<PAGE>
================================================================================
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:
[_] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
MIKOHN 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:
-------------------------------------------------------------------------
Notes:
<PAGE>
MIKOHN GAMING CORPORATION
1045 PALMS AIRPORT DRIVE
LAS VEGAS, NEVADA 89119
April 11, 1997
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders of
your Company, which will be held in the Coral Reef Room of the Rio Suite Hotel &
Casino, I-15 at Flamingo Road, Las Vegas, Nevada on Tuesday, May 13, 1997 at
10:00 a.m. Pacific Daylight Time. We hope that you will be able to attend the
Annual Meeting in person and we look forward to seeing you.
At the Annual Meeting, stockholders will elect seven members of the Board
of Directors to serve until the 1998 Annual Meeting and until their successors
are elected and qualified, and will act upon the other matters enumerated in the
accompanying Notice.
Irrespective of whether you plan to attend in person, it is important that
your shares be represented at the Annual Meeting. Accordingly, after reviewing
the enclosed Notice of Annual Meeting and Proxy Statement, please complete,
sign, date and return the enclosed Proxy in the postage paid envelope at your
earliest convenience.
Sincerely,
/s/ David J. Thompson
David J. Thompson
Chairman of the Board and
Chief Executive Officer
<PAGE>
MIKOHN GAMING CORPORATION
1045 PALMS AIRPORT DRIVE
P. O. BOX 98686
LAS VEGAS, NEVADA 89193-8686
(702) 896-3890
--------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
MAY 13, 1997
The 1997 Annual Meeting of the Stockholders of Mikohn Gaming Corporation, a
Nevada corporation (the "Company"), will be held in the Coral Reef Room of the
Rio Suite Hotel & Casino, I-15 at Flamingo Road, Las Vegas, Nevada on Tuesday,
May 13, 1997, commencing at 10:00 a.m. Pacific Daylight Time to consider the
following matters:
1. Electing seven directors to serve until the 1998 Annual Meeting of
Stockholders and until their successors are elected and qualified;
2. Amending the Mikohn Gaming Corporation Stock Option Plan in certain
respects as set forth in the Proxy Statement;
3. Approving the appointment of Deloitte & Touche LLP as the Company's
independent accountants for 1997; and
4. Acting upon such other business as may properly come before the Annual
Meeting and any adjournment or postponement thereof.
Only stockholders of record on the books of the Company at the close of
business on March 17, 1997 are entitled to vote at the Annual Meeting and any
adjournment or postponement thereof.
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE ANNUAL MEETING,
REGARDLESS OF THE NUMBER YOU HOLD. WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL
MEETING, PLEASE SIGN, DATE AND MAIL THE ENCLOSED PROXY IN THE RETURN ENVELOPE,
WHICH REQUIRES NO POSTAGE IN THE UNITED STATES.
Any stockholder who attends the Annual Meeting may upon request revoke a
proxy previously submitted and vote in person.
By Order of the Board of Directors
/s/ Charles H. McCrea, Jr.
Charles H. McCrea, Jr.
Secretary
Las Vegas, Nevada
April 11, 1997
<PAGE>
MIKOHN GAMING CORPORATION
1045 PALMS AIRPORT DRIVE
P. O. BOX 98686
LAS VEGAS, NEVADA 89193-8686
(702) 896-3890
--------------------
PROXY STATEMENT
APRIL 11, 1997
--------------------
ANNUAL MEETING OF STOCKHOLDERS
MAY 13, 1997
This Proxy Statement and accompanying Proxy were mailed on or about April
14, 1997 to all holders of the $.10 par value common stock ("Common Stock") of
Mikohn Gaming Corporation, a Nevada corporation (the "Company"), of record as of
the close of business on March 17, 1997.
The enclosed Proxy is solicited by and on behalf of the Board of Directors
(the "Board") of the Company, for use at the Company's 1997 Annual Meeting of
Stockholders and at any and all adjournments or postponements thereof (the
"Annual Meeting"). You may revoke your Proxy at any time prior to its use by
(i) providing a written revocation to the Secretary of the Company, (ii)
executing and delivering a later dated Proxy or (iii) attending the Annual
Meeting and informing the Company officials that you wish to vote in person.
Stockholders holding shares in street name should consult their brokers
regarding revocation procedures. Shares represented by an unrevoked Proxy will
be voted as instructed by the stockholder. IN THE ABSENCE OF ANY CONTRARY
INSTRUCTIONS, SUCH SHARES WILL BE VOTED (1) FOR THE ELECTION OF THE NOMINEES FOR
DIRECTORS NAMED HEREIN, (2) FOR THE AMENDMENT TO THE MIKOHN GAMING CORPORATION
STOCK OPTION PLAN, (3) FOR THE CONTINUED RETENTION OF DELOITTE & TOUCHE LLP AS
INDEPENDENT ACCOUNTANTS AND (4) IN THE DISCRETION OF THE PROXY HOLDERS WITH
RESPECT TO ANY OTHER MATTERS PROPERLY PRESENTED TO THE ANNUAL MEETING.
Only holders of record of the Company's Common Stock at the close of
business on the record date, March 17, 1997, are entitled to notice of and to
vote at the Annual Meeting. On the record date there were outstanding 9,904,083
shares of Common Stock. The presence, either in person or by proxy, of persons
entitled to vote a majority of the Company's outstanding Common Stock is
necessary to constitute a quorum for the transaction of business at the Annual
Meeting. Each share is entitled to one vote in connection with each matter
submitted for stockholder approval, and a majority of a quorum is sufficient to
approve or disapprove any item on the agenda. All shares represented at the
Annual Meeting are counted for the purpose of ascertaining the presence of a
quorum, irrespective of whether the record holder of any shares or its nominee
abstains from voting on all matters or on any particular matter. It follows
that shares represented at the Annual Meeting and not voted in effect are voted
"against" each matter as to which they are not voted.
The Directors and executive officers of the Company, who among them own
beneficially and/or have voting power with respect to approximately 55.1 percent
of the Company's outstanding Common Stock (see "PRINCIPAL STOCKHOLDERS" below),
intend to vote their shares in favor of all actions proposed in the Proxy
Statement.
1
<PAGE>
ELECTION OF DIRECTORS
The Company has seven Directors, all of whom are elected annually. The
Board's nominees are David J. Thompson, Richard H. Irvine, Dennis A. Garcia,
Bruce E. Peterson, Terrance W. Oliver, John K. Campbell and Douglas M. Todoroff.
