SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted
by Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
GRIFFIN GAMING & ENTERTAINMENT, INC.
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement,
if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or
14a-6(i)(2) or Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange
Act Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-
6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction
applies:_______________________________________________
(2) Aggregate number of securities to which transaction
applies:_______________________________________________
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth
the amount on which the filing fee is calculated and
state how it was determined):__________________________
(4) Proposed maximum aggregate value of transaction:_______
(5) Total fee paid:________________________________________
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for
which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the
Form or Schedule and the date of its filing.
(1) Amount Previously Paid:________________________________
(2) Form, Schedule or Registration Statement No.:__________
(3) Filing Party:__________________________________________
(4) Date Filed:____________________________________________<PAGE>
PRELIMINARY PROXY SOLICITING MATERIAL
GRIFFIN GAMING & ENTERTAINMENT, INC.
1133 Boardwalk
Atlantic City, New Jersey 08401
ANNUAL MEETING
May 10, 1996
To Our Shareholders:
You are cordially invited to attend the Annual Meeting of
your Company to be held at 10:00 a.m. on Friday, May 10, 1996 at
Merv Griffin's Resorts Casino Hotel, located at 1133 Boardwalk,
Atlantic City, New Jersey 08401. Your Board of Directors and
management look forward to greeting those shareholders who are
able to attend.
A report on the current affairs of the Company will be
presented at the meeting and shareholders will have an
opportunity for questions and comments. In addition, holders of
Common Stock will be asked to consider and vote upon proposals to
elect a Class II director, to approve an amendment to the
Company's Restated Certificate of Incorporation to increase the
number of authorized shares of Common Stock, to approve an
amendment to the Company's 1994 Stock Option Plan to increase the
number of shares of Common Stock that may be issued under the
Plan, and to ratify the appointment of Ernst & Young LLP as the
Company's independent auditors for the current year. Also,
holders of Class B Stock will be asked to consider and vote upon
a proposal to elect a Class II director who will serve as a Class
B Director.
In preparation for the meeting, we have enclosed a package
consisting of: (i) the Company's 1995 Annual Report; (ii) a
proxy statement; and (iii) a proxy card and a prepaid return
envelope for voting your shares. It is important that your
shares be represented and voted at the meeting whether or not you
plan to attend. Please complete, sign, date and return the
enclosed proxy card at your earliest convenience.
We are grateful for your assistance and express our
appreciation in advance.
Sincerely yours,
MERV GRIFFIN THOMAS E. GALLAGHER
Chairman of the Board President and Chief
Executive Officer<PAGE>
GRIFFIN GAMING & ENTERTAINMENT, INC.
1133 Boardwalk
Atlantic City, New Jersey 08401
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held On May 10, 1996
NOTICE IS HEREBY GIVEN that the Annual Meeting of
Shareholders of GRIFFIN GAMING & ENTERTAINMENT, INC. (the
"Company") will be held at Merv Griffin's Resorts Casino Hotel,
located at 1133 Boardwalk, Atlantic City, New Jersey 08401 on
Friday, May 10, 1996 at 10:00 a.m., to consider and vote on:
1. The election of two Class II directors, including a
Class B Director, each to hold office until the 1999 Annual
Meeting of Shareholders and until their respective
successors have been duly elected and qualified;
2. The approval of an amendment to the Company's Restated
Certificate of Incorporation to increase the number of
authorized shares of the Company's common stock, par value
$.01 per share (the "Common Stock"), from 20,000,000 shares
to 100,000,000 shares;
3. The approval of an amendment to the Company's 1994
Stock Option Plan to increase the maximum number of shares
of Common Stock that may be issued under the plan from
466,685 shares to 966,685 shares;
4. The ratification of the appointment of Ernst & Young
LLP as the Company's independent auditors for the fiscal
year ending December 31, 1996; and
5. Such other matters as may properly come before the
Annual Meeting or any adjournment or adjournments thereof.
The Board of Directors has fixed the close of business on
April 1, 1996 as the record date for determining the shareholders
entitled to vote at the Annual Meeting.
The presence, in person or by proxy, of the holders of at
least a majority of all outstanding shares of Common Stock is
required to constitute a quorum for the transaction of business
at the Annual Meeting by holders of Common Stock. The presence,
in person or by proxy, of the holders of at least a majority of
all outstanding shares of the Company's class B redeemable common
stock, par value $.01 per share (the "Class B Stock") entitled to
vote is required to constitute a quorum for the transaction of
business by holders of Class B Stock, which will be limited to
the election of a Class B Director. Accordingly, it is important
that your shares be represented at the Annual Meeting whether or
not you plan to attend. The Board of Directors urges you to
complete, date, sign and return the enclosed proxy as soon as
possible in the enclosed envelope. You may revoke the proxy at
any time prior to<PAGE>
its exercise, provided that you comply with the procedures set
forth in the attached Proxy Statement. If you attend the Annual
Meeting, you may vote in person if you wish.
By order of the Board of Directors,
David G. Bowden
Secretary
Atlantic City, New Jersey
April 5, 1996
IMPORTANT: PLEASE MAIL YOUR PROXY PROMPTLY IN THE ENCLOSED
ENVELOPE. THE MEETING DATE IS MAY 10, 1996.<PAGE>
PROXY STATEMENT
GRIFFIN GAMING & ENTERTAINMENT, INC.
ANNUAL MEETING OF SHAREHOLDERS
May 10, 1996
GENERAL INFORMATION
This Proxy Statement and the accompanying 1995 Annual Report
(the "Annual Report") are furnished to you in connection with the
solicitation by the Board of Directors (the "Board") of Griffin
Gaming & Entertainment, Inc. (the "Company") of proxies from
holders of the Company's common stock, par value $.01 per share
(the "Common Stock") and class B redeemable common stock, par
value $.01 per share (the "Class B Stock," and collectively with
the Common Stock, the "GGE Common Stock"). The proxies will be
voted at the Annual Meeting of Shareholders to be held at Merv
Griffin's Resorts Casino Hotel, located at 1133 Boardwalk,
Atlantic City, New Jersey 08401 on Friday, May 10, 1996 at
10:00 a.m., and at any adjournment or adjournments thereof (the
"Annual Meeting").
The mailing address of the principal executive offices of
the Company is 1133 Boardwalk, Atlantic City, New Jersey 08401.
The Company's telephone number is (609) 344-6000. This Proxy
Statement and the accompanying proxy card (the "Proxy Card") are
first being transmitted to shareholders of the Company on or
about April 5, 1996.
The Board has fixed the close of business on April 1, 1996
as the record date (the "Record Date") for determining the
holders of GGE Common Stock entitled to vote at the Annual
Meeting. At the close of business on the Record Date, an
aggregate of 7,941,035 shares of Common Stock and 35,000 shares
of Class B Stock were issued and outstanding. Each share of
Common Stock entitles its holder to one vote on the election of
directors, except a Class B Director, and on each other matter to
be voted upon at the Annual Meeting. Except as discussed under
"Voting of Class B Stock," each share of Class B Stock entitles
its holder to one vote on the election of a Class B Director.
Holders of Class B Stock, as such, will not be entitled to vote
on any other matter to be voted on at the Annual Meeting.
Holders of the Class B Stock will vote separately as a class.
The Company has no other outstanding class of voting securities.
The presence, in person or by proxy, of the holders of a majority
of the outstanding shares of Common Stock, and of the outstanding
shares of Class B Stock who are entitled to vote, separately, is
required to constitute a quorum for the transaction of business
at the Annual Meeting by each of those classes of GGE Common
Stock. Proxies will be solicited by mail. The Company also
intends to make, through bankers, brokers or other persons, a
solicitation of beneficial holders of GGE Common Stock.
1<PAGE>
At the 1995 annual meeting of shareholders, holders of the
Common Stock approved a one-for-five reverse stock split (the
"Reverse Stock Split") of the Common Stock. The Reverse Stock
Split became effective on June 30, 1995, on which date each share
of Common Stock was reclassified into one-fifth of a new share of
Common Stock. All references in this Proxy Statement to number
of shares, per share amounts and market and exercise prices
relating to the Common Stock give effect to the Reverse Stock
Split, unless the context may otherwise indicate.
At the Annual Meeting, holders of Common Stock will be asked
to consider and vote upon: (i) the election of one Class II
director, to hold office until the 1999 annual meeting of
shareholders and until his successor has been duly elected and
qualified; (ii) the approval of an amendment to the Company's
R e s tated Certificate of Incorporation (the "Restated
Certificate") to increase the number of authorized shares of
Common Stock from 20,000,000 shares to 100,000,000 shares; (iii)
an amendment to the Company's 1994 Stock Option Plan (the "1994
Stock Option Plan") to increase the maximum number of shares of
Common Stock that may be issued under the 1994 Stock Option Plan
from 466,685 shares to 966,685 shares; and (iv) the ratification
of the appointment of Ernst & Young LLP as the Company's
independent auditors for the fiscal year ending December 31,
1996.
At the Annual Meeting, holders of Class B Stock who are
entitled to vote will be asked to consider and vote, separately
as a class, upon the election of one Class B Director to hold
office as a Class II director until the 1999 annual meeting of
shareholders and until his successor has been duly elected and
qualified.
Election of Directors requires the vote of a plurality of
the shares of Common Stock and of Class B Stock, voting as
separate classes, represented at the Annual Meeting. Proposal
(ii) requires the affirmative vote of the holders of a majority
of the outstanding shares of Common Stock. Proposals (iii) and
(iv) require a majority vote of the holders of shares of Common
Stock represented at the Annual Meeting. The Board knows of no
matters to be brought before the Annual Meeting other than those
set forth above. Holders of shares of GGE Common Stock, however,
also may be asked to consider and take action with respect to
such other matters as properly may come before the Annual
Meeting.
VOTING OF CLASS B STOCK
Each share of Class B Stock is issued as part of a unit
along with $1,000 principal amount of 11.375% Junior Mortgage
Notes due 2004 issued by Resorts International Hotel Financing,
Inc. ("RIHF"), a wholly owned subsidiary of the Company. Shares
of
2<PAGE>
Class B Stock may not be transferred separately from the related
Junior Mortgage Notes.
