BALLY'S GRAND, INC.

3645 LAS VEGAS BOULEVARD SOUTH
LAS VEGAS, NEVADA 89109

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

TO BE HELD FEBRUARY 3, 1997

To Our Stockholders:

The Annual Meeting of Stockholders of Bally's Grand, Inc. (the
"Company") will be held at Bally's Las Vegas, 3645 Las Vegas Boulevard South,
Las Vegas, Nevada 89109, on February 3, 1997 at 9:00 a.m. (local time) to
consider and act upon the following matters which are more fully described in
the accompanying Proxy Statement:

1. The election of six directors to the Company's Board of Directors;
and

2. Such other business as may properly come before the meeting or any
adjournment thereof.

Stockholders of record as of the close of business on December 12, 1996
will be entitled to notice of and to vote at the meeting and any adjournment
thereof. The transfer books will not be closed.

The Board of Directors of the Company desires to have the maximum
representation at the meeting and respectfully requests that you date,
execute and mail promptly the enclosed proxy card in the enclosed
postage-paid envelope.

By Order of the Board of Directors,

DAVID ARRAJJ, SECRETARY

Las Vegas, Nevada
January 10, 1997

BALLY'S GRAND, INC.

3645 LAS VEGAS BOULEVARD SOUTH
LAS VEGAS, NEVADA 89109

PROXY STATEMENT

ANNUAL MEETING OF STOCKHOLDERS
FEBRUARY 3, 1997

To Our Stockholders:

This Proxy Statement is furnished to stockholders of Bally's Grand, Inc.
(the "Company") for use at the Annual Meeting of Stockholders to be held at
9:00 a.m. (local time) on February 3, 1997 (the "Annual Meeting"), at Bally's
Las Vegas, Skyview Three, Twenty Sixth Floor, Main Tower, 3645 Las Vegas
Boulevard South, Las Vegas, Nevada 89109 or at any postponements or
adjournments thereof for the purposes set forth in the accompanying Notice of
Annual Meeting of Stockholders. The approximate date on which this Proxy
Statement and the enclosed proxy card are first being sent to stockholders is
January 10, 1997.

The enclosed Proxy Statement and proxy is solicited on behalf of the
Board of Directors of the Company. Any stockholder giving a proxy has the
right to revoke it at any time prior to its exercise, either by delivering
notice in writing to the Secretary of the Company or by appearing and voting
in person at the Annual Meeting. Unless a contrary choice is indicated, all
duly executed proxies received by the Company will be voted:

1. For the election of the nominees for director; and

2. In the discretion of the proxy holder with respect to such other
business as may properly come before the meeting or any adjournment
thereof.

At the Annual Meeting, the results of stockholder voting will be tabulated
by an inspector of elections appointed for the Annual Meeting.

VOTING SECURITIES

Stockholders of record as of the close of business on December 12, 1996
(the "Record Date") are entitled to notice of, and to vote at, the Annual
Meeting and any adjournments or postponements thereof. On that date there
were outstanding 8,441,590 shares of common stock, par value $0.01 per share
("Common Stock"). Each share of Common Stock is entitled to one vote on all
matters to come before the Annual Meeting. Shares of Common Stock cannot be
voted at the Annual Meeting unless the holder is present in person or
represented by proxy. The presence, in person or by proxy, of a majority of
stockholders is necessary to constitute a quorum at the Annual Meeting of
Stockholders. The affirmative vote of holders of a majority of the shares of
Common Stock represented in person or by proxy at the Annual Meeting is
required to elect directors. Hilton Hotels Corporation ("Hilton"), as the
successor to Bally Entertainment Corporation ("BEC"), is the beneficial owner
of a majority of the issued and outstanding shares of Common Stock and has
indicated that it intends to cause its shares to be voted for the election of
the nominees for the Board of Directors.

CHANGE IN CONTROL

On December 18, 1996, BEC was merged with and into Hilton pursuant to a
merger agreement dated June 6, 1996, as amended (the "Merger"). Pursuant to
the merger agreement between BEC and Hilton, Hilton issued 54,692,087 shares
of its common stock and 14,832,300 shares of Hilton Preferred Redeemable
Increased Dividend Equity Securities, 8% PRIDES, Convertible Preferred Stock
to BEC's shareholders as consideration. As a result of the Merger, Hilton
owned, directly and indirectly, approximately 85% of the issued and
outstanding shares of Common Stock as of December 18, 1996.

ELECTION OF DIRECTORS

At the Annual Meeting, six directors are to be elected to serve until
the next annual meeting of stockholders of the Company or until their
successors have been duly elected and qualified. Set forth below are the
names of, and certain information with respect to, the persons nominated by
the Board of Directors for election as directors. It is intended that all
duly executed proxies in the accompanying form will be voted for the election
of such nominees (or such substitute nominees as provided below), unless such
authorization has been withheld.

Authority granted to the persons named in the proxy to vote for nominees
is limited to the six nominees proposed by the Board of Directors and named
below, and proxies cannot be voted for a greater number of persons than the
number of nominees named. The Board of Directors is not aware that any of the
nominees will be unavailable for service at the date of the meeting. If, for
any reason, any of the nominees shall become unavailable for election, an
event which is not presently anticipated, discretionary authority may be
exercised by the persons named in the proxy to vote for substitute nominees
proposed by the Board of Directors.

