<PAGE> 1
SCHEDULE 14A
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
[X] Definitive Proxy Statement Only (as permitted by Rule 14a-6(e)(2))
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
</TABLE>
Boyd Gaming Corporation
- --------------------------------------------------------------------------------
(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] No fee required.
[ ] 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> 2
BOYD GAMING CORPORATION
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 21, 1998
The Annual Meeting of Stockholders (the "Annual Meeting") of Boyd Gaming
Corporation, a Nevada corporation (the "Company"), will be held at the Stardust
Resort and Casino, 3000 Las Vegas Boulevard South, Las Vegas, Nevada 89109, on
Thursday, May 21, 1998 at 11:00 a.m. local time for the following purposes:
1. To elect four Class I directors of the Company to serve until the 2001
Annual Meeting of Stockholders or until their successors are duly
elected and qualified;
2. To ratify the appointment of Deloitte & Touche LLP as the independent
auditors for the Company for the fiscal year ending December 31, 1998;
and
3. To transact such other business as may properly come before the Annual
Meeting and any adjournment or postponement thereof.
The foregoing items of business, including the nominees for directors, are
more fully described in the Proxy Statement which is attached and made a part of
this notice.
The Board of Directors has fixed the close of business on March 31, 1998 as
the record date for determining the stockholders entitled to notice of and to
vote at the Annual Meeting and any adjournment or postponement thereof.
All stockholders are cordially invited to attend the Annual Meeting in
person. However, whether or not you expect to attend the Annual Meeting in
person, you are urged to mark, sign, date and return the enclosed proxy card as
promptly as possible in the postage-prepaid envelope provided to ensure your
representation and the presence of a quorum at the Annual Meeting. If you send
in your proxy card and then decide to attend the Annual Meeting to vote your
shares in person, you may still do so. Your proxy is revocable in accordance
with the procedures set forth in the Proxy Statement.
By Order of the Board of Directors,
/s/ WILLIAM S. BOYD
-----------------------------------
WILLIAM S. BOYD
Chairman of the Board
and Chief Executive Officer
Las Vegas, Nevada
April 13, 1998
<PAGE> 3
BOYD GAMING CORPORATION
2950 SOUTH INDUSTRIAL ROAD
LAS VEGAS, NEVADA 89109
PROXY STATEMENT
GENERAL
This Proxy Statement is furnished to stockholders of Boyd Gaming
Corporation, a Nevada corporation (the "Company"), in connection with the
solicitation by the Board of Directors of the Company (the "Board") of proxies
in the enclosed form for use in voting at the Annual Meeting of Stockholders
(the "Annual Meeting") of the Company to be held on Thursday, May 21, 1998 at
11:00 a.m., local time, at the Stardust Resort and Casino, 3000 Las Vegas
Boulevard South, Las Vegas, Nevada 89109, and any adjournment or postponement
thereof. The shares represented by the proxies received, properly marked, dated,
executed and not revoked will be voted at the Annual Meeting.
These proxy solicitation materials are being mailed to stockholders on or
about April 13, 1998.
VOTING AND SOLICITATION
Votes cast by proxy or in person at the Annual Meeting will be tabulated by
the Inspector of Elections. The Inspector of Elections will also determine
whether or not a quorum is present. The presence, in person or by proxy, of the
holders of a majority of the shares of Common Stock issued and outstanding is
necessary to constitute a quorum at the meeting. Shares represented at the
meeting in person or by proxy but not voted will nevertheless be counted for
purposes of determining the presence of a quorum. Accordingly, abstentions and
broker non-votes (shares as to which a broker or nominee has indicated that it
does not have discretionary authority to vote) on a particular matter, including
the election of directors, will be treated as shares that are present and
entitled to vote for purposes of determining the presence of a quorum. Under the
rules of the New York Stock Exchange (the "Exchange"), certain matters submitted
to a vote of stockholders are considered by the Exchange to be "routine" items
upon which brokerage firms may vote in their discretion on behalf of their
customers if such customers have not furnished voting instructions within a
specified period prior to the meeting. On those matters which the Exchange
determines to be "non-routine," brokerage firms that have not received
instructions from their customers would not have discretion to vote. Neither the
Company's Articles or Bylaws, nor any Nevada corporate statute addresses the
treatment and effect of abstentions and broker non-votes. In the election of
directors, the four nominees for Class I directors who receive the greatest
number of affirmative votes within that class will be elected to the Board of
Directors, without giving effect to abstentions and broker non-votes.
Ratification of the appointment of Deloitte & Touche LLP as the Company's
independent auditors for the fiscal year ending December 31, 1998 requires the
affirmative vote of a majority of the shares present or represented at the
meeting, assuming that a quorum is present or represented at the meeting. An
abstention will have the same effect as a vote cast against the resolution, but
broker non-votes will not be counted as shares present or represented at the
meeting. Holders of Common Stock are entitled to one vote for each share held on
each matter to be voted upon.
Proxies in the accompanying form that are properly executed, duly returned
to the Company and not revoked will be voted in accordance with the instructions
therein. IF NO INSTRUCTION IS GIVEN WITH RESPECT TO ANY PROPOSAL TO BE ACTED
UPON, THE PROXY WILL BE VOTED FOR THE ELECTION OF ALL OF THE NOMINEES NAMED IN
THIS PROXY STATEMENT AND IN FAVOR OF PROPOSAL 2. No matter currently is expected
to be considered at the Annual Meeting other than the proposals set forth in the
accompanying Notice of Annual Meeting, but if any other matters are properly
brought before the Annual Meeting for action, it is intended that the persons
named in the proxy and acting thereunder will vote in accordance with their
discretion on such matters.
