii)
may nevertheless indemnify each employee and agent of the
Corporation, as to costs, charges and expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement
with respect to any action, suit or proceeding, whether civil,
criminal, administrative or investigative, including an action by
or in the right of the Corporation, to the full extent permitted
by any applicable portion of this Article V that shall not have
been invalidated and to the full extent permitted by applicable
law.
K. Subsequent Amendment. No amendment, modification or
repeal of this Article V shall affect or impair in any way the
rights of any director or officer of the Corporation to
indemnification under the provisions hereof with respect to any
action, suit or proceeding arising out of, or relating to, any
actions, transactions or facts occurring prior to the final
adoption of such amendment, modification or repeal.
L. Subsequent Legislation. If the General Corporation Law
of the State of Delaware is amended to further expand the
indemnification permitted to directors, officers, employees or
agents of the Corporation, then the Corporation shall indemnify
such persons to the fullest extent permitted by the General
Corporation Law of the State of Delaware, as so amended.
27<PAGE>
ARTICLE VI
NEW JERSEY CASINO CONTROL ACT
This Certificate of Incorporation shall be subject to the
New Jersey Casino Control Act, N.J.S.A. 5:12-1et seq., and the
rules and regulations of the New Jersey Casino Control Commission
(the "Commission") as they currently exist or as they hereinafter
may be amended (the "Act"), including without limitation the
following:
A. The securities of the Corporation shall always be
subject to redemption by the Corporation, by action of the Board
of Directors, if, in the judgment of the Board of Directors, such
action should be taken, pursuant to Section 151(b) of the General
Corporation Law of Delaware or any other applicable provision of
law, to the extent necessary to prevent the loss or secure the
reinstatement of any government-issued license or franchise held
by the Corporation or any Subsidiary (as defined in Paragraph E
of this Article VI) to conduct any portion of the business of the
Corporation or such Subsidiary, which license or franchise is
conditioned upon some or all of the holders of the Corporation's
securities possessing prescribed qualifications. In the event a
holder of the Corporation's securities is found not to possess
such prescribed qualifications by the Commission pursuant to the
Act (a "Disqualified Holder"), such Disqualified Holder shall
indemnify the Corporation for any and all direct or indirect
costs, including attorneys' fees, incurred by the Corporation as
a result of such holder's continuing ownership or failure to
divest promptly.
B. Except as is otherwise expressly provided in instruments
containing the terms of the Corporation's securities, which
instruments have been approved by the Commission, so long as the
Corporation shall remain a publicly traded holding company as
defined in the Act, in accordance with N.J.S.A. 5:12- 82(d)(7)
and (9), all securities of the Corporation shall be held subject
to the condition that if a holder thereof is found to be a
Disqualified Holder, such holder shall dispose of his interest in
the Corporation within 120 days following the Corporation's
r e c e ipt of notice (the "Notice Date") of the holder's
disqualification. Promptly following its receipt of notice from
the Commission that a holder of securities of the Corporation has
been found disqualified, the Corporation shall either deliver
such written notice personally to the Disqualified Holder, mail
it to such Disqualified Holder at the address shown on the
Corporation's books and records, or use any other reasonable
means. Failure of the Corporation to provide notice to a
Disqualified Holder after making reasonable efforts to do so
shall not preclude the Corporation from exercising its rights.
I f any Disqualified Holder fails to dispose of his
securities within 120 days following receipt by the Corporation
of notice that
28<PAGE>
such holder has been found disqualified, the Corporation may
redeem such securities at the lesser of (i) the lowest closing
sale price of such securities between the Notice Date and the
date 120 days after the Notice Date, or (ii) such holder's
original purchase price.
C. If the Corporation shall become, and so long as it shall
remain, a privately-held holding company as defined in the Act,
in accordance with N.J.S.A. 5:12-82(d)(7), (8) and (10), the
Commission shall have the right of prior approval with regard to
transfers of securities, shares, and other interests in the
Corporation and the Corporation shall have the absolute right to
redeem at the market price or purchase price, whichever is the
lesser, any security, share or other interest in the Corporation
in accordance with the Act.
D. So long as the Corporation shall remain a holding
company as defined in the Act, in accordance with N.J.S.A. 5:12-
105(e), commencing on the date the Commission serves notice on
t h e Corporation that a security holder has been found
disqualified, it shall be unlawful for the Disqualified Holder to
(i) receive any dividends or interest upon any such securities of
the Corporation held by such holder; (ii) exercise, directly or
through any trustee or nominee, any right conferred by such
securities; or (iii) receive any remuneration in any form, for
services rendered or otherwise, from any subsidiary of the
Corporation that holds a casino license.
E. For purpose of this Article VI, the term "Subsidiary"
shall be defined in accordance with N.J.S.A. 5:12-47.
ARTICLE VII
BOARD OF DIRECTORS
A. Number and Designations of Directors. Until such time
as a Class B Triggering Event (as defined in Article IX hereof)
shall have occurred, the number of directors which shall
constitute the Board as of the Effective Date (as defined in
Article IX hereof) shall be six, consisting of four Common Stock
Directors (as defined in Article IX hereof) and two Class B
Directors (but subject to Paragraph F below). After the
Effective Date, the number of directors which shall constitute
the whole Board may be increased or decreased to such other
number as from time to time shall be fixed by resolution of the
Board; provided, however, that at all times the number of Class B
Directors prior to the occurrence of a Class B Triggering Event
shall be one-third (rounded up to the nearest whole number) of
the number of directors which constitutes the entire Board (but
subject to Paragraph F below). Upon the occurrence of a Class B
Triggering Event, the number of directors which shall constitute
the Board shall be increased, with such
29<PAGE>
vacancies created thereby filled by the vote of a majority of the
Class B Directors then in office, such that the number of Class B
Directors equals a majority of the number of directors which
constitutes the entire Board after giving effect to the creation
of such vacancies (but subject to Paragraph F below).
B. Election of Directors.
1. Election of directors need not be by written ballot
unless the By-Laws so provide.
