UNITED
STATES
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SECURITIES AND EXCHANGE COMMISSION
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Washington, D.C. 20549
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SCHEDULE 14A
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Proxy
Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
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Filed by the Registrant
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Filed by a Party other than the
Registrant
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Check the appropriate box:
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Preliminary Proxy Statement
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Confidential, for
Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material Pursuant to
§240.14a-12
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ISLE
OF CAPRI CASINOS, INC.
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(Name
of Registrant as Specified In Its Charter)
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(Name
of Person(s) Filing Proxy Statement, if other than the Registrant)
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Payment of Filing Fee (Check the
appropriate box):
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No fee required.
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Fee computed on table below per
Exchange Act Rules 14a-6(i)(1) and 0-11.
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Title of each class of securities to
which transaction applies:
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Aggregate number of securities to
which transaction applies:
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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)
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Proposed maximum aggregate value of
transaction:
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(5)
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Total fee paid:
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Fee paid previously with preliminary
materials.
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Check box if any part of the fee is
offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing
for which the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or Schedule and the date
of its filing.
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(1)
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Amount Previously Paid:
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(2)
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Form, Schedule or Registration
Statement No.:
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(3)
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Filing Party:
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Date Filed:
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ISLE OF CAPRI CASINOS, INC.
600 EMERSON ROAD
ST. LOUIS, MISSOURI 63141
(314) 813-9200
NOTICE OF ANNUAL MEETING OF
STOCKHOLDERS
To be Held on Tuesday, October 5, 2010
The
2010 Annual Meeting of Stockholders of Isle of Capri Casinos, Inc. will be
held at 600 Emerson Road, St. Louis, Missouri, on Tuesday, October 5,
2010 at 9:00 a.m., Central Time, for the following purposes:
(1)
To elect nine
persons to the Board of Directors.
(2)
To ratify the
Audit Committees selection of Ernst & Young, LLP as our
independent registered public accounting firm for the 2011 fiscal year.
(3)
To amend our Certificate of
Incorporation to increase authorized common stock.
(4)
To amend our Certificate of
Incorporation to provide more detail with respect to the powers of the Board of
Directors in connection with issuing preferred stock.
(5)
To amend our Certificate of
Incorporation to fix a range for the number of Directors.
(6)
To amend our Certificate of
Incorporation with respect to filling vacancies on the Board of Directors.
(7)
To amend our Certificate of
Incorporation with respect to indemnification of directors, officers, employees
and agents.
(8)
To amend our Certificate of
Incorporation with respect to calling of special meetings of stockholders.
(9)
To amend our Certificate of
Incorporation with respect to the redemption of shares of a disqualified
holder.
(10)
To adopt the Amended and
Restated Certificate of Incorporation.
(11)
To transact
such other business as may properly come before the Annual Meeting.
The
record date for the determination of stockholders entitled to vote at the
Annual Meeting, or any adjournments or postponements thereof, is the close of
business on August 13, 2010. A stockholder list will be available for
examination for any purpose germane to the meeting, during ordinary business
hours at our principal executive offices, located at 600 Emerson Road,
St. Louis, Missouri 63141 for a period of 10 days prior to the
meeting date. Additional information regarding the matters to be acted on at
the Annual Meeting can be found in the accompanying Proxy Statement.
In
accordance with the Securities and Exchange Commission rules that allow us
to furnish proxy materials to you via the Internet, we have made these proxy
materials available to you at
www.proxyvote.com
,
or, upon your request, have delivered printed versions of these materials to
you by mail. We are furnishing this proxy statement in connection with the
solicitation by our Board of Directors of proxies to be voted at our 2010 Annual
Meeting. Reference is made to the proxy statement for further information with
respect to the items of business to be transacted at the Annual Meeting. We
have not received notice of other matters that may be properly presented at the
Annual Meeting.
Your
vote is important. Please read the proxy statement and the voting instructions
on the proxy. Then, whether or not you plan to attend the Annual Meeting in
person, and no matter how many shares you own, please download, sign, date and
promptly return the proxy. If you are a holder of record, you may also cast
your vote in person at the Annual Meeting.
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BY ORDER OF THE BOARD OF
DIRECTORS,
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Edmund L.
Quatmann, Jr.