Unless marked to the contrary, proxies in the accompanying form will be voted
for the re-election of the Board's nominees to serve as Directors until the 1998
Annual Meeting of Stockholders and until their successors are duly elected and
qualified. Should a vacancy occur for any reason (none is anticipated), the
persons named as proxies will vote for a substitute nominee designated by the
Board. The Board recommends a vote for each director nominated.
Following is a list of the current Directors and executive officers of the
Company.
<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
David J. Thompson 53 Chairman of the Board and Chief Executive Officer
John K. Campbell (1) 67 Director and Chairman of Audit Committee
Richard H. Irvine 55 Director, President and Chief Operating Officer
Dennis A. Garcia 51 Director, Executive Vice President-Proprietary Games
Terrance W. Oliver 47 Director
Bruce E. Peterson 49 Director
Douglas M. Todoroff (1) 50 Director and Chairman of Compensation Committee
Charles H. McCrea, Jr. 47 Executive Vice President, General Counsel and Secretary
Seamus McGill 46 Executive Vice President-Sales
Donald W. Stevens 56 Executive Vice President, Chief Financial Officer and Treasurer
</TABLE>
(1) Member of the Audit and Compensation Committees
Mr. Thompson has been Chief Executive Officer of the Company since 1988,
and was appointed Chairman of the Board of the Company in September 1993. Mr.
Thompson also served as Chief Financial Officer of the Company from 1988 to
September 1993 and from August 1995 to June 1996. From 1977 to 1988, Mr.
Thompson was in private practice as a certified public accountant in Reno and
Las Vegas, Nevada, serving a number of clients involved in the gaming industry.
From 1973 to 1976, Mr. Thompson served as a consultant to various gaming
industry clients in Las Vegas and Reno. He was an executive with Harrah's from
1969 to 1973.
Mr. Irvine was a non-employee Director of the Company from December 1993 to
July 1995. He was a member of the Audit and Compensation Committees of the
Board until he was named President and Chief Operating Officer effective July 1,
1995. From July 1993 to July 1995 he served as senior vice president of
marketing/entertainment for Boomtown, Inc.; from 1991 to July 1993 as vice
president of marketing for Walt Disney Attractions; from 1989 to 1991 as
executive vice president of Unicorn/Sovaminco, a U.S./Soviet joint venture; and
from 1985 to 1989 as executive vice president of International Game Technology.
Mr. Garcia has been a Director since December 1993 and was Vice President-
Sales, Casino Signs Division of the Company, from November 1993 to March 1996.
From March 1996 to May 1996, Mr. Garcia served as Executive Vice President-
Sales. From May 1996 to present, Mr. Garcia has served as Executive Vice
President-Proprietary Games. From 1985 until joining the Company in 1993, Mr.
Garcia was president and director of sales of Casino Signs North, Inc. ("CSN"),
and from 1990 until joining the Company he also was president of A&D Sign
Manufacturing, Inc. ("A&D"). Both CSN and A&D served as distributors of the
Company's products and were merged into the Company in November 1993. Mr.
Garcia was a founder of both CSN and A&D and served as a director of both
corporations from their inception.
Mr. Peterson has been a Director since December 1993 and was Vice
President-Production from November 1993 (Executive Vice President since March
1996) until his retirement as an officer effective December 31, 1996. Prior to
joining the Company, Mr. Peterson was president and a director of Peterson Sign
Art, Inc. ("PSA") and a
2
<PAGE>
general partner of PSA's predecessor since 1979. PSA was a distributor of the
Company's products and was merged into the Company in November 1993.
Mr. Oliver has been a Director of the Company since 1988 and served as
Chairman of the Board of Directors of the Company from 1988 to September 1993.
From 1986 to 1995 he was a director and president of The Nevada Club, Inc., a
casino in Reno, Nevada. That company was rolled up effective February 25, 1995
as part of Fitzgerald's Gaming Corporation, in which he now serves as a director
and served as executive vice-president and chief operating officer until his
retirement in June 1996. Mr. Oliver was appointed to the Audit and Compensation
Committees in May 1996 and attended one meeting of each. In November 1996 the
Company retained Mr. Oliver as a consultant to assist it in the promotion of its
SafeJack/TM/ system because of his extensive experience in casino management,
and pays him $1,000 per day plus reasonable expenses for his services. In view
of this engagement, Mr. Oliver resigned from both committees on November 13,
1996.
Mr. Campbell has served as a Director of the Company since December 1993.
From 1986 until February 1995, Mr. Campbell served as a director of Sahara
Gaming Corporation (formerly Sahara Resorts) and of various Sahara subsidiary
corporations. He is president of Sportco Sporting Goods, Inc., a retail
sporting goods store. Mr. Campbell was self-employed as a consultant from 1986
to 1989 and was vice president/finance and treasurer of the MGM Grand Hotel from
1972 until 1986.
Mr. Todoroff has served as a Director of the Company since December 1993.
Mr. Todoroff has been president of Mercier Management Company since November
1993. He was senior vice president-manager of commercial lending with Bank of
America Nevada from 1992 to 1993 and executive vice president and senior credit
officer of its predecessor, Valley Bank of Nevada, from 1981 to 1992.
Mr. McCrea has served the Company as Vice President-Secretary and General
Counsel since May, 1994 (Executive Vice President since March 1996). For more
than ten years prior to his employment by the Company he was a partner in
Lionel, Sawyer & Collins, a Nevada law firm with offices in Las Vegas and Reno.
He is admitted to practice law in Nevada and California.
Mr. McGill was employed by the Company in October 1995 and was appointed
Executive Vice President-Systems and Surveillance on March 20, 1996. From May
1996 to present he has served as Executive Vice President-Sales. He was
employed by Genasys II Inc. of Fort Collins, Colorado as vice president-sales
and operations (1993-1995); by Spectradyne, Inc. of Dallas, Texas as senior vice
president, U.S. sales and international operations (1989-1993); by Porsche
Computer Services, a Division of Porsche Cars, North America in Reno, Nevada as
sales and marketing manager (1988-1989); and by Lodgistix, Inc. in Reno as sales
manager, western division (1987-1988) and senior account representative (1986-
1987), and in Singapore as general manager, Southeast Asia (1982-1986).