2. The Board of Directors shall be divided into three
classes: Class I, Class II, and Class III. Such Classes shall be
as nearly equal in number of directors as possible. Each
director shall serve for a term ending at the third annual
stockholders' meeting following the annual meeting at which such
director was elected; provided, however, that the directors first
appointed to Class I shall serve for a term ending at the annual
meeting held in 1995, the directors first appointed to Class II
shall serve for a term ending at the annual meeting held in 1996,
and the directors first appointed to Class III shall serve for a
term ending at the annual meeting held in 1997. Notwithstanding
any of the foregoing provisions of this Article VII and subject
to Paragraph F below, each director shall serve until his
successor is elected and qualified or until his earlier death,
resignation or removal.
3. At each annual meeting of stockholders (which shall
be held on such date as shall be determined pursuant to the By-
Laws of the Corporation), or at any duly called special meeting
of stockholders, the Common Stock Directors to be elected shall
be elected by the holders of the Common Stock voting as a
separate class and the Class B Director(s) to be elected shall be
elected by the holders of the Class B Stock voting as a separate
class.
4. At each annual election, the directors chosen to
succeed those whose terms then expire shall be identified as
being the same Class as the directors they succeed, unless, by
reason of any intervening changes in the authorized number of
directors, the Board of Directors shall designate one or more
directorships whose term then expires as directorships of another
Class in order to more nearly achieve equality in the number of
directors among the Classes. When the directors fill a vacancy
resulting from the death, resignation or removal of a director in
accordance with paragraph E below, the director chosen to fill
that vacancy shall be of the same Class as the director he
succeeds.
5. Notwithstanding the rule that the three Classes
shall be as nearly equal in number of directors as possible, in
the event of any change in the authorized number of directors,
each Common Stock Director and each Class B Director then
continuing to serve as such will nevertheless continue as a
director of the Class of
30<PAGE>
which such director is a member until the expiration of his
current term or his earlier death, resignation or removal.
C. Effective Date Board. As of the Effective Date, the
Board of Directors of the Corporation shall be reconstituted to
consist of the following persons in the Classes and of the
designations indicated:
Director Class Designation
Thomas E. I Common Stock Director
Gallagher
Jay M. Green I Common Stock Director
William Fallon II Common Stock Director
Vincent J. Naimoli II Class B Director
Merv Griffin III Common Stock Director
Charles Masson III Class B Director
D. Removal of Directors. Subject to Paragraph F below,
any director, may be removed from office at any time, but only
(i) for cause, and (ii) by the affirmative vote of the holders of
80% of the voting power of all the shares of the class of stock
which elected such director.
E. Filling of Vacancies.
1. Any vacancy among the Common Stock Directors,
occurring from any cause whatsoever, may be filled by a majority
of the remaining Common Stock Directors, even if such remaining
Common Stock Directors do not constitute a quorum; provided,
however, that the holders of the Common Stock removing any Common
Stock Director may at the same meeting fill the vacancy caused by
such removal; provided further, however, that if the remaining
Common Stock Directors fail to fill any such vacancy, the holders
of the Common Stock entitled to vote thereon may fill such
vacancy at any special meeting of stockholders called for that
purpose. Any person elected or appointed to fill a vacancy shall
hold office, subject to the right of removal as herein before
provided, until the next election for such Class of directors and
until his successor is elected and qualifies.
2. Subject to Paragraph F below, any vacancy among the
Class B Directors, occurring from any cause whatsoever (including
(i) as a result of an increase in the number of directors which
shall constitute the entire Board, or (ii) as a result of the
occurrence of a Class B Triggering Event), may be filled only by
a majority of the remaining Class B Directors, even if such
remaining Class B Directors do not constitute a quorum; provided,
however, that the holders of the Class B Stock removing any Class
B Director
31<PAGE>
may at the same meeting fill the vacancy caused by such removal;
provided further, however, that if the remaining Class B
Directors fail to fill any such vacancy, the holders of the Class
B Stock entitled to vote thereon may fill such vacancy at any
special meeting of stockholders called for that purpose. Any
person elected or appointed to fill a vacancy shall hold office,
subject to the right of removal as herein before provided, until
the next election for such Class of directors and until his
successor is elected and qualifies.
F. Final Payment Date. After the Final Payment Date (as
defined in Article IX hereof), (i) all the Class B Directors then
in office shall resign and if such Class B Directors fail to
resign, a majority of the Common Stock Directors shall be
entitled to remove, without cause, such Class B Directors then in
office, and (ii) the number of directors constituting the Board
shall be decreased to six directors, who shall be elected by the
holders of Common Stock.
ARTICLE VIII
AMENDMENT OF CERTIFICATE OF INCORPORATION AND BY-LAWS
A. I n addition to any affirmative vote required by
applicable law, any alteration, amendment, repeal or rescission
of any provision of this Restated Certificate of Incorporation
must be approved by a majority of the directors of the
Corporation then in office and by the affirmative vote of the
holders of a majority of the outstanding shares of the Common
Stock.
B. Except as provided in Paragraph (B)(1) of Article IV
hereof, the Board of Directors shall have the power without the
assent or vote of the stockholders to make, alter, amend, change,
add to or repeal the By-Laws of the Corporation.
ARTICLE IX
DEFINITIONS
A. As used in this Restated Certificate of Incorporation,
the following terms shall have the meanings indicated below:
"Additional Junior Notes" shall mean Junior Notes issued by
RIHF in payment of interest on outstanding Junior Notes, in
accordance with the terms of the Junior Notes and the New RIHF
Second Mortgage Junior Note Indenture.
"Class B Directors" shall mean the directors of the
Corporation elected by the holders of the Class B Stock.
32<PAGE>
"Class B Triggering Event" shall mean either (i) the payment
on any Interest Payment Date by RIHF of interest on the Junior
Notes in the form of Additional Junior Notes or (ii) the failure
on any Interest Payment Date by RIHF to pay interest in full on
the Junior Mortgage Notes, if, in either case, on any prior six
Interest Payment Dates (whether consecutive or non-consecutive),
interest on the Junior Notes either has been paid in Additional
Junior Notes or has not been paid in full.