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Senior
Vice President, General Counsel and Secretary
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St. Louis, Missouri
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August [
·
], 2010
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IMPORTANT NOTICE REGARDING THE
AVAILABILITY OF PROXY MATERIALS FOR THE 2010 ANNUAL MEETING OF STOCKHOLDERS TO
BE HELD ON OCTOBER 5, 2010
Isle of Capri Casinos Proxy
Statement for the 2010 Annual Meetings of Stockholders is available at
www.proxyvote.com
ISLE OF CAPRI CASINOS, INC.
600 EMERSON ROAD
ST. LOUIS, MISSOURI 63141
(314) 813-9200
PROXY STATEMENT
AUGUST [
·
], 2010
We
are furnishing this proxy statement to you in connection with the solicitation
by the Board of Directors of Isle of Capri Casinos, Inc., a Delaware
corporation, of proxies for use at the 2010 Annual Meeting of Stockholders to
be held on Tuesday, October 5, 2010, beginning at 9:00 a.m., Central
Time, at 600 Emerson Road, St. Louis, Missouri, and at any adjournment(s) of
the Annual Meeting. Isle of Capri Casinos, Inc., together with its
subsidiaries, is referred to herein as the Company, we, us or our,
unless the context indicates otherwise.
Our
principal executive offices are located at 600 Emerson Road, St. Louis,
Missouri 63141. A notice containing instructions on how to access our 2010
Annual Report to Stockholders, this proxy statement, and accompanying proxy
card was first mailed to our stockholders on or about August [
·
], 2010.
QUESTIONS AND ANSWERS
When is the 2010 Annual Meeting, and why
did I receive a one-page notice in the mail regarding the Internet
availability of proxy materials this year instead of a full set of printed
proxy materials?
The
Board of Directors of Isle of Capri Casinos, Inc., a Delaware corporation,
seeks your proxy for use in voting at our 2010 Annual Meeting or at any
postponements or adjournments of the Annual Meeting. The Board of Directors is
soliciting proxies beginning on or about August [
·
], 2010. Our Annual Meeting will be held at 600
Emerson Road, St. Louis, Missouri on Tuesday, October 5, 2010, at
9:00 a.m., Central Time. All holders of our common stock, par value $0.01
per share, entitled to vote at the Annual Meeting, will receive a one-page notice
in the mail regarding the Internet availability of proxy materials. Along with
the proxy statement, you will also be able to access our Annual Report on
Form 10-K/A for the fiscal year ended April 25, 2010 on the Internet.
Pursuant
to the rules adopted by the Securities and Exchange Commission (SEC), we
have elected to provide access to our proxy materials over the Internet.
Accordingly, we sent a notice to all of our stockholders as of the record
date. All stockholders may access our
proxy materials on the website referred to in the notice. Stockholders may also
request to receive a printed set of our proxy materials. Instructions on how to
access our proxy materials over the Internet or to request a printed copy can
be found on the notice. In addition, by following the instructions in the
notice, stockholders may request to receive proxy materials in printed form by
mail or electronically by email on an ongoing basis.
Choosing
to receive your future proxy materials by email will save us the cost of
printing and mailing documents to you. If you choose to receive future proxy
materials by email, you will receive an email next year with instructions
containing a link to those materials and a link to the proxy voting site. Your
election to receive proxy materials by email will remain in effect until you
terminate it.
THE
PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF ISLE OF CAPRI
CASINOS, INC.
On what am I being asked to vote?
At
the Annual Meeting, the Companys stockholders will be asked to vote on the
following proposals:
(1)
To elect nine
persons to the Board of Directors;
(2)
The
ratification of the Audit Committees selection of Ernst &
Young, LLP as our independent registered public accounting firm for the
2011 fiscal year;
1
(3)
The amendment of our
Certificate of Incorporation to increase authorized common stock;
(4)
The amendment of our
Certificate of Incorporation to provide more detail with respect to the powers
of the Board of Directors in connection with issuing preferred stock;
(5)
The amendment of our
Certificate of Incorporation to fix a range for the number of Directors;
(6)
The amendment of our
Certificate of Incorporation with respect to filling vacancies on the Board of
Directors;
(7)
The amendment of our
Certificate of Incorporation with respect to indemnification of directors,
officers, employees and agents;
(8)
The amendment of our
Certificate of Incorporation with respect to calling of special meetings of
stockholders;
(9)
The amendment of our
Certificate of Incorporation with respect to the redemption of shares of a
disqualified holder; and
(10)
The adoption of
the Amended and Restated Certificate of Incorporation.
