<PAGE> 1
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 240.14a-11(c) or 240.14a-12
FITZGERALDS 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:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] 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
previously paid. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE> 2
FITZGERALDS GAMING CORPORATION
301 FREMONT STREET
LAS VEGAS, NEVADA 89101
----------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD AUGUST 27, 1998
----------------------
To the Stockholders of Fitzgeralds Gaming Corporation:
Notice is hereby given that the Annual Meeting of Stockholders of
Fitzgeralds Gaming Corporation, (the "Company"), a Nevada corporation, will be
held at 11:00 a.m., local time, on August 27, 1998 at the corporate offices
located at Fitzgeralds Casino/Hotel, twelfth floor meeting rooms, 301 Fremont
Street, Las Vegas, Nevada, 89101, for the following purposes:
1. To elect four directors to serve until the next Annual Meeting of
Stockholders and until their successors are duly elected and
qualified;
2. To ratify the appointment of Deloitte & Touche LLP as the
Company's independent certified public accountants for fiscal year
1998, and
3. To transact such other business as may properly be brought before
the meeting or any adjournments or postponements thereof.
Only stockholders of record at the close of business on July 27, 1998,
are entitled to notice of and to vote at the meeting or any adjournments or
postponements thereof.
Whether or not you plan to be present at the meeting, you are requested
to complete, sign, date and return the enclosed proxy so that your shares will
be represented. Please return your proxy promptly in the enclosed envelope. You
may vote in person even if you have sent in your proxy.
By Order of the Board of Directors,
Philip D. Griffith
Chairman of the Board, President
and Chief Executive Officer
Las Vegas, Nevada
August 3, 1998
<PAGE> 3
FITZGERALDS GAMING CORPORATION
301 FREMONT STREET
LAS VEGAS, NEVADA 89101
--------------------
PROXY STATEMENT FOR
1998 ANNUAL MEETING OF STOCKHOLDERS
GENERAL
This Proxy Statement is furnished to stockholders of Fitzgeralds Gaming
Corporation (the "Company"), a Nevada corporation, in connection with the
solicitation of proxies on behalf of the Board of Directors of the Company (the
"Board of Directors") for use at the Annual Meeting of Stockholders of the
Company (the "Annual Meeting") to be held in the twelfth floor meeting rooms at
the corporate offices of the Company, 301 Fremont Street, Las Vegas, Nevada, at
11:00 a.m., local time, on August 27, 1998, and at any adjournments or
postponements thereof, for the purpose of considering and acting upon the
matters referred to in the preceding Notice of Annual Meeting and more fully
discussed below.
This Proxy Statement and the accompanying form of proxy were first
mailed on August 4, 1998 to stockholders of the Company entitled to notice of
and to vote at the Annual Meeting. A copy of the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1997 (excluding exhibits) is
enclosed herewith, but it is not to be deemed a part of the proxy soliciting
material.
RECORD DATE; STOCKHOLDERS ENTITLED TO VOTE; QUORUM
Only stockholders of record at the close of business on July 27, 1998
(the "Record Date") are entitled to receive notice of and to vote at the Annual
Meeting. On the Record Date, the Company had outstanding 4,012,846 shares of
Common Stock, which constituted all of the outstanding voting securities of the
Company. Each share of Common Stock is entitled to one vote. A majority of the
outstanding shares of Common Stock will constitute a quorum. Abstentions and
broker non-votes are counted for purposes of determining the presence or absence
of a quorum for the transaction of business, but will not be counted for
purposes of determining whether a proposal has been approved, and thus will have
the effect of a "No" vote.
VOTE REQUIRED FOR APPROVAL
Nevada law requires that nominees for director be elected by a
plurality of the votes of the shares of Common Stock present in person or
represented by proxy at the Annual Meeting and that the ratification of the
appointment of the Company's independent certified public accountants be
approved by the affirmative vote of a majority of the votes of the shares of
Common Stock present in person or represented by proxy at the Annual Meeting,
without giving effect to abstentions.
<PAGE> 4
Stockholders may not cumulate their votes for any one or more nominees for
election as director. The affirmative vote of a majority of the votes of the
shares of Common Stock present in person or represented by proxy, without giving
effect to abstentions, will be required for any other items which might be
submitted for consideration at the Annual Meeting.
REVOCABILITY OF PROXIES
Shares may be voted by either completing and returning the enclosed
proxy prior to the Annual Meeting, voting in person at the meeting or submitting
a signed proxy at the meeting. A stockholder who dates, signs and returns the
enclosed proxy may revoke the proxy at any time before it is voted by submitting
a written notice of revocation to the Secretary of the Company, by submitting a
later dated proxy, or by attending the Annual Meeting and voting in person.
Attendance at the Annual Meeting will not have the effect of revoking a proxy
unless the stockholder notifies the Secretary of the Company in writing at any
time prior to the voting of the proxy. A stockholder may also be represented by
another person present at the Annual Meeting by executing a form of proxy
designating such person to act on such stockholder's behalf. Stockholders whose
shares are held in street name should consult with their brokers or other
nominees concerning procedures for revocation.
VOTING OF PROXIES
Proxies will be voted in accordance with the instructions indicated
thereon. If no choice is specified, properly signed and returned proxies will be
voted FOR the persons nominated by the Board of Directors for election as
directors and FOR the ratification of the appointment of Deloitte & Touche LLP
as the Company's independent certified public accountants. The Annual Meeting
will be held for the transaction of business described above and for the
transaction of such other business as may properly come before the Annual
Meeting. Proxies will confer discretionary authority with respect to any other
matters which may properly be brought before the Annual Meeting. As of the date
of this Proxy Statement, the only business which the Company's management
intends to present, or knows that others will present, is that described in this
Proxy Statement. If other matters properly come before the meeting, the persons
holding proxies solicited hereunder intend to vote such proxies in accordance
with their judgment on all such matters.
SOLICITATION OF PROXIES
In addition to soliciting proxies by mail, Company directors, officers
and other regular employees, without additional compensation, may solicit
proxies personally or by other appropriate means. The total cost of solicitation
of proxies will be borne by the Company. Although there are no formal agreements
to do so, it is anticipated that the Company will reimburse banks, brokerage
houses and other custodians, nominees and fiduciaries for their reasonable
expenses in forwarding any proxy soliciting materials to their principals.
-2-
<PAGE> 5
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following sets forth certain information as of July 27, 1998 with
regard to the beneficial ownership of Common Stock by (i) each person who, to
the knowledge of the Company, beneficially owned more that 5% of the outstanding
Common Stock, (ii) each director of the Company, (iii) each other person named
in the Summary Compensation Table (see "Executive Compensation"), and (iv) all
executive officers and directors of the Company as a group.