"Final Payment Date" means the date on which all the Junior
Notes are retired, redeemed or paid in full.
"Interest Payment Date" shall mean each date on which
interest is due and payable on the Junior Notes, in accordance
with the New RIHF Second Mortgage Junior Note Indenture.
"Junior Notes" shall mean the 11.375% Junior Mortgage Notes
due 2004 of RIHF, including the Additional Junior Notes.
"New RIHF Second Mortgage Junior Note Indenture" shall mean
the Indenture dated as of May 3, 1994, between RIHF and U.S.
Trust Company of California, N.A., as Trustee, under which the
Junior Notes have been or will be issued.
"RIHF" shall mean Resorts International Hotel Financing,
Inc., a Delaware corporation.
B. As used in this Restated Certificate of Incorporation,
the following terms shall have the meanings indicated below:
"Common Stock Directors" shall mean the directors of the
Corporation elected by the holders of the Common Stock.
"Effective Date" shall mean May 3, 1994.
IN WITNESS WHEREOF, the undersigned have signed this
R e stated Certificate of Incorporation, under penalties of
perjury, and caused the corporate seal of the Corporation to be
hereunto affixed this 10th day of May, 1996.
By:
/s/ Matthew B. Kearney
Matthew B. Kearney
Executive Vice President-Finance
and Treasurer
[Corporate Seal]
Attest:
By:
/s/ David G. Bowden
David G. Bowden
Vice President-Controller and Secretary
33<PAGE>
EXHIBIT (3)(b)
AMENDED AND RESTATED BY-LAWS
OF
GRIFFIN GAMING & ENTERTAINMENT, INC.
ARTICLE I
OFFICES
SECTION 1. Principal Office. The principal office of
Griffin Gaming & Entertainment, Inc. (the "Corporation") in the
State of Delaware shall be established and maintained at the
office of the United States Corporation Company in the City of
Wilmington, County of New Castle, and said corporation shall be
the resident agent of this Corporation in charge thereof.
SECTION 2. Other Offices. The Corporation may also have
an office or offices and keep the books and records of the
Corporation, except as may otherwise be required by the laws of
the State of Delaware, at such other place or places either
within or without the State of Delaware as the Board of Directors
of the Corporation (the "Board") may from time to time determine
or the business of the Corporation may require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
SECTION 1. Place of Meetings. All meetings of the
stockholders shall be held at such place, within or without the
State of Delaware, as may from time to time be fixed by the Board
or as shall be specified or fixed in the respective notices or
waivers of notice thereof.
SECTION 2. Annual Meetings. The annual meeting of the
stockholders of the Corporation for the election of directors and
for the transaction of such other business as may properly come
before the meeting shall be held on a date and at a time and
place as designated by resolution of the Board of Directors of
the Corporation.
SECTION 3. Special Meetings. Special meetings of the
stockholders, unless otherwise provided by law, may be called at
any time by the Chairman of the Board or by a majority of the
Board of Directors. Special meetings of the holders of Class B
S t o c k (as such term is defined in the Certificate of
Incorporation) may be
34<PAGE>
called at any time by the Chairman of the Board or by a majority
of the Class B Directors (as such term is defined in the
Certificate of Incorporation).
SECTION 4. Notice of Meetings. Except as otherwise
expressly required by law or the Certificate of Incorporation of
the Corporation, written notice stating the place and time of the
meeting and, in the case of a special meeting, the purpose or
purposes of such meeting, shall be given by the Secretary to each
stockholder entitled to vote thereat at the last known post
office address not less than ten nor more than sixty days prior
to the date of meeting. No business other than that stated in
the notice shall be transacted at any special meeting. Notice of
any meeting of stockholders shall not be required to be given to
any stockholder who shall attend such meeting in person or by
proxy; and if any stockholder shall, in person or by attorney
thereunto duly authorized, in writing or by telegraph, cable or
wireless, waive notice of any meeting, whether before or after
such meeting be held, the notice thereof need not be given to
him. Notice of any adjourned meeting of stockholders need not be
given except as provided in SECTION 7 of this ARTICLE II.
SECTION 5. List of Stockholders. It shall be the duty of
the Secretary or other officer who shall have charge of the stock
ledger of the Corporation, either directly or through a transfer
agent appointed by the Board, to prepare and make, at least 10
days before every election of directors, a complete list of the
stockholders entitled to vote at said election, arranged in
alphabetical order and showing the address of each stockholder
and the number of shares registered in the name of each
stockholder. Such list shall be open for said 10 days to the
examination of any stockholder in the place where said election
is to be held and shall be produced and kept at the time and
place of the election for the whole time thereof, and subject to
the inspection of any stockholder who may be present. The
original or a duplicate stock ledger shall be the only evidence
as to who are the stockholders entitled to examine such list or
the books of the Corporation or to vote in person or by proxy at
such election.
SECTION 6. Quorum. At any meeting of the stockholders of
the Corporation, the presence, in person or by proxy, of
stockholders then entitled to cast a majority in number of votes
upon a question to be considered at the meeting shall constitute
a quorum for the consideration of such question.
SECTION 7. Adjournments. In the absence of a quorum at
any annual or special meeting of stockholders, a majority in
interest of those present in person or by proxy and entitled to
vote may adjourn the meeting from time to time without further
notice, other than by announcement at the meeting at which such
adjournment shall be taken, until a quorum shall be present;
provided, however, that if an adjournment is for more than thirty
days, a notice of the
35<PAGE>
adjourned meeting shall be given to each stockholder of record
entitled to vote. At any such adjourned meeting at which a
quorum may be present any business may be transacted which might
have been transacted at the meeting as originally called.
SECTION 8. Order of Business. The order of business at
all meetings of the stockholders shall be as determined by the
chairman of the meeting, but the order of business to be followed
at any meeting at which a quorum shall be present may be changed
by a vote of the stockholders present in person or by proxy at
the meeting and holding a majority of the shares entitled to vote
thereat.