The stockholders may also
transact any other business that may properly come before the meeting.
Who is entitled to vote at the Annual
Meeting?
The
record date for the Annual Meeting is August 13, 2010, and only
stockholders of record at the close of business on that date may vote at and
attend the Annual Meeting.
What constitutes a quorum for the purposes
of voting?
A
majority of the shares of the Companys common stock outstanding, represented
in person or by proxy at the Annual Meeting, will constitute a quorum for the
purpose of transacting business at the Annual Meeting. Abstentions and broker
non-votes (explained below) are counted as present for the purpose of
determining the presence or absence of a quorum for the transaction of
business. As of the record date, August 13, 2010, there were [
·
] shares of the Companys common stock outstanding
and entitled to vote, which excludes [
·
] shares held
by us in treasury.
What if a quorum is not present at the
Annual Meeting?
If
a quorum is not present during the meeting, we may adjourn the meeting. In
addition, in the event that there are not sufficient votes for approval of any
of the matters to be voted upon at the meeting, the meeting may be adjourned in
order to permit further solicitation of proxies.
How many votes do I have?
Each
outstanding share of the Companys common stock entitles its owner to one vote
on each matter that comes before the meeting. Your proxy card indicates the
number of shares of the Companys common stock that you owned as of the record
date, August 13, 2010.
How many votes are needed to approve each
item?
Provided
a quorum is present, directors will be elected by the affirmative vote of a
plurality of the shares of our common stock present at the Annual Meeting, in
person or by proxy, and entitled to vote on the proposal. Withheld votes, if
any, and broker non-votes, if any, will have no effect on the vote for the
proposal. Stockholders are not allowed to cumulate their votes for the election
of directors.
Ratification
of the Audit Committees selection of Ernst & Young, LLP as our independent
registered public accounting firm for the 2011 fiscal year requires the
affirmative vote of at least a majority of the shares of our common stock
present at the Annual Meeting, in person or by proxy, and entitled to vote on
the proposal. Broker non-votes, if any, will have
2
no effect on the vote for
this proposal. Abstentions will have the same effect as a vote against this
proposal. If this selection is not ratified by our stockholders, our Audit Committee
may reconsider its selection.
The
amendment of our Certificate of Incorporation and the adoption of the Amended
and Restated Certificate of Incorporation
require the affirmative vote of at least a majority of the shares of our
common stock that are outstanding and
entitled to vote on the proposals. Abstentions from voting and broker
non-votes, if any, will have the same effect as voting against the proposals.
What if my stock is held by a broker?
If
you are the beneficial owner of shares held in street name by a broker, your
broker, as the record holder of the shares, must vote those shares in
accordance with your instructions. In accordance with Rule 5635 of the
NASDAQ Marketplace Rules (the Marketplace Rules), certain matters
submitted to a vote of stockholders are considered to be routine items upon
which brokerage firms may vote in their discretion on behalf of their customers
if such customers have not furnished voting instructions within a specified
period prior to the meeting, so called broker non-votes. For those matters
that are considered to be non-routine, brokerage firms that have not received
instructions from their customers will not be permitted to exercise their
discretionary authority. Each of the items listed above is a non-routine
item.
How do I vote?
Stockholders
of record can choose one of the following ways to vote:
(1)
By mail: Please
download and print the proxy card from the Internet at
www.proxyvote.com
, complete, sign, date
and return the proxy card to:
Isle of Capri
Casinos, Inc.
c/o Broadridge
51 Mercedes Way
Edgewood, NY 11717
(2)
By Internet:
www.proxyvote.com
(3)
By telephone:
1-800-690-6903
(4)
In person at
the Annual Meeting.
By
casting your vote in any of the four ways listed above, you are authorizing the
individuals listed on the proxy to vote your shares in accordance with your
instructions.
If
you hold our voting securities in street name, only your broker or bank can
vote your shares. If you want to vote in person at our Annual Meeting and you
hold our voting securities in street name, you must obtain a proxy from your
broker and bring that proxy to our Annual Meeting.
How do I vote using the proxy card?
If
the proxy is properly signed and returned, the shares represented by the proxy will
be voted at the Annual Meeting according to the instructions indicated on your
proxy. If the proxy does not specify how your shares are to be voted, your
shares represented by the proxy will be voted:
1.
For the
election of the directors recommended by the Board of Directors;
2.