<TABLE>
<CAPTION>
NUMBER OF SHARES PERCENT OF
NAME(1) BENEFICIALLY OWNED CLASS
------- ------------------ -----
<S> <C> <C>
Philip D. Griffith 2,644,356(2) 64.6%
Jerome H. Turk 842,568(3) 21.0%
Max L. Page 133,231(4) 3.3%
Michael A. Ficaro 6,333(5) *
Patricia W. Becker 33,808(6) *
Paul H. Manske 134,898(7) 3.3%
Michael E. McPherson 24,853(8) *
Fernando Bensuaski 0(9) --
All directors and executive officers as a group
(five persons) 2,842,581 68.6%
</TABLE>
- -------------------
(1) The address of Mr. Griffith is 301 Fremont Street, Las Vegas, Nevada
89101. The address of Mr. Turk is 9017 Greensboro Lane, Las Vegas, NV
89134.
(2) Mr. Griffith's stock is held by the Philip D. Griffith Gaming Trust of
which Mr. Griffith is a trustee. Includes 83,333 shares issuable upon
exercise of options which are exercisable within 60 days of July 27,
1998.
(3) Mr. Turk's stock is held by the Jerome H. Turk Gaming Properties Trust
of which Mr. Turk is a trustee.
(4) Mr. Page's stock is held by the Max L. Page Trust of which Mr. Page is
a trustee. Includes 9,666 shares issuable upon exercise of options
which are exercisable within 60 days of July 27, 1998.
(5) Represents shares issuable upon exercise of options which are
exercisable within 60 days of July 27, 1998.
(6) Ms. Becker's stock is held by the Patricia W. Becker Family Trust of
which Ms. Becker is a trustee. Includes 6,333 shares issuable upon
exercise of options which are exercisable within 60 days of July 27,
1998.
-3-
<PAGE> 6
(7) Mr. Manske's stock is held by the Paul H. Manske Family Trust of which
Mr. Manske is a trustee. Includes 11,333 shares issuable upon exercise
of options which are exercisable within 60 days of July 27, 1998.
(8) Represents shares issuable upon exercise of options which are
exercisable within 60 days of July 27, 1998.
(9) Mr. Bensuaski, formerly Executive Vice President and Chief Financial
Officer of the Company, resigned as an officer of the Company,
effective September 7, 1997.
* Less than 1%.
-4-
<PAGE> 7
ELECTION OF DIRECTORS
Directors are elected at the Annual Meeting of Stockholders and each
director is elected to serve until a successor is elected and qualified. In
accordance with the Company's Articles of Incorporation and its Bylaws, the
number of directors which constitutes the whole Board of Directors may not be
less than three or more than nine, except that in cases where all the shares of
the Company are owned beneficially or of record by either one or two
stockholders, the number may be less than three but not less than the number of
stockholders. The actual number of directors may be established from time to
time by resolution of the Board of Directors. The Board of Directors is
currently comprised of four persons. The names of the nominees, each of whom is
currently a director of the Company, are set forth below:
Philip D. Griffith, Michael A. Ficaro, Patricia W. Becker and Max L. Page
Information concerning the nominees for election as directors is set
forth under the caption "Management - Directors and Executive Officers."
The Board of Directors has no reason to believe that any of its
nominees will be unable or unwilling to serve if elected. However, should any
nominee named herein become unable or unwilling to accept nomination or
election, the proxies solicited by the Board of Directors will vote instead for
such other person as the Board of Directors may recommend.
THE COMPANY'S BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE NOMINEES
FOR DIRECTOR LISTED ABOVE.
MANAGEMENT
The following tables set forth certain information as of July 27, 1998
with regard to (i) each director, including the four nominees who currently
serve as directors, (ii) each executive officer of the Company who is neither a
director nor a nominee and (iii) certain significant employees of the Company.
The positions held refer to the Company unless otherwise noted.
DIRECTORS AND EXECUTIVE OFFICERS
<TABLE>
<CAPTION>
NAME AGE POSITION(S) HELD
---- --- ----------------
<S> <C> <C>
Philip D. Griffith 53 Chairman, President, Chief Executive Officer and Director
Michael A. Ficaro 51 Director
Patricia W. Becker 46 Director
Max L. Page 48 Director; Executive Vice President and a director of Fitzgeralds
Reno, Inc. and General Manager of Fitzgeralds Reno
Michael E. McPherson 47 Senior Vice President, Chief Financial Officer, Treasurer and
Secretary
</TABLE>
-5-
<PAGE> 8
SIGNIFICANT EMPLOYEES
<TABLE>
<CAPTION>
NAME AGE POSITION(S) HELD
---- --- ----------------
<S> <C> <C>
Paul H. Manske 58 Senior Vice President of Marketing; Executive Vice President of
Fitzgeralds Reno, Inc.
Cara L. Brown 35 Vice President and General Counsel
William J. Noonan, III 46 Vice President and a director of Fitzgeralds Las Vegas, Inc. and
General Manager of Fitzgeralds Las Vegas
Domenic Mezzetta 62 Vice President and a director of Fitzgeralds Mississippi, Inc. and
General Manager of Fitzgeralds Tunica
Joe C. Collins 59 Vice President and a director of Fitzgeralds Black Hawk, Inc. and
Fitzgeralds Black Hawk II, Inc. and General Manager of Fitzgeralds
Black Hawk
</TABLE>
Philip D. Griffith, one of the Company's founders, has been President,
Chief Executive Officer and a Director of the Company since its inception in
1984, an officer and director of certain of its subsidiaries since 1984 and has
been Chairman of the Board since August 1997. Mr. Griffith serves as President
and Chief Executive Officer of each significant subsidiary of the Company. Prior
to his involvement with the Fitzgeralds group of companies, Mr. Griffith was
active in the gaming industry in a variety of positions, serving as Chief
Financial Officer and then President of Harolds Club in Reno from 1973 to 1984
and President of the Sands Hotel and Casino in Las Vegas from 1982 to 1984. From
1968 to 1973, Mr. Griffith was a Certified Public Accountant with the St. Louis,
Missouri and Las Vegas offices of Deloitte Haskins & Sells.
Michael A. Ficaro joined the Company as a Director in December 1995.
Mr. Ficaro has been a partner in the Chicago law firm of Hopkins & Sutter since
1989. Mr. Ficaro has been an adjunct faculty member at John Marshall Law School
since 1986 and the National College of District Attorneys since 1978. From 1990
to 1992, Mr. Ficaro was appointed to the position of Special States Attorney of
Cook County, Illinois. From 1981 to 1989, Mr. Ficaro served in the office of the
Attorney General of Illinois as First Assistant Attorney General (1987-1989) and
Director of Enforcement (1986-1989). From 1982 to 1984, he was appointed Special
Assistant United States Attorney. From 1978 to 1981, Mr. Ficaro was Deputy
States Attorney of Cook County, after serving since 1972 as Assistant States
Attorney of Cook County.