Mr. Stevens has been Executive Vice President, Chief Financial Officer and
Treasurer since June 10, 1996. From 1981 to June 1996, Mr. Stevens was the
owner and president of Orange Torpedo Trips Inc., Grants Pass, Oregon. From
1971 to 1981, he held several positions with Harrah's, progressing to Treasurer
and Controller at the time he resigned to establish his excursion business.
THE BOARD OF DIRECTORS AND ITS COMMITTEES
The Company's Board of Directors held four meetings in 1996, each of which
was attended by all Directors. Other business was handled from time to time by
unanimous written consent of the Directors.
The Board has an Audit Committee and a Compensation Committee. There is no
nominating committee. Committee members are appointed by the full Board. Both
the Audit Committee and the Compensation Committee are comprised of Directors
Campbell and Todoroff, both of whom are outside directors.
3
<PAGE>
The Audit Committee, chaired by Director Campbell, is charged with
reviewing the audited financial statements of the Company and making
recommendations to the full Board on matters concerning the Company's audits,
the selection of independent public accountants, and such other matters relating
to the Company's financial affairs and accounting as the Audit Committee may in
its discretion choose to address. The Audit Committee met once during 1996 and
all members attended.
The Compensation Committee, chaired by Director Todoroff, is responsible
for monitoring the performance of the Company's executive officers, passing upon
salaries, bonuses and other compensation for the Company's executive officers,
and administering the Company's Stock Option Plan. The Compensation Committee
met three times in 1996 and all members attended.
Each director who is not an employee of the Company receives a fee of
$2,000 for each Board and Board committee meeting attended, receives each year,
immediately following the Annual Meeting, a ten year option (vesting as to one-
third of the optioned shares, cumulatively, on each of the first three
anniversaries) to purchase at 100% of the fair market value at the date of grant
5,000 shares of Company Common Stock plus 1,000 shares for each year he has
served as a director, and is reimbursed for expenses incurred in attending Board
and Board committee meetings. Directors who are employees of the Company do not
receive additional compensation for their services as directors.
EXECUTIVE COMPENSATION AND OTHER INFORMATION
EXECUTIVE COMPENSATION
The Summary Compensation Table below sets forth information for the fiscal
years ended December 31, 1996, 1995 and 1994 regarding compensation paid to the
Chief Executive Officer and each of the five other most highly compensated
executive officers of the Company in fiscal 1996.
4
<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
AWARDS
-----------------
ANNUAL COMPENSATION NUMBER OF ALL OTHER
--------------------------- SHARES UNDERLYING COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY ($)(1) BONUS($) OPTION(3) ($)(4)
--------------------------- ---- ------------- ------------ ----------------- ------------
<S> <C> <C> <C> <C> <C>
David J. Thompson 1996 $335,846 $ 39,778(10) 20,000 $1,616
Chairman and CEO(5) 1995 291,494 -- 1,503
1994 276,186 464,948(2) 10,000 370
Richard H. Irvine 1996 285,116 17,048(10) 20,000 2,375
President and COO(6) 1995 112,330 260,000(6) 250,000 --
1994 -- -- 1,000(7) --
Dennis A. Garcia 1996 242,216 -- 20,000 1,148
Executive Vice President- 1995 219,618 -- -- 1,098
Proprietary Games 1994 212,019 28,852(2) 10,000 283
Bruce E. Peterson 1996 242,196 -- 20,000 2,375
Executive Vice President-Production 1995 219,615 -- -- 1,098
1994 212,019 28,852(2) 10,000 283
Charles H. McCrea, Jr 1996 235,667 -- 20,000 1,118
Executive Vice President- 1995 191,917 54,772 61,000(8) 1,000
General Counsel and Secretary 1994 110,856 -- -- 236
Seamus McGill 1996 193,140 25,000 80,000 --
Executive Vice President-Sales(9) 1995 24,923 -- 30,000 --
1994 -- -- -- --
</TABLE>
- ---------------
(1) In addition to the annual compensation shown in the table, the executive
officers received personal benefits including automobile allowances and
payment of certain membership dues and personal and family medical
expenses. In no case did the amount paid to or on behalf of any named
executive officer in respect of such personal benefits exceed the lesser of
$50,000 or 10 percent of compensation for any fiscal year shown.
(2) The bonuses of Messrs. Thompson, Garcia and Peterson, although paid to them
in 1995 pursuant to their employment contracts, were based on the Company's
1994 results and accrued in that year. See Employment Agreements and
Change in Control Arrangements, below, regarding the conditions under which
these bonuses were paid.
(3) No stock appreciation rights (SARs) ever have been granted by the Company.
(4) These amounts represent employer contributions under the Company's 401(k)
plan, which has been in operation since October 1, 1994.
(5) Mr. Thompson resigned as CFO and Treasurer when Mr. Stevens was appointed
to these posts effective June 10, 1996.
(6) Signing bonus paid pursuant to Mr. Irvine's employment contract. On
November 13, 1996 the Compensation Committee increased Mr. Irvine's base
salary by $17,628 effective July 1, 1996, with additional increases of the
same amount in his base salary to become effective in each successive 12
month period through the period ending July 1, 2000.
(7) Granted under Director Stock Option Plan; Mr. Irvine was a non-employee
Director on the date of this grant.
(8) Pursuant to an exchange offer made to all employees under the Company's
Employee Stock Option Plan, Mr. McCrea exchanged (i) a ten year Incentive
Stock Option dated May 1, 1994 to purchase 70,000 shares of Common Stock at
$12.75 per share for a ten year Incentive Stock Option dated November 16,
1995 to purchase 52,500 shares at $4.25 per share and (ii) a ten year
Incentive Stock Option dated December 9, 1994 to purchase 10,000 shares at
$9.25 per share for a ten year Incentive Stock Option dated November 16,
1995 to purchase 8,500 shares at $4.25 per share.
5
<PAGE>
(9) Mr. McGill was hired by the Company on October 23, 1995.
(10) The bonuses of Messrs. Thompson and Irvine, although paid to them in 1997
pursuant to their employment contracts, are based on the Company's 1996
results and accrued in that year. See Employment Agreements and Change in
Control Arrangements, below, regarding the conditions under which these
bonuses are paid.
