COAST CASINOS, INC. |
1. | To elect four Class I directors to serve until the 2006 Annual Meeting of Stockholders and until their successors are elected and qualified; and |
2. | To transact any other business that properly comes before the Annual Meeting and or adjournment or postponement thereof. |
1. | To elect four Class I directors for three-year terms. |
The stockholders also will transact any other business that properly comes before the meeting. WHO IS ENTITLED TO VOTE? The record date for the meeting is April 4, 2003. Only holders of record of our common stock at the close of business on that date are entitled to vote at and attend the Annual Meeting. Each outstanding share of common stock is entitled to one vote on all matters that come before the meeting. At the close of business on the record date there were 1,461,177.94 shares of common stock, outstanding. You may also have another person attending the meeting represent you by signing a Proxy designating that person to act on your behalf. HOW MANY SHARES MUST BE PRESENT TO HOLD THE MEETING? The holders of a majority of the shares of our common stock outstanding on the record date, in person or by a valid Proxy, must be present at the meeting for any business to be conducted. Proxies received but marked as abstentions or broker non-votes will be counted as shares that are present and entitled to vote for purposes of determining the presence of a quorum. WHAT IF A QUORUM IS NOT PRESENT AT THE MEETING? If a quorum is not present at the scheduled time of the Annual Meeting, we may adjourn the Annual Meeting, either with or without a vote of the stockholders. If we propose to have the stockholders vote whether to adjourn the meeting, the people named in the enclosed proxy will vote all shares of our common stock for which they have voting authority in favor of the adjournment. We also may adjourn the meeting if for any reason we believe that additional time should be allowed for the solicitation of proxies. An adjournment will have no effect on the business that may be conducted at the Annual Meeting. HOW DO I VOTE? YOU MAY VOTE BY MAIL. If you properly complete and sign the enclosed proxy and return it in the enclosed envelope prior to the Annual Meeting, it will be voted in accordance with your instructions. The enclosed envelope requires no additional postage if mailed in the United States. YOU MAY VOTE IN PERSON. If you are a stockholder of record as of the record date and attend the Annual Meeting, you may deliver your completed proxy in person or vote in person by ballot at the meeting. 4 CAN I CHANGE MY VOTE AFTER I SUBMIT MY PROXY? Yes, you may revoke your proxy at any time before it is voted at the Annual Meeting by signing and returning another proxy with a later date; or giving written notice of revocation to the Company’s Secretary prior to or at the Annual Meeting. Your attendance at the meeting will not have the effect of revoking your proxy unless you give written notice of revocation to the Corporate Secretary of the Company before the polls are closed. Any written notice revoking a proxy should be sent to our Corporate Secretary at 4500 West Tropicana Ave., Las Vegas, Nevada 89103 and must be received before the polls are closed. WHO WILL COUNT THE VOTES? The votes will be tabulated and certified by our Chief Financial Officer, who will serve as the inspector of election. HOW DOES THE BOARD OF DIRECTORS RECOMMEND I VOTE ON THE PROPOSALS? Your Board recommends that you vote for election of the four nominees to the Board of Directors. WHAT IF I DO NOT SPECIFY HOW MY SHARES ARE TO BE VOTED? If you send in a signed proxy but do not give any voting instructions, your shares will be voted FOR all proposals listed on the proxy. Proxies received but marked as abstensions or broker non-votes will be counted as shares that are present and entitiled to vote for purposes of determining the presence of a quorum. WILL ANY OTHER BUSINESS BE CONDUCTED AT THE MEETING? Our Board of Directors does not know of any other business that will be presented at the Annual Meeting. If any other proposal properly comes up for a vote at the Annual Meeting, however, the proxy holders will vote your shares in accordance with their best judgment. WHAT ARE MY VOTING OPTIONS ON EACH PROPOSAL? You have three choices on the proposal to elect the four nominees to the Board of Directors. By checking the appropriate box on your proxy, you may: |