Patricia W. Becker joined the Company as a Director in December 1995.
Ms. Becker is a self-employed consultant and served as Chief of Staff to Nevada
Governor Bob Miller from October 1993 to January 1995. From September 1984 to
October 1993, Ms. Becker was a Senior Vice President, General Counsel and
Secretary for Harrah's Casino Hotels, where she was responsible for all legal
affairs and was a member of the senior strategic management group. From January
1983 to September 1984, Ms. Becker was a member of the Nevada State Gaming
Control Board. From July 1979 to January 1983, Ms. Becker was a Deputy and Chief
Deputy Attorney General assigned to the Nevada Gaming Division. Ms. Becker is a
Vice Chair for the Gaming Law Section of the American Bar Association, a past
President of the Nevada Trial Lawyers Association of Gaming Attorneys and a
director of Powerhouse Technologies, Inc.
-6-
<PAGE> 9
Max L. Page, one of the Company's founders, has served as Executive
Vice President and a director of certain subsidiaries of the Company since
September 1986 and as General Manager of Fitzgeralds Reno since November 1994.
Mr. Page was elected a Director of the Company in January 1998. Mr. Page holds a
B.A. in Political Science and a Masters in Public Administration from Brigham
Young University.
Michael E. McPherson was named Senior Vice President, Chief Financial
Officer and Treasurer of the Company in August 1997, was appointed Secretary in
September 1997 and serves as Senior Vice President, Chief Financial Officer,
Treasurer and Secretary of each significant subsidiary of the Company. Mr.
McPherson joined the Company in March 1985 and has served in various executive
positions in the Company, including Senior Vice President of Operations from
September 1995 to July 1997, Vice President of Finance from November 1994 to
September 1995, as well as Vice President and Treasurer for certain subsidiaries
of the Company and Director of Finance for Fitzgeralds Reno. Mr. McPherson holds
a degree in Business Administration from the University of Nevada Reno and is an
associate member of the Nevada Society of Certified Public Accountants.
Paul H. Manske, one of the Company's founders, has served as Executive
Vice President of a subsidiary of the Company since 1988 and was appointed
Senior Vice President of Marketing for the Company in January 1997. Prior to
joining the Company, Mr. Manske served as Vice President of Marketing for
Harolds Club and the Sands Hotel and Casino with the Howard Hughes organization
from 1978 to 1984, and prior to that, as a marketing executive with the Ford
Motor Company from 1964 to 1978. Mr. Manske holds a degree in Business
Administration from Jacksonville University.
Cara L. Brown joined the Company as Vice President and General Counsel
in May 1996. For the three years prior to May 1996, she was an associate counsel
at Harrah's Las Vegas and for the three years prior thereto, she was a staff
attorney at Jones, Jones, Close & Brown in Las Vegas. Ms. Brown has a degree
from the University of North Carolina at Chapel Hill and holds a law degree from
the Marshall-Wythe School of Law at the College of William and Mary in
Williamsburg, Virginia.
William J. Noonan, III was named Vice President and a director of a
subsidiary of the Company and General Manager of Fitzgeralds Las Vegas in May
1994. He was first employed by a subsidiary of the Company in January 1994 as
Vice President of that subsidiary. Prior to joining the Company, Mr. Noonan
served over 11 years as a city manager: (i) in Perry, Florida from 1982 to
September 1987; (ii) in Cape Coral, Florida from September 1987 to January 1991;
and (iii) in Las Vegas, Nevada from February 1991 to July 1993. Mr. Noonan was
also engaged in business and gaming consulting services from August 1993 to
February 1994. Mr. Noonan holds a Master's degree in Public Administration from
the University of Kansas and a degree in Public Administration and Economics
from Southwest Missouri State University.
Domenic Mezzetta was named Vice President and a director of a
subsidiary of the Company and General Manager of Fitzgeralds Tunica in May 1998,
and has over 27 years of
-7-
<PAGE> 10
experience in the gaming industry. Prior to joining the Company, Mr. Mezzetta
served as Vice President and General Manager of Hollywood Casino and Hotel in
Tunica from January 1994 to May 1998; as Vice President and General Manager of
Island Fantasy Casino in Tunica from August 1993 to January 1994; as General
Manager of El Capitan in Hawthorne, Nevada from May 1990 to August 1993; as
Assistant General Manager of the Stardust Hotel and Casino in Las Vegas from May
1986 to May 1990; and as General Manager of Cactus Pete's Resort Hotel and
Casino in Elko, Nevada from October 1983 to May 1985; and in various executive
level positions at Harvey's Resort Hotel and Inn Casino at Lake Tahoe from July
1971 to October 1983.
Joe C. Collins was named Vice President and a director of a subsidiary
of the Company and general manager of Fitzgeralds Black Hawk in January 1995 and
was named Vice President and a director of a second subsidiary of the Company
related to the Fitzgeralds Black Hawk operations in July 1997. Prior to that
time, Mr. Collins had been hotel director at Fitzgeralds Reno from April 1985 to
December 1994. Mr. Collins currently serves on the executive board of the Black
Hawk Casino Owners Association and on the Board of the Black Hawk Business
Improvement District.
BOARD OF DIRECTORS AND COMMITTEES
The Board of Directors has two standing committees: the Audit Committee
and the Compensation Committee.
The Audit Committee, which held five meetings during the fiscal year
ended December 31, 1997, reviews reports of the Company's independent certified
public accountants and makes recommendations to the full Board on matters
concerning the Company's audits and the selection of independent certified
public accountants. The members of the Audit Committee are Patricia W. Becker
and Michael A. Ficaro, as chairperson.
The Compensation Committee, which held seven meetings during the fiscal
year ended December 31, 1997, reviews and makes recommendations to the Board of
Directors with respect to salaries, bonuses and other compensation of the
Company's executive officers. The members of the Compensation Committee are
Michael A. Ficaro and Patricia W. Becker, as chairperson.
Directors who are also employees of the Company do not receive any
compensation for their services as directors. Non-employee directors are paid
fees of $40,000 per year and $1,000 per Board meeting attended in person or
telephonically. The two non-employee directors of the Company have each received
five-year options to purchase 14,000 shares of the Common Stock of the Company,
exercisable at a price equal to the fair market value of the Common Stock on the
date of grant. No fee is payable for participation in Board committee meetings.
However, Ms. Becker as chairperson of the Company's Gaming Compliance Committee
(a non-Board committee) is paid an additional fee of $30,000 per year and
participates in all health insurance plans generally available to the Company's
employees. The Company reimburses each director for reasonable out-of-pocket
expenses incurred in his or her capacity as a member of the Board of Directors.
No payments are made for actions taken in writing.