The holders of Class B Stock are not entitled to vote on any
matter except that they are entitled to vote separately as a
class (i) in the election of Class B Directors, (ii) to the
extent required under the Delaware General Corporation Law, and
(iii) with respect to certain amendments to the Company's
Restated Certificate or By-laws that would affect the Class B
Stock. No matter on which the holders of Class B Stock are
entitled to vote is under consideration at the Annual Meeting
other than the election of a Class B Director.
Of the 35,000 shares of Class B Stock outstanding, 12,899
are owned by Resorts International Hotel, Inc. ("RIH"), an
indirect wholly owned subsidiary of the Company which owns and
operates Merv Griffin's Resorts Casino Hotel in Atlantic City,
New Jersey (the "Resorts Casino Hotel"). Under the General
Corporation Law of Delaware, the state of the Company's
incorporation, the shares of Class B Stock owned by RIH, and
controlled by the Company as RIH's ultimate parent, are not
entitled to vote or be counted for quorum purposes at any meeting
of the Company's shareholders. Accordingly, references in this
Proxy Statement to shares of Class B Stock entitled to vote,
needed to elect the Class B Director or to establish a quorum do
not include the shares of Class B Stock owned by RIH.
SOLICITATION AND REVOCATION
Proxies in the form of the enclosed Proxy Card are solicited
by, or on behalf of, the Board. The persons named in the Proxy
Card have been designated as proxies by the Board. Each such
person is an officer of the Company. Holders of Common Stock and
of Class B Stock will receive separate Proxy Cards for use in
voting their shares.
Shares of GGE Common Stock represented at the Annual Meeting
by a properly executed and returned Proxy Card will be voted at
the Annual Meeting in accordance with instructions noted thereon
or, if no instructions are noted, the proxy will be voted in
favor of the proposals set forth in the Notice of Annual Meeting
of Shareholders. As to other business, if any, that may properly
come before the meeting, the persons named in the accompanying
Proxy Card will vote or refrain from voting thereon in their
discretion.
A submitted proxy is revocable by a shareholder at any time
prior to its being voted, provided that such shareholder gives
written notice to the Secretary of the Company at or prior to the
Annual Meeting that such shareholder intends to vote in person or
by submitting a subsequently dated proxy. Attendance at the
Annual
3<PAGE>
Meeting by a shareholder who has given a proxy in and of itself
will not constitute a revocation of such proxy.
Proxies will be solicited initially by mail. Further
solicitation may be made by officers and regular employees of the
Company personally, by telephone or otherwise, but such persons
will not be specifically compensated for such services. The
Company has retained Chemical Mellon Shareholder Services to
assist, if necessary, in the solicitation of proxies for a fee of
approximately $6,500 plus reasonable out-of-pocket expenses.
Banks, brokers, nominees and other custodians and fiduciaries
will be reimbursed for their reasonable out-of-pocket expenses in
forwarding solicitation material to their principals, the
beneficial owners of GGE Common Stock. The costs of soliciting
proxies will be borne by the Company. It is expected that such
costs will be nominal.
Abstentions and broker non-votes are counted for purposes of
determining the presence or absence of a quorum for the
transaction of business. Abstentions are not considered as
having voted for purposes of determining the outcome of the
election of directors, but are considered as a vote "against" any
other matter. Broker non-votes are not considered as having
voted for purposes of determining the outcome of a vote on any
matter. In accordance with the Company's By-Laws and the
Delaware General Corporation Law, the Board will appoint two
inspectors of election. The inspectors will take charge of, and
will count, the votes and ballots cast at the Annual Meeting and
will make a written report on their determination.
OWNERSHIP OF VOTING SECURITIES BY CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
Security Ownership of Certain Beneficial Owners
Common Stock
The following table sets forth information as to the
beneficial ownership of Common Stock as of February 29, 1996 by
persons known by the Company to be holders of more than 5% of the
Common Stock. Information as to the number of shares
beneficially owned has been furnished by the persons named in the
table.
4<PAGE>
<TABLE><CAPTION>
Name and Address of Amount and Nature of
Beneficial Owner Beneficial Ownership Percent of Class
<S> <C> <C>
Merv Griffin, 3,293,038(1)(2) 36.63%
Thomas E. Gallagher and
Lawrence Cohen (1)(2)
c/o The Griffin Group, Inc.
780 Third Avenue, Suite 1801
New York, New York 10017
_______________
</TABLE>
(1) According to a Schedule 13D filed with the Securities and
Exchange Commission on January 6, 1995, pursuant to the
Securities Exchange Act of 1934, as amended (the "Exchange
Act") (giving effect to the Reverse Stock Split) (i) Mr.
Griffin, Chairman of the Board of Directors of the Company,
individually and through his ownership interest in Atlantic
Resorts Holdings, Inc. ("ARH"), beneficially owns 2,871,803
shares of Common Stock, including 746,695 shares issuable
upon exercise of warrants; (ii) Thomas E. Gallagher, a
director, President and Chief Executive Officer of the
Company, individually beneficially owns 249,926 shares of
Common Stock, including 140,006 shares issuable upon
exercise of warrants and (iii) Lawrence Cohen, a director of
RIH and RIHF, individually beneficially owns 56,309 shares
of Common Stock, including 46,669 shares issuable upon
exercise of warrants. Messrs. Gallagher and Cohen are
executive officers of The Griffin Group, Inc. ("Griffin
Group") and ARH, corporations controlled by Mr. Griffin.
Messrs. Griffin, Gallagher and Cohen may be deemed to be
members of a "group" for purposes of Rule 13d-5(b)(1) and
each may be deemed to be the beneficial owner of shares
owned by the other two members of the group. The amount
reported here represents holdings by the group comprised of
Messrs. Griffin, Gallagher and Cohen. The shares issuable
upon exercise of warrants included herein, a total of
933,370 shares, represent the Griffin Warrant, portions of
which were sold to Messrs. Gallagher and Cohen by ARH in
September 1994. See "Griffin Services Agreement" under
"Election of Directors - Related Party Transactions and
Relationships - Transactions with Management and Others."
(2) The beneficial ownership shown also includes 100,000 and
15,000 shares of Common Stock issuable to Messrs. Gallagher
and Cohen, respectively, upon the exercise of options
granted to them under the 1994 Stock Option Plan. Although
these options vest as to 25% on each of the following dates
- September 27, 1995, August 1, 1996, August 1, 1997 and
August 1, 1998 - all such options are included in the
beneficial ownership presented herein because the group
referred to in footnote (1) above is in a position to
influence control of the Company.
5<PAGE>
Class B Stock
The 12,899 shares of Class B Stock owned by RIH represent
36.85% of the class outstanding. However, as indicated under
"Voting of Class B Stock," because of provisions of the Delaware
General Corporation Law, the shares of Class B Stock owned by RIH
are not entitled to be voted or counted for quorum purposes. The
following table sets forth information as to the beneficial
ownership of Class B Stock as of February 29, 1996 by persons
known by the Company to be holders of more than 5% of the 22,101
shares of Class B Stock owned by persons other than RIH. The
information as to the number of shares beneficially owned has
been furnished by the persons named in the table.
<TABLE><CAPTION>
Name and Address of Amount and Nature of Percent of Class
Beneficial Owner Beneficial Ownership (1)
<S> <C> <C>
Robert Fleming & Co., Ltd. 2,102 9.5%
c/o Robert Fleming, Inc.
320 Park Avenue
New York, New York 10022
Andrew J. McLaughlin, Jr. 1,908 (2) 8.6%
c/o Loeb Partners
61 Broadway, 24th Floor
New York, New York 10006
SunAmerica, Inc. 1,594 7.2%
1 SunAmerica Center
Los Angeles, California 90067
Nate J. Rogers 1,412 (2) 6.4%
P.O. Box 1310
Beaumont, Texas 77704
_______________
</TABLE>
(1) Based on 22,101 shares of Class B Stock.
(2) Andrew J. McLaughlin, Jr. and Nate J. Rogers each have
irrevocably authorized and empowered the Executive Vice
President - Finance and Chief Financial Officer of the
Company, Matthew B. Kearney, as their attorney-in-fact, to
vote their respective shares of Class B Stock on "any and
all matters which owners of such Class B Stock are entitled
to vote in equal proportion to all other votes cast on any
matter put to vote." The Company understands that the
authorizations were in response to discussions between Mr.
McLaughlin and Mr. Rogers, separately, with the New Jersey
Casino Control Commission in connection with waivers being
requested by Messrs. McLaughlin and Rogers of certain
qualification requirements of the New Jersey Casino Control
Act. Acting pursuant to the authorizations, Mr. Kearney
will vote the shares of Class B Stock owned by Messrs.
McLaughlin and Rogers in the manner authorized.
Accordingly, the aggregate of 3,320
6<PAGE>
shares of Class B Stock owned by Messrs. McLaughlin and
Rogers will be voted in the same proportion as all other
shares of Class B Stock are voted at the Annual Meeting.
Messrs. McLaughlin and Rogers each have retained their right
to sell at any time their respective shares of Class B Stock
and correspondingly transfer all voting rights of any Class
B Stock sold.
Security Ownership of Management
The following table sets forth information as to the
beneficial ownership of Common Stock and Class B Stock as of
February 29, 1996 by each director, each nominee, each executive
officer named in the Summary Compensation Table (see
"Compensation of Directors and Executive Officers") and by all
directors and officers as a group. Except as noted below, each
director, nominee and executive officer has sole voting and
investment power over the shares shown.
<TABLE><CAPTION>
Common Stock Class B Stock
Amount and Amount and
Nature of Nature of
Name of Beneficial Percent Beneficial Percent
Beneficial Owner Ownership of Class Ownership of Class
<S> <C> <C> <C> <C>
Merv Griffin 2,871,803 (1) 33.06%
(2)
Thomas E. Gallagher 349,926 (1) 4.28%
(2)
(3)
William J. Fallon 9,000 (4) .11%
Jay M. Green 3,000 (5) .04%
Charles M. Masson 3,000 (6) .04%
Vincent J. Naimoli 5,000 (5) .06%
Matthew B. Kearney 27,500 (6) .35% 215 .97% (8)
David G. Bowden 6,750 (6) .08%
Directors and
officers as a group
(8 persons) 3,275,979 (7) 36.51% 215 .97% (8)
_______________
</TABLE>
(1) Messrs. Griffin and Gallagher, together with Lawrence Cohen,
may be deemed to be members of a "group" for purposes of
Rule 13d-5(b)(1) under the Exchange Act. As a group,
Messrs. Griffin, Gallagher and Cohen may be deemed to
beneficially own an aggregate of 3,293,038 shares, or
36.63%, of the Common Stock. See notes (1) and (2) to table
of "Security Ownership of Certain Beneficial Owners - Common
Stock.