The presence at the meeting of a stockholder will not revoke his or her
proxy. However, a proxy may be revoked at any time before it is voted by
delivering to the Company (Attention: Charles E. Huff, Secretary, at the
principal offices of the Company) a written notice of revocation or a duly
executed proxy bearing a later date.
1
<PAGE> 4
The solicitation of proxies will be conducted by mail, and the Company will
bear all attendant costs. These costs will include the expense of preparing and
mailing proxy solicitation materials for the Annual Meeting and reimbursements
paid to brokerage firms and others for their expenses incurred in forwarding
such materials to beneficial owners of the Company's Common Stock. The Company
may conduct further solicitation personally, telephonically or by facsimile
through its officers, directors and employees, none of whom will receive
additional compensation for assisting with the solicitation.
RECORD DATE AND SHARES OUTSTANDING
The close of business on March 31, 1998 has been fixed as the record date
(the "Record Date") for determining the holders of shares of Common Stock of the
Company entitled to notice of and to vote at the Annual Meeting. As of the close
of business on the Record Date, the Company had 61,669,628 shares of Common
Stock outstanding. Each stockholder entitled to vote at the meeting may cast one
vote in person or by proxy for each share of Common Stock held by such
stockholder.
STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the beneficial
ownership of the Common Stock as of February 28, 1998 (i) by each person who is
known by the Company to beneficially own more than 5% of the Company's Common
Stock, (ii) by each director and nominee, (iii) by each executive officer of the
Company named in the Summary Compensation Table contained herein and (iv) by all
directors and executive officers of the Company as a group. Except as indicated,
each person listed below has sole voting and investment power with respect to
the shares set forth opposite such person's name.
<TABLE>
<CAPTION>
NAME(a) SHARES PERCENTAGE
------- ---------- ----------
<S> <C> <C>
William S. Boyd(b).......................................... 26,626,161 42.67%
Jimma L. Beam(c)............................................ 3,610,289 5.85
Robert L. Boughner(d)....................................... 315,537 *
William R. Boyd(e).......................................... 1,947,717 3.16
Philip J. Dion(f)........................................... 2,500 *
Marianne Boyd Johnson(g).................................... 1,984,676 3.22
Michael O. Maffie(h)........................................ 4,250 *
Billy G. McCoy(i)........................................... 3,136 *
Warren L. Nelson(j)......................................... 71,500 *
Donald D. Snyder(k)......................................... 47,275 *
Perry B. Whitt(l)........................................... 1,695,158 2.75
William G. Yates, Jr........................................ 5,800 *
James W. Hippler(m)......................................... 20,827 *
Ellis Landau(n)............................................. 413,615 *
All current directors and executive officers as a group (16
persons)(o)............................................... 33,257,062 52.84
</TABLE>
- ---------------
* Represents less than 1%.
(a) The mailing address of all persons in the table set forth above is: 2950
South Industrial Road, Las Vegas, Nevada 89109.
(b) Includes 21,758,906 shares of Common Stock held by the William S. Boyd
Gaming Properties Trust, of which Mr. Boyd is trustee; 1,320,796 shares
held by the William S. Boyd Family Limited Partnership, of which the
William S. Boyd Family Corporation (which is wholly owned by Mr. Boyd) is
the sole general partner; 2,800,000 shares held by the W.M. Limited
Partnership, of which W.S.B., Inc. (which is wholly owned by Mr. Boyd) is
the sole general partner; and 14,792 shares held by the William S. Boyd
Family Corporation. Also includes 731,667 shares issuable pursuant to
options exercisable within 60 days.
(c) Includes 1,000 shares of Common Stock held by the Jimma L. Beam Revocable
Trust, of which Ms. Beam is trustee.
(d) Includes 108,870 shares of Common Stock held by the Robert L. Boughner
Investment Trust, of which Mr. Boughner is trustee. Also includes 206,667
shares issuable pursuant to options exercisable within 60 days.
2
<PAGE> 5
(e) Includes 1,818,214 shares of Common Stock held by the William R. Boyd
Gaming Properties Trust, of which Mr. Boyd is trustee; 85,247 shares held
by the William R. Boyd and Myong Boyd Children's Trust; and 9,523 shares
held by the Sean William Johnson Educational Trust, of which Mr. Boyd is
trustee. Mr. Boyd disclaims beneficial ownership of the shares held by the
William R. Boyd and Myong Boyd Children's Trust and by the Sean William
Johnson Educational Trust. Also includes 33,167 shares issuable pursuant to
options exercisable within 60 days.
(f) Includes 1,250 shares of Common Stock held by The Dion Family Trust, of
which Mr. Dion is trustee. Also includes 1,250 shares issuable pursuant to
options exercisable within 60 days.
(g) Includes 1,813,832 shares of Common Stock held by the Marianne E. Boyd
Gaming Properties Trust, of which Ms. Johnson is trustee; 47,604 shares
held by the Boyd Grandchildren's Trust, of which Ms. Johnson is trustee;
and 72,524 shares held by the Johnson Children's Trust. Ms. Johnson
disclaims beneficial ownership of the shares held by the Boyd
Grandchildren's Trust and by the Johnson Children's Trust. Also includes
33,167 shares issuable pursuant to options exercisable within 60 days.
(h) Includes 1,250 shares of Common Stock issuable pursuant to options
exercisable within 60 days.
(i) Includes 1,250 shares of Common Stock issuable pursuant to options
exercisable within 60 days.