-8-
<PAGE> 11
The Board of Directors held a total of seven meetings during the fiscal
year ended December 31, 1997. During such fiscal year, each director attended
100% of the total number of meetings of the Board and the committees on which he
or she served.
The Company has no nominating committee or committee performing similar
functions.
OTHER COMMITTEES
The Executive Committee (a non-Board committee), comprised of Michael
E. McPherson, Max L. Page and Philip D. Griffith, as chairperson, provides a
forum for interaction and discussion among its senior executives.
The Gaming Compliance Committee (a non-Board committee), comprised of
Cara L. Brown, Kathleen Bryant, Michael E. McPherson and Patricia W. Becker, as
chairperson, establishes procedures for and monitors compliance with gaming
regulations.
SECTION 16(A) BENEFICIAL OWNERSHIP COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's executive officers and directors and persons who own more than ten
percent of a registered class of the Company's equity securities (collectively
the "reporting persons") to file initial reports of ownership and changes in
ownership with the Securities and Exchange Commission and to furnish the Company
with copies of these reports. Based on the Company's review of the copies of
these reports and written representations received from reporting persons that
no reports were required from such persons, the Company has determined that the
following persons filed late reports for the fiscal year ending December 31,
1997.
Mr. Griffith filed a late Form 5, reporting three transactions which
should have been reported on Form 4 and two additional transactions. Mr.
McPherson filed a late Form 5, reflecting a late Form 3 filing (which would have
shown the existence of three grants of options to Mr. McPherson prior to his
becoming an officer) and two additional transactions. Mr. Page filed a late Form
3 relating to his election as a director in January 1998. Mr. Ficaro and Ms.
Becker each filed a late Form 5 reporting two transactions.
EXECUTIVE COMPENSATION
The following table sets forth a summary of the compensation paid by
the Company in the three fiscal years ended December 31, 1997, 1996 and 1995 to
the Company's Chief Executive Officer and each of its other most highly
compensated executive officers (collectively, "Named Executive Officers"). The
Named Executive Officers include (i) each person who served as Chief Executive
Officer during 1997 (one person), (ii) each person who (a) served as an
executive officer at December 31, 1997, (b) was among the four most highly paid
executive officers of the Company, not including the Chief Executive Officer,
during 1997 and (c) received over $100,000 in compensation in 1997 (one person),
(iii) up to two persons who would be included under clause (ii)
-9-
<PAGE> 12
above had they served as an executive officer at December 31, 1997 (two) and (v)
certain persons who served as executive officers of a subsidiary of the Company
(one person).
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION(1) COMPENSATION
---------------------- ------------
ALL
SECURITIES OTHER
FISCAL UNDERLYING COMPENSATION
NAME AND POSITION YEAR SALARY($) BONUS($) OPTIONS/(#) ($)(2)
----------------- ---- --------- -------- ----------- ------
<S> <C> <C> <C> <C>
Philip D. Griffith 1997 $510,008 - 100,000 114,448
Chairman, President & Chief 1996 465,000 - - 69,292
Executive Officer 1995 507,500 - 75,000 10,154
Michael E. McPherson (3) 1997 169,327 $7,500 19,000 3,206
Senior Vice President, 1996 128,077 15,000 - 1,714
Chief Financial Officer, 1995 125,000 - 21,854 1,424
Treasurer & Secretary
Paul H. Manske 1997 224,192 - 19,000 10,701
Senior Vice President 1996 195,000 2,500 - 10,938
Marketing 1995 195,000 - 7,500 7,513
Max L. Page 1997 207,308 - 9,000 9,975
Executive Vice President of 1996 200,000 5,000 - 7,009
FRI & General Manager of 1995 200,000 - 10,000 8,884
Fitzgeralds Reno
Fernando Bensuaski(4) 1997 200,353 - 50,000 20,834
1996 257,200 - 177
1995 73,315 - 52
</TABLE>
- ---------
(1) Amounts shown include cash compensation earned for the periods reported
whether paid or accrued in such periods.
(2) Amounts represent premiums for life insurance and long-term disability
policies, medical benefits and the Company's Profit Sharing and 401(k)
contributions. In fiscal 1997, the Company's Profit Sharing and 401(k)
contributions were $2,375, $1,862, $2,375 and $2,275 for Messrs.
Griffith, McPherson, Manske and Page, respectively. During 1997, the
Company paid $2,524, $2,829, $5,319 and $20,381 in medical benefits for
Messrs. Griffith, Manske, Page and Bensuaski, respectively. During 1997,
the Company paid $109,549 in premiums for split dollar, life insurance
and long-term disability policies for Mr. Griffith, and $1,344, $5,497,
$2,381 and $453 in premiums for life insurance and long-term disability
policies for Messrs. McPherson, Manske, Page and Bensuaski, respectively.
See Employment Agreements with Executive Officers and Key Employees.
(3) Mr. McPherson was elected Senior Vice President, Chief Financial Officer
and Treasurer of the Company on August 1, 1997, and was appointed
Secretary on September 8, 1997.
-10-
<PAGE> 13
(4) Mr. Bensuaski, formerly Executive Vice President and Chief Financial
Officer of the Company, resigned as an officer of the Company effective
September 7, 1997. Of the 50,000 stock options granted to Mr. Bensuaski,
16,668 expired unexercised on September 7, 1997 and the remaining 33,332
expired unexercised on June 30, 1998.
OPTION GRANTS
The following table sets forth, with respect to the Named Executive
Officers, information concerning the grant of options to purchase shares of the
Company's Common Stock during the fiscal year ended December 31, 1997. During
fiscal year 1997, there was a total of 321,000 new options granted, of which
147,000 options were granted to the Named Executive Officers. The Company has
never granted stock appreciation rights.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
---------------------------------------------------------------
POTENTIAL REALIZABLE
VALUE AT ASSUMED
NUMBER OF ANNUAL RATE OF STOCK
SECURITIES % OF TOTAL OPTIONS EXERCISE PRICE FOR APPRECIATION
UNDERLYING GRANTED TO EMPLOYEES OR BASE FOR OPTION TERM($)(1)
OPTIONS IN PRICE EXPIRATION ----------------------
NAME GRANTED(#) FISCAL YEAR ($/SH) DATE 5% 10%
---- ---------- ----------- ------ ---- -- ---
<S> <C> <C> <C> <C> <C> <C>
Philip D. Griffith 100,000 33.0% 1.10 12/31/00 127,339 146,410
Michael E. McPherson 19,000 6.3% 1.00 12/31/00 21,995 25,289
Paul H. Manske 19,000 6.3% 1.00 12/31/00 21,995 25,289
Max L. Page 9,000 3.0% 1.00 12/31/00 10,419 11,979
Fernando Bensuaski(2) - - - - - -
</TABLE>
- ---------
(1) The Company's stock is not publicly traded. Amounts shown represent the
potential value of granted options if the assumed annual rates of stock
appreciation are maintained over the 10-year terms of the granted
options. The assumed rates of appreciation are established by regulation
and are not intended to be a forecast of the Company's performance or to
represent management's expectations with respect to the appreciation, if
any, of the Common Stock.