Information with respect to the nominees for election to the Board of
Directors, furnished in part by each such person, is as follows:

NAME, AGE AND POSITION WITH THE
COMPANY OTHER THAN DIRECTOR OCCUPATION AND OTHER INFORMATION
- -------------------------------- -------------------------------------------

Arthur M. Goldberg, 54 Mr. Goldberg was elected Chairman of the
Chairman of the Board of Board of Directors of the Company in August
Directors and Chief Executive 1992 and has been its Chief Executive
Officer Officer since September 1992. Mr. Goldberg
was President of the Company from August
1992 through May 1994. Hilton, as
successor to BEC, designated Mr. Goldberg
as its nominee for the Board of Directors
of the Company pursuant to its right under
the management agreement dated August 20,
1993 (the "Management Agreement") among
the Company, BEC and Bally's Grand
Management Co., Inc., a Nevada corporation
(the "Manager") to nominate one member of
the Company's Board of Directors, which
nomination is submitted to stockholders
for election. Mr. Goldberg has served as
Chairman of the Board of Directors,
President, Chief Executive Officer and
Secretary of the Manager since September
1992; served as Chairman of the Board of
Directors and Chief Executive Officer of
BEC between October 1990 and December
1996; President of BEC between January
1993 and December 1996; and Chairman of
the Board of Directors, President and
Chief Executive Officer of Bally's Casino
Holdings, Inc. (an indirect wholly-owned
subsidiary of Hilton) since June 1993. In
addition, Mr. Goldberg serves as Executive
Vice President, President-Gaming Division
and a director of Hilton, Chairman of the
Board of Directors and Chief Executive
Officer of GNOC, Corp. and Bally's Park
Place, Inc. (both of which are
subsidiaries of Hilton), Chairman of the
Board of Bally Total Fitness Holding
Corporation, as well as Chairman of the
Board of Directors, President and Chief
Executive Officer of Di Giorgio
Corporation and a director of White Rose
Foods, Inc. (food distributors) since
February 1990. Mr. Goldberg is also a
director of First Union Corporation (a
financial services company) and Managing
Partner of Arveron Investments L.P. (an
investment partnership).

NAME, AGE AND POSITION WITH THE
COMPANY OTHER THAN DIRECTOR OCCUPATION AND OTHER INFORMATION
- -------------------------------- -------------------------------------------
Jay Burnham, 34 Mr. Burnham was elected a director of the
Company in August 1993. Mr. Burnham has
been a Vice President of DDJ Capital
Management, LLC (a diversified investment
management firm) since March 1996. From
January 1995 until March 1996, Mr. Burnham
served as an investment advisor with Libra
Investments (a diversified investment
management firm). From June 1990 until he
joined Libra, Mr. Burnham performed
investment analyst management for Paul D.
Sonz Partners (a diversified investment
management firm). Mr. Burnham is also a
director of Live Entertainment, Inc. (a
distributor of motion pictures and home
videos).

J. Kenneth Looloian, 74 Mr. Looloian was elected a director of the
Company in October 1995. Mr. Looloian is
an Executive Vice President of Di Giorgio
Corporation, a former partner in Arveron
Investments L.P. and a former Executive
Vice President of International Controls
Corporation. Mr. Looloian is also a
director of Bally Total Fitness Holding
Corporation, Bally's Casino Holdings,
Inc., Bally's Park Place, Inc. and GNOC,
Corp.

Darrell A. Luery, 56 Mr. Luery was elected a director of the
President and Company in October 1995. Mr. Luery has been
Chief Operating President of the Company since May 1994 and
its Chief Operating Officer since
September 1992. Officer Mr. Luery served
as Senior Vice President of the Company
from August 1989 through May 1994. Mr.
Luery has served as President and Chief
Operating Officer of Grand Resorts, Inc.
since July 1990 and Senior Vice President
and Chief Operating Officer of Grand
Reservation Services, Inc. since July
1990. Mr. Luery is also a director of
American Bank of Commerce.

Jack L. McDonald, 63 Mr. McDonald was elected a director of the
Company in August 1993. Mr. McDonald has
served as a director of Amre, Inc. (a home
improvements company) since April 1992, a
director of Triangle Pacific Inc. (a wood
products company) since June 1992, a
director of U.S. Homes, Inc. (a home
building company) since June 1993 and a
director of American Homestar Corporation
(a mobile home manufacturer) since October
1994.

Nicholas H. Politan, Jr., 35 Mr. Politan was elected a director of the
Company in October 1995. Mr. Politan has
been Chief Financial Officer of Kenetech
Corp. (a developer of energy systems)
since April 1996. From April 1995 until
March 1996, Mr. Politan served as Vice
President of Kenetech Energy Systems, Inc.
and from October 1992 until April 1995,
Mr. Politan was Counsel for Kenetech
Energy Systems, Inc. From September 1986
until he joined Kenetech Energy Systems,
Inc., Mr. Politan was an attorney with
Heller, Ehrman, White and McAuliffe (a law
firm). Mr. Politan is a Vice President of
Kenetech Windpower, Inc., a wholly-owned
subsidiary of Kenetech Corp. which filed
for protection under Chapter 11 of the
United States Bankruptcy Code in May 1996.

BENEFICIAL OWNERSHIP OF SECURITIES

The following table sets forth information regarding the ownership of
the Company's Common Stock and common stock of Hilton on December 18, 1996 by
(i) beneficial owners known to the Company of more than five percent of the
outstanding shares of Common Stock; (ii) each director, nominee to the Board
of Directors and each Named Executive Officer (defined below); and (iii)
directors and executive officers of the Company as a group. Information
concerning beneficial holders of more than five percent of the outstanding
shares of Hilton common stock was supplied by Hilton.

AMOUNT AND NATURE
OF BENEFICIAL
AMOUNT AND NATURE OF OWNERSHIP OF
NAME OF BENEFICIAL OWNERSHIP PERCENT OF HILTON PERCENT OF
BENEFICIAL OWNER OF COMMON STOCK CLASS (1) COMMON STOCK CLASS (1)
- --------------------------------------- -------------------- ---------- ----------------- ----------

Arthur M. Goldberg(2) 2,904,738 1.2%
Jerry A. Blumenshine
Jay Burnham
William D. Harrold 266 * 100 *
J. Kenneth Looloian 10,000 *
Darrell A. Luery
Jack L. McDonald
Nicholas H. Politan, Jr.
Directors and executive officers
as a group (11 persons) (3) 266 * 2,914,838 1.2%
BEA Associates (4) 619,899 7.3%
Hilton Hotels Corporation (5) 7,153,238 84.7%
Barron Hilton (6)(7) 46,954,756 18.9%
Conrad N. Hilton Fund(7) 16,498,736 6.6%
FMR Corp. (8) 24,351,348 9.8%

- ---------------
* Less than 1%

(1) Calculated on the basis of applicable rules of the Securities and
Exchange Commission (the "Commission"), which require for purposes of
calculating beneficial ownership that presently exercisable warrants or
options to acquire shares of Common Stock and Hilton common stock
(which include options that become exercisable within 60 days) held by
the person for whom the calculation is made be treated as outstanding
shares.