EMPLOYMENT AGREEMENTS AND CHANGE IN CONTROL ARRANGEMENTS
In July 1993, the Company entered into an employment agreement with
Mr. Thompson extending through December 31, 1999, pursuant to which he received
a base salary of $315,000 for 1996. His base salary increases by $20,000 each
succeeding fiscal year. The employment agreement provided that Mr. Thompson will
receive a bonus equal to 5% of net pretax income (but in no case greater than $1
million) for each fiscal year multiplied by a fraction, the numerator of which
is 9,802,611 and the denominator of which is the weighted average number of
shares of Common Stock and equivalents outstanding (on a primary basis) for such
fiscal year, as reflected in the Company's audited financial statements. However
in 1996 and the remaining years under his employment contract, Mr. Thompson will
receive a bonus based on 3.5% of net pretax income rather than 5%; he
relinquished 1.5% to be awarded to Mr. Irvine as a performance based incentive
bonus (see paragraph immediately following) without adversely impacting earnings
otherwise available to stockholders. In the event that Mr. Irvine's employment
agreement is terminated for any reason, the percentage of net pretax income Mr.
Thompson will be entitled to receive for any years remaining under his
employment agreement will again be based on 5% of net pretax income. In the
event of termination of Mr. Thompson's employment without "good cause" (as
defined in his employment agreement), he will be entitled to a lump-sum
termination payment equal to any unpaid base salary through the end of the term
of the agreement plus $1,000,000.
On July 1, 1995 the Company entered into a five year employment
agreement with Richard H. Irvine, naming him President and Chief Operating
Officer of the Company. The agreement provides for (i) an annual base salary of
$260,000 per year (prorated for 1995), (ii) a signing bonus of $260,000 and
(iii) an opportunity to receive an annual bonus (in no case to exceed $1
million) contingent upon the Company's profitability, equal to 1.5% of the
Company's net pretax income during its prior fiscal year multiplied by a
fraction, the numerator of which is 9,802,611 and the denominator of which is
the weighted average number of shares of Common Stock and equivalents (on a
primary basis) outstanding for such fiscal year, as reflected in the Company's
audited financial statements. The agreement also obligated the Company to issue
to Mr. Irvine a ten year option (assuming continued employment with the Company)
to purchase up to 250,000 shares of Common Stock at a price of $5.25 per share
(renegotiated to $4.25 per share, corresponding to the fair market value of the
stock on November 13, 1995, the date the option was issued). In the event of
termination of Mr. Irvine's employment without "good cause" (as defined in his
agreement), he will be entitled to a lump sum termination payment equal to any
unpaid base salary through the end of the term of the agreement plus $500,000.
See also Footnote (6) to Summary Compensation Table on page 5.
In November 1993, the Company entered into employment agreements with
Dennis A. Garcia and Bruce E. Peterson, extending through December 31, 1999.
Mr. Garcia resigned his position under his Employment Agreement effective June
1, 1996, but has continued his employment with the Company as Executive Vice
President-Proprietary Games on an at will basis. Mr. Peterson retired on
December 31, 1996 thereby terminating his agreement. He remains employed as a
consultant to the Company on a retainer of $1,000 per month. Messrs. Peterson
and Garcia each received a base salary of $230,000 in fiscal 1996.
On May 1, 1994 the Company entered into a four year employment
agreement with Charles H. McCrea, Jr., Executive Vice President-General Counsel
and Secretary of the Company, which provided for an annual base salary of
$215,000 in 1996, increasing by $20,000 on January 1 of each year of the term of
the agreement. The Company is obligated to review Mr. McCrea's base salary
annually (but is not obligated to increase it beyond the requirements of Mr.
McCrea's employment agreement) and to consider cash bonuses. In the event that
Mr. McCrea is terminated without "good cause" (as defined in his employment
agreement), he will be entitled to a lump-sum payment equal to his base salary
for the most recent calendar year, and his stock option rights will remain in
full force and effect. The employment agreement also provides for, and Mr.
McCrea was granted, options to purchase 70,000 shares of
6
<PAGE>
Common Stock (which, together with other options covering 10,000 shares, were
subsequently exchanged for options covering 61,000 shares at a lower exercise
price). See Footnote 8 to the Summary Compensation Table.
The employment agreements with Messrs. Irvine and McCrea provide for
automatic renewals for additional one-year periods after their initial terms
unless either the Company or the employee gives notice of termination.
Any termination of employment without good cause of Mr. Thompson must
be approved by a five-sevenths vote of the Board. The employment agreements
with Messrs. Thompson, Irvine and McCrea provide that such agreements will not
be terminated by any merger, consolidation, asset sale, dissolution or change in
ownership of the Company. Each of these officers has agreed not to compete with
the Company for a period of two years following the termination of his
employment relationship with the Company. The employment agreement with Mr.
Thompson also provides for the continuation of salary payments for six months
following termination of employment owing to disability and payments thereafter
of $100,000 annually through December 31, 1999.
In October 1995, the Company entered into a three year employment
agreement with Seamus McGill, who on June 1, 1996 was promoted to Executive Vice
President-Sales. The agreement was amended on April 23, 1996, provides for a
base annual salary of not less than $175,000, which was increased to $185,000 on
July 5, 1996. Mr. McGill also was awarded a cash bonus of $25,000 on April 23,
1996 and ten year Incentive Stock Options covering 60,000 shares of Common Stock
at an exercise price of $4.25 per share, exercisable as to 16,000 shares per
year, cumulatively, on each of the first three anniversaries of the date of the
grant and 6,000 shares on each the fourth and fifth anniversaries thereof. A
ten year 1995 option covering 30,000 shares at an exercise price of $4.50 per
share was canceled by the April 23, 1996 amendment to Mr. McGill's employment
contract. The employment agreement also provides that Mr. McGill may earn
additional options covering from 2,000 shares to a maximum of 20,000 shares per
year in 1996, 1997 and 1998 if sales of the Company's surveillance and systems
products meet certain targets in those years ranging from $15 to $20 million in
1996, $20 to $25 million in 1997 and $25 to $30 million in 1998 and generate
specified gross profit margins. However, business from these operations has
been very weak; results were far below targets for 1996 and projections for 1997
and 1998 strongly indicate that the targets will not be reached in these years
either. The agreement continues from month to month after the expiration of the
initial three year term unless either party gives 30 days written notice of
termination. Mr. McGill will receive a separation payment of $150,000 if he is
terminated without just cause, as defined in the agreement.
PROPOSED STOCK OPTION PLAN AMENDMENT
The Company has two stock option plans, both of which were adopted in
1993 and amended by stockholders at the 1996 Annual Meeting: (i) the Mikohn
Gaming Corporation Stock Option Plan (the "Plan"), to which 1,700,000 shares are
allocated and (ii) the Director Stock Option Plan (the "Director Plan") to which
150,000 shares are allocated. The Company proposes to amend the Plan as
hereinafter explained and seeks stockholder approval for the amendment. No
change in the Director Plan is proposed.