7<PAGE>
(2) Mr. Griffin s holdings include 746,695 shares issuable upon
exercise of warrants. Mr. Gallagher s holdings include
140,006 shares issuable upon exercise of warrants. Related
percentage shown gives effect to the exercise of all such
warrants.
(3) Includes 100,000 shares issuable upon the exercise of
options granted to Mr. Gallagher. See Note (2) to table of
"Security Ownership of Certain Beneficial Owners - Common
Stock."
(4) Includes 3,000 shares which are issuable upon exercise of
stock options. Related percentage shown gives effect to the
exercise of all such options. Also includes 1,000 shares
held by Mr. Fallon's spouse in her Individual Retirement
Account, as to which Mr. Fallon disclaims any beneficial
ownership.
(5) Mr. Green s holdings include 2,000 shares which are issuable
upon exercise of stock options. Mr. Naimoli s holdings
include 3,000 shares which are issuable upon exercise of
stock options. Related percentage shown gives effect to the
exercise of all such options.
(6) Ownership represents shares issuable upon exercise of stock
options. Related percentage shown gives effect to the
exercise of all such options.
(7) Includes 886,701 shares issuable upon exercise of warrants
and 145,250 shares issuable upon exercise of stock options.
Related percentage shown gives effect to the exercise of all
such warrants and options.
(8) Ownership percentage reflected here is based on shares of
Class B Stock outstanding, excluding the 12,899 shares owned
by RIH.
ELECTION OF DIRECTORS
The Restated Certificate provides for a Board of six
directors. The following persons are currently serving as
directors of the Company: Merv Griffin, Thomas E. Gallagher,
William J. Fallon, Jay M. Green, Charles M. Masson and Vincent J.
Naimoli. The Company's Board of Directors is divided into three
equal classes which have staggered terms. Messrs. Fallon and
Naimoli are serving as Class II directors; their terms expire at
the Annual Meeting. Mr. Naimoli is a Class B Director. Messrs.
Griffin and Masson are serving as Class III directors; their
terms will expire at the 1997 annual meeting of shareholders.
Mr. Masson is a Class B Director. Messrs. Gallagher and Green
are serving as Class I directors; their terms will expire at the
1998 annual meeting of shareholders. Notwithstanding the
foregoing, each
8<PAGE>
director serves until his or her successor is elected and
qualified or until his or her earlier death, resignation or
removal.
Each of the current directors was appointed pursuant to a
joint plan of reorganization (the "1994 Reorganization Plan")
effected by the Company and certain of its subsidiaries on May 3,
1994 (the "Effective Date"). Messrs. Gallagher and Green were
elected to the Board for their current terms at the 1995 annual
meeting of shareholders.
Messrs. Fallon and Naimoli have been nominated for election
as Class II directors; Mr. Naimoli has been nominated to serve as
a Class B Director. The terms of the Class II directors elected
at the Annual Meeting will expire at the 1999 annual meeting of
shareholders. The Company has no reason to believe that either
of the foregoing nominees will be unavailable or will not serve
if elected, although in the unexpected event that either such
nominee should become unavailable or unwilling to serve as a
director, full discretion is reserved to the persons named as
proxies to vote for such other persons as may be nominated.
Vote Required for Election
The election of Mr. Fallon as a director of the Company, and
of Mr. Naimoli as a Class B Director, requires the affirmative
vote of a plurality of the shares of Common Stock, and of Class B
Stock, each voting separately as a class, represented at the
Annual Meeting.
The Board recommends that you vote FOR the election of
Mr. Fallon and Mr. Naimoli to be directors of the Company.
9<PAGE>
Nominees to Board of Directors
The following information is provided with respect to each
nominee for election to the Board:
Name, Age and Other
Positions and Offices, Tenure as Director and
if any, with the Company Business Experience
William J. Fallon, 42 Director of the Company since May
Chairman, Business 1994; Chairman of the Board of
Development and Strategic R.M. Bradley & Co., Inc.
Planning Committee; ("Bradley"), a real estate
Member, brokerage and management company,
Compensation/Option since _____ 199__; Executive Vice
Committee President of Bradley from March
1994 to _______ 199__; Senior
Vice President of Bradley from
1988 to March 1994; other
positions with Bradley from 1979
to 1988; a director of
Massachusetts Certified
Development Corporation, a small
business development company,
since 1987; President of A.D.
Ventures, Inc., an asset
development consulting company
owned by Mr. Fallon, since its
formation in September 1994.
A.D. Ventures has provided real
estate consulting services to
Griffin Group.
10<PAGE>
Name, Age and Other
Positions and Offices, Tenure as Director and
if any, with the Company Business Experience
Vincent J. Naimoli, 58 Director of the Company since May
(Class B Director) 1994; Chairman, President and
Chairman, Chief Executive Officer of
Compensation/Option Harvard Industries, Inc., a
Committee; Member, Audit manufacturer of automotive parts,
Committee since 1993; Chairman and Chief
Executive Officer of Doehler-
Jarvis Corporation, a designer
and manufacturer of aluminum
castings, since 1991; Chairman,
President and Chief Executive
Officer of Ladish Company, Inc.,
a manufacturer of forged titanium
and other metal components, since
1993; Managing General Partner of
the Tampa Bay Baseball Ownership
Group since 1992; Chairman,
President and Chief Executive
Officer of Anchor Industries
International, Inc., a multi-
industry operating, holding and
financial services company, since
1989; a director of Simplicity
Pattern Company, a maker of
sewing patterns, since 1990; a
director of Florida Progress
Corporation, a utility holding
company since _____; Chairman,
President and Chief Executive
Officer of Anchor Glass Container
Corporation from 1983 through
1989.
11<PAGE>
Directors Not Standing for Election
The following information is provided with respect to the
directors of the Company who are not nominees for election to the
Board at this Annual Meeting and whose terms of office as
directors will continue after the Annual Meeting:
Name, Age and Other
Positions and Offices, Tenure as Director and
if any, with the Company Business Experience
Merv Griffin, 70 Chairman of the Board of the
Chairman of the Board of Company since November 1988;
Directors; Member, Chairman of Griffco Resorts
Executive Committee Holding, Inc. ("Griffco," a
company which through September
1990 was owned by Mr. Griffin and
from November 1988 through
September 1990 was the Company's
parent) from its incorporation in
1986 to September 1990; President
of Griffco from September 1988 to
September 1990; Chairman of
Griffin Group since its
incorporation in September 1988;
Chairman of January Enterprises,
Inc. ("January Enterprises"), a
television production and holding
company doing business as Merv
Griffin Enterprises, from 1964 to
May 1986, and Chief Executive
Officer from 1964 to March 1994;
director of Hollywood Park
Operating Company from 1987 to
June 1991; television and radio
producer since 1945. Mr. Griffin
created and produced the
nationally syndicated television
game shows, "Wheel of Fortune"
and "Jeopardy." For 21 years,
through 1986, Mr. Griffin hosted
"The Merv Griffin Show," a
nationally syndicated talk show.
In 1986, Mr. Griffin sold January
Enterprises to The Coca Cola
Company, but he continues to act
as Executive Producer of "Wheel
of Fortune" and "Jeopardy," now
owned by Sony Pictures
Entertainment, Inc.
12<PAGE>
Name, Age and Other
Positions and Offices, Tenure as Director and
if any, with the Company Business Experience
Thomas E. Gallagher, 51 Director of the Company since
President and Chief October 1993; President and Chief
Executive Officer; Executive Officer of the Company
Chairman, Executive since May 1995; President and
Committee; Member, Chief Executive Officer of
Business Development and Griffin Group since April 1992; a
Strategic Planning director of Players
Committee International, Inc. ("Players"),
a gaming company, since December
1992. For the preceding 15
years, Mr. Gallagher was a
partner of the law firm of
Gibson, Dunn & Crutcher.
Charles M. Masson, [42] Director of the Company since May
(Class B Director) 1994; Chairman of the Board of
Member, Executive Directors of Cadillac Fairview
Committee, Corporation Limited, a property
Compensation/Option developer, since September 1994;
Committee, Audit Committee President of McCloud Partners, a
and Business Development private advisory firm, since June
and Strategic Planning 1993; a director of Salomon
Committee Brothers Inc from 1991 through
May 1993; Vice President of
Salomon Brothers Inc from 1983
through 1990.
Jay M. Green, 48 Director of the Company since May
Chairman, Audit Committee; 1994; Executive Vice President -
Member, Chief Financial Officer and
Compensation/Option Treasurer of Culbro Corporation
Committee and Business (" Culbro"), a diversified
Development and Strategic consumer and industrial products
Planning Committee company, since 1988; Chairman of
the Board of The Eli Witt
Company, a Culbro subsidiary,
since February 1993; prior to
1988, Vice President and
Controller of Columbia Pictures
Entertainment, Inc.
13<PAGE>
Executive Officers
The following information is provided with respect to the
executive officers of the Company who are not directors of the
Company:
Offices and Positions
Name and Age with the Company
Matthew B. Kearney, 56 Executive Vice President -
Finance since September 1993;
Chief Financial Officer since
1982; Treasurer since May 1993;
Office of the President from
November 1993 to March 1995; and
Vice President - Finance from
1982 through September 1993.
David G. Bowden, 55 Vice President - Controller and
Chief Accounting Officer since
1979; and Secretary since August
1994.
The Company's executive officers serve at the pleasure of
the Board.
Board Meetings
The Board held five meetings in 1995. The Executive
Committee of the Board consists of Messrs. Gallagher (Chairman),
Griffin and Masson. The Board also has a standing Audit
Committee, consisting of Messrs. Green (Chairman), Masson and
Naimoli; a standing Compensation/Option Committee, consisting of
Messrs. Naimoli (Chairman), Fallon, Green and Masson; and a
standing Business Development and Strategic Planning Committee,
consisting of Messrs. Fallon (Chairman), Gallagher, Green (member
since February 1996) and Masson. The Audit Committee met two
times in 1995 and the Compensation Committee/Option met three
times in 1995. The Board does not have a nominating committee or
committee performing similar functions.