(2) Includes options to acquire 600,000 shares of Hilton common stock which
Mr. Goldberg has the right to exercise.

(3) Mr. Contesse's employment with the Company terminated on June 3, 1996.
Based on records available to the Company, it believes he owns no shares
of Common Stock and owns no shares of Hilton common stock.

(4) BEA Associates ("BEA") is a New York corporation with a business address
of 153 East 53rd Street, One Citicorp Center, New York, New York 10022.
BEA, an investment advisor, owns 619,899 shares of Common Stock in
discretionary accounts which it manages. BEA has sole dispositive power
with respect to all 619,899 shares of Common Stock. Such information is
derived from a Schedule 13G dated January 15, 1996 which was prepared by
BEA pursuant to Commission regulations.

(5) Hilton is a Delaware corporation with a business address of 9336 Civic
Center Drive, Beverly Hills, California 90210. Such number includes
shares of Common Stock owned by Hilton indirectly through its wholly
owned subsidiaries.

(6) Includes 24,000,000 shares of Hilton common stock owned by the Charitable
Remainder Unitrust (the "Trust"), of which Mr. Hilton is sole Trustee. As
Trustee, Mr. Hilton has the sole voting power with respect to, and is
deemed to be the beneficial owner of, the 24,000,000 shares. The Trust
will continue until the later of Mr. Hilton's death or May 8, 2009. By
virtue of the foregoing and the other shares beneficially owned by Mr.
Hilton, Mr. Hilton may be deemed to be in "control" of Hilton as such
term is defined in the rules and regulations promulgated by the
Commission.

(7) Mr. Hilton is one of the nine directors of the Conrad N. Hilton Fund (the
"Fund"). Mr. Hilton disclaims beneficial ownership of the 16,498,736
shares of Hilton common stock owned by the Fund.

(8) FMR Corp. ("FMR") is a Massachusetts corporation with a business address
of 82 Devonshire Street, Boston, Massachusetts 02109. The amount of
Hilton common stock beneficially owned by FMR is reported on the basis of
two Schedule 13Gs filed with the Commission under the Securities Exchange
Act of 1934, as amended, which are dated May 9, 1996 with respect to
shares of Hilton common stock and December 9, 1996 with respect to shares
of BEC common stock held prior to the Merger. As reported in such
Schedule 13Gs, wholly-owned subsidiaries of FMR beneficially own an
aggregate of 24,318,148 shares of Hilton common stock and members of the
family of Edward C. Johnson 3rd, Chairman of FMR, may be deemed, under
the Investment Company Act of 1940, as amended, to form a controlling
group with respect to FMR.

INFORMATION RELATING TO THE BOARD OF DIRECTORS
AND CERTAIN COMMITTEES OF THE BOARD

The Board of Directors held two (2) meetings during 1995. Each incumbent
director attended at least 75% of the aggregate number of meetings of the
Board of Directors and all committees on which he served during 1995.

The Board of Directors has an Audit Committee and a Compensation
Committee. The general functions of such committees, the identity of each
committee member and the number of committee meetings held by each committee
during 1995, are set forth below.

AUDIT COMMITTEE

The current members of the Audit Committee are Mr. Looloian and Mr.
Politan. The general functions of the Audit Committee include reviewing the
selection of the independent auditors with the Manager, evaluating the
performance of the independent auditors and their fees for services,
reviewing the scope of the annual audit with the independent auditors and the
results of the audit with senior management of the Company and the
independent auditors, and consulting with the Manager, senior management of
the Company, internal auditors and the independent auditors as to the systems
of internal accounting controls. The Audit Committee held two (2) meetings
during 1995.

COMPENSATION COMMITTEE

The current members of the Compensation Committee are Mr. McDonald and
Mr. Burnham. The general functions of the Compensation Committee include
reviewing the compensation arrangements for senior management of the Company
and oversight of management development to ensure continuity of senior
management. Under the terms of the Management Agreement, the Manager is
responsible for all personnel decisions of the Company and has authority to
determine compensation and other benefits with the exception of new pension
and profit sharing plans. However, the Company's Board of Directors must
approve any employment contracts or other arrangements for employees of the
Company which involve more than $125,000 annual compensation, including
salary and bonuses. The Compensation Committee held one (1) meeting during
1995.

COMPENSATION OF DIRECTORS

Each director who is not an officer of the Company receives $20,000 per
year, payable quarterly, as compensation for his service in such capacity and
a $500 fee for each meeting attended, including meetings of any committees.
Directors who are officers of the Company do not receive additional
compensation for service as directors. In addition, the Company made payments
to the members of the independent Special Committee of the Board of Directors
constituted in connection with the approval of the sale of certain property
to BEC. See "Certain Transactions with Affiliates and Management". The
Chairman of the Special Committee, Mr. McDonald, received $35,000. The other
members of the Special Committee, Messrs. Politan and Burnham, each received
$15,000.

COMPENSATION OF EXECUTIVE OFFICERS

The following table sets forth the compensation paid by the Company to
its Chief Executive Officer and the four other most highly compensated
executive officers of the Company at the end of 1995 (the "Named Executive
Officers") for services rendered in all capacities to the Company during the
years indicated.