SECTION 9. Voting. Except as otherwise provided by the
General Corporation Law of the State of Delaware or in the
Certificate of Incorporation, each stockholder shall at each
meeting of the stockholders be entitled to one vote in person or
by proxy for each share entitled to be voted thereat and held by
him and registered in his name on the books of the Corporation:
(a) On such date as may be fixed pursuant to SECTION 3
of ARTICLE VI of these By-Laws as the record date for the
determination of stockholders entitled to notice of and to
vote at such meeting; or
(b) In the event that no record date shall have been
so fixed, the record date for determining stockholders
e n titled to notice of or to vote at a meeting of
stockholders shall be at the close of business on the day
next preceding the day on which notice is given, or, if
notice is waived, at the close of business on the day next
preceding the day on which the meeting is held.
Shares of stock belonging to the Corporation shall not be
voted directly or indirectly. Persons holding stock having
voting power in a fiduciary capacity shall be entitled to vote
the shares so held, and persons whose stock having voting power
is pledged shall be entitled to vote, unless in the transfer by
the pledgor on the books of the Corporation he shall have
expressly empowered the pledgee to vote thereon, in which case
only the pledgee, or his proxy, may represent such stock and vote
thereon. Any vote on stock may be given at any meeting of the
stockholders by the stockholder entitled thereto in person or by
his proxy appointed by an instrument in writing, subscribed by
such stockholder or by his attorney thereunto duly authorized and
delivered to the secretary of the meeting; provided, however,
that no proxy shall be voted on after three years from its date,
unless said proxy provides for a longer period. At all meetings
of the stockholders all matters, except those the manner of
deciding upon which is otherwise expressly regulated by statute
or by the Certificate of Incorporation or by these By-Laws, shall
be decided by the vote of the stockholders holding a majority of
the shares present in person or by proxy and entitled to vote on
such matters. Unless demanded
36<PAGE>
by a stockholder present in person or by proxy at such meeting
and entitled to vote thereat or determined by the chairman of the
meeting to be advisable, the vote on any matter need not be by
written ballot.
SECTION 10. Inspectors of Election or Judges. Before, or
at, each meeting of the stockholders at which a vote by ballot is
to be taken, the Board, or the chairman of such meeting, shall
appoint two Inspectors of Election or judges to act thereat.
Each Inspector of Election or Judge so appointed shall first
subscribe an oath or affirmation faithfully to execute the duties
of an Inspector of Election or Judge at such meeting with strict
impartiality and according to the best of his ability. Such
Inspectors of Election or Judges shall take charge of the ballots
at such meeting and after the balloting thereat on any question
shall count the ballots cast thereon and shall make a report in
writing to the secretary of such meeting of the results thereof.
The Inspectors of Election or Judges need not be stockholders;
and any officer or director may be an Inspector of Election or
Judge on any question other than a vote for or against his
election to any position with the Corporation or on any other
question in which he may be directly interested.
ARTICLE III
DIRECTORS
SECTION 1. General Powers. The Board shall manage the
business and affairs of the Corporation and may exercise all such
authority and powers of the Corporation and do all such lawful
a c ts and things as are not by law, the Certificate of
Incorporation or these By-Laws directed or required to be
exercised or done by the stockholders.
SECTION 2. Number, Qualification and Term of Office. The
number of directors of the Corporation shall be as set forth in
the Certificate of Incorporation. Directors need not be
s t o c kholders. The Certificate of Incorporation of the
Corporation provides for a classified Board, wherein each
director shall serve for a term as provided therein. The
Certificate of Incorporation also provides for two designations
of directors, elected by the holders of the Common Stock and the
Class B Stock (as such terms are defined in the Certificate of
Incorporation), respectively.
SECTION 3. Election of Directors. At each meeting of the
stockholders for the election of a director or directors, the
person or persons receiving the greater number of votes, up to
the number of directors then to be elected, cast by the
stockholders present in person or by proxy and entitled to vote
for such director or directors shall be the director or directors
elected by such stockholders. The election of directors is
subject to any
37<PAGE>
provisions contained in the Certificate of Incorporation relating
thereto, including any provisions for a classified Board and any
provisions relating to the election of Common Stock Directors (as
such term is defined in the Certificate of Incorporation) and
Class B Directors, respectively.
SECTION 4. Quorum. At all meetings of the Board the
presence of a majority of the whole Board shall be necessary to
constitute a quorum for the transaction of business at such
meeting. Any act of a majority present at a meeting at which
there is a quorum shall be the act of the Board, except as may be
otherwise specifically provided by statute or by the Certificate
of Incorporation or by these By-Laws. In the absence of a
quorum, a majority of the directors present may adjourn any
meeting from time to time until a quorum shall be present. At
any adjourned meeting at which a quorum is present, any business
may be transacted which might have been transacted at the meeting
as originally called. Notice of any adjourned meeting need not
be given.
SECTION 5. Place of Meeting. The Board may hold its
meetings at such place or places within or without the State of
Delaware as it may from time to time by resolution determine or
as shall be fixed or specified in the respective notices or
waivers of notice thereof. Members of the Board, or any
committee thereof, may participate in a meeting of such Board or
c o m m i ttee by means of conference telephone or similar
c o m m unications equipment by means of which all persons
participating in the meeting can hear and communicate with each
other.
SECTION 6. Regular Meetings. Regular meetings of the
Board may be held without notice at such places and times as may
be fixed from time to time by resolution of the Board.
SECTION 7. Special Meetings. Special meetings of the
Board may be called by the Chairman of the Board. Special
meetings of the Class B Directors with respect to matters to be
determined by the Class B Directors only may be called by any
Class B Director. At least twenty-four hours' written or
telegraphic notice of each special meeting shall be given to each
director. The notice of any meeting, or any waiver thereof, need
not state the purpose or purposes of such meeting.
SECTION 8. Action by Consent. Any action required or
permitted to be taken at any meeting of the Board or of any
committee thereof may be taken without a meeting, if prior to
such action a written consent thereto is signed by all members of
the Board or all members of such committee, as the case may be,
and such written consent is filed with the minutes of proceedings
of the Board or committee. Any action required or permitted to
be taken at any meeting of the Class B Directors may be taken
without a meeting, if prior to such action a written consent
thereto is
38<PAGE>
signed by all Class B Directors, and such written consent is
filed with the minutes of proceedings of the Board.