(2) Mr. Bensuaski, formerly Executive President and Chief Financial Officer
of the Company, resigned as an officer of the Company, effective
September 7, 1997.
-11-
<PAGE> 14
OPTION EXERCISES AND HOLDINGS
The following table sets forth, with respect to the Named Executive
Officers, information concerning the exercise of options during the fiscal year
ended December 31, 1997 and the number of unexercised options held at December
31, 1997.
AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT IN-THE-MONEY OPTIONS AT FISCAL
SHARES FISCAL YEAR END (#) YEAR END($)(1)
ACQUIRED ON VALUE ---------------------- -------------------------------
NAME EXERCISE (#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ------------ ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Philip D. Griffith 0 0 83,333 91,667 0 0
Michael E. McPherson 0 0 24,853 16,001 0 0
Paul H. Manske 0 0 11,333 15,167 0 0
Max L. Page 0 0 9,666 9,334 0 0
Fernando Bensuaski (2) 0 0 33,332 0 0 0
</TABLE>
- ----------
(1) The exercise price of the unexercised options exceeds the assigned value
of the Common Stock. The Company's Common Stock is not publicly traded.
(2) Mr. Bensuaski, formerly Executive Vice President and Chief Financial
Officer of the Company, resigned as an officer of the Company effective
September 7, 1997. Of the 50,000 options granted to Mr. Bensuaski, 16,668
expired on September 7, 1997 and the remaining 33,332 expired unexercised
on June 30, 1998.
-12-
<PAGE> 15
OPTION REPRICING
The following table sets forth information, with respect to the Named
Executive Officers, related to the repricing of options held during the fiscal
year ended December 31, 1997. The gaming industry's aggressive environment
requires the Company to maintain a competitive stock option plan in order to
attract, motivate and retain key employees. In May 1997, the Company determined
that the Stock Option Plan was in jeopardy of not providing the necessary
incentives because key executive officers, directors and employees held stock
options with exercise prices that were significantly higher than what the
Company believed was the maximum fair market value of the Company's Common
Stock. Therefore, effective June 1, 1997, the Company reduced the exercise price
of all the then outstanding options, except those that the two controlling
stockholders held, from $4.50 per share to $1.00 per share to reflect what the
Company believed was the then maximum fair market value. The Company reduced the
exercise price of the options that the two controlling stockholders held from
$4.50 per share to $1.10 per share. The Company believes that this repricing was
in the best interests of the stockholders to minimize the risk of the loss of
valuable employees. The total number of options subject to the repricing was
362,000, of which 152,500 options were held by the Named Executive Officers.
TEN-YEAR OPTION REPRICINGS
<TABLE>
<CAPTION>
NUMBER OF LENGTH OF
SECURITIES ORIGINAL
UNDERLYING MARKET PRICE OF EXERCISE OPTION TERM
OPTIONS STOCK AT TIME OF PRICE AT TIME NEW REMAINING AT
REPRICED OR REPRICING OR OF REPRICING EXERCISE DATE OF
AMENDED AMENDMENT OR AMENDMENT PRICE REPRICING OR
NAME DATE (#) ($)(1) ($)(1) ($) AMENDMENT
---- ---- --- ------ ----- --- ---------
<S> <C> <C> <C> <C> <C> <C>
-
Philip D. Griffith 6/1/97 75,000 - 4.50 1.10 12/31/99
Michael E. McPherson 6/1/97 10,000 - 4.50 1.00 12/31/99
Paul H. Manske 6/1/97 7,500 - 4.50 1.00 12/31/99
Max L. Page 6/1/97 10,000 - 4.50 1.00 12/31/99
Fernando Bensuaski 6/1/97 50,000 - 4.50 1.00 12/31/99
</TABLE>
- ---------
(1) The Company's Common Stock is not publicly traded. Although the Company's
Common Stock was not publicly traded at the time the options were
repriced, the Company believes that the fair market value of the
Company's Common Stock was not in excess of $1.00 per share at June 1,
1997.
EMPLOYMENT AGREEMENTS WITH EXECUTIVE OFFICERS AND KEY EMPLOYEES
The Company has entered into employment agreements with each of Messrs.
Manske and McPherson, and Ms. Brown to serve in their present offices for terms
expiring February 28, 1999, December 31, 1999 and April 30, 1999, respectively.
Mr. Griffith had an employment agreement with the Company, which employment
agreement expired on June 30, 1998. The Company and Mr. Griffith are discussing
the terms of a new employment agreement and Mr. Griffith is currently
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<PAGE> 16
employed by the Company on a month-to-month basis, on the same terms as the
agreement that expired June 30, 1998. As of April 1, 1998, Messrs. Griffith,
Manske and McPherson, and Ms. Brown, receive salaries of $496,125, $250,000,
$225,000 and $100,000, respectively. Messrs. Manske's and McPherson's and Ms.
Brown's employment agreements generally provide for annual merit increases. The
employment agreements also provide that such persons will participate in the
Company's Executive Bonus Plan, health plan and any other benefit plan
established for selected officers of the Company and that, in the event of a
termination of employment without "good cause" (as defined in the agreements),
such persons will be entitled to any unpaid salary in a specified percentage
through the remainder of the term of their respective agreement. The Company
also entered into an employment agreement with Mr. Bensuaski, who resigned as an
officer of the Company effective September 7, 1997. The agreement with Mr.
Bensuaski provided for the Company to continue to pay annual premiums for
certain life insurance coverage through 1998.
Fitzgeralds Reno, Inc. ("FRI") has entered into an employment agreement
with Mr. Page, under which he was appointed Vice President of FRI for a term
expiring on December 31, 1999. As of April 1, 1998, Mr. Page receives a salary
of $225,000, participates in FRI's bonus plan and a health plan and may
participate in any other benefit plan established by FRI for its executives. FRI
also maintains a life insurance policy for the benefit of Mr. Page in an amount
of $500,000. Mr. Page is entitled to certain severance payments in the event of
a termination of employment by reasons of disability or death. His employment
agreement also includes a covenant not to compete for a casino license in Reno,
Sparks or downtown Las Vegas, Nevada or in Tunica, Mississippi.