SUMMARY COMPENSATION TABLE

LONG-TERM COMPENSATION
ANNUAL COMPENSATION AWARDS
------------------------------------- -----------------------------
OTHER ANNUAL SECURITIES RESTRICTED ALL OTHER
COMPENSATION UNDERLYING STOCK AWARDS COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) ($) (1) OPTIONS (#)(2) ($) ($)
- --------------------------- ---- ---------- --------- ------------ -------------- ------------ ------------

Arthur M. Goldberg (3) 1995
Chairman of the Board of 1994
Directors and Chief 1993 3,535,000(3)
Executive Officer

Darrell A. Luery 1995 558,000 283,500 25,000 67,468(4)
President and 1994 540,000 270,000 75,000 39,351
Chief Operating Officer 1993 493,269 210,000 30,000 921,625 4,947

Jerry A. Blumenshine 1995 184,231 56,000 7,500 26,082(5)
Vice President and Chief 1994 183,654 75,000 25,000 22,909
Financial Officer 1993 172,019 60,000 10,000 391,375 82,386

Paul Contesse (6) 1995 198,077 80,000 8,250 27,294(7)
Senior Vice President -- 1994 187,115 75,000 25,000 22,565
Hotel Operations 1993 172,596 50,000 10,000 391,375 3,673

William D. Harrold 1995 217,885 103,500 8,250 26,505(8)
Executive Vice President 1994 186,250 75,000 25,000 19,620
1993 167,308 50,000 10,000 391,375 4,672

- ---------------
(1) Certain incidental personal benefits to executive officers of the Company
may result from expenses incurred by the Company in the interest of
attracting and retaining qualified personnel. These incidental personal
benefits made available to executive officers during 1995 are not described
herein because the incremental cost to the Company of such benefits is below
the Commission disclosure threshold.

(2) Such amounts represent the number of shares of BEC common stock underlying
options granted by BEC to each named executive officer.

(3) Mr. Goldberg was the Chairman of the Board of Directors, President and Chief
Executive Officer of BEC. For serving in such capacities, Mr. Goldberg
received from BEC in 1995, 1994 and 1993 aggregate compensation of
$6,203,812, $3,530,285 and $3,486,997, respectively. Mr. Goldberg was also
awarded non-qualified options to purchase 550,000 shares, 150,000 shares and
450,000 shares of BEC common stock during 1995, 1994 and 1993, respectively.
BEC did not allocate the amount of any compensation paid to Mr. Goldberg as
being compensation paid to Mr. Goldberg for services rendered to the
Company. In connection with the services provided to the Company by the
Manager under the Management Agreement, including the services of Mr.
Goldberg, the Company pays the Manager an annual management fee of
$3,000,000. See "Certain Transactions with Affiliates and Management." On
August 20, 1993, Mr. Goldberg received an award of 280,000 shares of Common
Stock pursuant to the Company's Incentive Stock Plan (as hereinafter
defined). As of such date, the Common Stock had a fair market value of
$12.625 per share. On December 13, 1993, Mr. Goldberg sold the shares to a
wholly-owned subsidiary of BEC.

(4) This total includes (i) $5,082 paid to the Company's 401(k) plan and (ii)
$62,386 matched by the Company for Mr. Luery's participation in the Bally
Entertainment Corporation Management Retirement Savings Plan (the "Savings
Plan"). See "Compensation of Executive Officers -- Retirement Savings Plan."

(5) This total includes (i) $5,082 paid to the Company's 401(k) plan and (ii)
$21,000 matched by the Company for Mr. Blumenshine's participation in the
Savings Plan.

(6) Mr. Contesse's employment with the Company terminated effective June 3,
1996.

(7) This total includes (i) $5,082 paid to the Company's 401(k) plan and (ii)
$22,212 matched by the Company for Mr. Contesse's participation in the
Savings Plan.

(8) This total includes (i) $5,082 paid to the Company's 401(k) plan and (ii)
$21,423 matched by the Company for Mr. Harrold's participation in the
Savings Plan.

STOCK OPTION AND SAR GRANTS

The following table sets forth certain information concerning grants by
BEC of options to purchase BEC common stock made during 1995 to each of the
Named Executive Officers pursuant to the 1989 Incentive Plan of BEC (the
"Incentive Plan"). In connection with the Merger, all options to purchase BEC
common stock were settled for an amount in cash equal to $28.425 per share
less the exercise price per share. The "option settlement price" was
determined based on a formula set forth in the agreement governing the Merger
which was related to the consideration received by BEC stockholders for each
share of BEC common stock they owned prior to the Merger.

BEC OPTION/SAR (1) GRANTS IN LAST FISCAL YEAR

INDIVIDUAL GRANTS POTENTIAL REALIZABLE
-------------------------------------------------------------- VALUE AT ASSUMED ANNUAL
NUMBER OF % OF TOTAL RATES OF STOCK PRICE
SECURITIES OPTIONS APPRECIATION FOR OPTION
UNDERLYING GRANTED TO EMPLOYEES EXERCISE TERM(2)
OPTIONS OF THE COMPANY IN PRICE EXPIRATION ------------------------
NAME GRANTED(#)(3) FISCAL YEAR ($/SH.)(3) DATE 5%($) 10%($)
- ------------------------ ------------- -------------------- -------- ---------- ---------- ----------

Arthur M. Goldberg(4).... -- -- -- -- -- --
Darrel A. Luery.......... 25,000 25.2% 11.05 12/12/05 173,732 440,271
Jerry A. Blumenshine..... 7,500 7.6% 11.05 12/12/05 52,150 132,081
Paul Contesse............ 8,250 8.3% 11.05 12/12/05 57,332 145,290
William D. Harrold....... 8,250 8.3% 11.05 12/12/05 57,332 145,290

- ---------------

(1) There were no SARs granted in 1995 to any of the executive officers named in
this table. In addition, the Incentive Plan was amended in 1995 to eliminate
BEC's ability to issue SARs.

(2) The potential realizable values represented future opportunity at December
31, 1995 and have not been reduced to present value in 1995 dollars. The
dollar amounts included in these columns are the result of calculations at
assumed rates set by the Commission for illustration purposes. The potential
realizable values are based on arbitrarily assumed annualized rates of stock
price appreciation of 5% and 10% over the full 10-year term of the options
and do not reflect the results of the Merger. For example, in order for the
individuals named above who received options with an exercise price of
$11.05 per share to have realized the potential values set forth in the 5%
and 10% columns in the table above, the price per share of BEC's common
stock would have had to be approximately $18.00 and $28.66, respectively.

(3) Pursuant to the terms of BEC's stock option plans, BEC's Compensation and
Stock Option Committee made an adjustment to the exercise price of all
outstanding options in connection with the distribution of the shares of
Bally Total Fitness Holding Corporation to BEC's stockholders in January
1996. The adjustment was equal to one quarter of the average closing price
for the shares of Bally Total Fitness Holding Corporation for the first 20
days of trading, reflecting the distribution of one quarter of a share of
Bally Total Fitness Holding Corporation for each share of BEC common stock.
This adjustment resulted in a reduction of all exercise prices by $1.20 per
share.