SECTION 9. Resignations; Removal. Any director may resign
at any time by giving written notice to the Chairman of the Board
or the Secretary. Such resignation shall take effect at the time
specified therein or, if no time is specified, upon receipt of
such notice. The acceptance of a resignation shall not be
necessary to make it effective. Directors may only be removed in
accordance with the Certificate of Incorporation.
SECTION 10. Vacancies. A vacancy in the Board caused by
death, resignation or removal may only be filled in accordance
with the Certificate of Incorporation. Each director so chosen
to fill a vacancy shall, unless otherwise provided or as provided
in the Certificate of Incorporation, hold office until his
successor shall have been elected and shall qualify or until he
shall resign or shall have been removed.
SECTION 11. Compensation. Each director, in consideration
of his or her serving as such, shall be entitled to receive from
the Corporation such amount per annum or such fees for attendance
at directors' meetings, or both, as the Board shall from time to
time determine, together with reimbursement for the reasonable
expenses incurred by him in connection with the performance of
his duties. Each director who shall serve as a member of the
Executive Committee or any other committee of the Board in
consideration of his serving as such, shall be entitled to such
additional amount per annum or such fees for attendance at
committee meetings, or both, as the Board shall from time to time
determine. Nothing herein contained shall be construed to
preclude any director from serving the Corporation in any other
capacity and receiving proper compensation therefor.
ARTICLE IV
COMMITTEES
SECTION 1. Designation and Powers of Committees. The
Board may, by resolution or resolutions passed by a majority of
the whole Board, designate two or more of its members to
constitute an Executive Committee, which, during the intervals
between the meetings of the Board, shall have, and may exercise,
all the powers of the Board in the management of the business,
affairs, and property of the Corporation, to the extent permitted
by Delaware law. The Board, by resolution passed by a majority
of the whole Board, may designate members of the Board to
constitute other committees, including an Audit Committee and a
Compensation Committee, which shall consist of such numbers of
directors and shall have, and may exercise, such powers as the
Board may determine and specify in the respective resolutions
appointing
39<PAGE>
them, to the extent permitted by Delaware law. The Board shall
have power at any time to change the members of the Executive
Committee or any such other committee, to fill vacancies and to
discharge the Executive Committee or any such other committee.
ARTICLE V
OFFICERS
SECTION 1. Election and Number. The principal officers of
the Corporation shall be a Chairman of the Board, a President,
one or more Vice Presidents, a Treasurer and a Secretary, all of
whom shall be chosen by the Board, and such other officers as may
be appointed in accordance with the provisions of SECTION 3 of
this ARTICLE V. One person may hold the office and perform the
duties of any two or more of said officers other than those of
President and Secretary.
SECTION 2. Term of Office and Qualifications. Each
officer, except such as may be appointed in accordance with the
provisions of SECTION 3 of this ARTICLE V, shall hold office
until the next annual election of officers and until his
successor shall have been chosen and shall qualify or until his
death or until he shall have resigned or until he shall have been
removed in the manner provided in SECTION 4 of this ARTICLE V.
SECTION 3. Appointive Officers. The Chairman of the Board
or the Board may from time to time appoint such other officers as
they may deem necessary, including one or more Assistant
Treasurers, one or more Assistant Secretaries and such other
agents and employees of the Corporation as they may deem proper.
Such officers and agents and employees shall hold office for such
period, have such authority and perform such duties, subject to
the control of the Board, as the Chairman of the Board or the
Board may from time to time prescribe.
SECTION 4. Removal. Any elected officer may be removed,
either with or without cause, at any time, by the vote of a
majority of the whole Board at any meeting of the Board, and any
appointive officer may be removed, either with or without cause,
at any time by the Chairman of the Board.
SECTION 5. Resignations. Any officer may resign at any
time by giving written notice to the Board or to the President or
to the Secretary. Such resignation shall take effect upon receipt
of such notice or at any later time specified therein; and,
unless otherwise specified therein, the acceptance of such
resignation shall not be necessary to make it effective.
SECTION 6. Vacancies. A vacancy in any office because of
death, resignation, removal or any other cause shall be filled
for
40<PAGE>
the unexpired portion of the term in the manner prescribed in
SECTIONS 2 and 3 of this ARTICLE V for election or appointment,
respectively, to such office.
SECTION 7. Chairman of the Board. The Chairman of the
Board if present shall preside at all meetings of stockholders
and at all meetings of the Board and shall have such other powers
and duties as from time to time may be assigned to him by the
Board or these By-Laws.
SECTION 8. President. The President shall be the chief
executive officer of the Corporation, and shall have general
supervision over the business of the Corporation, subject to the
control of the Board. In general, he shall perform all duties
incident to the office of President and have such other powers
and duties as from time to time may be assigned to him by the
Board.
SECTION 9. Vice President. Each Vice President shall have
such powers and shall perform such duties as from time to time
may be assigned to him by the Board. The Board may elect, or
designate, one or more of the Vice Presidents as an Executive
Vice President. At the request of the President, or in the case
of his absence or inability to act, the Executive Vice President
or, if there shall be more than one Executive Vice President, an
Executive Vice President designated by the Board, or if the Board
shall have not have elected or designated an Executive Vice
President then one of the Vice Presidents who shall be designated
for the purpose by the Board, shall perform the duties of the
President, and, when so acting, shall have all the powers of the
President.
SECTION 10. Secretary. The Secretary shall keep or cause
to be kept in books provided for this purpose the minutes of all
meetings of the stockholders and of the Board; shall see that all
notices are duly given in accordance with the provisions of these
By-Laws and as required by law; shall be the custodian of the
seal of the Corporation and shall affix the seal or cause it to
be affixed to all certificates of stock of the Corporation and to
all documents the execution of which on behalf of the Corporation
under its seal shall be duly authorized in accordance with the
provisions of these By-Laws; shall have charge of the stock
r e cords of the Corporation; shall see that all reports,
statements and other documents required by law are properly kept
and filed; may sign, with any other proper officer of the
Corporation thereunto authorized, certificates for stock of the
Corporation; and, in general, shall perform all the duties
incident to the office of Secretary, and such other duties as
from time to time may be assigned to him by the Board.
