BALLY ENTERTAINMENT CORPORATION
8700 West Bryn Mawr Avenue
Chicago, Illinois 60631-3547
(312) 399-1300
January 23, 1995
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, DC 20549
Dear Sir:
On November 23, 1994, Bally Entertainment Corporation ("Bally")
received from Mr. Leonard Bronfeld, a Bally stockholder, a proposal
and a statement in support thereof for inclusion in the Proxy
Statement relating to the 1995 Annual Meeting of Stockholders.
Mr. Bronfeld submitted a similar proposal for inclusion in the Proxy
Statement relating to the 1994 Annual Meeting of Stockholders, and
Bally included his proposal and statement in support thereof in that
Proxy Statement. However, Mr. Bronfeld failed to present,
personally or by a representative, his proposal at the 1994 Annual
Meeting.
Rule 14a-8(a)(2) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act") provides that if a proponent or his
representative fails, without good cause, to present the proposal
for action at the annual meeting, the registrant is not required to
include any proposals submitted by the proponent in its proxy
soliciting material for any meeting held in the following two
calendar years.
Based on the fact that Mr. Bronfeld did not present his proposal at
Bally's 1994 Annual Meeting, Bally is not required to include his
proposal in the Proxy Statement relating to the 1995 Annual Meeting.
Bally informed Mr. Bronfeld of this position in a letter dated
December 5, 1994.
Pursuant to Rule 14a-8(d) of the Exchange Act, enclosed are six
copies of Mr. Bronfeld's proposal and his statement in support
thereof.
Bally hereby requests a waiver of the requirement under Rule 14a-
8(d) of the Exchange Act that this statement be filed 80 calendar
days prior to the date of filing the definitive copies of the Proxy
Statement and form of proxy pursuant to Rule 14a-6 of the Exchange
Act so that Bally may file its definitive proxy materials on March
30, 1995. Thank you for your consideration of this matter.
Very truly yours,
BALLY ENTERTAINMENT CORPORATION
Carol S. DePaul
Secretary and Corporate Counsel
mk
<PAGE>
Leonard Bronfeld
84-25 Edgerton Blvd.
Jamaica Estates, New York 11432
Fax 718/657-3091
November 19, 1994
Carol S. DePaul
Secretary and Corporate Counsel
Bally Entertainment Corporation
8700 W. Bryn Mawr
Chicago, Illinois 60631-3547
Dear Ms. DePaul:
As a result of the relatively large vote in favor of the proposal
relating to long-term compensation awards, I am resubmitting in
modified form a similar proposal for next year's annual with a more
detailed supporting statement. I request that you confirm receipt
of the proposal and its inclusion in the 1995 proxy for the annual
meeting.
I am the owner of 644 shares of Common Stock. I wish to submit the
following proposal for inclusion in the proxy materials relating to
the Annual Meeting of Stockholders for the 1995 Annual Meeting
pursuant to the information on page 31 of the 1994 Proxy Statement.
"RESOLVED: That the shareholders recommend that the Board of
Directors take the necessary steps to revise the following:
1. The compensation of employees with total compensation of
$100,000 per annum or greater as follows:
a - The annual compensation other than salary and
bonus (i.e. other annual compensation, long-term
compensation awards, and all other compensation
as listed on the Company's Notice of Annual
Meeting of Stockholders) may not exceed 2% of the
Company's net income* for the year before the
compensation is to be paid, and that it be
limited to 1/2 of 1% of the Company's net income
for the year before the compensation is to be
paid in any year following a reduction or
omission of a dividend on the Company's Common
Stock.
The awarding of stock options within the above
limitations would be calculated as follows. The
number of shares of stock to be awarded would be
limited at the time of grant to the current
dollar value of stock equal to the above percent
limitations. For example, if the Company had net
income in 1995 of $100 million and a dividend is
being paid which is not reduced from a 1994
dividend, then compensation other than salary and
bonus would be limited to $2 million total
available for all employees as indicated above.
If the Company paid out $1 million for the
portion other than stock options, the stock
options would be limited to the number of shares
equal to the then current per share market value
of the stock divided into $1 million. If the
price of the stock was $5 per share, then the
number of shares available for stock option
awards would be limited to 200,000 shares.
b - The annual bonuses shall not exceed 50% of
salary.
c - The annual salary increases or decreases shall in
part be based on the increases and decreases in
the Company's net income.*
2. The compensation of non-employee directors as follows:
The award of stock options will be eliminated during any
time in which the Company reduces or omits a dividend on
its Common Stock. At other times, stock options will be
limited to a maximum of 1/4 of 1% per annum of the
Company's annual net income* as calculated in 1. above.
The statement made in support of this proposal is as follows:
"At a time when shareholders continue to suffer under a
substantial subpar performance level of the total cumulative
return on investment, senior employees continue to receive
extraordinarily high levels of compensation and potential
compensation relative to shareholder return. During the
current period of financial sacrifice where the shareholders
are no longer receiving the small dividend paid for many
years, the senior employees and outside directors should share
in the financial sacrifices necessary to rebuild the financial
strength of the Company and lower debt to equity ratios.
"Although stock options do not generally include any cash
payments, they dilute the value of equity per share to the
existing stockholders, and can be more costly in the long run
than actual cash payments. If there is a generally increasing
relative value of stockholder's investment, stock options are
a fair and positive incentive to employee performance;
however, if share price goes up and down because of
inconsistent performance, then employees may unfairly be
compensated at the expense of long term investors if the
employees are awarded stock options during a time when stock
price is down only to sell it when the stock price is up
before it goes down again.
"At last year's annual meeting, 5,062,172 shares were voted in
favor of a proposal which limited compensation as a result of
the disappointed financial performance of the company.
Although the proposal was defeated, continued support of
similar proposals may send a signal to the Board of Directors
indicating stockholder dissatisfaction with compensation not
adequately reflecting performance.
"If you AGREE, please mark your proxy FOR this resolution."
Please confirm receipt and inclusion of this proposal as soon as
possible.
Very truly yours,
Leonard Bronfeld
*net income before non-recurring charges