(j) Includes 10,000 shares of Common Stock held by the Warren L. Nelson Family
Trust, of which Mr. Nelson is trustee. Also includes 6,500 shares issuable
pursuant to options exercisable within 60 days.
(k) Includes 608 shares of Common Stock owned by the Donald D. and Dorothy R.
Snyder Living Trust, of which Mr. Snyder is trustee. Also includes 46,667
shares issuable pursuant to options exercisable within 60 days.
(l) Includes 1,688,658 shares of Common Stock held by the Whitt Family Trust,
of which Mr. Whitt is a trustee. Also includes 6,500 shares issuable
pursuant to options exercisable within 60 days.
(m) Includes 8,334 shares of Common Stock issuable pursuant to options
exercisable within 60 days.
(n) Includes 161,667 shares of Common Stock issuable pursuant to options
exercisable within 60 days.
(o) Includes 1,271,920 shares of Common Stock issuable pursuant to options
exercisable within 60 days.
3
<PAGE> 6
PROPOSAL NO. 1
ELECTION OF DIRECTORS
In accordance with the Company's Restated Articles of Incorporation, the
Company's Board of Directors is divided into three classes, as nearly equal in
number as the then-total number of directors at the time of initial election,
with the term of office of one class expiring each year. At the Annual Meeting,
the stockholders will elect four Class I directors of the Company to serve until
the 2001 Annual Meeting of Stockholders or until their successors are duly
elected and qualified, or until any such director's earlier resignation or
removal. At each following annual meeting of stockholders, the successors to the
class of directors whose term is then expiring will be elected to hold office
for a term expiring at the third succeeding annual meeting. Vacancies on the
Board of Directors and newly created directorships will generally be filled by
vote of a majority of the directors then in office, and any directors so chosen
will hold office until the next election of the class for which such directors
were chosen. The Board of Directors has no reason to believe that any of its
nominees will be unable or unwilling to serve if elected to office, and to the
knowledge of the Board of Directors, each of its nominees intends to serve the
entire term for which election is sought. However, should any nominee of the
Board of Directors become unable or unwilling to accept nomination or election
as a director of the Company, the proxies solicited by management will be voted
for such other person as the Board may determine.
In voting for directors, each stockholder is entitled to cast one vote for
each candidate. Stockholders are not entitled to cumulate their votes for
members of the Board of Directors. The four nominees for Class I directors who
receive the greatest number of affirmative votes will be elected to the Board of
Directors.
The nominees for election as Class I directors are:
William S. Boyd
Philip J. Dion
Perry B. Whitt
William G. Yates, Jr.
THE BOARD RECOMMENDS A VOTE FOR THE ELECTION
OF THE NOMINEES NAMED ABOVE
4
<PAGE> 7
NOMINEES AND DIRECTORS
The names of the nominees and the continuing directors, their ages as of
the Record Date, and certain other information about them are set forth below:
<TABLE>
<CAPTION>
DIRECTOR
NAME AGE POSITION WITH COMPANY SINCE
---- --- --------------------------------------- --------
<S> <C> <C> <C>
MEMBERS OF THE BOARD WHOSE TERMS EXPIRE
IN 1998 (CLASS I)
William S. Boyd........................ 66 Chairman of the Board of Directors and 1988
Chief Executive Officer
Philip J. Dion......................... 53 Director 1997
Perry B. Whitt......................... 75 Vice Chairman of the Board of Directors 1988
William G. Yates, Jr................... 56 Director 1997
MEMBERS OF THE BOARD WHOSE TERMS EXPIRE
IN 1999 (CLASS II)
William R. Boyd........................ 38 Vice President and Director 1992
Michael O. Maffie...................... 50 Director 1997
Warren L. Nelson....................... 85 Director 1988
Donald D. Snyder....................... 50 President and Director 1996
MEMBERS OF THE BOARD WHOSE TERMS EXPIRE
IN 2000 (CLASS III)
Robert L. Boughner..................... 45 Executive Vice President, Chief 1996
Operating Officer and Director
Marianne Boyd Johnson.................. 39 Vice President and Director 1990
Billy G. McCoy......................... 57 Director 1997
</TABLE>
NOMINEES
William S. Boyd has served as a director of the Company since its inception
in June 1988 and as Chairman of the Board of Directors and Chief Executive
Officer since August 1988. A co-founder of California Hotel and Casino, the
predecessor of the Company and now one of its subsidiaries, Mr. Boyd has served
as a director and President of California Hotel and Casino since its inception
in 1973 and has also held several other offices with that company. Prior to
joining California Hotel and Casino, Mr. Boyd practiced law in Las Vegas for 15
years. Between 1970 and 1974 he also was Secretary and Treasurer and a member of
the Board of Directors of the Union Plaza Hotel and Casino. Mr. Boyd serves on
the Board of Directors of the American Gaming Association, and he serves on the
Board of Directors and as President of the Gaming Entertainment Research and
Education Foundation, which, among other things, provides funding for the
National Center for Responsible Gaming. Mr. Boyd is the father of William R.
Boyd and Marianne Boyd Johnson, who are both directors and officers of the
Company.
Philip J. Dion has been a director of the Company since March 1997. Mr.
Dion is the Chairman and Chief Executive Officer of Del Webb Corporation, a
Phoenix-based real estate corporation specializing in the development of active
adult communities. Mr. Dion has been with Del Webb Corporation since 1982 and
has held his current position since 1987. Prior to joining Del Webb Corporation,
Mr. Dion spent 12 years with Armour-Dial, Inc., a subsidiary of the Greyhound
Corporation.