EXECUTIVE BONUS PLAN
The Company has established an Executive Bonus Plan (the "Bonus Plan")
to provide the senior executive officers of the Company with a performance-based
compensation program. Effective January 1, 1998, the Company will set aside a
portion of its annual consolidated EBITDA, adjusted for extraordinary
non-recurring items that are deemed non-operational in nature ("Adjusted
EBITDA"), each year so long as Adjusted EBITDA for such year is at least $30
million. The set aside amount will start at 1.4% of Adjusted EBITDA at the $30
million level and increase by one-tenth of one percent for each $1 million of
Adjusted EBITDA above $30 million up to a limit of 3%. Prior to January 1, 1998,
the Bonus Plan was based upon EBITDA prior to any adjustments. No bonuses were
paid under the Bonus Plan during the fiscal year ended December 31, 1997. The
Compensation Committee will have full discretion concerning the payment of
executive bonuses.
In May of 1998, the Board of Directors and the Compensation Committee
approved the payment of bonuses to certain employees, including certain of the
Named Executive Officers. The bonuses aggregated a total of $425,000, of which
$238,000 was paid in May 1998 and the remainder of which is to be paid in August
1998.
-14-
<PAGE> 17
STOCK OPTIONS
On June 26, 1997, the Company adopted the Stock Option Incentive Plan
(the "Stock Option Plan") to replace its two previously adopted stock options
plans which had never become effective because they were adopted subject to
approvals which had not been obtained. The Stock Option Plan was approved by
stockholders on August 1, 1997. The Stock Option Plan was amended and restated
by the Board of Directors on (i) October 1, 1997, to permit a one-time grant of
options to certain former employees in substitution for options previously
granted to them and having substantially the same terms and conditions; (ii)
February 25, 1998, to eliminate the 100,000 share cap on the number of options
which may be granted to a single optionee during any calendar year; and (iii)
May 1, 1998, to extend the term of the options due to expire on June 30, 1998
for optionees employed by the Company or any of its subsidiaries on that date
until June 30, 1999, and to eliminate certain language concerning the treatment
of options in the event of a reorganization, merger or consolidation. The
following is a description of the Stock Option Plan.
The Stock Option Plan provides for the grant of options to purchase
Common Stock of the Company that are intended either to qualify as "incentive
stock options" within the meaning of Section 422 of the Internal Revenue Code of
1986, as amended (the "Code"), or not intended to qualify ("non-qualified stock
options"). All officers, directors, employees, consultants, advisers,
independent contractors and agents are eligible to receive options under the
Stock Option Plan, except that only employees may receive incentive stock
options. The maximum number of shares available for issuance under the Stock
Option Plan is 1,000,000.
In October 1997, the Board of Directors granted options to purchase
660,974 shares under the Stock Option Plan in full replacement of all previously
granted options then outstanding. All of such options were granted subject to
the optionee's agreement to the cancellation of all previously granted options.
The replacement options were for the same number of shares, with substantially
the same terms and conditions, as the then outstanding options. At December 31,
1997, there were 676,974 options outstanding under the Stock Option Plan.
The Stock Option Plan is administered by the Board of Directors or, in
its discretion by a committee of the Board appointed for that purpose (the
"Stock Option Plan Committee"), which, subject to the terms of the Stock Option
Plan, has the authority in its sole discretion to determine: (a) the individuals
to whom options shall be granted; (b) the time or times at which options may be
exercised; (c) the number of shares subject to each option, (d) the option price
and the duration of each option granted; and (e) all of the other terms and
conditions of options granted under the Stock Option Plan.
The exercise price of incentive options granted under the Stock Option
Plan must be at least equal to the fair market value of the shares on the date
of grant (110% of the fair market value in the case of participants who own
shares possessing more than 10% of the total combined voting power of all
classes of stock of the Company) and may not have a term in excess of 10 years
from the date of grant (five years in the case of participants who own shares
possessing more than 10% of the combined voting power all classes of stock of
the Company). In no event, may the aggregate fair market value (determined at
the time the option is granted) of the shares with respect to which
-15-
<PAGE> 18
incentive stock options (granted under the Stock Option Plan and all other plans
of the Company or any of its subsidiaries) are exercisable for the first time by
an optionee in any calendar year exceed $100,000.
Options granted under the Stock Option Plan are not transferable other
than by will or the laws of descent and distribution. Unless otherwise
determined by the Board of Directors or the Stock Option Plan Committee, all
stock options granted under the Stock Option Plan terminate (i) immediately upon
the optionee's termination of employment (or other relationship) with the
Company for cause, (ii) one year after the optionee's termination of employment
(or other relationship) by reason of death or permanent disability, and (iii) 90
days after the optionee's termination of employment (or other relationship) for
any other reason (unless the optionee has resumed a continuing relationship with
the Company), but in no case later than the scheduled expiration date of the
option. Unless otherwise determined by the Board of Directors or Stock Option
Plan Committee, the number of shares with respect to which an option may be
exercised following the optionee's termination of employment or other
relationship is limited to that number of shares which could have been purchased
pursuant to the option had the option been exercised by the optionee on the date
of such termination.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee of the Board of Directors consists of two
non-employee directors, Michael A. Ficaro and Patricia W. Becker, as
chairperson. Neither Mr. Ficaro nor Ms. Becker was an officer of the Company or
any of its subsidiaries during or prior to 1997, has no relationship requiring
disclosure under Item 404 of Regulation S-K nor has an "interlocking"
relationship with Company executives.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Company's policies and procedures relating to the compensation of
the Named Executive Officers during the fiscal year ended December 31, 1997 and
the respective levels and forms of their compensation, including awards made
pursuant to the Company's Stock Option Plan and the Bonus Plan, is determined by
the Compensation Committee of the Board.
COMPENSATION POLICIES
The Company's compensation of executive officers, including the Chief
Executive Officer, consists principally of the following components: (i) base
salary, (ii) performance bonuses, and (iii) stock options.
The Company's compensation policies for its executive officers,
including its Chief Executive Officer, are intended to further the interests of
the Company and its stockholders by encouraging the growth of its business and
its earnings on a stable and consistent basis through securing, retaining and
motivating management employees of high caliber who possess skills useful to the
development and growth of the Company.
-16-
<PAGE> 19
The compensation of the Company's executive officers, including its
Chief Executive Officer, during the fiscal year ended December 31, 1997 reflects
the continuing view of its Board of Directors that the Company's executive
officers work together as a team, each contributing to the Company in his or her
own area of expertise to achieve a common goal.
BASE SALARY
The base salary paid to each of the Company's Named Executive Officers,
including the Chief Executive Officer, was established by the terms of an
employment agreement discussed under Executive Compensation Employment
Agreements with Executive Officers and Key Employees, and the base salary of
each of the Company's other executive officers is influenced significantly by
the need to attract and retain management employees with high levels of
expertise. With the tremendous competition in jurisdictions where gaming is
permitted, the Company competes with other companies which often have greater
resources than the Company or locations that officers may consider more
desirable for relocation than the Company's for a limited pool of experienced
and skilled executive officers. As employment opportunities have increased in
the gaming industry, the demand for executive officers has exceeded the supply
of available personnel. Potential executive officers are not only being sought
by an increased number of companies, but also are seeking opportunities in which
they may capitalize upon the entrepreneurial nature of the gaming industry to
establish companies.