DESCRIPTION OF THE PLAN
Eligible Participants. Options to purchase shares of Common Stock may
be granted under the Plan to officers, including officers who are Directors (but
not to non-officer Directors, who are covered by the Director Plan), to other
key employees, and to other persons who have a Relationship (as defined in the
Plan) with the Company. At December 31, 1996 approximately 118 persons held
options granted pursuant to the Plan.
Classes of Options. Options granted under the Plan may be either
Incentive Options that meet the requirements of Section 422 of the Internal
Revenue Code or Non-Qualified Options that do not satisfy such requirements.
Administration. The Plan is administered by the Compensation
Committee of the Board, which is composed of two outside Directors who are not
and never have been officers or employees of the Company. The
7
<PAGE>
Compensation Committee has the exclusive authority (subject to the provisions of
the Plan) among other things to designate the persons to whom grants are to be
made, the number of shares to be covered by each grant, the date or dates on
which each grant is to become exercisable from time to time and any other
conditions with respect to exercise and the term (not to exceed ten years) over
which any option is to remain exercisable. The Compensation Committee makes
grants of options subject to Board approval.
Shares Subject to the Plan. The maximum number of shares of Common
Stock issuable over the term of the Plan is 1,700,000. Shares covered by
forfeited and expired options are returned to the Plan, and the number of shares
subject to outstanding options and remaining in the Plan are subject to
adjustment in the event of a stock split or other relevant change in the
Company's capital structure. Upon any reorganization, merger or consolidation
of the Company into another corporation or sale of all or substantially all of
the assets of the Company (collectively "change in control"), options
outstanding under the Plan may be subject to early termination, acceleration of
vesting or assumption by the acquiring corporation, as determined by the
Compensation Committee. The employment agreements with Messrs. Thompson,
Irvine, McCrea and McGill contain provisions requiring all options to vest upon
any change in control.
Exercise Prices. The exercise price of Incentive Options granted
under the Plan may not be less than 100% of the fair market value of the Common
Stock on the date the option is granted (110% of the fair market value in the
case of persons owning beneficially more than 10% of the Common Stock). The
exercise price of Non-Qualified Options may be set at such level as the Board
determines. The fair market value of a share of Common Stock on any relevant
date is the closing selling price per share on that date, as such price is
reported on the NASDAQ National Market (or other applicable market or exchange).
The exercise price may be paid in cash or in shares of Common Stock. On April
1, 1997, the Company's Common Stock closed at $4.125 per share.
Exercise Dates. Options are exercisable at such times and in such
amounts as the Compensation Committee may determine, but a typical option
extends for ten years from the date of grant and is exercisable 20% per year,
cumulatively, commencing on the first anniversary of the date of the grant. The
term of an Incentive Option granted to a person owning beneficially more than
10% of the Common Stock may not exceed five years. The Compensation Committee
sometimes conditions the right to exercise options granted to officers and
senior managers upon appreciation in the market price of the Common Stock and/or
the Company achieving certain sales and profit objectives.
Termination of Options Prior to Expiration. With rare exceptions, an
option held by any employee or other optionee at the time of termination of
service does not remain exercisable beyond any limited post-service period
specified in the option grant or the Plan. The number of shares as to which an
option is exercisable after termination of service normally will not exceed the
number of shares as to which it was exercisable on the date of termination of
service.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
Incentive Options. The Company believes that Incentive Options
granted under the Plan qualify as incentive stock options within the purview of
Section 422 of the Code. The following is a summary of the principal federal
income tax provisions affecting Incentive Options.
No income is recognized by an optionee at the time an Incentive Option
is granted, and no income is recognized by an optionee upon his or her exercise
of the option (although the difference between the fair market value of the
shares on the date of exercise and the option price generally is a minimum tax
adjustment for purposes of the alternative minimum tax). If the optionee makes
no disposition of the shares received upon exercise of the option within two
years from the date the option was granted and one year from the date the shares
were issued to such individual upon exercise of the option, he or she will
recognize gain or loss when he or she disposes of his or her shares. Such gain
or loss will be measured by the difference between the option price and the
amount received for the shares at the time of disposition. Provided such shares
are held as a capital asset, such gain or loss will be long-term capital gain or
loss.
8
<PAGE>
If the optionee disposes of shares acquired upon exercise of an
Incentive Option before the expiration of the applicable holding period, any
amount realized from such disqualifying disposition will be taxable as ordinary
income in the year of disposition generally to the extent that the lesser of the
fair market value of the shares on the date the option was exercised or the
amount received upon such disposition exceeds the option price. Provided such
shares are held as capital assets, any amount realized upon such a disposition
in excess of the fair market value of the shares on the date of exercise will be
treated as long-term or short-term capital gain, depending upon whether the
shares have been held for more than one year.
The Company is not allowed a deduction for federal income tax purposes
at the time of the grant or exercise of an Incentive Option. At the time of a
disqualifying disposition by an optionee, the Company generally is entitled to a
deduction to the extent that the optionee recognizes ordinary income.
Non-Qualified Options. An optionee recognizes no income at the time a
Non-Qualified Option is granted under either Plan. An optionee will recognize
ordinary income at the time a Non-Qualified Option is exercised in an amount
equal to the excess of the fair market value of the shares on the date of
exercise over the exercise price, provided, however, that if an optionee who is
subject to the provisions of Section 16(b) of the Securities and Exchange Act of
1934 (an officer, director or 10% stockholder) exercises a Non-Qualified Option
within six months of the date of grant, the optionee will recognize ordinary
income on the date that is six months after the date of grant unless the
optionee makes an election under Section 83(b) of the Code to recognize income
at the time of exercise. The Company generally will be entitled to a deduction
for federal income tax purposes in the year and in the same amount as the
optionee is considered to have recognized ordinary income in connection with the
exercise of a Non-Qualified Option.
An optionee will recognize gain or loss on the subsequent sale of
shares upon exercise of a Non-Qualified Option in an amount equal to the
difference between the amount realized and the tax basis of such shares, which
tax basis will equal the option price paid plus the amount included in the
optionee's income by reason of the exercise of the option.