(4) Mr. Goldberg was the Chairman of the Board of Directors, President and Chief
Executive Officer of BEC. For serving in such capacities, during 1995 BEC
granted Mr. Goldberg options to purchase 500,000 shares of BEC common stock
at an exercise price of $6.30 per share, which options expire on January 19,
2005, and 50,000 shares of BEC common stock at an exercise price of $11.05
per share, which options expire on December 12, 2005. The aggregate
potential realizable value of such options at assumed annualized rates of
stock price appreciation of 5% and 10% for the option term would be
$2,328,482 and $5,900,832, respectively.

STOCK OPTION AND SAR EXERCISES

The following table sets forth certain information concerning exercises
of BEC stock options and SARs during 1995 by each of the Named Executive
Officers and their stock options and SARs outstanding as of December 31,
1995. As described previously, all options to purchase BEC common stock were
settled in connection with the Merger for an amount in cash equal to $28.425
per share less the exercise price per share.

AGGREGATED BEC OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUES(1)

NUMBER OF SECURITIES
UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS/SARS OPTIONS/SARS AT
AT FISCAL YEAR-END(#) FISCAL YEAR-END($)(3)
SHARES VALUE --------------------- ---------------------
ACQUIRED ON RECEIVED EXERCISABLE(E)/ EXERCISABLE(E)/
NAME EXERCISE(#) ($)(2) UNEXERCISABLE(U) UNEXERCISABLE(U)
- ---------------------- ------------ --------- --------------------- ---------------------

Arthur M. Goldberg(4)...
Darrell A. Luery........ None -- 55,001(E) 436,008(E)
84,999(U) 551,992(U)
Jerry A. Blumenshine(5). 3,000 23,850 25,335(E) 130,241(E)
27,499(U) 181,534(U)
Paul Contesse........... None -- 20,001(E) 164,216(E)
28,249(U) 183,747(U)
William D. Harrold...... None -- 20,001(E) 164,216(E)
28,249(U) 183,747(U)

- ---------------

(1) Pursuant to the terms of BEC's stock option plans, BEC's Compensation and
Stock Option Committee made an adjustment to the exercise price of all
outstanding options in connection with the distribution of the shares of
Bally Total Fitness Holding Corporation to BEC's stockholders in January
1996. The adjustment was equal to one quarter of the average closing price
for the shares of Bally Total Fitness Holding Corporation for the first 20
days of trading, reflecting the distribution of one quarter of a share of
Bally Total Fitness Holding Corporation for each share of BEC common stock.
This adjustment resulted in a reduction of all exercise prices by $1.20 per
share.

(2) Value based on the closing price of BEC common stock as of May 12, 1995
(the exercise date) minus the exercise price.

(3) Value based on the closing price of BEC common stock as of December 31, 1995
($14.00) minus the exercise or base price and does not reflect the results
of the Merger.

(4) Mr. Goldberg had 2,650,000 unexercised shares under option at December 31,
1995 of which 1,850,001 were exercisable and 799,999 were unexercisable. The
1,850,001 exercisable option shares and 799,999 unexercisable option shares
are valued at $22,020,008 and $5,678,742, respectively, based on the $14.00
closing price per share of BEC common stock as of December 31, 1995, minus
the exercise or base price and does not reflect the results of the Merger.
Those options included an award to purchase 500,000 shares of BEC common
stock that could have been deemed stock appreciation rights at Mr.
Goldberg's election.

(5) Such options included an award to purchase 8,334 shares of BEC common stock
that could have been deemed stock appreciation rights at Mr. Blumenshine's
election.

EMPLOYMENT ARRANGEMENTS

MR. LUERY

The Company and Mr. Luery entered into an employment agreement dated June
5, 1995, for a term expiring April 30, 1998. The agreement provides for the
payment of an annual base salary, subject to periodic review by the Manager,
plus bonuses, payable at the discretion of the Manager. As of December 1, 1996,

Mr. Luery's annual base salary is $567,000. In the event that Mr. Luery
voluntarily terminates the agreement or his employment is terminated by the
Company for "cause", Mr. Luery will be subject to certain non-competition
covenants for a period of one year following the termination of his
employment. In the event a change in control of the Company occurs and Mr.
Luery is asked to leave the employ of the Company, or, absent cause, Mr.
Luery elects to terminate his employment because he has been constructively
terminated, Mr. Luery will be entitled to receive a lump sum payment equal to
the full amount of his then current base salary for the remainder of the term
of his agreement or twenty-four (24) months, whichever is greater, and the
greater of the average of the bonuses, if any, paid to Mr. Luery for the
three (3) previous years or the bonus paid to Mr. Luery for the prior year,
if any. If a change in control of the Company occurred on December 1, 1996
and Mr. Luery were asked to leave the employ of the Company or, absent cause,
constructively terminated, he would be entitled to a payment of approximately
$1,434,000 under his agreement. Additionally, if a change in control occurred
on December 1, 1996 Mr. Luery could elect, at his option, to terminate the
employment agreement and receive a lump sum of six (6) months salary or
$283,500.

MR. BLUMENSHINE

The Company and Mr. Blumenshine entered into an employment agreement
dated December 1, 1992, that was subsequently amended on August 26, 1993, for
a term expiring December 31, 1995. As of December 1, 1996, Mr. Blumenshine's
annual base salary is $140,000.