The Compensation Committee has continued to review publicly available
information in the casino industry to determine the level of base salary
necessary to remain competitive and accomplish the goal of attracting and
retaining high caliber executives. Mr. Griffith, the Company's Chief Executive
Officer, Mr. Bensuaski who served as the Company's Chief Financial Officer
during the period from January 1, 1997 to August 1, 1997 and Mr. McPherson, who
served in such capacity for the balance of the fiscal year ended December 31,
1997, were compensated during the fiscal year 1997 in accordance with existing
employment agreements described under Executive Compensation - Employment
Agreements with Executive Officers and Key Employees. During the fiscal year
ended December 31, 1997, the Compensation Committee believes that the base
salary paid to its senior executives, including the Chief Executive Officer, was
in the middle range of compensation for comparable positions in the casino
industry.
STOCK OPTIONS
The Company believes that the granting of stock options encourages its
executive officers to achieve long-term goals and objectives that are consistent
with results that benefit the Company's stockholders. In addition, in view of
the increased entrepreneurial opportunities available to individual executives
in the casino industry, the Company believes that providing the opportunity to
acquire an equity stake in the Company will be increasingly important in
attracting and retaining key executives. In keeping with this policy of
providing long-term incentives, the Company granted a total of 147,000 stock
options to the Named Executive Officers during the fiscal year ended December
31, 1997. See Executive Compensation - Stock Options.
-17-
<PAGE> 20
REPRICING OF STOCK OPTIONS
The gaming industry's aggressive environment requires the Company to
maintain a competitive stock option plan in order to attract, motivate and
retain key employees. In May 1997, the Company determined that the Stock Option
Plan was in jeopardy of not providing the necessary incentives because key
executive officers, directors and employees held stock options with exercise
prices that were significantly higher than what the Company believed was the
maximum fair market value of the Company's Common Stock. Therefore, effective
June 1, 1997, the Company reduced the exercise price of all the then outstanding
options, except those that the two controlling stockholders held, from $4.50 per
share to $1.00 per share to reflect what the Company believed was the then
maximum fair market value. The Company reduced the exercise price of the options
that the two controlling stockholders held from $4.50 per share to $1.10 per
share. The Company believes that this repricing was in the best interests of the
stockholders to minimize the risk of the loss of valuable employees.
PERFORMANCE BONUSES
The Company established the Bonus Plan to provide the senior executive
officers of the Company with a performance-based compensation program. Effective
January 1, 1998, the Company will set aside a portion of its Adjusted EBITDA,
each year so long as Adjusted EBITDA for such year is at least $30 million. The
set aside amount will start at 1.4% of Adjusted EBITDA at the $30 million level
and increase by one-tenth of one percent for each $1 million of Adjusted EBITDA
above $30 million up to a limit of 3%. Prior to January 1, 1998, the Bonus Plan
was based upon EBITDA prior to any adjustments. No bonuses were paid under the
Bonus Plan during the fiscal year ended December 31, 1997. The Compensation
Committee will have full discretion concerning the payment of executive bonuses.
In May of 1998, the Board of Directors and the Compensation Committee
approved the payment of bonuses to certain employees, including certain of the
Named Executive Officers. The bonuses aggregated a total of $425,000, of which
$238,000 was paid in May 1998 and the remainder of which is to be paid in August
1998.
THE COMPENSATION COMMITTEE
PATRICIA W. BECKER, CHAIRPERSON
MICHAEL A. FICARO
-18-
<PAGE> 21
PERFORMANCE GRAPH
The graph set forth below is provided solely to comply with the
provisions of Item 8 of Schedule 14A under the Securities Exchange Act of 1934,
as amended, and Item 402(l) of Regulation S-K under the Securities Act of 1933,
as amended. The Company's Common Stock is not presently listed for trading on
any securities exchange and the Company has no plans to list the Common Stock on
any securities exchange. The Company has not performed, and does not intend to
perform, an appraisal or valuation of its Common Stock, and the Company has not
obtained, and does not intend to obtain, any appraisal or valuation of its
Common Stock. Additionally, the Company makes no representations, and explicitly
disclaims any representations, concerning the presentation of the information
concerning the cumulative total stockholder return with respect to the Company's
Common Stock. Accordingly, the information presented in the graph concerning the
cumulative total stockholder return with respect to the Company's Common Stock
should not be considered in making any investment decision with respect to the
Company and should not be considered or relied upon as indicative or
representative of the Company's performance.
The graph presents a comparison of the Company's stock performance with
the broader base indexes indicated therein. The graph assumes $100 invested on
December 31, 1995 in the Company's Common Stock and $100 invested at that time
in each of the indexes shown. The comparison assumes that all dividends, if any,
are reinvested.
-19-
<PAGE> 22
PERFORMANCE GRAPH
<TABLE>
<CAPTION>
1995 1996 1997
------ ------ ------
<S> <C> <C> <C>
Fitzgeralds Gaming Corp. $100.00 $ 22.22 $ 22.22
SBI Small Cap Gaming Index 100.00 108.22 117.10
SIC Code 7922-7999 100.00 106.28 114.81
S&P 500 Index 100.00 120.26 157.55
</TABLE>
(1) Fitzgeralds Gaming Corporation was formed on November 10, 1994, but
registered its Common Stock pursuant to Section 13(g) and became subject
to the reporting requirements of the Securities Exchange Act of 1934 on
December 13, 1995.
(2) SBI Small Cap Gaming Index refers to the average of small cap gaming
companies as published by Salomon Smith Barney.
(3) NASDAQ SIC 79XX refers to the published index covering companies bearing
Standard Industrial Classification Codes 7900-7999.
(4) The Company has elected to replace the NASDAQ SIC 79XX index with the S&P
500 Index because the Company believes that the S&P 500 Index is a more
familiar and easily understood index to investors than the NASDAQ SIC
79XX index.
CERTAIN TRANSACTIONS
In June 1987, Fitzgeralds Reno, Inc. ("FRI") loaned $3,250,000 to its
then stockholders (the "Stockholders"), including Messrs. Griffith and Page.
Such funds were in turn loaned to Lincoln Partners Corporation ("LPC"), the
general partner of Fitzgeralds Las Vegas Limited Partnership ("FLVLP"), to fund
the purchase of Fitzgeralds Las Vegas by FLVLP. The transactions were
-20-
<PAGE> 23
structured for tax reasons associated with FRI's then status as an S corporation
and FRI continues to have an obligation to indemnify Messrs. Griffith and Page
for certain potential tax liabilities arising from such transaction. At that
time, FRI and LPC had, and they continue to have, directly or indirectly,
numerous stockholders in common. The Company has no interest in LPC. The loans
made by FRI were repayable pursuant to promissory notes (the "Notes") having
identical terms. Such Notes, which were amended in March 1992, bore interest at
6.69% per annum and were payable interest only on each anniversary date thereof
until June 1997, on which date the Notes matured and were payable in full with
all accrued and unpaid interest. The Stockholders failed to pay the sums due
under their respective Notes, aggregating $1,807,255 in principal amount on the
June 30, 1997 due date. All amounts owed to FRI by the Stockholders under the
Notes were paid by November 10, 1997.