SECTION 11. A s sistant Secretaries. The Assistant
Secretaries shall have such powers and duties as from time to
time may be assigned to them by the Board. At the request of the
Secretary or
41<PAGE>
in case of his absence or inability to act, any Assistant
Secretary may act in his place.
SECTION 12. Treasurer. The Treasurer shall have charge and
custody of, and be responsible for, all funds, securities,
evidences of indebtedness and other valuable documents of the
Corporation; shall deposit all such funds in the name of the
Corporation in such banks or other depositaries as shall be
selected by the Board; shall receive, and give or cause to be
given receipts and acquittances for, moneys paid in on account of
the Corporation and shall pay out of the funds on hand all just
debts of the Corporation of whatever nature upon maturity of the
same; shall enter or cause to be entered in books of the
Corporation to be kept for that purpose full and accurate
accounts of all moneys received and paid out on account of the
Corporation, and whenever required by the Board, shall render a
statement of his cash accounts; shall keep or cause to be kept
such other books as will show the true record of the expenses,
losses, gains, asset and liabilities of the Corporation; and in
general shall perform all duties incident to the office of
Treasurer and such other duties as from time to time may be
assigned to him by the Board.
SECTION 13. Assistant Treasurers. The Assistant Treasurers
shall have such powers and duties as from time to time may be
assigned to them by the Board. At the request of the Treasurer,
or in case of his absence or inability to act, any Assistant
Treasurer may act in his place.
SECTION 14. S a laries. The salaries of the elective
officers and any appointive officers of the Corporation shall be
fixed from time to time by the Board. An officer shall not be
prevented from receiving such salary by reason of the fact that
he is also a director of the Corporation or a member of any
committee contemplated by the By-Laws.
ARTICLE VI
CAPITAL STOCK
SECTION 1. Certificate for Stock. Every holder of shares
of stock shall be entitled to have a certificate, in such form as
the Board shall prescribe, certifying the number and class of
shares of stock of the Corporation owned by him. Each such
certificate shall be signed in the name of the Corporation by the
President or a Vice President and the Treasurer or an Assistant
Treasurer or the Secretary or an Assistant Secretary; provided,
however, that where such certificate is signed by a transfer
agent or an assistant transfer agent or by a transfer clerk
acting on behalf of the Corporation and a registrar, the
signature of any such officer may be a facsimile.
42<PAGE>
SECTION 2. Transfer of Shares. The shares of stock of the
Corporation shall be transferable only upon its books by the
registered holders thereof or by their duly authorized attorneys
or legal representatives, and upon such transfer the old
certificates shall be surrendered to the Corporation by the
delivery thereof to the Secretary or to such other person as the
Board may designate, by whom such old certificates shall be
cancelled and new certificates shall thereupon be issued. A
record shall be made of each transfer. Each share of Class B
Stock shall be issued in connection with and upon the issuance of
each $1,000 in principal amount of Junior Notes (as such term is
defined in the Certificate of Incorporation), and may not be
transferred separately from such principal amount of Junior
Notes.
SECTION 3. Fixing Date for Determination of Stockholders
of Record. In order that the Corporation may determine the
stockholders entitled to notice of or to vote at any meeting of
stockholders or any adjournment thereof, or to express consent to
corporate action in writing without a meeting, or entitled to
receive payment of any dividend or other distribution or
allotment of any rights, or entitled to exercise any rights in
respect of any change, conversion or exchange of stock or for the
purpose of any other lawful action, the Board of Directors may
fix a record date, which record date shall not precede the date
upon which the resolution fixing the record date is adopted by
the Board of Directors and which record date: (l) in the case of
determination of stockholders entitled to vote at any meeting of
stockholders or adjournment thereof, shall not be more than sixty
nor less than ten days before the date of such meeting; (2) in
the case of determination of stockholders entitled to express
consent to corporate action in writing without a meeting, shall
not be more than ten days from the date upon which the resolution
fixing the record date is adopted by the Board of Directors; and
(3) in the case of any other action shall not be more than sixty
days prior to such other action. If no record date is fixed:
(l) the record date for determining stockholders entitled to
notice of or to vote at a meeting of stockholders shall be at the
close of business on the day next preceding the day on which
notice is given, or, if notice is waived, at the close of
business on the day next preceding the day on which the meeting
is held; (2) the record date for determining stockholders
entitled to express consent to corporate action in writing
without a meeting when no prior action of the Board of Directors
is required by law, shall be the first date on which a signed
written consent setting forth the action taken or proposed to be
taken is delivered to the Corporation in accordance with
applicable law, or, if prior action by the Board of Directors is
required by law, shall be at the close of business on the day on
which the Board of Directors adopts the resolution taking such
p r i o r action; and (3) the record date for determining
stockholders for any other purpose shall be at the close of
business on the day on which the Board of Directors adopts the
resolution relating thereto. A determination of stockholders of
43<PAGE>
record entitled to notice of or to vote at a meeting of
stockholders shall apply to any adjournment of the meeting;
provided, however, that the Board of Directors may fix a new
record date for the adjourned meeting.
SECTION 4. Lost or Destroyed Certificates. The Board may
determine the conditions upon which a new certificate of stock
will be issued in place of a certificate which is alleged to have
been lost or destroyed, and may, in its discretion, require the
owner of such certificate or his legal representative to give
bond, with sufficient surety to the Corporation to indemnify it
against any and all losses or claims which may arise by reason of
the issue of a new certificate in the place of the one so lost or
destroyed.
SECTION 5. Condition Requiring Disposition. Any and all
equity securities of the Corporation are held subject to the
condition that if a holder thereof is found to be "disqualified"
by the New Jersey Gaming Commission pursuant to the provisions of
the New Jersey Casino Control Act (P.L. 1977 c. 110) then such
holder shall dispose of his interest in the Corporation's equity
securities within 120 days after receipt of notice of such
finding.