During the intervals between the meetings of the Board, the
Executive Committee may exercise all powers of the Board in the
management of the business, affairs and property of the Company,
to the extent permitted by Delaware law. Among the Audit
Committee's responsibilities are: to recommend to the Board the
engagement or discharge of the Company's independent auditors; to
review with the Company's independent auditors the plan and
results of the annual audit engagement; to review the degree of
independence of the Company's independent auditors; to consider
the range of audit and non-audit fees; and to review the results
of the Company's internal
14<PAGE>
audit reports. The Compensation/Option Committee is authorized
to review salaries and compensation, including non-cash benefits,
of directors, officers and other employees of the Company, and to
recommend to the Board salaries and other forms of compensation
and benefits as it deems necessary. The Business Development and
Strategic Planning Committee's responsibilities include
developing and monitoring the Company's strategic goals.
During 1995, no director of the Company attended fewer than
75% of the aggregate number of meetings of the Board and
committees of the Board on which he served as a director or
committee member.
Related Party Transactions and Relationships
Transactions with Management and Others
Griffin Services Agreement. In April 1993 the Company and
RIH, the Company's indirect subsidiary which owns and operates
the Resorts Casino Hotel, entered into a License and Services
Agreement with Griffin Group (the "Griffin Services Agreement")
dated and effective as of September 17, 1992 to replace the
previous License and Services Agreement among the Company, Merv
Griffin and Griffin Group upon its expiration. Pursuant to the
Griffin Services Agreement, Griffin Group granted the Company and
RIH a non-exclusive license to use the name and likeness of Merv
Griffin in certain advertising media and limited merchandising
for the sole purpose of advertising and promoting the facilities
and operations of the Company and RIH. In connection with such
license, Griffin Group will not grant any similar license to any
casino/hotel located in Atlantic City during the term of the
Griffin Services Agreement, so long as the Company and RIH own or
operate casino and hotel facilities there.
Pursuant to the Griffin Services Agreement, Griffin Group
agreed to provide to the Company and RIH, for the term of the
Griffin Services Agreement, the non-exclusive services of Merv
Griffin, subject to the performance by the Company and RIH of
their obligations under the Griffin Services Agreement, (i) as
Chairman of the Board of Directors of the Company, (ii) as host,
producer, presenter and featured performer relative to certain
shows to be presented at the Resorts Casino Hotel, (iii) as
consultant and marketing adviser, (iv) in certain capacities, as
spokesperson for the Company and RIH and (v) as participant in
certain radio, television and print advertisements.
The Griffin Services Agreement is to continue in force until
September 17, 1997 and provides for earlier termination under
certain circumstances including, among others, a change of
control (as defined) of the Company and RIH and Mr. Griffin
ceasing to serve as Chairman of the Board of the Company.
15<PAGE>
The Griffin Services Agreement provides for compensation to
Griffin Group in the following annual amounts over the five year
term: $2,000,000; $2,100,000; $2,205,000; $2,310,000 and
$2,425,000. The agreement called for a payment of $4,100,000,
upon signing, representing compensation for the first two years
of services. Thereafter, the agreement called for annual
payments on September 17, each representing a prepayment for the
year ending two years hence. In lieu of paying in cash, at the
Company's option, it could satisfy its obligation to make any of
the payments required under the Griffin Services Agreement by
reducing the amount of a then outstanding note receivable from
Griffin Group (the "Group Note"). In the event of an early
termination of the Griffin Services Agreement, and depending on
the circumstances of such early termination, all or a portion of
the compensation paid to Griffin Group in respect of the period
subsequent to the date of termination may be required to be
repaid to the Company and RIH.
RIH made the $4,100,000 payment for the first two years
under the Griffin Services Agreement in April 1993. In September
1993, the Company satisfied the obligation to make the $2,205,000
payment for the year ending September 16, 1995 by reducing the
Group Note by that amount. In May 1994, as contemplated in the
1994 Reorganization Plan, the Company satisfied the $2,310,000
obligation to Griffin Group for the fourth year of the Griffin
Services Agreement by reducing the principal amount of the Group
Note in an equal amount. The final payment required under the
agreement, $2,425,000, was to be due in September 1995. On
August 1, 1994, following review and approval by the independent
members of the Company's Board of Directors, the Company agreed
to issue 388,000 shares of Common Stock to ARH, an affiliate of
Griffin Group through which Mr. Griffin holds certain securities
of the Company, in satisfaction of this final payment obligation.
The closing price of Common Stock on the date of the agreement
was $5.3125 per share. The shares are not registered under the
Securities Act of 1933 and are restricted securities.
As additional compensation provided for in the Griffin
Services Agreement, on the Effective Date the Company issued to
ARH, as assignee from Griffin Group, a warrant to purchase
933,370 shares of Common Stock at $6.00 per share (the "Griffin
Warrant"). The Griffin Warrant is exercisable through May 3,
1998. Subsequent to the issuance of the Griffin Warrant, ARH
sold portions of the Griffin Warrant to Thomas E. Gallagher and
Lawrence Cohen, officers of ARH. Mr. Gallagher is President,
Chief Executive Officer and a member of the Board of the Company.
Mr. Cohen is a member of the Board of Directors of RIH and RIHF.
The Company and RIH also have agreed to indemnify Merv
Griffin and Griffin Group for certain costs and liabilities
arising in connection with the Griffin Services Agreement or Merv
Griffin's services, or the service of any employee of Griffin
Group, as a director or officer of the Company or any subsidiary
thereof.
16<PAGE>
Pursuant to the Griffin Services Agreement, the Company and
RIH have agreed to maintain comprehensive public liability,
personal injury and umbrella insurance coverage in specified
amounts for both Griffin Group and Merv Griffin, individually.
The Company and RIH also have agreed to reimburse Griffin
Group for certain expenses incurred by Griffin Group and Merv
Griffin in connection with the license and services agreed to
under the Griffin Services Agreement.
Other Transactions. Effective May 1, 1995 Thomas E.
Gallagher became President and Chief Executive Officer of the
Company. Mr. Gallagher has been President and Chief Executive
Officer of Griffin Group since April 1992. In connection with
Mr. Gallagher s appointment as President and Chief Executive
Officer of the Company, following review and approval by
independent members of the Company s Board of Directors, the
Company agreed to pay $300,000 per year for his services in this
capacity. In 1995 such payments were made to Griffin Group where
Mr. Gallagher remains President and Chief Executive Officer.
Since January 1, 1996 the Company has been compensating Mr.
Gallagher directly, rather than making payments to the Griffin
Group for his services.
Subsidiaries of the Company reimbursed Griffin Group
$208,000 for charter air services rendered in 1995 to
Mr. Griffin, as well as other directors and officers of the
Company and its subsidiaries, for travel related to business of
the Company or its subsidiaries.
In 1995 RIH and Griffin Entertainment, Inc. ("GEI"), another
subsidiary of the Company, incurred charges from unaffiliated
parties of $450,000 in producing the nationwide television
broadcast of "Merv Griffin's New Year's Eve Special" from the
Resorts Casino Hotel.
In 1995 GEI entered into an agreement with Players Island
Resort Casino Spa ("Players Island"), a subsidiary of Players, to
produce and present a stage show in the theater of Players Island
in Mesquite, Nevada. GEI received $266,000 and $130,000 from
Players Island under this agreement for services rendered during
1995 and 1996, respectively, which services resulted in a modest
profit after expenses. This agreement terminated in early March
1996. Griffin Group owns in excess of 10% of the outstanding
common stock of Players. Mr. Gallagher serves as a member of the
Board of Directors of Players.
Compliance with Section 16(a) of the Exchange Act
William J. Fallon, member of the Board, did not timely
report the purchase by his spouse of 1,000 shares, as to which
Mr. Fallon disclaims any beneficial ownership. Matthew B.
Kearney, Executive
17<PAGE>
Vice President - Finance of the Company, did not timely file a
Form 5 as to a grant of options to purchase 5,000 shares.
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
The following table (the "Summary Compensation Table") sets
forth information concerning compensation earned by, paid to or
awarded to each individual serving as the Company's Chief
Executive Officer or acting in a similar capacity during 1995 and
to each of the other executive officers of the Company who were
serving as executive officers at December 31, 1995 for services
rendered in all capacities to the Company and its subsidiaries.
18<PAGE>
<TABLE>
Summary Compensation Table
<CAPTION> Long Term
Compensation -
Number of
Securities
Name and Principal Annual Compensation Underlying Stock All Other
Position during 1995 Year Salary Bonus Options Granted Compensation
<S> <C> <C> <C> <C> <C>
Thomas E. Gallagher 1995 (1) $181,000 (2) 100,000 (1)
President and Chief Executive
Officer
Matthew B. Kearney 1995 $367,308 $179,000 (2) 5,000 $11,957 (5)
Executive Vice President - 1994 $300,000 $325,000 (3) 40,000 $17,002
Finance and Chief Financial 1993 $281,712 $100,000 (4) $26,419
Officer
David G. Bowden 1995 $135,000 $ 22,000 (2) $14,417 (5)
Vice President - Controller 1994 $135,000 $ 70,000 (3) 7,000 $11,857
and Chief Accounting Officer 1993 $135,000 $31,303
_______________
(1) Mr. Gallagher was named President and Chief Executive Officer effective May 1, 1995. The Company paid
Griffin Group $200,000 for Mr. Gallagher's serving in those capacities during 1995. See "Other
Transactions" under "Election of Directors - Related Party Transactions and Relationships -
Transactions with Management and Others." Also, see "Compensation of Directors" below for discussion
of director s fees paid to Mr. Gallagher prior to his becoming an officer of the Company.
(2) Represents performance bonus for 1995.
(3) Includes bonus in recognition of efforts relative to the reorganization of the Company: Mr. Kearney -
$125,000 and Mr. Bowden - $50,000; and performance bonus for 1994: Mr. Kearney - $200,000 and
Mr. Bowden - $20,000.
(4) Represents bonus in recognition of efforts relative to the reorganization of the Company.
(5) Includes the cost of group life, health, and other insurance coverage: Mr. Kearney - $8,957 and
Mr. Bowden - $11,717; and the Company's contribution to a defined contribution group retirement plan:
Mr. Kearney - $3,000 and Mr. Bowden - $2,700.