A fee is payable to executive officers of the Company, not to exceed
$250,000 per year as to any such individual, who agrees to provide any requested
guarantee of Company borrowings and letters of credit. Such fee which is set by
the Board of Directors on a case-by-case basis, is generally equal to 2% or 3%
of the amount guaranteed or the letter of credit. Mr. Griffith has guaranteed
letters of credit and certain Company borrowings. For the period January 1, 1997
through July 31, 1998, Mr. Griffith has guaranteed borrowings, aggregating at
any one time a maximum of $5,638,889, for which he received fees of $117,138 and
has guaranteed letters of credit and surety bonds, aggregating at any one time a
maximum of $981,000, for which he received fees of $31,490. In connection with
the proposed settlement of the Harolds Club claims, Mr. Griffith has also agreed
to provide a guarantee of certain promissory notes for which he will receive the
customary fee.
All future transactions between the Company and its affiliates in
excess of $1.0 million, other than transactions entered into in the ordinary
course of business on terms generally made available to third parties, will be
reviewed and passed upon by a majority of disinterested directors.
RATIFICATION OF SELECTION OF INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors has selected Deloitte & Touche LLP as the
Company's independent certified public accountants for the fiscal year ending
December 31, 1998. Although not required by law or otherwise, the selection is
being submitted to the stockholders of the Company as a matter of corporate
policy for their approval. Deloitte & Touche LLP, an international firm of
independent certified public accountants, has audited the financial statements
of the Company since 1994.
It is anticipated that a representative of Deloitte & Touche LLP will
be present at the meeting, will be given the opportunity to make a statement,
and is expected to be available to respond to appropriate questions.
THE COMPANY'S BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THIS PROPOSAL.
-21-
<PAGE> 24
PROPOSALS OF STOCKHOLDERS FOR THE 1999 ANNUAL MEETING
Proposals of stockholders intended to be presented at the 1999 Annual
Meeting of Stockholders must be received by the Secretary of the Company at the
Company's principal executive offices on or before April 29, 1999 to be
considered for inclusion in management's proxy statement and form of proxy for
that meeting. A proposal which does not comply with the applicable requirements
of Rule 14(a)-8 under the Securities Exchange Act of 1934 will not be included
in management's proxy soliciting material for the 1999 Annual Meeting of
Stockholders.
OTHER MATTERS
As of the date hereof, management does not intend to present, not has
it been informed that other persons intend to present, any matters for action at
the meeting, other than those specifically referred to herein. If, however, any
other matters should properly come before the meeting, it is the intention of
the persons named in the proxies to vote the shares represented thereby in
accordance with their best judgment on such matters.
By Order of the Board of Directors
Philip D. Griffith
Chairman of the Board, President
and Chief Executive Officer
Las Vegas, Nevada
August 3, 1998
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<PAGE> 25
REVOCABLE PROXY
FITZGERALDS GAMING CORPORATION
ANNUAL MEETING OF STOCKHOLDERS - AUGUST 27, 1998
The undersigned stockholder(s) of Fitzgeralds Gaming Corporation (the
"Company") hereby nominates, constitutes and appoints Philip D. Griffith and
Michael E. McPherson, or either of them, the attorney, agent and proxy of the
undersigned, with full power of substitution, to vote all stock of Fitzgeralds
Gaming Corporation which the undersigned is entitled to vote at the Annual
Meeting of Stockholders of the Company to be held in the twelfth floor meeting
rooms at the corporate offices of the Company, 301 Fremont Street, Las Vegas,
Nevada, at 11:00 a.m., local time, on August 27, 1998, and at any adjournments
or postponements thereof, with respect to the matters described in the
accompanying Proxy Statement, and in their discretion, on such other matters
which may properly come before the meeting, as fully and with the same force and
effect as the undersigned might or could do if personally present thereat, as
follows:
1. Election of Directors:
[ ] AUTHORITY GIVEN to vote for the nominees listed below
(except as indicated to the contrary below).
[ ] WITHHOLD AUTHORITY to vote for the nominees.
(INSTRUCTIONS: To withhold authority to vote for any nominee, strike a line
through such nominee's name below.)
- --------------------------------------------------------------------------------
Philip D. Griffith, Michael A. Ficaro, Patricia W. Becker and Max L. Page
2. Proposal to ratify the appointment of Deloitte & Touche LLP as the
Company's independent certified public accountants for fiscal year 1998:
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. To transact such other business as may properly come before the Meeting and
at any adjournments or postponements thereof. Management presently knows of
no other business to be presented by or on behalf of the Company or its
Board of Directors at the Meeting.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
AND MAY BE REVOKED PRIOR TO ITS EXERCISE.
PLEASE SIGN AND DATE ON REVERSE SIDE.
<PAGE> 26
THE BOARD OF DIRECTORS RECOMMENDS A VOTE OF "AUTHORITY GIVEN" FOR THE
ELECTION OF DIRECTORS AND A VOTE "FOR" THE RATIFICATION OF THE APPOINTMENT OF
DELOITTE & TOUCHE LLP AS THE COMPANY'S INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
FOR FISCAL YEAR 1998. THE PROXY CONFERS AUTHORITY TO AND SHALL BE VOTED
"AUTHORITY GIVEN" FOR THE ELECTION OF DIRECTORS AND "FOR" THE RATIFICATION OF
DELOITTE & TOUCHE AS THE COMPANY'S INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
UNLESS OTHER INSTRUCTIONS ARE INDICATED, IN WHICH CASE THE PROXY SHALL BE VOTED
IN ACCORDANCE WITH SUCH INSTRUCTIONS.
IF ANY OTHER BUSINESS IS PRESENTED AT THE MEETING, THIS PROXY SHALL BE
VOTED IN ACCORDANCE WITH THE RECOMMENDATIONS OF THE BOARD OF DIRECTORS.
Dated:
-----------------------
-------------------------------------------------
(Please print name)
-------------------------------------------------
(Signature of Stockholder)
-------------------------------------------------
(Please print name)
-------------------------------------------------
(Signature of Stockholder)
(Please date this Proxy and sign your name as it
appears on your stock certificates. Executors,
administrators, trustees, etc., should give their
full titles. All joint owners should sign.)
I [We] do do not expect to attend the meeting.
NUMBER OF PERSONS:
----------------