ARTICLE VII
CORPORATE SEAL
The seal of the Corporation shall be in the form of a circle
and shall bear the full name of the Corporation, the year of its
incorporation and the words "CORPORATE SEAL DELAWARE".
ARTICLE VIII
SIGNATURES
All checks, bonds, notes, contracts, agreements or other
obligations or instruments of the Corporation shall be signed by
such officer or officers as the Board may from time to time
designate.
ARTICLE IX
MISCELLANEOUS PROVISIONS
SECTION 1. Waiver of Notice. Whenever any notice whatever
is required to be given by these By-Laws or by statute, the
person entitled thereto may in person, or in the case of a
stockholder by his attorney thereunto duly authorized, waive such
n o t ice in writing (including telegraph, cable, radio or
wireless), whether before or after the meeting or other matter
with respect of which such notice is to be given, and in such
event such notice need not
44<PAGE>
be given to such person and such waiver shall be equivalent to
such notice, and any action to be taken after such notice or
after the lapse of a prescribed period of time may be taken
without such notice and without the lapse of any period of time.
SECTION 2. Employment Contracts. No contract of
employment shall be entered into for or on behalf of the
Corporation for a period of more than one year without prior
approval of the Board.
ARTICLE X
AMENDMENTS
Except as otherwise may be provided herein or in the
Certificate of Incorporation, these By-Laws, or any of them, may
be amended, modified or repealed, or new By-Laws may be adopted,
either by vote of a majority of the directors present at any
annual, regular or special meeting, or by a vote constituting a
majority in number of the votes cast by stockholders present in
person or represented by proxy and entitled to vote at any annual
or special meeting.
5/10/96
45<PAGE>
EXHIBIT (4)
GRIFFIN GAMING & ENTERTAINMENT, INC.
1994 Stock Option Plan
(as amended on May 10, 1996)
1. Purpose
Griffin Gaming & Entertainment, Inc. ("GGE"), a Delaware
corporation formerly known as Resorts International, Inc., 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 GGE, 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 GGE, and thus to create in such persons an increased
interest in and a greater concern for the welfare of GGE and any
subsidiary. As used in the Plan, the term "subsidiary" shall
mean any entity in which GGE, directly or indirectly, owns a
controlling interest.
The stock options described in Sections 6, 7 and 8 (the
"Options"), and the shares of common stock, $.01 par value per
share, of GGE (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
a m e nded (the "Code"), or options that do not meet the
requirements for Incentive Options ("Non-Qualified Options"), but
GGE 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 GGE or by
s u c h 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 GGE, 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
C o mmittee 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
46<PAGE>
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, GGE and its officers and directors shall be entitled
to rely upon the advice, opinions or valuations of any such
p e rsons. All actions taken and all interpretations and
determinations made by the Committee in good faith shall be final
and binding upon all persons who have received grants under the
Plan, GGE 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
f u l ly protected by GGE 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 966,685 shares. If, for any reason, any
shares as to which Options have been granted cease to be subject
t o 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 GGE's treasury or
both, at the discretion of GGE.
4. Eligibility and Bases of Participation
Grants under the Plan (i) may be made, pursuant to Section
6, to key employees and officers of GGE or any subsidiary thereof
who are regularly employed on a salaried basis by GGE 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 GGE, 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
47<PAGE>
subsidiary of GGE and to consultants and others providing
services to GGE or any subsidiary thereof (the "Subsidiary and
Consultant Participants").
The Officer and Key Employee Participants and the Director
P a r ticipants 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. p r ovide 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,
for the purpose of assisting the optionee in the
exercise of an Option, such authority to include the
payment by GGE 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 GGE or any subsidiary in respect
of the issuance or disposition of Common Stock acquired
p u r suant 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;
48<PAGE>
e. p r e scribe, 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
C o m m ittee 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
g r a nted hereunder shall be such amount as the
Committee, in its best judgment, shall determine to be
not less than 100% of the Fair Market Value per share
a t 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 GGE, or of any subsidiary of GGE, having more
than 10% of the total combined voting power of all
classes of shares of capital stock of GGE 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
49<PAGE>
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
p a y able 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 GGE that portion of any sale proceeds receivable
by the optionee upon exercise of a Participant Option
or by any other instrument acceptable to GGE or, in the
discretion of the Committee, by delivery to GGE of
shares of Common Stock or by any other method permitted
pursuant to Section 5. Shares delivered to or withheld
by GGE 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
P a r ticipant Options under the Plan cumulatively
exercisable for more than 100,000 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 GGE 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 GGE 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 GGE, or of any subsidiary of GGE,
having more than 10% of the total combined voting power
of all classes of shares of capital stock of GGE or of
such
50<PAGE>
subsidiary, such Incentive Option shall expire not
later than five years from the date such Incentive
Option is granted. The 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
b e 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
t e r m i nation (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
t e r m i nation (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 GGE 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
51<PAGE>
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
t e r m i nation (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 GGE such options shall remain exercisable
as provided in Section 6.j and if such optionee's
employment was terminated by GGE 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 respect to an optionee who is a
party to a written employment agreement with GGE 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 GGE
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 GGE 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 GGE 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 GGE or any
subsidiary.
j. Cessation of Directorship. In the event a Grant
Participant shall cease to be a director of GGE, 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 GGE or any
subsidiary,
52<PAGE>
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
GGE 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 2,000 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 1,000 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 a "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
C o mmittee Options to all Committee Participants otherwise
entitled thereto pursuant to this Section 7, each Committee
Participant shall receive Committee Options to purchase a
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.