See also the description of the Griffin Services Agreement under "Election of Directors - Related
Party Transactions and Relationships - Transactions with Management and Others - Griffin Services Agreement"
for a description of compensation to Griffin Group for certain services rendered by Mr. Griffin.
</TABLE>
19<PAGE>
<TABLE>
Option Grants in Last Fiscal Year
The following table sets forth the information concerning options to purchase shares of Common Stock
which were granted during 1995 to the individuals named in the Summary Compensation Table.
<CAPTION>
Potential Realizable
Value at Assumed
Individual Grants Annual Rates of
Number of % of Total Stock Price
Securities Options Appreciation for
Underlying Granted to Option Term -
Options Employees Exercise Expiration 10 Years
Name Granted in Fiscal Year Price Date 5% 10%
<S> <C> <C> <C> <C> <C> <C>
Thomas E. Gallagher 100,000 (1) 87.0% $10.46875 3/27/05 $658,374 $1,668,449
Matthew B. Kearney 5,000 (2) 4.3% 15.75000 8/9/05 49,525 125,507
_______________
(1) These options vest 25% on each of the following dates: September 27, 1995, August 1, 1996, August 1,
1997 and August 1, 1998.
(2) These options vest one-third on each of the following dates: August 1, 1996, August 1, 1997 and
August 1, 1998.
</TABLE>
20<PAGE>
Fiscal Year End Option Value Table
The following table sets forth information as of December
31, 1995, concerning the unexercised options held by executive
officers named in the Summary Compensation Table, none of whom
exercised options in 1995. Options are "in-the-money" when the
fair market value of underlying common stock exceeds the exercise
price of the option. The closing price of Common Stock on
December 31, 1995, was $11.00 per share.
<TABLE><CAPTION>
Number of Securities
Underlying Unexercised Value of Unexercised
Options at In-the-Money Options
December 31, 1995 at December 31, 1995
Exercisable Unexercisable Exercisable Unexercisable
<S> <C> <C> <C> <C>
Thomas E. Gallagher 25,000 75,000 $13,281 $ 39,844
Matthew B. Kearney 27,500 35,000 86,875 175,313
David G. Bowden 6,750 5,250 18,352 30,680
</TABLE>
Compensation of Directors
The Company's non-employee directors are each entitled to
receive $35,000 annually as compensation for serving as a
director, $500 for each Board meeting attended and $500 for each
Committee meeting attended when such Committee meeting is not
held on the same day as a Board meeting or another Committee
meeting. Also, any non-employee director who, upon the request
of the Board or of the Chairman of a Committee of the Board,
performs services on behalf of the Company or its subsidiaries in
addition to such director's preparation for and attendance at
meetings of the Board or its Committees is entitled to receive a
per diem fee of $1,250.
No compensation was paid to Mr. Griffin for his services as
a director of the Company in 1995. However, Griffin Group was
compensated for certain services provided by Mr. Griffin,
including Mr. Griffin's serving as Chairman of the Board of the
Company. See the description of the Griffin Services Agreement
under "Election of Directors - Related Party Transactions and
Relationships - Transactions with Management and Others - Griffin
Services Agreement."
Messrs. Fallon, Green, Masson and Naimoli received $38,500,
$38,500, $38,500 and $38,000, respectively, for their services
during 1995. Mr. Gallagher received $13,167 for his services as
a director through April 1995. As of May 1, 1995 Mr. Gallagher
became the President and Chief Executive Officer of the Company.
Thereafter he received no compensation for serving on the Board,
though he continues to serve. For a discussion of Mr.
Gallagher s compensation subsequent to his becoming President and
Chief Executive Officer of the Company, see "Summary Compensation
Table"
21<PAGE>
above and "Election of Directors - Related Party Transactions and
Relationships - Transactions with Management and Others - Other
Transactions."
Pursuant to the 1994 Stock Option Plan, on the third day
following the date of any annual meeting of the holders of Common
Stock at which directors are elected, each person who is serving,
or has been named to serve, on the Compensation/Option Committee
shall be granted a non-qualified option to purchase 1,000 shares
of Common Stock. Such options are to be fully exercisable upon
grant. Accordingly, on June 30, 1995, Messrs. Fallon, Green,
Masson and Naimoli were each granted options to purchase 1,000
shares of Common Stock at $14.0625 per share. During 1995 Mr.
Green realized compensation of $10,781 through the exercise of
options to purchase 1,000 shares of Common Stock.
Employment Contracts and Termination of Employment and Change in
Control Arrangements
The Company has an employment agreement with Mr. Kearney,
dated as of May 3, 1991, which was extended to May 1996.
Mr. Kearney's agreement, as amended, provides for an annual
salary of $300,000. However, effective May 1, 1995 Mr. Kearney s
annual salary was increased to $400,000 and effective January 1,
1996 Mr. Kearney s annual salary was increased to $425,000.
Compensation Committee Interlocks and Insider Participation
During 1995 Messrs. Fallon, Green, Masson and Naimoli served
as members of the Compensation/Option Committee of the Board.
Board Compensation/Option Committee Report on Executive
Compensation
The Compensation/Option Committee (the "Committee") is
comprised of the four independent non-employee members of the
Board of Directors.
General
The Company emerged from bankruptcy for the second time in
four years on May 3, 1994, and calendar year 1995 was the first
full year since 1988 that the Company was managed without the
distraction of either the threat of impending bankruptcy or
actually being under the jurisdiction of a bankruptcy court.
The Company's executive compensation program is designed to
attract and retain qualified executives as well as link the
22<PAGE>
executives' compensation to the financial performance of the
Company. The Company's executive compensation program consists
of three key elements: (1) the annual base salary, (2) the annual
incentive bonus and (3) a long-term component comprised of stock
options.
Base Salary
On May 1, 1995, Thomas E. Gallagher was appointed President
and Chief Executive Officer of the Company. Mr. Gallagher was at
that time and currently is President and Chief Executive Officer
of Griffin Group, which is controlled by Merv Griffin, Chairman
of the Board and the largest shareholder of the Company. At the
time of Mr. Gallagher's appointment, the Committee agreed to
reimburse Griffin Group for his services based upon, among other
things, the proportionate amount of Mr. Gallagher's time and
effort that would be required to develop and commence the
implementation of the Company's strategic plan. Such plan would
include the expansion of Resorts Casino Hotel as well as the
diversification of the Company s operations into other gaming
jurisdictions and/or into other facets of the entertainment
industry. The allocation to the Company of Mr. Gallagher's base
salary was $300,000 annually.
On May 3, 1995, the annual salary of Matthew B. Kearney,
Executive Vice President - Finance, was increased from $300,000
to $400,000, which was his first increase since October 1993.
After discussion with a compensation consultant who specializes
in the gaming industry, the Committee evaluated Mr. Kearney s
salary and responsibilities in comparison to those of other
executive officers in the industry. This salary adjustment was
made in order to compensate Mr. Kearney at a more competitive
level, commensurate with his responsibilities and performance.
Incentive Bonus
In February 1996, the Committee agreed to pay a portion of
Mr. Gallagher's annual incentive bonus awarded to him by the
Griffin Group. The Company granted a bonus payment of $181,000
based on the Company's financial performance in 1995 as well as
the progress made in implementing the initial phase of the
Company's strategic plan.
In February 1996, the Committee awarded cash bonuses of
$179,000 and $22,000 to Mr. Kearney and David G. Bowden, Vice
President - Controller, respectively. Such bonuses were
calculated pursuant to specific formulas relating to the
Company's financial performance as measured against a target
earnings before interest, taxes, depreciation and amortization
(the "Target EBITDA") for the Company's principal operation, Merv
Griffin's Resorts Casino Hotel. Such formula was designed with
the assistance of the Company's
23<PAGE>
compensation consultant. The Target EBITDA for 1995, established
by the Committee in February 1995, was an increase of 7% over
1994's actual EBITDA. The actual EBITDA for 1995 was 6% over the
Target EBITDA and 15% over 1994's actual EBITDA.
Long-term Compensation
To provide an incentive for increased performance and align
shareholder and executive officer interests, the long-term
component of the Company's executive compensation program uses
stock option grants. The exercise price of options granted is
equal to the fair market value of the Common Stock on the day of
grant and the right to exercise such options is extended over a
number of years. Therefore, such stock options provide incentive
for the creation of shareholder value over the long term, as the
full benefit of this compensation element cannot be realized
unless an appreciation in the price of Common Stock occurs over a
specified number of years. The magnitude of the grant is based
on , among other things, the Committee's analysis of the
executive's past and expected future contributions to the
Company's achievement of its long-term performance goals.
In 1995, the Committee granted to Mr. Gallagher options to
purchase 100,000 shares of Common Stock and to Mr. Kearney
options to purchase 5,000 shares. The grant to Mr. Gallagher was
his initial grant while Mr. Kearney had previously been granted
options under the Company s stock option plans.
Compensation/Option Committee
Vincent J. Naimoli, Chairman
William J. Fallon
Jay M. Green
Charles M. Masson
24<PAGE>
Stock Price Performance Graph
The f ollowing graph compares the cumulative total
shareholder return on the Common Stock with that of the Dow Jones
Equity Market Index and the Dow Jones Industry Group Index for
the Entertainment & Leisure - Casinos industry group. The stock
performance used herein is calculated by assuming $100 was
invested at December 31, 1990. The computation of cumulative
total shareholder performance assumes reinvestment of dividends;
however, the Company paid no dividends on the Common Stock during
the periods presented.
December 31,
1990 1991 1992 1993 1994 1995
Common Stock $100 $200 $117 $217 $117 $293
Dow Jones Equity
Market Index 100 132 144 158 159 221
Dow Jones Industry
Group Index -
Casinos 100 153 237 362 278 368
[INSERT STOCK PRICE PERFORMANCE GRAPH IN PRINTED COPIES.]
[DESCRIPTION OF STOCK PRICE PERFORMANCE GRAPH:
THE STOCK PRICE PERFORMANCE GRAPH ILLUSTRATES THE DATA POINTS
PRESENTED IN THE PRECEDING TABLE IN LINEAR FORM FOR EACH OF
(i) THE COMMON STOCK, (ii) THE DOW JONES EQUITY MARKET INDEX
AND (iii) THE DOW JONES INDUSTRY GROUP INDEX - CASINOS.]