MR. HARROLD

The Company and Mr. Harrold entered into an employment agreement dated
July 10, 1995, for a term expiring June 30, 1998. The agreement provides for
the payment of an annual base salary, subject to periodic review by the
Manager, plus bonuses, payable at the discretion of the Manager. As of
December 1, 1996, Mr. Harrold's annual base salary is $260,000. In the event
that Mr. Harrold voluntarily terminates the agreement or his employment is
terminated by the Company for "cause", Mr. Harrold will be subject to certain
non-competition covenants for a period of one year following the termination
of his employment. In the event a change in control of the Company occurs and
Mr. Harrold is asked to leave the employ of the Company, or, absent cause,
Mr. Harrold elects to terminate his employment because he has been
constructively terminated, Mr. Harrold will be entitled to receive a lump sum
payment equal to the full amount of his then current base salary for the
remainder of the term of his agreement or for twenty-four (24) months,
whichever is greater, and the greater of the average of the bonuses, if any,
paid to Mr. Harrold for the three (3) previous years or the bonus paid to Mr.
Harrold for the prior year, if any. If a change in control of the Company
occurred on December 1, 1996 and Mr. Harrold were asked to leave the employ
of the Company or, absent cause, constructively terminated, he would be
entitled to payment of approximately $670,000 under his agreement.

RETIREMENT SAVINGS PLAN

The Savings Plan, adopted by BEC on September 7, 1994, is a deferred
compensation plan designed to permit a select group of management or highly
compensated employees to enhance the security of themselves and their
beneficiaries following retirement or other termination of their employment.
The Savings Plan is intended to be an "employee pension benefit plan" under
the Employee Retirement Income Security Act of 1974, as amended, and is
unfunded and maintained by BEC. The Savings Plan is not intended to be
qualified under the Internal Revenue Code of 1986, as amended. The Board of
Directors of BEC, in its sole discretion, designates those members of
management or highly compensated employees who are eligible to participate in
the Savings Plan.

During the first half of 1995, the Company provided a matching
contribution as follows: 100% of the first 10% of eligible compensation the
participant defers, 50% of the second 10% of eligible compensation the
participant defers and 0% thereafter. Effective July 1, 1995, the Savings
Plan was amended so that the Company provides a matching contribution of 50%
of the first 15% of eligible compensation the participant defers and 0%
thereafter. Matching contributions are credited to a participant's matching
account and become vested as follows: after one but less than two Years of
Deferral they become 33 1/3% vested, after two but less

than three Years of Deferral they become 66 2/3% vested, and after more than
three Years of Deferral they become fully vested. For this purpose, a "Year
of Deferral" is credited with respect to a matching contribution for each
completed calendar year commencing after the calendar year for which the
matching contribution was made. A participant generally may elect to receive
his benefits under the Savings Plan in a lump sum or in installments over a
period of no more than ten years. As soon as possible (but not later than
five business days) after a change in control of BEC, as defined in the
Savings Plan, all of the participants' accounts will become 100% vested.

For 1995, the Company contributed cash of $258,113 to the accounts of
participants in the Savings Plan, of which $142,333 was allocated to the
accounts of all executive officers as a group. Amounts allocated to each of
the Named Executive Officers are as follows: Mr. Luery $62,386, Mr.
Blumenshine $21,000, Mr. Contesse $22,212 and Mr. Harrold $21,423.

INCENTIVE STOCK AWARDS

In accordance with the Company's Chapter 11 Plan of Reorganization, on
August 20, 1993, the Company established the Bally's Grand, Inc. 1993
Incentive Stock Plan, pursuant to which 600,000 shares of its Common Stock
were made available for award to its officers actively involved in its
management or operations (the "Incentive Stock Plan"). The Incentive Stock
Plan generally provides for grants of stock awards to participants for no
consideration which may or may not be subject to restrictions.

Pursuant to the Chapter 11 Plan and the Management Agreement, the
Manager is responsible for the administration of the Incentive Stock Plan and
has authority, in its sole discretion, to determine which officers of the
Company will participate in the Incentive Stock Plan, any individual or
corporate performance goals applicable to a participant, which participants
will be awarded shares, the date on which awards will be made, the number of
shares to be awarded, if any, and all other terms of the awards, which need
not be the same for all participants. Subject to the express provisions of
the Incentive Stock Plan, the Manager also has the authority, in its sole
discretion, to construe, amend and rescind the rules and regulations relating
to the Incentive Stock Plan, and to make all other determinations necessary
or advisable for administering the Incentive Stock Plan.

The following table sets forth certain information with respect to
awards granted under the Incentive Stock Plan to each of the Named Executive
Officers:

NUMBER OF SHARES OF
COMMON STOCK
NAME AWARDED (ALL IN 1993)
---- -------------------

Arthur M. Goldberg.............................. 280,000
Darrell A. Luery................................ 73,000
Jerry A. Blumenshine............................ 31,000
Paul Contesse................................... 31,000
William D. Harrold.............................. 31,000

The Company, the Manager and each participant in the Incentive Stock
Plan entered into individual stock award agreements which set forth the
specific terms and conditions applicable to such participant's stock award.
The stock award agreement entered into with Mr. Goldberg provided that the
shares awarded to him were not subject to restrictions. During 1993, Mr.
Goldberg sold the 280,000 shares of Common Stock awarded to him to a wholly
owned subsidiary of BEC. The stock award agreements entered into with the
four other persons listed above contained substantially identical terms.
These stock award agreements provided for a grant of shares of Common Stock
subject to certain restrictions and subject to forfeiture if the
participant's employment with the Company was terminated before the
restrictions lapsed. The restrictions applicable to the shares awarded
automatically lapsed as to approximately one-third of the number of shares
awarded on each of December 31, 1993, 1994 and 1995. On January 12, 1994,
December 31, 1994 and December 29, 1995, the Company purchased from
participants in the Incentive Stock Plan 98,150 shares, 82,025 shares and

76,900 shares, respectively, of Common Stock at prices of $12.625 per share,
$11.00 per share and $16.00 per share, respectively. Such shares are held by
the Company as treasury stock.

As of December 18, 1996, 42,925 shares of Common Stock were available
for future award pursuant to the Incentive Stock Plan.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

Mr. Burnham and Mr. McDonald were members of the Compensation Committee
during 1995. Neither Mr. Burnham nor Mr. McDonald have interlocking
relationships with third parties which might be considered conflicts of
interest based on their membership of the Company's Compensation Committee.

REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION

In connection with the Management Agreement, the role of the Board of
Directors includes the approval of compensation determinations made by the
Manager which involves more than $125,000 (including salary and bonus). The
Manager and the Board of Directors each believe that the growth of the Las
Vegas casino market has made the recruitment and retention of top casino
executives highly competitive. Consequently, the Manager and the Board of
Directors believe that the payment of significant base salaries to key
personnel is very important to the Company's ability to retain these
employees.

In reviewing the bonuses approved by the Manager, the Board of Directors
considered the Company's prime strategic goals and the qualitative factors
which contributed to their achievement. The Company's prime strategic goal
was, and is, to maximize shareholder value by generating increased operating
income on a consistent and sustainable basis. This goal was largely
accomplished in 1995 (during a period when neither the Manager nor the Board
of Directors expected to increase market share) by the Company establishing a
competitive uniqueness geared toward those segments of the market the Company
believes it is best equipped to handle and that are most profitable. The
Company's positioning was achieved through changes to operations which were
implemented by senior management. In that regard, the qualitative factors
that the Manager and the Board of Directors recognized were managerial
vision, decision-making acumen, effectiveness, teamwork and the results
obtained by senior management.

PERFORMANCE GRAPH

COMPARISON OF CUMULATIVE TOTAL RETURN
FROM AUGUST 1, 1994 TO DECEMBER 31, 1995*
BALLY'S GRAND, INC., S&P 500 INDEX AND
DOW JONES CASINO INDUSTRY GROUP INDEX

MEASUREMENT PERIOD
(FISCAL YEAR COVERED) BALLY'S GRAND DJ CASINO S&P 500
- -------------------------- ------------ -------- -------
8/1/94 100 100 100
12/31/94 97 109 101
12/31/95 142 144 139

- -------------

* Assumes $100 invested on August 1, 1994 in Bally's Grand, Inc. Common Stock,
the S&P 500 Index and the Dow Jones Casino Industry Group Index. Bally's
Grand, Inc. Common Stock was first listed for trading on August 1, 1994. Total
return assumes reinvestment of dividends.

CERTAIN TRANSACTIONS WITH AFFILIATES AND MANAGEMENT

Pursuant to the Management Agreement, the Manager provides certain
management and administrative services to the Company and BEC licenses, on a
non-exclusive basis, the use of the "Bally" name and certain computer
software to the Company for an annual fee of $3,000,000 payable in monthly
installments. The initial term of the Management Agreement is ten years. The
Management Agreement will be automatically renewed from year to year unless
notice of intent not to renew is given at least six months prior to the
expiration of the initial term or any subsequent term or in the event that
Bally's Las Vegas is sold. Property, general liability and other insurance
coverage has been obtained by BEC for the Company. BEC paid insurance
premiums for itself, its subsidiaries and the Company and allocated these
premiums among those parties. In 1995, the Company paid approximately
$1,173,000 to BEC for allocated insurance premiums. In addition, BEC leased
an airplane which was used for the business of BEC, its subsidiaries and the
Company and allocated the cost of the airplane based upon usage. In 1995, the
Company paid approximately $121,000 for allocated airplane usage costs.

Pursuant to the terms of the Management Agreement, Hilton has the right
to nominate one of the six members of the Company's Board of Directors and a
member to any of the committees thereof, provided such nominee is reasonably
acceptable to the Company. The Company is required to submit the name of
Hilton's nominee to the Company's stockholders for election, subject to the
exercise of the fiduciary duties of the Company's Board of Directors. Hilton
has designated Mr. Goldberg as its nominee to serve on the Board of Directors
of the Company.

Under the terms of the Management Agreement, the Manager is responsible
for all personnel decisions of the Company and has the authority to determine
compensation and other benefits with the exception of new pension and profit
sharing plans. However, the Company's Board of Directors must approve any
employment contracts or other arrangements for employees of the Company which
involve more than $125,000 annual compensation, including salary and bonuses.

Beginning on March 21, 1995, when BEC's ownership percentage of
outstanding Common Stock reached 80%, taxable income or loss of the Company
has been included in the consolidated federal income tax return of BEC. Under
a tax sharing arrangement between the Company and BEC, income taxes are
allocated to the Company based on amounts the Company would pay or receive if
it filed a separate consolidated federal income tax return. Payments to BEC
for tax liabilities are due at such time and in such amounts as payments
would be required to be made to the Internal Revenue Service. Payments from
BEC for tax benefits are due at the time BEC files the applicable
consolidated federal income tax return.

On December 29, 1995, the Company purchased 76,900 shares of Common
Stock for $16.00 per share from participants in the Incentive Stock Plan,
which included purchases from the Named Executive Officers as follows: 24,300
shares from Mr. Luery, 10,300 shares from Mr. Blumenshine, 10,300 shares from
Mr. Contesse, and 10,300 shares from Mr. Harrold. See "Compensation of
Executive Officers -- Incentive Stock Awards."

On May 10, 1995, the Company made a payment of $250,000 to Arveron
Investments L.P., of which Mr. Goldberg is Managing Partner, as compensation
for consulting services provided in connection with the Company's investments
in publicly-traded securities and certain repurchases of Common Stock.

In August 1996, the Company sold Paris Casino Corp. (an indirect wholly
owned subsidiary that owns 24 acres of land next to Bally's Las Vegas upon
which the Paris Casino-Resort is planned to be developed) to BEC for
consideration having an aggregate value of $57,500,000 ($17,500,000 in cash
and 1,457,195 shares of BEC common stock which were converted into 1,457,195
shares of Hilton common stock in the Merger). In addition, BEC reimbursed the
Company for Paris Casino-Resort development costs incurred to date and
certain transaction-related costs, and granted the Company certain operating
considerations pursuant to a shared facilities agreement. The transaction was
negotiated and approved by an independent Special Committee of the Board of
Directors of the Company consisting of Mr. McDonald, Mr. Politan and Mr.
Burnham. The Special Committee retained independent legal counsel and
financial advisors in connection with the evaluation and negotiation of the
transaction.

AUDITORS

The Company's independent auditors for 1995 were Ernst & Young LLP. In
connection with the Merger, the Manager recommended the Company engage Arthur
Andersen LLP (Hilton's independent auditors) so as to provide uniformity in
certifying public accountants. On December 31, 1996, after review by the
Audit Committee of the Company, the Board of Directors of the Company
unanimously approved the engagement of Arthur Andersen LLP as its independent
auditors for the fiscal year ending December 31, 1996 to replace the firm of
Ernst & Young LLP, who were dismissed as auditors of the Company on that
date.