Perry B. Whitt has served as a director of the Company since its inception
and Vice Chairman of the Board of Directors since August 1988. He also served as
a director of California Hotel and Casino from its inception until 1994, and has
also held several offices with California Hotel and Casino. Mr. Whitt has over
50 years experience in the gaming industry, much of it with the Boyd family. He
is also past President and director of the Utility Shareholders Association of
Nevada and was director of the United Way of Southern Nevada. Mr. Whitt serves
on the Board of Directors of BankWest of Nevada and is a member of the Variety
Club of Southern Nevada, Tent 39.
William G. Yates, Jr. has been a director of the Company since December
1997. Mr. Yates is Chief Executive Officer of W.G. Yates & Sons Construction
Co., which he founded with his father in 1963.
5
<PAGE> 8
W.G. Yates & Sons is one of the largest contractors in Mississippi and works
throughout the southeastern United States.
CONTINUING DIRECTORS
William R. Boyd has been a Vice President of the Company since December
1990 and a director since September 1992. From June 1987 until December 1990, he
was director of operations at the Fremont Hotel and Casino. From 1978 until
1987, he held various positions at the California Hotel and Casino and Sam's
Town Hotel and Gambling Hall. Mr. Boyd also serves on the Board of Directors of
the Better Business Bureau of Southern Nevada and of the Secret Witness Program.
Mr. Boyd is the son of William S. Boyd and the brother of Marianne Boyd Johnson,
who are both directors and officers of the Company.
Michael O. Maffie has been a director of the Company since March 1997. Mr.
Maffie is the President and Chief Executive Officer of Southwest Gas
Corporation, a major Las Vegas based utility company. Mr. Maffie joined
Southwest Gas Corporation in 1978 as its treasurer and held several executive
positions prior to being named to his current position in 1993. Prior to joining
Southwest Gas Corporation, Mr. Maffie was with Arthur Andersen & Co. for seven
years.
Warren L. Nelson has served as a director of the Company since its
inception and as a director of California Hotel and Casino from its inception
until 1994. For the last 30 years, he has been a co-owner of the Club Cal Neva,
a gaming facility in Reno, Nevada. Mr. Nelson has over 60 years experience in
the gaming industry. He is a Director of International Game Technology, a
manufacturer of slot machines.
Donald D. Snyder has been President of the Company since January 1997,
served as Executive Vice President and Chief Administrative Officer from July
1996 to January 1997 and has served as a director of the Company since April
1996. Prior to joining the Company, from 1992 to July 1996 Mr. Snyder served as
Chairman, Chief Executive Officer and President of the Fremont Street Experience
Limited Liability Co. ("FSELLC"), which developed the Fremont Street Experience
in downtown Las Vegas. He continues as Chairman of FSELLC. Mr. Snyder worked for
First Interstate Bancorp (FIB) for 22 years, serving as Chairman and Chief
Executive Officer of First Interstate Bank of Nevada from 1987 through 1991. He
was involved in various entrepreneurial activities after leaving FIB, including
co-founding BankWest of Nevada; Strategic Associates, Inc.; Graphic Enterprises,
Inc.; and FSELLC. He serves on the Boards of Directors of BankWest of Nevada,
the Nevada Resort Association, the Las Vegas Convention and Visitors Authority
and several non-profit boards.
Robert L. Boughner has been Executive Vice President and Chief Operating
Officer of the Company since April 1990 and has served as a director since April
1996. From 1985 until April 1990, he served as Senior Vice President of
Administration of California Hotel and Casino, and prior to that time he held
various management positions in the Company. Mr. Boughner is active in civic and
industry affairs and is a director of the Nevada Hotel and Motel Association and
the Nevada Restaurant Association. Mr. Boughner serves on the Board of Directors
of BankWest of Nevada.
Marianne Boyd Johnson has been Vice President of the Company since
September 1997, Assistant Secretary since September 1989 and a director since
September 1990. From 1976 until September 1990, she held a variety of full and
part-time positions with the Company and California Hotel and Casino, including
participation in the Company's management training program. Ms. Johnson serves
on the Board of Directors of BankWest of Nevada. Ms. Johnson is the daughter of
William S. Boyd and the sister of William R. Boyd, who are both directors and
officers of the Company.
Billy G. McCoy has been a director of the Company since March 1997. From
1993 to 1996, Mr. McCoy served as a Director of Development for the Company. In
1997, Mr. McCoy was named the President and Chief Operating Officer of Luscombe
Aircraft Corporation. Mr. McCoy joined the Air Force in June 1963 and rose from
Second Lieutenant to Major General, a rank he achieved in October 1989. He
served as Commander of Nellis Air Force Base in Las Vegas from 1989 to 1992 and
as Commander of Lackland Air Force Base in Texas in 1993. Mr. McCoy serves on
the Boards of Directors of the Nevada Federal Credit Union and Desert Research
Institute Foundation.
6
<PAGE> 9
COMPENSATION OF DIRECTORS
Each director who was not an employee of the Company received an annual fee
of $25,000, meeting fees of $1,000 per board meeting attended, $500 per
committee meeting attended and related expenses for services as a director.