(a) | vote for all of the director nominees as a group; |
(b) | withhold authority to vote for all director nominees as a group; or |
(c) | vote for all director nominees as a group except those nominees you identify by striking their name out on the proxy. |
HOW MANY VOTES ARE REQUIRED TO APPROVE THE PROPOSALS? Nominees receiving the highest number of affirmative votes cast, up to the number of directors to be elected, are elected. WHAT HAPPENS IF A NOMINEE FOR DIRECTOR IS UNABLE TO STAND FOR ELECTION? If a nominee is unable to stand for election, our Board of Directors may either reduce the number of directors to be elected or select a substitute nominee. If a substitute nominee is selected, the proxy holders will vote your shares for the substitute nominee, unless you have withheld authority. 5 ELECTION OF DIRECTORSThe Company’s Amended Articles of Incorporation and Bylaws provide for a Board of Directors of not less than three nor more than thirteen directors and authorizes the board periodically to set the number of directors within that range by a majority vote. The number of directors currently set by the Board is twelve. The Company’s Amended Articles of Incorporation and Bylaws also divide our Board of Directors into three classes with staggered terms. Each class of directors is elected for a term of three years. Four Class I directors are to be elected at the 2003 Annual Meeting for a three-year term ending in 2006, and until their successors are duly elected and qualified. The Board has nominated the following individuals for election to Class I positions with their term in office expiring at the Annual Meeting to be held in 2006: |
o | Michael Gaughan; |
o | Gage Parrish; |
o | Harlan Braaten; and |
o | Clyde Turner. |
Nominees receiving the highest number of affirmative votes cast, up to the number of the directors to be elected, are elected. The enclosed proxy, unless indicated to the contrary, will be voted for the Board’s nominees. Under the Company’s Bylaws, in order to be effective, nominations by a stockholder of a candidate for election as a director must be submitted to the Secretary of the Company not later than sixty days in advance of the Annual Meeting. Any such notice of nomination must set forth: (i) the name, age, business address and residence address of each nominee proposed in such notice, (ii) the principal occupation or employment of each such nominee, (iii) the number of shares of capital stock of the Company beneficially owned by each such nominee and (iv) such other information concerning each such nominee as would be required under the rules and regulations of the Securities and Exchange Commission (“SEC”) in a proxy statement soliciting proxies for the election of such nominees. Such notice must also include a written consent to serve as a director, if elected, executed by each such nominee. THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE “FOR” THE NOMINEES LISTED ABOVE. 6 DIRECTORS AND EXECUTIVE OFFICERSThe following tables set forth the names and ages of the directors and executive officers of the Company, their respective positions and the expiration dates of their respective terms as of April 8, 2003. Directors and Executive Officers |
Name | Age | Position(s) Held | Term Expires | ||||
---|---|---|---|---|---|---|---|
Nominees for Reelection | |||||||
Michael J. Gaughan | 60 | Chairman of the Board and Chief Executive Officer | 2003 | ||||
Harlan D. Braaten | 52 | Director, President and Chief Operating Officer | 2003 | ||||
Gage Parrish | 49 | Director, Vice President, Chief Financial Officer, Assistant Treasurer and Assistant Secretary | 2003 | ||||
Clyde T. Turner | 65 | Director | 2003 | ||||
Other Directors | |||||||
F. Michael Corrigan | 67 | Director | 2004 | ||||
Charles Silverman | 70 | Director | 2004 | ||||