General Considerations. The foregoing statements concerning the
impact of federal income tax laws upon options granted under the Plan are based
on currently applicable provisions of the Code and the regulations promulgated
thereunder and are intended only as a general outline of certain of the tax
consequences of participation in the Plan.
PROPOSED AMENDMENTS TO THE PLAN (ITEM 2 ON PROXY).
The stockholders are asked to approve an amendment to the Plan that
will increase by 700,000 (to a total of 2,400,000) the number of shares of
Common Stock for which options may be granted under the Plan.
Following is the proposed amendment to the Plan that the
stockholders are asked to approve:
Section 4. The first sentence of Section 4 is amended to read in
its entirety as follows:
The aggregate number of shares of Common Stock subject to Options
which may be granted under the Plan shall not exceed 2,400,000.
The Compensation Committee recommended and the Board of Directors
adopted the proposed amendment to the Plan, subject to stockholder approval at
the Annual Meeting. The Board believes that the amendment is necessary to
provide the Company with a sufficient reserve of Common Stock for future option
grants needed to attract and retain the services of key personnel essential to
the Company's long-term success. An option has realizable value only when the
market price of the Common Stock exceeds the exercise price of the option. The
Board recommends a vote for the amendments to the Plan.
9
<PAGE>
STOCK OPTIONS GRANTED TO EXECUTIVE OFFICERS IN 1996
The table below sets forth the grants of stock options under the Plan
to the executive officers named in the Summary Compensation Table during the
fiscal year ended December 31, 1996. No stock appreciation rights (SARs) ever
have been granted by the Company. The amounts shown for the named executive
officers as potential realizable values are based on arbitrarily assumed
annualized rates of stock price appreciation of five percent and ten percent
over the per share exercise price of the options during the full terms of the
options. No gain to the optionees is possible without an increase in the stock
price that will benefit all stockholders in proportion to their holdings. These
potential realizable values are based solely on arbitrarily assumed rates of
appreciation required by applicable Securities and Exchange Commission
regulations. Actual gains, if any, are dependent on the future performance of
the Common Stock. There can be no assurance that the potentially realizable
values shown in this table will be achieved. Moreover, because the appreciation
base in each case is the exercise price, the potentially realizable values are
not comparable. The higher the exercise price, the higher is the extrapolated
realizable value and the lower is the likelihood that such value will be
realized.
OPTION / SAR GRANTS IN FISCAL 1996
INDIVIDUAL GRANTS
<TABLE>
<CAPTION>
POTENTIAL
REALIZABLE VALUE
(NET OF COST) AT
NUMBER OF % OF TOTAL ASSUMED ANNUAL
SHARES OPTIONS RATES OF STOCK PRICE
UNDERLYING GRANTED TO EXERCISE FOR OPTION TERM
OPTIONS EMPLOYEES IN PRICE EXPIRATION --------------------
NAME GRANTED FISCAL YEAR(1) $/SHARE(2) DATE 5% 10%
---- ---------- -------------- ---------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
David J. Thompson 20,000(3) 2.8 3.75 12/31/00 20,720 45,780
Richard H. Irvine 20,000(3) 2.8 3.75 12/31/05 47,160 119,540
Dennis A. Garcia 20,000(3) 2.8 3.75 12/31/00 20,720 45,780
Bruce E. Peterson 20,000(3) 2.8 3.75 12/31/00 20,720 45,780
Charles H. McCrea, Jr. 20,000(3) 2.8 3.75 12/31/05 47,160 119,540
Seamus McGill 20,000(3)(4) 2.8 3.75 12/31/05 47,160 119,540
60,000 8.4 4.25 04/23/06 160,368 406,404
</TABLE>
(1) Options granted under the Plan in 1996 totaled 710,250, including options
(since forfeited) granted to persons no longer employed by the Company.
(2) The exercise price in each case is the fair market value of the Common
Stock on the date of the grant.
(3) These options became fully exercisable during 1996 after the stock traded
at $6.00 or more per share for 20 consecutive trading days.
(4) On September 24, 1996, Mr. McGill purchased 8,000 shares in a partial
exercise of this option. No other officer or director exercised any option
during 1996.
REPORT OF THE COMPENSATION COMMITTEE ON
EXECUTIVE COMPENSATION AND STOCK OPTIONS
INTRODUCTION
It is the responsibility of the Compensation Committee to establish
and review the Company's executive compensation plans, programs and policies, to
administer the Company's Stock Option Plan, to monitor the performance and
compensation of executive officers, and to make recommendations to the Board
with respect to executive compensation. The Compensation Committee, established
in January 1994, is composed of Directors
10
<PAGE>
Campbell and Todoroff, both of whom are outside directors and neither of whom
ever has served as an officer or employee of the Company. Director Oliver was
appointed to the Compensation Committee in May, 1996 but resigned in November
when he was engaged by the Company as a consultant. See page 3 regarding this
transaction
The Compensation Committee held three formal meetings during 1996 and
handled additional matters by unanimous written consent.
COMPENSATION POLICIES
The Compensation Committee has adopted certain principles and policies
regarding compensation for executive officers and other key employees. The
Company strives to offer competitive compensation opportunities for all
employees based on each individual's contribution and personal performance. The
Compensation Committee recognizes that a successful executive compensation
policy must provide competitive levels of compensation that integrate pay with
personal and Company performance, reward excellence, recognize individual
initiative and achievement and assist the Company in attracting and retaining
qualified executives. The Compensation Committee believes that an executive
compensation program should include three primary elements: annual base salary,
annual incentive compensation and, particularly in the case of executive
officers who are not large stockholders, long-term incentive compensation.
CERTAIN AGREEMENTS
The compensation arrangements for each of the executive officers
named in the Summary Compensation Table of the Proxy Statement are subject to
employment agreements. Employment agreements covering the services of Mr.
Thompson were entered into prior to, and disclosed in connection with, the
Company's initial public offering in November 1993 and antedated the creation of
the Compensation Committee. Details of individual employment agreements between
the Company and each of its executive officers are set forth in the Proxy
Statement under Executive Compensation and other information, sub-caption
"Employment Agreements and Change in Control Arrangements."
The principal role of the Compensation Committee in connection with
discretionary incentive compensation payable to all executive officers under
their respective employment agreements generally is to monitor performance and
measure it against the terms of their agreements and the Company's performance.
The Compensation Committee is satisfied that the Company's employment agreements
with its CEO and other executive officers provide them with base compensation
that is not excessive plus ample incentive to achieve, to their and the
Company's mutual benefit.