Employee and non-employee directors, along with certain executive officers,
participate in the Directors' Medical Reimbursement Plan, which covers medical
expenses incurred by plan participants and their spouses that are not covered by
other medical plans. During the six month fiscal period ended December 31, 1997,
William R. Boyd, Marianne Boyd Johnson, Donald D. Snyder and Perry B. Whitt
received reimbursement under this plan totaling $2,246, $1,303, $252 and $3,059,
respectively. The Company also has a Directors' Non-Qualified Stock Option Plan
under which each non-employee director receives an option to purchase 5,000
shares of the Company's Common Stock upon first joining the Board and receives
an additional option to purchase 1,000 shares of the Company's Common Stock on
the date of each succeeding annual meeting of stockholders so long as the
director has served on the Board for the entire preceding year. Options are
granted at fair market value on the date of grant and vest over four years from
the date of grant.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors has an Audit Committee and a Compensation and Stock
Option Committee. The Board of Directors does not have a nominating committee.
However, the Board of Directors will consider nomination recommendations from
stockholders, which should be addressed to Charles E. Huff, Secretary, at the
principal offices of the Company.
The members of the Audit Committee are Michael Maffie (Chairman), Philip
Dion, Perry Whitt and William Yates, Jr. The Audit Committee held one meeting
during the six month fiscal period ended December 31, 1997. The functions of the
Audit Committee include reviewing and supervising the financial controls of the
Company, making recommendations to the Board of Directors regarding the
Company's auditors, reviewing the books and accounts of the Company, meeting
with the officers of the Company regarding the Company's financial controls,
acting upon recommendations of the auditors and taking such further actions as
the Audit Committee deems necessary to complete an audit of the books and
accounts of the Company.
The members of the Compensation and Stock Option Committee are Philip Dion
(Chairman), Michael Maffie, Billy McCoy and Warren Nelson. The Compensation and
Stock Option Committee held one meeting during the six month fiscal period ended
December 31, 1997. The Compensation and Stock Option Committee's functions
include reviewing with management cash and other compensation policies for
employees, making recommendations to the Board of Directors regarding
compensation matters and determining compensation for the Chief Executive
Officer. In addition, the Compensation and Stock Option Committee administers
the Company's stock plans and, within the terms of the respective stock plan,
determines the terms and conditions of issuances thereunder.
The Board of Directors held a total of 5 meetings during the six month
fiscal period ended December 31, 1997. During such fiscal period, each director
attended over 75% of the meetings of the Board and the committees of the Board
on which he served that were held during the period he served.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
W.G. Yates & Sons Construction Company, of which William G. Yates, Jr. is a
founder and the Chief Executive Officer, and its affiliates were paid an
aggregate of $472,756 during the six month fiscal period ended December 31,
1997. Such payments related to general construction work provided by W.G. Yates
& Sons for ongoing renovations at Sam's Town Tunica. The Company believes this
transaction was on terms no less favorable to the Company than could otherwise
have been obtained from an unaffiliated third party.
7
<PAGE> 10
EXECUTIVE COMPENSATION AND OTHER INFORMATION
The following table sets forth the cash compensation earned for services
performed for the Company during the twelve months ended December 31, 1997 and
the two fiscal years in the period ended June 30, 1997 by the Company's Chief
Executive Officer and each of its other four most highly compensated executive
officers (collectively, the "Named Executive Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
AWARDS
----------------
ANNUAL COMPENSATION(1) SECURITIES
------------------------------------ UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) OPTIONS/ SARS(#) COMPENSATION($)(2)
- --------------------------- ------------- --------- -------- ---------------- ------------------
<S> <C> <C> <C> <C> <C>
William S. Boyd............ Calendar 1997 1,000,000 0 320,000 5,763
Chairman and Chief Fiscal 1997 1,000,000 0 200,000 5,601
Executive Officer Fiscal 1996 1,000,000 0 0 7,865
Robert L. Boughner......... Calendar 1997 525,000 0 95,000 5,763
Executive Vice President Fiscal 1997 525,000 7,875 50,000 5,601
and Chief Operating
Officer Fiscal 1996 500,000 30,000 0 4,250
Donald D. Snyder........... Calendar 1997 450,000 0 95,000 4,192
President(3) Fiscal 1997 350,000 3,750 50,000 2,340
Ellis Landau............... Calendar 1997 367,500 0 70,000 5,365
Executive Vice President, Fiscal 1997 367,500 5,513 35,000 5,340
Treasurer, and Chief Fiscal 1996 350,000 21,000 0 5,592
Financial Officer
James W. Hippler........... Calendar 1997 210,000 26,775 16,334(4) 5,440
Senior Vice President -- Fiscal 1997 210,000 3,150 41,334(4) 5,340
Administration Fiscal 1996 200,000 12,000 0 5,592
</TABLE>
- ---------------
(1) The incremental cost to the Company of providing perquisites and other
personal benefits during the last three fiscal years did not exceed, as to
any Named Executive Officer, the lesser of $50,000 or 10% of the total
salary and bonus paid to such executive officer for any such year and,
accordingly, is omitted from the table.
(2) Amounts represent the Company's Profit Sharing and 401(k) Plan
contributions, payments of term life insurance premiums and medical cost
reimbursement. In the twelve months ended December 31, 1997, the Company's
Profit Sharing and 401(k) Plan contributions were $3,000, $3,000, $1,600,
$3,000 and $3,100 for Messrs. Boyd, Boughner, Snyder, Landau and Hippler,
respectively. In the twelve months ended December 31, 1997, life insurance
premium payments by the Company for Messrs. Boyd, Boughner, Snyder, Landau
and Hippler were $2,763, $2,763, $2,340, $2,340 and $2,340, respectively.
(3) Mr. Snyder has been an executive officer of the Company since July 1996 and
has served as President since January 1997. Prior to Mr. Snyder's employment
with the Company, he served as a consultant and received options to purchase
45,000 shares of Common Stock in fiscal 1996.
(4) 16,334 shares represent options previously awarded and repriced in 1997.