Joseph Blasco | 59 | Director | 2004 | ||||
Thomas Girardi | 63 | Director | 2004 | ||||
Tito Tiberti | 57 | Director and Secretary | 2005 | ||||
Jerry Herbst | 65 | Director and Treasurer | 2005 | ||||
Franklin Toti | 64 | Director and Vice President of Casino Operations | 2005 | ||||
Peter Thomas | 53 | Director | 2005 |
7 Michael J. Gaughan. Mr. Gaughan has been a director of the Company since its formation in September 1995 and is the Chairman of the Board and Chief Executive Officer of the Company. His current term as a director expires in 2003. He is also a director and Chairman of the Board and Chief Executive Officer of Coast Hotels and Casinos, Inc. (“Coast Hotels”). Mr. Gaughan was a general partner of the Barbary Coast Partnership from its inception in 1979 until January 1, 1996, the effective date of the reorganization in which the Barbary Coast Partnership and the Gold Coast Partnership consolidated with Coast Casinos and Coast Hotels (the “Reorganization”). Mr. Gaughan served as the managing general partner of the Gold Coast Partnership from its inception in December 1986 until the effective date of the Reorganization. Mr. Gaughan and Mr. Herbst were the sole stockholders of Gaughan-Herbst, Inc., which was the sole corporate general partner of the Gold Coast Partnership prior to the Reorganization. Mr. Gaughan has been involved in the gaming industry since 1960 and has been licensed as a casino operator since 1967. Harlan D. Braaten. Mr. Braaten joined the Company as the President, Chief Financial Officer and a director in October 1995, and was appointed Chief Operating Officer in February 1996. His current term as a director expires in 2003. Mr. Braaten is also the President and Chief Operating Officer of Coast Hotels. Prior to joining the Company, Mr. Braaten was employed in various capacities, including serving as a senior vice president, and chief financial officer of Rio Hotel and Casino, Inc. in Las Vegas from February 1991 to September 1995. From March 1989 to February 1991, Mr. Braaten was vice president, finance of MGM/Marina Hotel and Casino in Las Vegas, Nevada. Prior thereto, from November 1983 to March 1989, Mr. Braaten was property controller for Harrah’s in Reno, Nevada. Mr. Braaten has over 24 years of experience in the Nevada gaming industry. Gage Parrish. Mr. Parrish was named Vice President, Finance and a director of the Company and Coast Hotels in October 1995 and was promoted to Chief Financial Officer in February 1996. He currently is also an Assistant Treasurer and Assistant Secretary. His current term as a director of the Company expires in 2003. From 1986 until the Reorganization, he was the Controller and Chief Financial Officer of the Gold Coast Partnership. From 1981 to 1986, Mr. Parrish served as Assistant Controller of the Barbary Coast Partnership. Mr. Parrish is a certified public accountant and has more than 23 years of experience in the gaming industry. Clyde T. Turner.Mr. Turner was appointed as a director of the Company and Coast Hotels effective as of August 12, 2002. His current term as a director of the Company expires in 2003. Since 1992, Mr. Turner has been Chairman and Chief Executive Officer of Turner Investments, Ltd. and a number of special purpose real estate development companies known as the Spectrum Companies. He has been a director of Sierra Pacific Resources since 2001. Mr. Turner is a former member of the Nevada Gaming Commission. His previous positions in the gaming industry include Chairman and Chief Executive Officer of Circus Circus Enterprises, Inc. (now Mandalay Bay Group) until his retirement from those positions in 1998, Executive Vice President, Chief Financial Officer and Director of Golden Nugget, Inc./Mirage Casinos, Inc., and Director and Executive Committee member of the American Gaming Association. He is a member of the Audit Committee of the Board. 