25<PAGE>
INCREASE IN AUTHORIZED SHARES OF COMMON STOCK
The Board unanimously has approved, and recommends to the
holders of Common Stock that they approve, an amendment to the
Restated Certificate that would increase the number of authorized
shares of Common Stock from 20,000,000 shares to 100,000,000
shares. The Board proposes that the first sentence of Paragraph
A of Article IV, as amended at the 1995 annual meeting of
shareholders (see "Background" below), be amended in its entirety
to read as follows:
"The total number of shares of capital stock
of all classifications which the Corporation
shall have authority to issue is 110,120,000
c o nsisting 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 Common
Stock," and collectively with the Common
Stock, the "GGE Common Stock").
Background
The principal purpose of the Reverse Stock Split approved at
the 1995 annual meeting of shareholders was to reduce the number
of shares of Common Stock outstanding in order to increase their
marketability and liquidity. In the Board's view, the number of
shares outstanding before the Reverse Stock Split was effected
was disproportionately large relative to the Company's then
market capitalization due to the issuance of additional shares of
Common Stock pursuant to the 1994 Reorganization Plan. By means
of the Reverse Stock Split, the Board sought to increase the
trading price of the shares to a level more appropriate for an
exchange listed security, while at the same time, not causing any
material alteration of the proportionate economic interest in the
Company of individual shareholders. Additionally, the Board
believed that the marketability of the Common Stock would be
enhanced by overcoming the reluctance of many brokerage firms and
institutional investors to recommend lower-priced stocks to their
clients or to hold them in their own portfolios.
As part of the Reverse Stock Split, the number of authorized
shares of Common Stock was reduced from 100,000,000 shares to
20,000,000 shares, and the first sentence of Paragraph A of
Article IV of the Restated Certificate was amended to reflect the
reduced authorization. The Board believes that the overall
objectives of the Reverse Stock Split have been met, and that an
increase in the
26<PAGE>
number of authorized shares of Common Stock is now appropriate.
The additional shares of Common Stock will be identical to the
currently authorized shares of Common Stock in all respects.
Reasons for Increase in Authorized Shares
The Board believes that an increase in the number of
authorized shares of Common Stock to 100,000,000 is desirable in
order that a sufficient number of shares will be available for
issuance from time to time if needed for such corporate purposes
as may be deemed appropriate by the Board. These might include,
for example, the raising of additional capital funds through
public or private offerings, the acquisition by the Company of
other companies or assets, the issuance of shares under the
Company's stock option plans, and the declaration of stock splits
or stock dividends.
If the recommended amendment to the Restated Certificate is
approved by the requisite vote of the holders of Common Stock,
the Board will have the authority to issue the additional
authorized shares or any part thereof at such times, to such
persons and for such consideration as the Board may determine,
without further action by shareholders except as required by law
or applicable regulatory or stock exchange requirements. At this
time the Company has no specific plans or commitments for the
issuance of any shares of Common Stock other than pursuant to the
Company's two stock option plans and the Griffin Warrant.
Vote Required for Approval
The affirmative vote of the holders of a majority of the
outstanding shares of Common Stock is required for approval of
the amendment to the Restated Certificate. If approved by the
shareholders, the amendment will become effective upon filing
with the Secretary of State of Delaware.
The Board recommends a vote FOR the proposed amendment to
the Restated Certificate.
AMENDMENT TO 1994 STOCK OPTION PLAN
The Board unanimously has approved, and recommends to the
holders of Common Stock that they approve an amendment to the
1994 Stock Option Plan to increase the maximum aggregate number
of shares of Common Stock issuable upon the exercise of options
granted under the 1994 Stock Option Plan from 466,685 shares to
966,685 shares (the "Proposed Amendment").
27<PAGE>
The Board believes that the additional shares of Common
Stock available under the 1994 Stock Option Plan will enable the
Company to continue, for the foreseeable future, to afford
officers, directors and key employees of the Company and its
subsidiaries, as well as consultants and others providing
services to the Company and its subsidiaries, an opportunity to
acquire a proprietary interest in the Company, and thus create in
those persons an increased interest in and greater concern for
the welfare of the Company. The additional shares also will put
the Company in a better position to attract qualified individuals
in the future as and when the need to expand its management staff
arises.
Options Available Under the 1994 Stock Option Plan
The maximum aggregate number of shares of Common Stock that
could be purchased upon the exercise of options granted under the
1994 Stock Option Plan is 466,685 shares. As of February 29,
1996, options to purchase an aggregate of 357,300 shares of
Common Stock have been granted and may be exercised under the
1994 Stock Option Plan, leaving 109,385 shares available for
future grants. If the Proposed Amendment is approved by the
requisite vote of holders of the Common Stock, the maximum
aggregate number of shares of Common Stock that could be
purchased will be 966,685, or an increase of 500,000 shares.
Text of Proposed Amendment
The Board proposes to amend Section 3, captioned "Shares
Available," of the 1994 Stock Option Plan in its entirety to read
as follows:
"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 to purchase thereunder, including
without limitation the expiration of such
Options, the termination of such Options
prior to exercise or the forfeiture of such
Options, such shares thereafter shall be
available for grants to such individual or
other individuals under the Plan unless such
shares, if so made available, would not be
exempt under Section 16(b) of the Exchange
Act pursuant to Rule 16b-3. Options granted
under the Plan may be fulfilled in accordance
with the terms of the Plan with either
authorized and unissued shares of Common
Stock or issued shares of such Common
28<PAGE>
Stock held in GGE's treasury or both, at the
discretion of GGE."
The first sentence of the text of the Proposed Amendment
would replace the present first sentence which limits the maximum
number of shares that may be purchased to 466,685. The remainder
of the text of the Proposed Amendment is as it presently exists,
and would not be amended. Certain other non-material changes
would also be made to the 1994 Stock Option Plan, principally to
replace the Company's former name, "Resorts International, Inc.,"
with "Griffin Gaming & Entertainment, Inc.," consistent with the
name change approved by shareholders at the 1995 annual meeting.
Other Key Provisions of 1994 Stock Option Plan
Other key provisions of the 1994 Stock Option Plan are set
forth below.
Funding and Eligibility
The 1994 Stock Option Plan is unfunded. The 1994 Stock
Option Plan is administered by a committee appointed by the Board
(the "Option Committee"). The Option Committee consists solely
of "disinterested" directors, as that term is defined for
purposes of satisfying Rule 16b-3 of the Exchange Act and of
"outside directors, as that term is defined in Section 162(m) of
the Internal Revenue Code of 1986, as amended (the "Code").
Currently, the members of the Compensation/Option Committee of
the Board serve as the Option Committee.
Grants may be made under the 1994 Stock Option Plan (i) to
key employees and officers of the Company or any of its
subsidiaries who are regularly employed on a salaried basis by
the Company or any of its subsidiaries (the "Officer and Key
Employee Participants"), (ii) to directors of the Company who do
not serve on the Option Committee (the "Director Participants"),
(iii) to directors of the Company who serve on the Option
Committee or who have been named to serve on the Option Committee
in the future (the "Committee Participants"), (iv) to directors
of any subsidiary of the Company who are not also key employees,
officers or directors of the Company or key employees or officers
of a subsidiary of the Company (the "Subsidiary Director
Participants") and (v) to consultants and others providing
services to the Company or any of its subsidiaries (the
"Consultant Participants").
Under the 1994 Stock Option Plan both tax benefitted
incentive stock options ("Incentive Stock Options") and non-
qualified stock options that are not tax benefitted ("Non-
Qualified Stock Options") may be granted. However, Incentive
Stock Options may be granted only to Officers and Key Employee
Participants.
29<PAGE>
Awards to Officer and Key Employee Participants and Director
Participants
Subject to the express requirements of the 1994 Stock Option
Plan, the terms of any and all awards granted to Officer and Key
Employee Participants and Director Participants will be
determined by, and subject to the conditions imposed by, the
Option Committee, including provisions as to the exercisability,
expiration, termination or forfeiture of options. The 1994 Stock
Option Plan provides that the Company may not grant to Officer
and Key Employee Participants in any fiscal year options
cumulatively exercisable for more than 100,000 shares of Common
Stock.
The 1994 Stock Option Plan authorizes the Option Committee
to grant to Officer and Key Employee Participants and Director
Participants options to purchase Common Stock at an amount not
less than (i) the fair market value per share of Common Stock at
the time the options are awarded, or (ii) in the event that such
award is an Incentive Stock Option granted to a person who, at
the time such option is granted, owns shares of capital stock of
the Company, or any subsidiary corporation thereof, which possess
more than 10% of the total combined voting power of all classes
of capital stock of the Company or of any subsidiary of the
Company (a "10% Owner"), 110% of the fair market value per share
of Common Stock at the time such Incentive Stock Option is
awarded. The fair market value of the Common Stock is deemed to
be the average of the high and low sale prices of the Common
Stock on the date of grant of such option, or if there are no
sales on such date, the average closing bid and asked prices.
Options granted under the 1994 Stock Option Plan to Officer
and Key Employee Participants expire one year after the
optionee's death, one year after termination of the optionee's
employment because of disability, immediately upon termination of
the optionee's employment for "good cause" (as defined in the
1994 Stock Option Plan) and three months after termination of an
optionee's employment for any other reason. Options granted to
Director Participants expire one year after an optionee's death,
one year after termination of the optionee's employment because
of disability, and one year after the optionee ceases to be a
director. Notwithstanding the foregoing, options granted to
Officer and Key Employee Participants and Director Participants
expire ten years after the date of grant (five years in the case
of a 10% Owner), or at such earlier time as the Option Committee
may provide.
Awards to Committee Participants
Under the 1994 Stock Option Plan, on the date that a
director first commences service on the Option Committee, such
director automatically will be granted an option to purchase
2,000 shares of
30<PAGE>
Common Stock, half of which will be exercisable upon grant and
half of which will be exercisable upon the first anniversary of
the grant. During the term of the 1994 Stock Option Plan on the
third business day following the date of any annual meeting of
the holders of the Common Stock at which directors are elected,
each person who is on such day serving on the Option Committee or
has been named to serve on the Option Committee automatically
will be granted an option to purchase 1,000 shares of Common
Stock, which option will be fully exercisable upon grant.
Options granted under the 1994 Stock Option Plan to Committee
Participants expire one year after an optionee's death or
cessation of service as a director. Notwithstanding the
foregoing, in all cases options granted to Committee Participants
expire ten years after the date of grant. The exercise price of
such options equals the fair market value of the underlying
shares of Common Stock as of the date such options are granted.