8
<PAGE> 11
OPTIONS/SAR GRANTS IN LAST FISCAL YEAR(1)
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL REALIZABLE
------------------------------------------------------- VALUE AT ASSUMED
NUMBER OF % OF TOTAL ANNUAL RATES OF STOCK
SECURITIES OPTIONS/SARS EXERCISE PRICE APPRECIATION FOR
UNDERLYING GRANTED TO OR OPTION TERM(3)
OPTIONS/SARS EMPLOYEES IN BASE PRICE EXPIRATION -----------------------
NAME GRANTED(#) FISCAL YEAR(2) ($/SHARE) DATE 5%($) 10%($)
---- ------------ -------------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
William S. Boyd.............. 320,000 45.45 5.75 7/1/07 1,157,166 2,932,486
Robert L. Boughner........... 95,000 13.49 5.75 7/1/07 343,534 870,582
Donald D. Snyder............. 95,000 13.49 5.75 7/1/07 343,534 870,582
Ellis Landau................. 70,000 9.94 5.75 7/1/07 253,130 641,481
James W. Hippler............. 0 0 n/a n/a 0 0
</TABLE>
- ---------------
(1) The Company changed its fiscal year from June 30 to December 31 effective
July 1, 1997. Due to the transition, the chart reflects grants for the six
month fiscal period ended December 31, 1997.
(2) Based on options for 704,000 shares granted to employees of the Company and
its affiliates in the six month fiscal period ended December 31, 1997. All
options were granted at fair market value, had ten year terms and vest
ratably over three years.
(3) The potential realizable value is calculated based on the term of the option
at its time of grant (10 years). It is calculated by assuming that the stock
price appreciates at the indicated rate compounded annually for the entire
term of the option and that the option is exercised on the last day of its
term, and the underlying Common Stock is sold for the appreciated stock
price. No gain to the option holder is possible unless the stock price
increases over the exercise price during the term of the option.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END
OPTION/SAR VALUES(1)
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF SECURITIES IN-THE-MONEY
SHARES UNDERLYING UNEXERCISED OPTIONS/SARS
ACQUIRED VALUE OPTIONS/SARS AT FISCAL FISCAL YEAR-END($)
ON REALIZED YEAR-END(#) EXERCISABLE/
NAME EXERCISE(#) ($) EXERCISABLE/UNEXERCISABLE UNEXERCISABLE(2)
---- ----------- -------- ------------------------- --------------------
<S> <C> <C> <C> <C>
William S. Boyd............... 0 0 685,001/499,999 0/280,000
Robert L. Boughner............ 0 0 193,334/141,666 0/83,125
Donald D. Snyder.............. 0 0 31,667/158,333 0/83,125
Ellis Landau.................. 0 0 151,666/103,334 0/61,250
James W. Hippler.............. 0 0 8,333/33,001 0/14,292
</TABLE>
- ---------------
(1) The Company changed its fiscal year from June 30 to December 31 effective
July 1, 1997. Due to the transition, the chart reflects exercises for the
six month fiscal period ended December 31, 1997.
(2) Value is based on the closing price of the Company's Common Stock on the New
York Stock Exchange on December 31, 1997 ($6.625), less the exercise price.
REPORT OF THE COMPENSATION AND STOCK OPTION COMMITTEE ON EXECUTIVE COMPENSATION
Notwithstanding anything to the contrary set forth in any of the Company's
previous filings under the Securities Act of 1933 or the Securities Exchange Act
of 1934 that might incorporate future filings, including this Proxy Statement,
in whole or in part, the following report and the Stock Performance Graph which
follows shall not be deemed to be incorporated by reference into any such
filings.
The Committee reviews with management cash and other compensation policies
for employees, makes recommendations to the Board of Directors regarding
compensation matters and determines the compensation for the Chief Executive
Officer. In addition, the Committee administers the Company's stock plans and,
within the terms of the respective stock plan, determines the terms and
conditions of issuances thereunder. The Chief Executive Officer establishes the
compensation of the other executive officers of the Company,
9
<PAGE> 12
including the named executive officers, after consultation with the Committee
using the guidelines and ranges set by the Committee.
Compensation Policies
The Committee's executive compensation policies are designed to provide
competitive levels of compensation that integrate pay with the Company's annual
objectives and long-term goals, reward above-average corporate performance,
recognize individual initiative and achievements and assist the Company in
attracting and retaining qualified executives. Guidelines and ranges for the
compensation of the executive officers and compensation of the Chief Executive
Officer are generally set at levels that the Committee believes to be
competitive with others in the Company's industry, based on public information
with respect to compensation paid by leading casino hotel companies including,
but not limited to, companies in the peer group in the Stock Performance Graph
contained herein. Companies are selected for the purpose of comparing
compensation practices on the basis of a number of factors relative to the
Company, such as their size and complexity, the nature of their businesses, the
regions in which they operate, the structure of their compensation programs and
the availability of compensation information.
There are three primary elements in the Company's executive compensation
program:
- Base salary
- Bonus
- Stock options
The guidelines and ranges for the base salaries of the Company's executive
officers are generally set at a level which the Committee believes to be
competitive with base salaries paid by leading casino hotel companies including,
but not limited to, companies in the peer group in the Stock Performance Graph
contained herein. Individual base salaries are established based on an executive
officers' historical contribution and future importance to the Company and other
subjective factors, without assigning a specific weight to individual factors.
Bonuses are paid pursuant to an executive bonus plan in which certain
management personnel at the individual properties and at the corporate level
participate. The Chief Executive Officer does not participate in this plan.