8 F. Michael Corrigan. Mr. Corrigan has been a director of the Company and Coast Hotels since December 1996. His current term as a director of the Company expires in 2004. Since July 1989, Mr. Corrigan has served as the chief executive officer of Corrigan Investments, Inc., which owns and manages real estate in Nevada and Arizona. In addition, Mr. Corrigan is the Chief Executive Officer of Corstan, Inc., a mortgage banking company, and was previously the owner, President and Chief Operating Officer of Stanwell Mortgage, a Las Vegas mortgage company. He is a member of the Audit Committee of the Board. Charles Silverman. Mr. Silverman has been a director of the Company and Coast Hotels since March 1996. His current term as a director of the Company expires in 2004. Mr. Silverman is the President and sole stockholder of Yates-Silverman, Inc., which specializes in developing theme-oriented interiors and exteriors and is a leading designer of hotels and casinos. Completed projects of Yates-Silverman, Inc. include New York-New York, Excalibur, Circus Circus, Luxor, the Trump Taj Mahal, Trump Castle and Atlantic City Showboat. Yates-Silverman, Inc. also served as the principal designer for The Orleans and the Suncoast. Mr. Silverman has served as the president of Yates-Silverman, Inc. since its inception in 1971. He is a member of the Compensation Committee of the Board. Joseph A. Blasco. Mr. Blasco has been a director of the Company and Coast Hotels since December 1996. His current term as a director of the Company expires in 2004. Since 1984, Mr. Blasco has been a partner in the real estate development partnership that developed the Spanish Trail community in Las Vegas, a project that includes over 1,200 homes, a 27-hole golf course and a country club. Since 1994, Mr. Blasco has been the Managing Partner of United Realty Investments and Tropicana Trail L.P., real estate and management companies in Las Vegas that own and manage rental units and office buildings. He is a member of the Audit and Compensation Committees of the Board. Thomas V. Girardi.Mr. Girardi was appointed as a director of the Company and Coast Hotels effective as of August 12, 2002. His current term as a director of the Company expires in 2004. He is currently a partner in the Los Angeles law firm of Girardi and Keese and has been practicing law since 1965, specializing in medical malpractice, product liability law, toxic torts and bad faith insurance cases. Mr. Girardi also is a member of the Board of Directors of Spectrum Medical Services and Supergen. He is a member of the Compensation Committee of the Board. J. Tito Tiberti. Mr. Tiberti has been a director and Secretary of the Company and Coast Hotels since their formation in September 1995. His current term as a director expires in 2005. Mr. Tiberti is the president, a director and a stockholder of, and together with his immediate family, controls J. A. Tiberti Construction Company, a construction company which served as the general contractor for the construction of The Orleans and the Suncoast and the expansions and remodels at The Orleans, the Gold Coast and the Suncoast. He has also served as managing general partner of The Tiberti Company, a real estate rental and development company, since 1971. The Tiberti Company is the lessor of the real property site for The Orleans. Mr. Tiberti has been involved in the gaming industry for 24 years and was a general partner of the Barbary Coast Partnership prior to the Reorganization. 9 Jerry Herbst. Mr. Herbst has been a director, Treasurer and Assistant Secretary of the Company and Coast Hotels since their formation in September 1995. His current term as a director of the Company expires in 2005. Mr. Herbst has been with the Terrible Herbst Oil Company, an owner and operator of gas stations and car washes, since 1959 and is currently the President and Chairman of the Board. Mr. Herbst and Mr. Gaughan were the sole stockholders of Gaughan-Herbst, Inc., which was the sole corporate general partner of the Gold Coast Partnership prior to the Reorganization. Mr. Herbst has served as a member of the board of directors of Sierra Pacific Resources and its predecessors since 1990 and of Edelbrock Corporation since 1994. Franklin Toti.Mr. Toti has been a director of the Company and Coast Hotels since October 1998. His current term as a director of the Company expires in 2005. He has been Vice