Awards to Subsidiary Director Participants and Consultant
Participants
Subject to the express requirements of the 1994 Stock Option
Plan, the terms of any and all awards granted to Subsidiary
Director Participants and Consultant Participants will be
determined by, and subject to the conditions imposed by, the
Option Committee, including provisions as to the exercisability,
expiration, termination or forfeiture of options.
Other Option Provisions
The 1994 Stock Option Plan provides that all options
immediately become fully exercisable upon a "change in control,
as defined in the 1994 Stock Option Plan. The 1994 Stock Option
Plan deems a "change in control" to have occurred if any
corporation, person or group acquires a majority of the Common
Stock or a majority of the Company's outstanding voting
securities, or if within a two-year period a majority of the
Company's Board is replaced by persons who were not directors at
the beginning of such period and who were not nominated or
ratified by at least two-thirds of the directors who were
directors at the beginning of such two-year period. For purposes
of the 1994 Stock Option Plan, the election of a majority of the
Board by the holders of the Class B Stock pursuant to the
Restated Certificate will not constitute such a "change of
control."
No option granted under the 1994 Stock Option Plan may be
transferred other than by will or the laws of descent and
distribution or, except as to Incentive Stock Options, pursuant
to a qualified domestic relations order (as defined in the Code).
Options may be exercised during the recipient's lifetime only by
the recipient or by his or her guardian or legal representative.
31<PAGE>
An option under the 1994 Stock Option Plan may permit the
recipient to pay all or part of the purchase price of the shares
issuable pursuant thereto, or to pay all or part of such
recipient's tax withholding obligation with respect to such
issuance, by delivering a sufficient amount of shares of stock of
the Company or by having such number of shares withheld from the
amount otherwise issuable upon exercise of the option (the fair
market value thereof being calculated as of the date next
preceding the date of exercise) or otherwise as the Option
Committee may determine according to the terms and conditions of
the 1994 Stock Option Plan.
The 1994 Stock Option Plan authorizes the Option Committee
to provide for arrangements under which brokers that are
compensated by the Company provide temporary financing to assist
an optionee in paying the exercise price of an option, such
financing to be paid off by the sale of shares issuable upon
exercise of the option.
Amendment and Termination
Under the 1994 Stock Option Plan, the Board is able to
alter, amend, suspend or terminate the 1994 Stock Option Plan,
provided that no such action may alter or impair any option
granted to any optionee pursuant to the 1994 Stock Option Plan
without the optionee's consent. Except as provided in the 1994
Stock Option Plan, no amendment by the Board, unless taken with
the approval of the shareholders of the Company, may:
(1) increase the number of shares of Common Stock which may
be issued under the 1994 Stock Option Plan (except for
permitted adjustments pursuant to certain dilutive
events);
(2) materially increase the benefits accruing to
participants under the 1994 Stock Option Plan;
(3) decrease the minimum exercise price of an Incentive
Stock Option; or
(4) materially modify the requirements as to eligibility
for participation in the 1994 Stock Option Plan.
The Board is specifically authorized to amend the 1994 Stock
Option Plan and the options granted thereunder (i) to qualify
such options as Incentive Stock Options, or (ii) to comply with
Rule 16b-3 (or any successor rule) under the Exchange Act.
32<PAGE>
Federal Income Tax Treatment
The following is a brief description of the Federal income
tax treatment which generally will apply to benefits or awards
("Awards") made under the 1994 Stock Option Plan, based on
Federal income tax laws in effect on the date hereof. The exact
Federal income tax treatment of Awards will depend on the
specific nature of any such Award.
Incentive Stock Options
Pursuant to the 1994 Stock Option Plan, participants may be
granted options which are intended to qualify as Incentive Stock
Options under the provisions of section 422 of the Code.
Generally, the optionee is not taxed and the Company is not
entitled to a deduction on the grant or the exercise of an
Incentive Stock Option. However, if the optionee disposes of the
shares acquired upon the exercise of an Incentive Stock Option at
any time within (i) one year after the date the shares are
transferred to the optionee pursuant to the exercise of such
Incentive Stock Option or (ii) two years after the date of grant
of such Incentive Stock Option (a "disqualifying disposition"),
the optionee will recognize ordinary income in an amount equal to
the excess, if any, of the lesser of the amount realized on the
date of such disposition or the fair market value of the
Company's stock on the date of exercise, over the exercise price
of such Incentive Stock Option (with any remaining gain being
taxed as a capital gain). In such an event, the Company
generally will be entitled to a deduction in an amount equal to
the amount of ordinary income recognized by such optionee. If
the optionee does not dispose of the option shares within the
above described time limits, there will be no ordinary income
recognized upon any subsequent sale or other disposition of the
shares, but rather capital gain or loss will be recognized in an
amount equal to the difference between the amount realized on the
sale or disposition and the exercise price. The Company will not
be entitled to any deduction in this event. Finally, exercise of
an Incentive Stock Option may result in alternative minimum tax
liability for the optionee. Any excess of the fair market value
of the stock on the date the Incentive Stock Option is exercised
over the option exercise price will be included in the
calculation of the optionee's alternative minimum taxable income,
which may subject the optionee to the alternative minimum tax at
a rate of up to 28%. The portion of any such alternative minimum
tax attributable to the exercise of an Incentive Stock Option can
be credited against the optionee's regular tax liability in later
years to the extent that in any such year the optionee's regular
tax liability exceeds the alternative minimum tax.
33<PAGE>
Non-Qualified Stock Options
The grant of an option which does not qualify for treatment
as an Incentive Stock Option generally is not a taxable event for
the optionee. However, upon exercise, the optionee generally
will recognize ordinary income in an amount equal to the excess
of the fair market value of the stock acquired upon exercise
(determined as of the date of exercise) over the exercise price
of such option, and the Company will generally be entitled to a
deduction equal to such amount. Upon the later disposition of
the option shares acquired upon exercise, appreciation (or
depreciation) after the date of exercise will be treated as
capital gain (or loss) to the optionee and will have no tax
effect as to the Company.
Special Rules for Section 16 Insiders
If a Non-Qualified Stock Option has been held for less than
six months at the time of exercise, and the exercise price of the
option is equal to or less than the fair market value of the
acquired shares at the time of exercise, an officer, director or
more than 10% shareholder of the Company subject to the
provisions of Section 16 of the Exchange Act (an "Insider") will
not be taxed until the earlier of (i) the expiration of the six-
month holding period beginning on the date of grant of the Non-
Qualified Stock Option, or (ii) the sale of the acquired shares,
at which time the Insider will recognize ordinary income in an
amount equal to the excess, if any, of the then fair market value
of the acquired shares over the exercise price of the Non-
Qualified Stock Option. Alternatively, pursuant to Section 83(b)
of the Code, the Insider may elect within 30 days after exercise
of the Non-Qualified Stock Option to recognize ordinary income
equal to the excess, if any, of the fair market value of the
Common Stock on the date of exercise over the exercise price.
The capital gains holding period for the acquired shares will
commence immediately following the date on which the optionee is
required to recognize ordinary income, and any appreciation (or
depreciation) realized following such date, will be taxed as a
capital gain (or loss).
Miscellaneous
Special rules apply in cases where the participant pays the
exercise or purchase price of awards or applicable withholding
tax obligations under the 1994 Stock Option Plan by delivering
previously owned Common Stock or by reducing the amount of shares
or other property otherwise issuable pursuant to the award. The
surrender in the circumstances below or withholding of such stock
will be a taxable event, resulting in the recognition of gain or
loss. Such gain will be taxable as ordinary income if the stock
surrendered or withheld either (i) was acquired upon exercise of
an Incentive Stock Option and the surrender takes place within
one
34<PAGE>
year after the exercise or two years after the date of grant of
the Incentive Stock Option or (ii) is both subject to a
substantial risk of forfeiture and is not freely transferable for
purposes of Section 83 of the Code if the market value of such
stock is in excess of the amount paid for the stock and no
election has been made under Section 83(b) of the Code. In
addition, shares withheld on the exercise of a Non-Qualified
Stock Option in order to pay tax withholding should result in tax
on the withheld shares in an amount equal to the difference
between the fair market value of the shares (on the date of
exercise) and the exercise price.
Generally, the Company will receive a deduction equal to,
and will be required to withhold applicable taxes with respect
to, any ordinary income recognized by a participant in connection
with awards made under the 1994 Stock Option Plan.
The 1994 Stock Option Plan is not a "qualified plan" within
the meaning of Section 401(a) of the Code and is not subject to
the provisions of the Employee Retirement Income Security Act of
1974, as amended ("ERISA").
Grants of options under the 1994 Stock Option Plan are
intended to qualify as "performance-based compensation" that is
excluded from the limitation on the deductibility of compensation
paid to certain executive officers under Section 162(m) of the
Code.
Upon the accelerated exercisability of an option in
connection with a change in ownership or control of the Company,
depending upon the individual circumstances of the recipient
participant, certain amounts with respect to such awards may
constitute "excess parachute payments" under the golden parachute
provisions of the Code. Pursuant to these provisions a
participant will be subject to a 20% excise tax on any "excess
parachute payment" and the Company will be denied any deduction
with respect to such excess parachute payment.
Vote Required for Approval
The affirmative vote of the holders of a majority of the
shares of Common Stock represented at the Annual Meeting is
required for approval of the Proposed Amendment. If the
amendment is approved by the shareholders, it will become
effective immediately.
The Board recommends a vote FOR the Proposed Amendment to
the 1994 Stock Option Plan.
35<PAGE>
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The independent auditors selected by the Board for the
Company's fiscal year ending December 31, 1996 are Ernst & Young
LLP. This selection is being presented to the holders of Common
Stock for ratification. Ernst & Young LLP has served the Company
in that capacity since the fiscal year ended December 31, 1988.
Representatives of that firm are expected to be present at the
Annual Meeting. These representatives will be given an
opportunity, if they desire to do so, to make a statement to the
shareholders at the Annual Meeting, and they are expected to be
available to respond to appropriate questions from holders of
Common Stock.
Vote Required for Approval
The affirmative vote of the holders of a majority of the
shares of Common Stock represented at the Annual Meeting is
required for ratification of the selection of Ernst & Young LLP
as the independent auditors of the Company. If the selection of
Ernst & Young LLP is not ratified by the holders of the Common
Stock, the Board will consider such fact in determining whether
to retain Ernst & Young LLP or to appoint other independent
auditors.