The Compensation Committee has not yet established a policy with
respect to qualifying compensation paid to the Company's executive officers for
deductibility under Section 162(m) of the Internal Revenue Code of 1986, as
amended because there has been no need for such a policy and no immediate need
is seen. The Company has advised the Compensation Committee that it believes
all compensation payable under the existing employment agreements with executive
officers will qualify for deduction under such Section.
Compensation Committee of the
Board of Directors
Douglas M. Todoroff, Chairman
John K. Campbell, Member
11
<PAGE>
PERFORMANCE GRAPH AND TABLE
The graph and table below provide a comparison of the Company's
cumulative total stockholder return (which in the Company's case includes only
the price of the Common Stock because the Company paid no dividends) with (i)
Standard & Poor's 500 Composite Stock Index and (ii) the industry manufacturing
peer group used in the Company's 1996 Proxy Statement. The dates on which
comparisons are made are November 18, 1993 (immediately following the Company's
initial public offering), December 31, 1993, December 31, 1994, December 31,
1995 and December 31, 1996. The peer group includes companies that management
selected because it believes they are comparable to the Company in the lines of
business they are engaged in and because they include the Company's principal
competitors.*
This graph and table assume the investment of $100 on November 18,
1993 in (i) the Company's Common Stock and (ii) collectively, the common stocks
of the companies comprising the peer group, with reinvestment of dividends. The
comparisons in the graph and table are based on historical data covering the
performance of the Company's Common Stock over a relatively brief time. They
are not intended to forecast, and management believes they are not indicative
of, the future performance of the Company's Common Stock.
[COMPARISON OF CUMULATIVE TOTAL RETURN OF COMPANY, S&P 500 AND
PEER GROUP GRAPH GOES HERE]
<TABLE>
<CAPTION>
INDEX INDEX INDEX INDEX INDEX
AT AT AT AT AT
11/18/93 12/31/93 12/31/94 12/31/95 12/31/96
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Mikohn Gaming Corp $100 $ 92 $ 52 $ 23 $ 32
S&P 500 Index $100 $100 $102 $140 $173
Peer Group $100 $ 88 $ 50 $ 43 $ 66
</TABLE>
* The companies included in the peer group are Acres Gaming Inc.; Alliance
Gaming Corporation (which acquired Bally Gaming International during 1996);
Autotote Corporation; Casino Data Systems; GTECH Holdings Corp.; International
Game Technology; Mikohn Gaming Corporation; Paul-Son Gaming Corp.; Sodak Gaming
Inc.; Video Lottery Technologies and WMS Industries Inc.
12
<PAGE>
CERTAIN TRANSACTIONS
During 1996 the Company purchased materials and supplies in the
aggregate amount of $19,312 from Universal Brass, Inc., a company wholly owned
by Executive Vice President and Director Dennis A. Garcia and his wife. All
purchases were in the ordinary course of business.
On November 16, 1995 the Board authorized a loan of up to $300,000 to
Chairman and CEO David J. Thompson as extended until January 16, 1998 at a rate
of interest equal to prime (as determined by the Wall Street Journal)(currently
8.5%) plus three quarters of one percent. Mr. Thompson has borrowed $300,000
from the Company pursuant to this authorization, which is secured by a pledge of
150,000 shares of the Company's Common Stock.
Transactions among the Company and its affiliates in excess of
$250,000, other than transactions entered into in the ordinary course of
business on terms generally made available to third party customers, are
reviewed by the Board and passed upon by a majority of disinterested directors.
PRINCIPAL STOCKHOLDERS
The following table sets forth certain information regarding
beneficial ownership of the Company's Common Stock as of March 17, 1997, by (i)
each person who is known by the Company to own beneficially more than five
percent of the Company's outstanding Common Stock, (ii) each of the Company's
directors and (iii) all executive officers and directors of the Company as a
group.
<TABLE>
<CAPTION>
BENEFICIAL
OWNERSHIP OF
COMMON STOCK
---------------------
NAME OF BENEFICIAL OWNER (1) NUMBER PERCENT
- ---------------------------- ---------- -------
<S> <C> <C>
David J. Thompson (2) 1,583,250 15.6
Dennis A. Garcia (3) 1,583,250 15.6
Bruce E. Peterson (4) 1,592,250 15.7
Terrance W. Oliver (5) 640,350 6.3
John K. Campbell (6) 6,000 0.1
Richard H. Irvine (7) 85,667 0.9
Douglas M. Todoroff (8) 9,000 0.1
All directors and executive officers as a group (10 persons) (9) 5,584,967 55.1
</TABLE>
(1) The mailing address of each person named in this table is c/o Mikohn Gaming
Corporation, 1045 Palms Airport Drive, P. O. Box 98686, Las Vegas, Nevada
89193-8686.
(2) Total includes 24,000 shares that Mr. Thompson has the right to purchase
within 60 days (regardless of exercise price) through exercise of vested
stock options and 50,000 shares held in trusts for the benefit of Mr.
Thompson's children and stepchildren. Mr. Thompson disclaims beneficial
ownership of shares held in children's trust.
(3) Total includes 24,000 shares that Mr. Garcia has the right to purchase
within 60 days (regardless of exercise price) through exercise of vested
stock options.
(4) Total includes 24,000 shares that Mr. Peterson has the right to purchase
within 60 days (regardless of exercise price) through exercise of vested
stock options.
(5) Total includes 100,000 shares held in trusts for the benefit of Mr. Oliver's
children. Mr. Oliver disclaims beneficial ownership of shares held in
children's trusts. The remaining 540,350 shares beneficially owned by Mr.
Oliver are held of record by the Oliver Special Trust, of which Mr. Oliver
is sole trustee and beneficiary.
(6) Total includes 6,000 shares that Mr. Campbell has the right to purchase
within 60 days (regardless of exercise price) through exercise of vested
stock options.
13
<PAGE>
(7) Total includes 75,667 shares that Mr. Irvine has the right to purchase
within 60 days (regardless of exercise price) through exercise of vested
stock options.
(8) Total includes 6,000 shares that Mr. Todoroff has the right to purchase
within 60 days (regardless of exercise price) through exercise of vested
stock options.
(9) Includes 223,867 shares that the directors and three executive officers who
are not directors have the right to purchase within 60 days (regardless of
exercise price) through exercise of stock options.