President of Casino Operations for the Company and Coast Hotels since January 1, 1996. Mr. Toti was a general partner and Casino Manager of the Barbary Coast Partnership from its inception in 1979 until the Reorganization. Mr. Toti has more than 41 years of experience in the gaming industry. Peter M. Thomas.Mr. Thomas was appointed as a director of the Company and Coast Hotels effective as of August 12, 2002. His current term as a director of the Company expires in 2005. Mr. Thomas has been the Managing Member of Thomas & Mack Co. Limited Liability Company, a commercial real estate development and management company for more than the last five years. Mr. Thomas served on the Board of Directors of Rio Suite Hotel and Casino, Inc. fom 1995 through 1998. Mr. Thomas previously served as President and Chief Operating Officer of Bank of America, Nevada and, prior to the acquisition of Valley Capital Corporation by Bank of America, the President and Chief Operating Officer of Valley Bank of Nevada. The Board of Directors and Committees to the BoardThe Board of Directors held nine meetings during 2002. Six were held with a nine member Board and three were held with a twelve member Board. During the year, each director, except Mr. Girardi, attended at least 75% of the number of meetings of the Board on which he served while a member thereof. The Board of Directors has two standing committees: the Audit Committee, and the Compensation Committee. Each of the members of the committees, except Mr. Blasco, attended at least 75 % of the number of meetings of the Committee on which he served while a member, thereof. The Audit Committee consists entirely of directors who are not employees of the Company or Coast Hotels. Mr. Corrigan and Mr. Blasco were the members of the committee through September 2002. In October 2002 Mr. Turner and Mr. Thomas joined the Audit Committee. The Audit Committee held eight meetings during 2002. The purpose of the Audit Committee is to assist the Board of Directors in its general oversight of the Company’s financial reporting, internal control and audit functions. 10 The Compensation Committee consisted of Messrs. Corrigan, Silverman and Blasco through September 2002. In October 2002, Mr. Girardi replaced Mr. Corrigan as a member of the Compensation Committee. The Compensation Committee held three meetings during 2002. No member of the Committee is a former or current officer or employee of the Company or any of its subsidiaries. The functions performed by the Compensation Committee include oversight of executive compensation and review of the Company’s overall compensation programs. Compensation of DirectorsDirectors who are not employees of the Company or any of our subsidiaries earn an annual fee of $24,000. Members of the Audit Committee also earn $1,000 for each meeting that they attend. Directors are reimbursed for expenses reasonably incurred in connection with their service on the Board. EXECUTIVE COMPENSATION AND OTHER INFORMATIONExecutive CompensationThe following table sets forth all compensation earned by or paid by the Company during 2000, 2001 and 2002 to each executive officer (the “Named Executive Officers”) whose compensation exceeded $100,000 in all capacities in which they served. Summary Compensation Table |
Annual Compensation | All Other | |||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Name and Principal Position | Year | Salary | Bonus | Compensation(1) | ||||||||||
Michael J. Gaughan | 2002 | $ | 347,000 | $ | -- | $ | 5,954 | |||||||
Chairman of the Board and Chief | 2001 | $ | 300,000 | $ | -- | $ | 4,234 | |||||||
Executive Officer of Coast Casinos | 2000 | $ | 300,000 | $ | -- | $ | 4,361 | |||||||
Harlan D. Braaten | 2002 | $ | 333,000 | $ | 150,000 | $ | 5,396 | |||||||
President and Chief Operating | 2001 | $ | 325,000 | $ | 162,500 | $ | 2,642 | |||||||
Officer of Coast Casinos | 2000 | $ | 300,000 | $ | 150,000 | $ | 4,361 | |||||||
Gage Parrish | 2002 | $ | 260,000 | $ | 25,000 | $ | 5,810 | |||||||
Vice President, Chief Financial Officer | 2001 | $ | 250,000 | $ | 25,000 | $ | 3,438 | |||||||