The Board recommends a vote FOR the ratification of the
selection of Ernst & Young LLP as the independent auditors of the
Company.
OTHER MATTERS
Exhibits to the Form 10-K
The Company will furnish, upon payment of a reasonable fee
to cover reproduction and mailing expenses, a copy of all
exhibits to the Company's Form 10-K Annual Report for 1995. The
exhibits may be obtained by mailing a written request therefor to
David G. Bowden, Secretary, Griffin Gaming & Entertainment, Inc.,
1133 Boardwalk, Atlantic City, New Jersey 08401.
Shareholder Proposals for the 1997 Annual Meeting
Shareholder proposals intended to be presented for inclusion
in the Company's Proxy Statement and form of proxy for the next
annual meeting, scheduled to be held in 1997, must be received in
writing by the Secretary of the Company not later than December
5, 1996 in order for such proposals to be considered for
inclusion in
36<PAGE>
the Company's Proxy Statement and form of proxy for the 1997
annual meeting of shareholders.
Holders of Common Stock, and of Class B Stock, are urged to
complete, sign and date the accompanying Proxy Card for their
respective holdings and return it in the enclosed envelope. No
postage is necessary if the Proxy Card is mailed in the United
States.
By order of the Board of Directors,
David G. Bowden
Secretary
Atlantic City, New Jersey
April 5, 1996
37<PAGE>
[Form of proxy for Common Stock]
GRIFFIN GAMING & ENTERTAINMENT, INC.
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
MAY 10, 1996
The undersigned hereby appoints Matthew B. Kearney and David
G. Bowden, or either of them, each with full power of
substitution, as the proxies of the undersigned and hereby
authorizes them to represent and to vote as designated on the
reverse side all shares of the common stock, par value $.01 per
share (the "Common Stock"), of Griffin Gaming & Entertainment,
Inc. (the "Company") that the undersigned would be entitled to
vote if personally present at the Annual Meeting of Shareholders
of the Company to be held on May 10, 1996 and at any adjournment
or adjournments thereof.
_________________________________________________
THIS PROXY IS SOLICITED ON BEHALF OF THE DIRECTORS OF THE COMPANY
THIS PROXY, WHEN PROPERLY RECEIVED, WILL BE VOTED IN THE MANNER
INDICATED HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO
INSTRUCTION IS GIVEN, THIS PROXY WILL BE VOTED FOR THE ELECTION
OF THE DIRECTOR AND FOR PROPOSALS NO. 2, 3 AND 4, AND IN
ACCORDANCE WITH THE DISCRETION OF THE PROXIES ON SUCH OTHER
BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING.
IMPORTANT - PLEASE SIGN AND DATE THE OTHER SIDE AND RETURN
PROMPTLY
(Continued on reverse side)<PAGE>
GRIFFIN GAMING & ENTERTAINMENT, INC.
1. ELECTION OF A DIRECTOR: NOMINEE: William J. Fallon
FOR the nominee (INSTRUCTION: TO WITHHOLD
[ ] AUTHORITY to vote for the
nominee, write the nominee's
name on the line provided
below)
_____________________________
2. Proposal to approve an amendment to the Company's Restated
Certificate of Incorporation to increase the number of
authorized shares of the Company's Common Stock from
20,000,000 shares to 100,000,000 shares.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
3. Proposal to approve an amendment to the Company's 1994 Stock
Option Plan to increase the maximum number of shares of
Common Stock that may be issued under the plan from 466,685
shares to 966,685 shares.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
4. Proposal to ratify the selection of Ernst & Young LLP as the
Company's independent auditors for the fiscal year ending
December 31, 1996.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
5. In their discretion to vote on such other business as may
properly come before the meeting or any adjournment or
adjournments thereof.
When signing as attorney, executor, administrator, trustee or
guardian, please give full title as such. If a corporation,
please sign in full corporate name by President or such other
authorized officer. If a partnership, please sign in full
partnership name by authorized person.
Whether or not you plan to attend the meeting, you are urged to
execute and return this proxy, which may be revoked at any time
prior to its use.
____________________________________ Date:______________, 1996
(Signature of Shareholder)
____________________________________ Date:______________, 1996
(Signature of Additional Shareholder)
Please sign your name exactly as it appears hereon and date and
return this proxy in the reply envelope provided. If you receive
more than one proxy card, please sign and return all cards
received.<PAGE>
[Form of proxy for Class B Stock]
GRIFFIN GAMING & ENTERTAINMENT, INC.
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
MAY 10, 1996
The undersigned hereby appoints Matthew B. Kearney and David
G. Bowden, or either of them, each with full power of
substitution, as the proxies of the undersigned and hereby
authorizes them to represent and to vote as designated on the
reverse side all shares of the class B redeemable common stock,
par value $.01 per share (the "Class B Stock"), of Griffin Gaming
& Entertainment, Inc. (the "Company") that the undersigned would
be entitled to vote if personally present at the Annual Meeting
of Shareholders of the Company to be held on May 10, 1996 and at
any adjournment or adjournments thereof.
_________________________________________________
THIS PROXY IS SOLICITED ON BEHALF OF THE DIRECTORS OF THE COMPANY
THIS PROXY, WHEN PROPERLY RECEIVED, WILL BE VOTED IN THE MANNER
INDICATED HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO
INSTRUCTION IS GIVEN, THIS PROXY WILL BE VOTED FOR THE ELECTION
OF THE DIRECTOR AND IN ACCORDANCE WITH THE DISCRETION OF THE
PROXIES ON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE
MEETING.
IMPORTANT - PLEASE SIGN AND DATE THE OTHER SIDE AND RETURN
PROMPTLY
(Continued on reverse side)<PAGE>
GRIFFIN GAMING & ENTERTAINMENT, INC.
1. ELECTION OF A DIRECTOR: NOMINEE: Vincent J. Naimoli
FOR the nominee (INSTRUCTION: TO WITHHOLD
[ ] AUTHORITY to vote for the
nominee, write the nominee's
name on the line provided
below)
_____________________________
2. In their discretion to vote on such other business as may
properly come before the meeting or any adjournment or
adjournments thereof.
When signing as attorney, executor, administrator, trustee or
guardian, please give full title as such. If a corporation,
please sign in full corporate name by President or such other
authorized officer. If a partnership, please sign in full
partnership name by authorized person.
Whether or not you plan to attend the meeting, you are urged to
execute and return this proxy, which may be revoked at any time
prior to its use.
_____________________________________ Date:______________, 1996
(Signature of Shareholder)
_____________________________________ Date:______________, 1996
(Signature of Additional Shareholder)
Please sign your name exactly as it appears hereon and date and
return this proxy in the reply envelope provided. If you receive
more than one proxy card, please sign and return all cards
received.<PAGE>
[Form of proxy for pre-split Common Stock]
GRIFFIN GAMING & ENTERTAINMENT, INC.
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
MAY 10, 1996
The undersigned hereby appoints Matthew B. Kearney and David
G. Bowden, or either of them, each with full power of
substitution, as the proxies of the undersigned and hereby
authorizes them to represent and to vote as designated on the
reverse side all shares of the common stock, par value $.01 per
share (the "Common Stock"), of Griffin Gaming & Entertainment,
Inc. (the "Company") that the undersigned would be entitled to
vote if personally present at the Annual Meeting of Shareholders
of the Company to be held on May 10, 1996 and at any adjournment
or adjournments thereof.
_________________________________________________
THIS PROXY IS SOLICITED ON BEHALF OF THE DIRECTORS OF THE COMPANY
THIS PROXY, WHEN PROPERLY RECEIVED, WILL BE VOTED IN THE MANNER
INDICATED HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO
INSTRUCTION IS GIVEN, THIS PROXY WILL BE VOTED FOR THE ELECTION
OF THE DIRECTOR AND FOR PROPOSALS NO. 2, 3 AND 4, AND IN
ACCORDANCE WITH THE DISCRETION OF THE PROXIES ON SUCH OTHER
BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING.
IMPORTANT - PLEASE SIGN AND DATE THE OTHER SIDE AND RETURN
PROMPTLY
(Continued on reverse side)
_________________________________________________
The Company effected a one-for-five reverse stock split of
its Common Stock on June 30, 1995. The Company s records
indicate that you have not yet surrendered your pre-split share
certificates for exchange. Please contact the Reorganization
Department at Chemical Mellon Shareholder Services at (800)
777-3674 for information on how to exchange your certificates.
In counting the votes represented by this proxy, the inspectors
of election will divide the number of your pre-split shares of
Common Stock by five in order to give effect to the reverse stock
split; fractions will not be counted.<PAGE>
GRIFFIN GAMING & ENTERTAINMENT, INC.
1. ELECTION OF A DIRECTOR: NOMINEE: William J. Fallon
FOR the nominee (INSTRUCTION: TO WITHHOLD
[ ] AUTHORITY to vote for the
nominee, write the nominee's
name on the line provided
below)
_____________________________
2. Proposal to approve an amendment to the Company's Restated
Certificate of Incorporation to increase the number of
authorized shares of the Company's Common Stock from
20,000,000 shares to 100,000,000 shares.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
3. Proposal to approve an amendment to the Company's 1994 Stock
Option Plan to increase the maximum number of shares of
Common Stock that may be issued under the plan from 466,685
shares to 966,685 shares.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
4. Proposal to ratify the selection of Ernst & Young LLP as the
Company's independent auditors for the fiscal year ending
December 31, 1996.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
5. In their discretion to vote on such other business as may
properly come before the meeting or any adjournment or
adjournments thereof.
When signing as attorney, executor, administrator, trustee or
guardian, please give full title as such. If a corporation,
please sign in full corporate name by President or such other
authorized officer. If a partnership, please sign in full
partnership name by authorized person.
Whether or not you plan to attend the meeting, you are urged to
execute and return this proxy, which may be revoked at any time
prior to its use.
____________________________________ Date:______________, 1996
(Signature of Shareholder)
____________________________________ Date:______________, 1996
(Signature of Additional Shareholder)
Please sign your name exactly as it appears hereon and date and
return this proxy in the reply envelope provided. If you receive
more than one proxy card, please sign and return all cards
received.<PAGE>