Bonus awards are set as a percentage of base salary, with the specific
percentage determined by the person's position within the Company so that highly
compensated executives receive a relatively larger percentage of their total
compensation in bonuses dependent on performance. The award of bonuses is
dependent on the achievement of specified goals. The achievement of quantitative
goals at the department, property and corporate levels is the primary factor in
determining bonuses, and such goals are tied to the achievement of specified
earnings and other performance targets.
The Company believes that a significant component of the compensation paid
to the Company's executives over the long term should be derived from stock
options. The Company strongly believes that stock ownership in the Company is a
valuable incentive to executives and that the grant of stock options to them
serves to align their interests with the interests of the stockholders as a
whole and encourages them to manage the Company in its best long-term interests.
The Committee determines whether to grant stock options, as well as the amount
of the grants, based on a person's position within the Company.
Compensation of Chief Executive Officer
In establishing the Chief Executive Officer's overall compensation, the
Committee considered a number of factors, including the record of leadership and
service provided by the Chief Executive Officer since co-founding California
Hotel and Casino, the Company's predecessor and now one of its subsidiaries, in
1973; the identification of the Company with the Chief Executive Officer by the
Company's employees, the financial community and the general public; and the
recognition by the Committee and others in the gaming industry of the importance
of his leadership, creativity and other personal attributes to the Company's
continued success. The Committee has not found it practicable to, and has not
attempted to, assign relative weights to the specific factors considered in
determining the Chief Executive Officer's compensation. Consistent with the
Company's overall executive compensation program, the Chief Executive Officer's
compensation is composed of base salary, bonus and stock options. The Chief
Executive Officer's base salary remained unchanged during the
10
<PAGE> 13
prior year. Among the factors considered by the Committee in reaching this
decision were the reluctance of the Chief Executive Officer to receive, and of
the Committee to award, base salary that is not deductible for tax purposes and
the opportunity available to the Chief Executive Officer for additional
incentive compensation.
The Chief Executive Officer was the only executive officer who participated
in the 1996 Executive Management Incentive Plan approved by the Company's
stockholders in 1995. The Management Incentive Plan provides for annual
incentive awards to certain of the Company's key executives who are "covered
employees" within the meaning of Section 162(m) of the Internal Revenue Code and
is administered by the Committee. In determining awards to be made under the
Management Incentive Plan, the Committee may approve a formula based on one or
more objective criteria to measure corporate performance. Performance criteria
must include one or more of the following: the Company's pre- or after-tax
earnings, revenue growth, operating income, operating cash flow, return on net
assets, return on stockholders' equity, return on assets, return on capital,
share price growth, stockholder returns, gross or net profit margin, earnings
per share, price per share and market share. The annual maximum amount of cash
compensation payable to a participant under the Management Incentive Plan is
$2,000,000 per year. No bonus was granted to Mr. Boyd for the six month fiscal
period ended December 31, 1997 because the established performance target was
not achieved.
Policy Regarding Deductibility of Compensation for Tax Purposes -- Compliance
With Internal Revenue Code Section 162(m)
Section 162(m) of the Internal Revenue Code, enacted in 1993, generally
disallows a tax deduction to public companies for compensation over $1 million
paid to the Company's Chief Executive Officer or any of the other four most
highly compensated executive officers. Qualifying performance-based
compensation, such as the 1996 Executive Management Incentive Plan, will not be
subject to the deduction limit if certain requirements are met. The Company has
structured the performance-based portion of the compensation of its executive
officers in a manner that is designed to comply with the exceptions to the
deductibility limitations of Section 162(m).
Philip J. Dion, Chairman
Michael O. Maffie
Billy G. McCoy
Warren L. Nelson
Members,
Compensation and Stock Option
Committee
COMPENSATION AND STOCK OPTION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Company has no Committee interlocks or insider participation.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers and directors, and persons who own more than 10% of a registered class
of the Company's equity securities, to file an initial report of ownership on
Form 3 and changes in ownership on Form 4 or 5 with the Securities and Exchange
Commission (the "Commission"). Such officers, directors and 10% stockholders are
also required by the Commission rules to furnish the Company with copies of all
Section 16(a) forms they file.
Based solely on its review of the copies of such forms received by it, or
written representations from certain reporting persons that no Forms 5 were
required for such persons, the Company believes that during the six months ended
December 31, 1997, all Section 16(a) filing requirements applicable to its
officers, directors and 10% stockholders were complied with, except that
Marianne Boyd Johnson filed one late Form 4 with respect to an open market sale
by her spouse of 700 shares of Common Stock.
11
<PAGE> 14
STOCK PERFORMANCE GRAPH
The performance graph below compares the cumulative total stockholder
return of the Company with the cumulative total return of a peer group
consisting of Aztar Corporation, Circus Circus Enterprises, Inc., Grand Casinos,
Inc., Mirage Resorts, Incorporated, Harrah's Entertainment, Inc. (formerly The
Promus Companies Incorporated), Showboat, Inc. and Station Casinos, Inc., and
the cumulative total return of the Standard & Poor's 500 Stock Index ("S&P
500"). The performance graph assumes that $100 was invested in the Company's
initial public offering, on October 15, 1993, in common stock of the selected
peer group, and in the S&P 500. In accordance with guidelines of the Securities
and Exchange Commission, the stockholder return for each company in the peer
group index has been weighted on the basis of market capitalization as of the
beginning of the period. The stock price performance shown in this graph is
neither necessarily indicative of, nor intended to suggest, future stock price
performance.