and Asst. Secretary of Coast Casinos | 2000 | $ | 225,000 | $ | -- | $ | 4,361 |
_________________ |
(1) | The amounts reflect matching contributions paid to our 401(k) Profit Sharing Plan and Trust |
Name(1) | Number Of Shares | Percent | ||||
---|---|---|---|---|---|---|
Michael J. Gaughan | 453,928 | .97 | 31 | .1% | ||
Jerry Herbst | 265,488 | .08 | 18 | .2% | ||
Jimma Lee Beam | 104,529 | .41 | 7 | .1% | ||
Franklin Toti | 99,776 | .47 | 6 | .8% | ||
J. Tito Tiberti(2) | 99,951 | .47 | 6 | .8% | ||
Thomas Girardi | 52,781 | .01 | 3 | .6% | ||
Harlan D. Braaten(3) | 30,415 | .00 | 2 | .0% | ||
Clyde Turner | 10,452 | .94 | * | |||
F. Michael Corrigan | 5,263 | .24 | * | |||
Joseph Blasco | 500 | .00 | * | |||
Charles Silverman | 500 | .00 | * | |||
Gage Parrish(4) | 5,000 | .00 | * | |||
Peter Thomas | 0 | .00 | .0% | |||
All directors and executive officers as a group (twelve persons) | 1,024,057 | .18 | 68 | .4% |
* | Less than one percent. |
(1) | The address of Messrs. Gaughan and Toti is 4500 West Tropicana Avenue, Las Vegas, Nevada 89103. The address of Mr. Herbst is 5195 Las Vegas Boulevard South, Las Vegas, Nevada 89119. The address of Mr. Tiberti is 1806 South Industrial Road, Las Vegas, Nevada 89102. The address of Ms. Beam is 2409 Windjammer Way, Las Vegas, Nevada 89107. |
(2) | Includes 5,640 shares held by a partnership of which trusts for the benefit of Mr. Tiberti’s adult children are partners, 400 shares held by trusts for the benefit of Mr. Tiberti’s adult children and 12,000 shares held by another partnership of which trusts for the benefit of Mr. Tiberti’s children are indirect partners, as to which Mr. Tiberti disclaims beneficial ownership. |
(3) | Reflects shares that may be purchased upon exercise of a stock option. |
(4) | Reflects shares that may be purchased upon exercise of a stock option. |
Fiscal Year ended December 31, 2002: $443,154 Fiscal Year ended December 31, 2001 $307,336 |
Audit-Related FeesThe aggregate fees billed in each of the last two fiscal years for audit-related services included (i) accounting consultations concerning financial accounting and reporting standards; (ii) internal control reviews; and (iii) other non-statutory attestation services for those years were: |
Fiscal Year ended December 31, 2002: $53,584 Fiscal Year ended December 31, 2001: $48,000 |
Tax FeesThe aggregate fees billed in each of the last two fiscal years for professional services rendered by PricewaterhouseCoopers for tax compliance, tax advice and tax planning were: |
Fiscal Year ended December 31, 2002: $2,033 Fiscal Year ended December 31, 2001: $121,924 |
19 All Other FeesThe aggregate fees billed in each of the last two fiscal years for products and services provided by PricewaterhouseCoopers (except those included under the caption “Audit Fees”) were: |
Fiscal Year ended December 31, 2002: $0 Fiscal Year ended December 31, 2001: $0 |
A. | ELECTION OF DIRECTORS |
CLASS I (for election to serve until the 2006 Annual Meeting of Stockholders and until their successors are elected and have qualified): MICHAEL J. GAUGHAN, GAGE PARRISH, HARLAN D. BRAATEN and CLYDE T. TURNER. |
FOR all nominees listed above (except as marked to the contrary above): | |||
-or- | |||
WITHHOLD AUTHORITY to vote for all nominees listed above. |
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE THAT NOMINEE'S NAME IN THE LIST ABOVE. |
B. IN THE DISCRETION OF THE PROXYHOLDERS with respect to any other matter which may properly come before the Meeting. |
THE SHARES VOTED BY THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER INSTRUCTED HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO INSTRUCTIONS ARE GIVEN, THIS PROXY WILL BE VOTED “FOR” THE NOMINEES LISTED ABOVE. IMPORTANT: Please sign your name or names exactly as they appear on this Proxy. When signing as attorney, executor or administrator, trustee or guardian, please give your full title as such. If shares are held jointly, EACH holder should sign. |
Signature | |||
Signature | |||
Date: | , 2003 |
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, YOU ARE URGED TO SIGN AND RETURN THIS PROXY, WHICH MAY BE REVOKED AT ANY TIME PRIOR TO ITS USE. 22 |