The reports of Ernst & Young LLP on the Company's financial statements
for each of the two fiscal years ended December 31, 1995 did not contain an
adverse opinion or a disclaimer of opinion and were not qualified or modified
as to uncertainty, audit scope, or accounting principles. In connection with
the audits of the Company's financial statements for each of the two fiscal
years ended December 31, 1995 and in the subsequent interim period, there
were no disagreements with Ernst & Young LLP on any matters of accounting
principles or practices, financial statement disclosure, or auditing scope
and procedures which, if not resolved to the satisfaction of Ernst & Young
LLP would have caused Ernst & Young LLP to make reference to the matter in
their report. Neither representatives of Ernst & Young LLP or Arthur Andersen
LLP will be present at the meeting.

LITIGATION

Two derivative actions purportedly brought on behalf of the Company
against its directors and BEC, one commenced in October 1995 and the other in
September 1996, were consolidated under the caption IN RE: BALLY'S GRAND
DERIVATIVE LITIGATION in the Court of Chancery of the State of Delaware, in
and for New Castle County. The consolidated complaint alleges breaches of
fiduciary duty and waste of corporate assets in connection with certain
actions including the sale by the Company to BEC of the capital stock of
Paris Casino Corp. (the "Paris Transaction"), alleged improper delegation of
duties by the Company's Board of Directors by virtue of the Management
Agreement, the Manager's designation pursuant to the Management Agreement of
recipients awarded Common Stock pursuant to the Incentive Stock Plan,
purchases of Common Stock by the Company and BEC, and a consulting agreement
entered into by the Company with Arveron Investments L.P. in connection with
the Company's investments in publicly-traded securities and certain
repurchases of Common Stock. The plaintiffs seek, among other things: (i)
rescission of the Paris Transaction, (ii) a declaration that the Management
Agreement is unlawful, (iii) an accounting of damages to the Company and
profits to defendants as a result of the transactions complained of, (iv) an
accounting for purchases of Common Stock by the Company and BEC, and (v)
costs and expenses including reasonable attorneys' fees. A third derivative
action purportedly brought on behalf of the Company against its directors,
BEC, the Manager and Hilton was commenced in November 1996 under the caption
TOWER INVESTMENT GROUP, INC., ET AL. V. BALLY'S GRAND, INC., ET AL. in the
Court of Chancery of the State of Delaware, in and for New Castle County. The
complaint alleges breach of fiduciary duty and waste of corporate assets by
the Company's directors and BEC in connection with the Paris Transaction,
aiding and abetting by Hilton of the breaches of fiduciary duty and waste by
the Company's directors and BEC, fraud, willful misconduct or gross
negligence by BEC and the Manager in connection with the Management
Agreement, breach of fiduciary duty by the Company's directors in connection
with purchases of Common Stock by BEC while in possession of material inside
information concerning the Company's earnings, breach of fiduciary duty by
BEC in connection with alleged threats to abuse its controlling interest in
the Company, and violation by the Company's directors and BEC of Section 203
of the Delaware General Corporation Law in connection with the Paris
Transaction. The plaintiffs seek, among other things: (i) rescission of the
Paris Transaction, (ii) termination of the Management Agreement, (iii)
appointment of a custodian to manage the Company's affairs, (iv) compensatory
damages, (v) an order enjoining BEC and Hilton from conveying the Paris
Casino-Resort, (vi) disgorgement by BEC and Hilton of the profits of the
Paris Casino-Resort, (vii) disgorgement by Arthur M. Goldberg of all
payments, warrants and interests received in connection with the Merger, and
(viii) disgorgement by BEC of profits earned from any transactions in shares
of the Common Stock based upon material inside information. This action has
been consolidated with the original consolidated action under the caption IN
RE: BALLY'S GRAND, INC. SHAREHOLDERS LITIGATION. The defendants believe the
complaints are without merit.

OTHER BUSINESS

Management knows of no other business to be presented for action at the
meeting. If other matters properly come before the meeting or any adjournment
thereof, the persons named as proxies will vote upon them in accordance with
their best judgment.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

The Company is required to identify any director, officer, beneficial
owner of more than ten percent of Common Stock or any other person subject to
Section 16 of the Exchange Act that failed to file on a timely basis, as
disclosed in their forms, reports required by Section 16(a) of the Exchange
Act. Based on a review of forms submitted to the Company, the Company
believes all forms were timely filed.

EXPENSE OF SOLICITATION

The cost of this solicitation will be borne by the Company. In addition
to the use of the mail, proxy solicitation may be made by telephone,
telegraph and personal interviews by regular employees of the Company.

STOCKHOLDER PROPOSALS FOR THE 1997 ANNUAL MEETING

The 1997 Annual Meeting of Stockholders is expected to be held in
October of 1997. Accordingly, the date by which stockholder proposals for
inclusion in the proxy materials relating to the next Annual Meeting of
Stockholders must be received by the Company at its principal executive
offices, Attention David Arrajj, Secretary, Bally's Grand, Inc., 3645 Las
Vegas Boulevard South, Las Vegas, Nevada 89109, is June 30, 1997.

ANNUAL REPORT

A copy of the Company's Annual Report on Form 10-K for 1995, which
contains the consolidated financial statements of the Company, was previously
sent to stockholders. The Company will provide to any stockholder as of the
record date, who so requests in writing, copies of its Annual Report on Form
10-K, and, if specifically requested, the exhibits thereto. Requests for such
copies should be directed to David Arrajj, Secretary, Bally's Grand, Inc.,
3645 Las Vegas Boulevard South, Las Vegas, Nevada 89109.

By Order of the Board of Directors,

DAVID ARRAJJ, SECRETARY

Las Vegas, Nevada
January 10, 1997

PLEASE DATE AND SIGN YOUR

PROXY CARD AND RETURN IT PROMPTLY

USING THE ENCLOSED RETURN ENVELOPE.