COMPARISON OF CUMULATIVE TOTAL RETURN
AMONG BOYD GAMING CORPORATION, A PEER GROUP AND THE S&P 500
<TABLE>
<CAPTION>
STANDARD &
MEASUREMENT PERIOD BOYD GAMING POOR'S 500
(FISCAL YEAR COVERED) CORPORATION PEER GROUP STOCK INDEX
<S> <C> <C> <C>
10/15/93 100.00 100.00 100.00
6/30/94 86.76 53.66 94.63
6/30/95 100.00 84.88 116.03
6/30/96 88.24 103.97 142.84
6/30/97 33.82 73.80 188.53
12/31/97 38.97 70.77 206.69
</TABLE>
12
<PAGE> 15
PROPOSAL NO. 2
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
Deloitte & Touche LLP has served as the independent auditors of the Company
and California Hotel and Casino since 1981 and has been appointed by the Board
of Directors to continue as the independent auditors of the Company for the
fiscal year ending December 31, 1998. In the event that ratification of this
selection of auditors is not approved by a majority of the shares of Common
Stock voting at the Annual Meeting in person or by proxy, the Board of Directors
will review its future selection of auditors. A representative of Deloitte &
Touche LLP is expected to be present at the Annual Meeting, will have an
opportunity to make a statement and will be able to respond to appropriate
questions.
THE BOARD RECOMMENDS A VOTE FOR RATIFICATION OF THE APPOINTMENT OF DELOITTE
& TOUCHE LLP AS THE COMPANY'S INDEPENDENT AUDITORS FOR THE YEAR ENDING DECEMBER
31, 1998.
STOCKHOLDER PROPOSALS
Stockholders may submit proposals on matters appropriate for stockholder
action at subsequent annual meetings of the Company consistent with Rule 14a-8
promulgated under the Exchange Act. Proposals of stockholders intended to be
presented at the Company's 1999 Annual Meeting of Stockholders must be received
by the Company (Attention: Charles E. Huff, Secretary, at the principal offices
of the Company), no later than December 14, 1998, for inclusion in the Board's
proxy statement and form of proxy for that meeting.
OTHER MATTERS
The Board of Directors currently knows of no other business which will be
presented to the Annual Meeting. If any other business is properly brought
before the Annual Meeting, it is intended that proxies in the enclosed form will
be voted in respect thereof as the proxy holders deem advisable.
A FORM OF PROXY IS ENCLOSED FOR YOUR USE. PLEASE MARK, DATE, SIGN AND
PROMPTLY RETURN THE PROXY CARD IN THE ENCLOSED ENVELOPE. IT IS IMPORTANT THAT
THE PROXIES BE RETURNED PROMPTLY AND THAT YOUR SHARES BE REPRESENTED.
By Order of the Board of Directors,
/s/ WILLIAM S. BOYD
-----------------------------------
William S. Boyd
Chairman of the Board
and Chief Executive Officer
April 13, 1998
Las Vegas, Nevada
13
<PAGE> 16
PROXY PROXY
BOYD GAMING CORPORATION
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS ON MAY 21, 1998
The undersigned hereby appoints William S. Boyd and William R. Boyd
(collectively, the "Proxies"), or either of them, each with the power of
substitution, to represent and vote the shares of the undersigned, with all the
powers which the undersigned would possess if personally present, at the Annual
Meeting of Stockholders (the "Annual Meeting") of Boyd Gaming Corporation, a
Nevada corporation (the "Company"), to be held on Thursday, May 21, 1998, at
11:00 a.m. local time, at the Stardust Resort and Casino, 3000 Las Vegas
Boulevard South, Las Vegas, Nevada 89109, and at any adjournments or
postponements thereof. SHARES REPRESENTED BY THIS PROXY CARD WILL BE VOTED AS
DIRECTED BY THE STOCKHOLDER. IF NO SUCH DIRECTIONS ARE INDICATED, THE PROXIES
WILL HAVE AUTHORITY TO VOTE FOR THE ELECTION OF THE NOMINEES LISTED BELOW AND
FOR PROPOSAL 2. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON
SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE ANNUAL MEETING.
The Board of Directors recommends a vote FOR the election of Directors and
FOR Proposal 2.
SEE REVERSE SIDE: IF YOU WISH TO VOTE IN ACCORDANCE WITH
THE BOARD OF DIRECTORS' RECOMMENDATIONS, JUST SIGN AND DATE
ON THE REVERSE SIDE. YOU NEED NOT MARK ANY BOXES.
- FOLD AND DETACH HERE -
<PAGE> 17
Please mark
your votes as /X/
indicated in
this example
FOR WITHHOLD
the nominees listed below. AUTHORITY
(except as marked to the to vote for
contrary below) nominees listed below
1. Election of Directors:
INSTRUCTIONS: To withhold / / / /
authority to vote for any
nominee, print that nominee's
name in the space provided
below.
Class I: William S. Boyd, Philip J. Dion,
Perry B. Whitt, and William G. Yates, Jr.
-------------------------------------------
FOR AGAINST ABSTAIN
2. To ratify the appointment of / / / / / /
Deloitte & Touche LLP as the
independent auditors for the
Company for the fiscal year
ending December 31, 1998.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD
PROMPTLY USING THE ENCLOSED REPLY ENVELOPE.
(Signature)___________________________________________________________________
(Signature, if jointly held)__________________________________________________
DATE: ____________, 1998
Please sign exactly as your name appears herein. Joint owners should each sign.
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 other authorized person. If a partnership, please sign in full
partnership name by authorized person.
- FOLD AND DETACH HERE -