53<PAGE>
b. Payment. The exercise price per share of Common Stock
w i t h 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 GGE at the
time is prohibited from purchasing or acquiring shares
of its Common Stock.
c. E x ercisability. 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
g r anted and (ii) one year after such Committee
Participant ceases for any reason to be a director of
GGE. 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
P a rticipant, 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
C o m m ittee 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 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
54<PAGE>
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 GGE or another corporation by reason of any consolidation,
m e r g e r , combination, liquidation, reorganization,
r e c a pitalization, stock dividend, stock split, split-up,
split-off, spin-off, combination of shares, exchange of shares or
other like change in capital structure of GGE, 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 GGE 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
55<PAGE>
issuable upon exercise of an Option is not in effect at
the time such Option is exercised, GGE 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 GGE 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 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 GGE and shall
not be charged against any Option nor to any person
receiving an Option.
d. Funding of Plan. The Plan shall be unfunded. GGE
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
e x t ent 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) GGE or any
subsidiary to continue the employment of any Grant
Participant or (ii) any Grant Participant to remain in
the employ of GGE 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
56<PAGE>
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.
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
GGE'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 GGE representing a
majority of the combined voting power of GGE'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 GGE, at any time after the beginning of
such period, for any reason, cease to constitute a
majority of the Board of Directors of GGE unless the
election of each new director was nominated or
57<PAGE>
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
f a i lure of a Director Participant or Committee
Participant nominated for re-election 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
GGE'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 GGE or any subsidiary, provided that
such Grant Participant has been employed by GGE or any
subsidiary.
13. Amendment of Plan
The Board of Directors of GGE 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 GGE 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
a m e nded in any way that would retroactively impair the
Committee's discretion. The Board of Directors shall be
authorized to amend the Plan and the Options granted thereunder
(A) to qualify 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 GGE 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
58<PAGE>
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.
59<PAGE>
EXHIBIT 11
GRIFFIN GAMING & ENTERTAINMENT, INC.
COMPUTATION OF PER SHARE DATA
(In Thousands, except per share amounts)
Quarter Ended First Half Ended
June 30, June 30,
1996 1995 1996 1995
Per Share Data - Primary:
Net earnings (loss) $3,798 $5,696 $(315) $5,716
Shares and share
equivalents:
Weighted average number
of shares of Common
Stock outstanding 7,941 7,940 7,941 7,940
Weighted average number
of share equivalents
outstanding 834 848 426
Weighted average number
of shares and share
equivalents 8,775 8,788 7,941 8,366
Net earnings (loss)
per share $ .43 $ .65 $(.04) $ .68
Per Share Data - Fully
Diluted:
Net earnings (loss) $3,798 $5,696 $ (315) $5,716
Shares and share
equivalents:
Weighted average number
of shares of Common
Stock outstanding 7,941 7,940 7,941 7,940
Weighted average number
of share equivalents
outstanding 857 848 764
Weighted average number
of shares and share
equivalents 8,798 8,788 7,941 8,704
Net earnings (loss)
per share $ .43 $ .65 $(.04) $ .66
60<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM GRIFFIN
GAMING & ENTERTAINMENT, INC.'S CONSOLIDATED FINANCIAL STATEMENTS AND NOTES
THERETO INCLUDED IN THE FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 1996,
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> $60,783<F1>
<SECURITIES> 0
<RECEIVABLES> $8,218
<ALLOWANCES> $3,306
<INVENTORY> $2,109
<CURRENT-ASSETS> $77,323
<PP&E> $224,693
<DEPRECIATION> $67,032
<TOTAL-ASSETS> $342,594
<CURRENT-LIABILITIES> $44,558
<BONDS> $219,129<F2>
<COMMON> $79
0
0
<OTHER-SE> $25,553
<TOTAL-LIABILITY-AND-EQUITY> $342,594
<SALES> 0
<TOTAL-REVENUES> $142,973
<CGS> 0
<TOTAL-COSTS> $105,140<F3>
<OTHER-EXPENSES> $6,205<F4>
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> $14,476
<INCOME-PRETAX> $(315)
<INCOME-TAX> 0
<INCOME-CONTINUING> $(315)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> $(315)
<EPS-PRIMARY> $(.04)
<EPS-DILUTED> $(.04)
<FN>
<F1>INCLUDES NON-RESTRICTED CASH EQUIVALENTS OF $41,197 AND
RESTRICTED CASH EQUIVALENTS OF $4,454.
<F2>NET OF UNAMORTIZED DISCOUNTS.
<F3>EXCLUDES DEPRECIATION.
<F4>DEPRECIATION EXPENSE.
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM GRIFFIN
GAMING & ENTERTAINMENT, INC.'S CONSOLIDATED FINANCIAL STATEMENTS AND NOTES
THERETO INCLUDED IN THE FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 1995,
EXCEPT AT NOTED BELOW IN FOOTNOTES 2 AND 4, AND IS QUALIFIED IN ITS ENTIRETY
BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<RESTATED>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1995
<CASH> $47,317<F1>
<SECURITIES> 0
<RECEIVABLES> $9,213
<ALLOWANCES> $4,010
<INVENTORY> $2,463
<CURRENT-ASSETS> $66,197
<PP&E> $216,707<F2>
<DEPRECIATION> $55,972
<TOTAL-ASSETS> $332,905
<CURRENT-LIABILITIES> $47,768
<BONDS> $215,673<F3>
<COMMON> $79
0
0
<OTHER-SE> $15,685
<TOTAL-LIABILITY-AND-EQUITY> $332,905
<SALES> 0
<TOTAL-REVENUES> $146,461
<CGS> 0
<TOTAL-COSTS> $101,629<F4>
<OTHER-EXPENSES> $6,962<F5>
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> $14,593
<INCOME-PRETAX> $5,716
<INCOME-TAX> 0
<INCOME-CONTINUING> $5,716
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> $5,716
<EPS-PRIMARY> $.68
<EPS-DILUTED> $.66
<FN>
<F1>INCLUDES NON-RESTRICTED CASH EQUIVALENTS OF $27,177 AND
RESTRICTED CASH EQUIVALENTS OF $5,359.
<F2>RESTATED TO EXCLUDE LAND HELD FOR INVESTMENT, DEVELOPMENT AND RESALE.
<F3>NET OF UNAMORTIZED DISCOUNTS.
<F4>EXCLUDES DEPRECIATION; RESTATED TO EXCLUDE $140 RECLASSIFIED
TO SELLING, GENERAL & ADMINISTRATIVE EXPENSE.
<F5>DEPRECIATION EXPENSE.
</FN>
</TABLE>