APPOINTMENT OF INDEPENDENT ACCOUNTANTS (ITEM 3 ON PROXY)
The Board has appointed Deloitte & Touche LLP to serve as independent
accountants for the Company for the fiscal year ending December 31, 1997.
The firm of Deloitte & Touche LLP has served as independent
accountants for the Company since 1990. The Board, although it is not required
to do so, is submitting its appointment of Deloitte & Touche LLP for
ratification at the Annual Meeting in order to solicit the views of stockholders
concerning the appointment. If the appointment is not ratified, the Board will
reconsider.
The Board recommends that the Company's stockholders vote for the
ratification of the appointment of Deloitte & Touche LLP to audit the financial
statements of the Company for the fiscal year ending December 31, 1997.
A representative of Deloitte & Touche LLP will be present at the
Annual Meeting, will be given the opportunity to make a statement if so inclined
and will be available to respond to appropriate questions.
ANNUAL REPORT
The Annual Report of the Company for the fiscal year ended December
31, 1996, which includes the Company's annual report on Form 10-K to the
Securities and Exchange Commission (without exhibits), is being mailed
contemporaneously with this Proxy Statement to stockholders of record at the
close of business on March 17, 1997. The Company will provide a copy of the
exhibits to its annual report on Form 10-K for the fiscal year ended December
31, 1996, upon receipt of a written request from any beneficial owner of the
Company's securities as of March 17, 1997 and reimbursement of the Company's
reasonable expenses. Such request should be addressed to Charles H. McCrea,
Jr., Executive Vice President, Mikohn Gaming Corporation, 1045 Palms Airport
Drive, P. O. Box 98686, Las Vegas, Nevada 89193-8686.
STOCKHOLDER PROPOSALS FOR 1998 ANNUAL MEETING
Any eligible stockholder (as defined below) of the Company who wishes
to have a proposal considered for inclusion in the Company's 1998 proxy
solicitation material must set forth such proposal in writing and file it with
the Secretary of the Company on or before February 25, 1998. The Board will
review any proposals from eligible stockholders which it receives by that date
and will determine whether any such proposals will be included in its 1998 proxy
solicitation materials. An eligible stockholder is one who is the record or
beneficial owner of at least 1% or $1,000 in market value of securities entitled
to be voted on the proposal at the 1998 Annual Meeting, who has held such
securities for at least one year and who continues to own such securities
through the date on which the 1998 Annual Meeting is held.
14
<PAGE>
SOLICITATION OF PROXIES
The cost of this solicitation will be borne by the Company. Proxies
may be solicited by mail, telephone, telegraph, or personally by directors,
officers and regular employees of the Company, none of whom will receive any
special compensation for such services. The Company will reimburse persons
holding stock in their names or in the names of their nominees for reasonable
expenses incurred in forwarding proxy materials to their principals.
OTHER BUSINESS
The Board does not know of any other business which will be presented
for consideration at the Annual Meeting. If any other business properly comes
before the Annual Meeting or at any adjournment or postponement thereof, the
proxy holders will vote according to their discretion insofar as such proxies
are not limited to the contrary.
By Order of the Board of Directors
/s/ Charles H. McCrea, Jr.
Charles H. McCrea, Jr.
Secretary
Las Vegas, Nevada
April 11, 1997
15
<PAGE>
MIKOHN GAMING CORPORATION
PROXY
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
ANNUAL MEETING OF STOCKHOLDERS
MAY 13, 1997
The undersigned constitutes and appoints DAVID J. THOMPSON, RICHARD H. IRVINE
and CHARLES H. McCREA JR. Proxy, First Alternate Proxy and Second Alternate
Proxy, respectively, of the undersigned, to represent the undersigned and to
vote all shares of Common Stock, $.10 par value, of Mikohn Gaming Corporation
(the "Company") that the undersigned would be entitled to vote if personally
present at the Annual Meeting of Stockholders of the Company to be held at 10:00
a.m. (Pacific Daylight Time) on Tuesday, May 13, 1997, in the Coral Reef Room of
Rio Suite Hotel & Casino, I-15 at Flamingo Road, Las Vegas, Nevada, and at any
adjournment or postponement thereof. If the Proxy is unable to act, the
authority conferred hereby shall devolve on the First Alternate Proxy, and if he
also is unable to act, on the Second Alternate Proxy. All proxies will be voted
as instructed, and in the absence of instruction on any particular matter, FOR
the named Board of Directors nominees, FOR the Amendment to the Stock Option
Plan and FOR the continued retention of Deloitte & Touche LLP as independent
accountants.
1. ELECTION OF DIRECTORS
[ ] FOR the Board of Directors' [ ] AGAINST all
nominees who are listed below nominees listed below
for election as directors
Nominees: David J. Thompson, Dennis A. Garcia, Bruce E. Peterson,
Terrance W. Oliver, John K. Campbell, Richard H. Irvine and Douglas M.
Todoroff.
INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY CANDIDATE, CROSS
OUT THAT PERSON'S NAME ABOVE.
2. AMENDMENT TO MIKOHN GAMING CORPORATION STOCK OPTION PLAN.
[ ] FOR [ ] AGAINST
3. RETENTION OF DELOITTE & TOUCHE LLP AS INDEPENDENT ACCOUNTANTS.
[ ] FOR [ ] AGAINST
4. IN THE DISCRETION OF THE PROXY HOLDERS, WITH RESPECT TO ANY OTHER MATTER
THAT MAY PROPERLY COME BEFORE THE 1997 ANNUAL MEETING AND ANY ADJOURNMENT
OR POSTPONEMENT THEREOF. THE BOARD OF DIRECTORS IS NOT AWARE OF ANY OTHER
MATTERS THAT MAY BE PRESENTED AT THE MEETING.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF MIKOHN GAMING
CORPORATION.
Dated:_________________________________
_______________________________________
Signature
_______________________________________
Signature
PLEASE DATE AND SIGN EXACTLY AS YOUR
NAME OR NAMES APPEAR HEREON. IF MORE
THAN ONE REGISTERED OWNER, ALL SHOULD
SIGN. EXECUTORS, ADMINISTRATORS,
TRUSTEES, GUARDIANS, ATTORNEYS AND
CORPORATE OFFICERS SHOULD INDICATE
THEIR FIDUCIARY CAPACITY OR FULL TITLE
WHEN SIGNING.
PLEASE COMPLETE, SIGN, DATE AND RETURN THIS PROXY PROMPTLY USING THE ENCLOSED
ENVELOPE.