To ratify the
Audit Committees selection of Ernst & Young, LLP as our
independent registered public accounting firm for the 2011 fiscal year;
3.
To amend our
Certificate of Incorporation to increase authorized common stock;
4.
To amend our
Certificate of Incorporation to provide more detail with respect to the powers
of the Board of Directors in connection with issuing preferred stock;
3
5.
To amend our
Certificate of Incorporation to fix a range for the number of Directors;
6.
To amend our
Certificate of Incorporation with respect to filling vacancies on the Board of
Directors;
7.
To amend our
Certificate of Incorporation with respect to indemnification of directors,
officers, employees and agents;
8.
To amend our
Certificate of Incorporation with respect to calling of special meetings of
stockholders;
9.
To amend our
Certificate of Incorporation with respect to the redemption of shares of a
disqualified holder;
10.
To adopt the Amended and
Restated Certificate of Incorporation; and
11.
In their
discretion, upon such other business as may properly come before the meeting.
Can I change my vote after I have submitted
my proxy?
Yes,
a stockholder who has submitted a proxy may revoke it at any time prior to its
use by:
1.
Delivering a
written notice to the Secretary;
2.
Executing a
later-dated proxy; or
3.
Attending the
Annual Meeting and voting in person.
A
written notice revoking the proxy should be sent to the Companys Secretary at
the following address:
Edmund L. Quatmann, Jr.
Senior Vice President,
General Counsel and Secretary
Isle of Capri
Casinos, Inc.
600 Emerson Road
St. Louis, Missouri
63141
How will the votes be tabulated at the
meeting?
Votes
cast by proxy or in person at the Annual Meeting will be tabulated by the
election inspectors appointed for the Annual Meeting, and such election
inspectors also will determine whether or not a quorum is present.
Will the Company solicit proxies in
connection with the Annual Meeting?
Yes,
the Company will solicit proxies in connection with the Annual Meeting. We will
bear all costs of soliciting proxies including charges made by brokers and
other persons holding stock in their names or in the names of nominees for reasonable
expenses incurred in sending proxy material to beneficial owners and obtaining
their proxies. In addition to solicitation by mail, our directors, officers,
and employees may solicit proxies personally and by telephone, facsimile and
email, all without extra compensation. We may retain a proxy solicitation firm
to assist in the solicitation of proxies. If we retain such a firm, the fee to
be paid for such services will be borne by us and is not expected to exceed
$7,500 plus reasonable expenses.
4
ELECTION OF DIRECTORS
At
the Annual Meeting, stockholders will vote on the election of nominees listed
below to serve as directors until the next annual meeting of stockholders or
until their respective successors, if any, are have been elected and qualified.
Each of these individuals is currently serving on the Companys Board of
Directors. John G. Brackenbury, a director currently serving on the Companys
Board of Directors, is retiring and not standing for re-election. The Company does not know of any reason why
any nominee would be unable or unwilling to serve as a director. If any nominee
is unable or unwilling to serve, the shares represented by all valid proxies
will be voted for the election of such other person as the Companys Board may
nominate.
Nominees
The
Board of Directors recommends that you vote FOR each of the following
nominees:
Name
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Age
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James B. Perry
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60
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Robert S. Goldstein
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55
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W. Randolph Baker
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63
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Alan J. Glazer
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69
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Jeffrey D. Goldstein
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57
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Richard A. Goldstein
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49
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Shaun R. Hayes
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50
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Gregory J. Kozicz
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49
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Lee S. Wielansky
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59
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Nominee Background
James B. Perry
has been a
director since July 2007 and was named Chairman of the Board in August 2009.
Since March 2008, he has served as our Chief Executive Officer. Prior to being
named Chairman, Mr. Perry was Executive Vice Chairman from March 2008
to August 2009 and Vice Chairman from July 2007 to March 2008.
Mr. Perry served as a Class III Director on the board of Trump
Entertainment Resorts, Inc. from May 2005 until July 2007. From July 2005
to July 2007, Mr. Perry served as Chief Executive Officer and
President of Trump Entertainment Resort, Inc., which filed for Chapter 11
bankruptcy in February 2009.
Mr. Perry was President of Argosy Gaming Company from April 1997
through July 2002 and Chief Executive Officer of Argosy Gaming Company
from April 1997 through May 2003. Mr. Perry also served as a
member of the Board of Directors of Argosy Gaming Company from 2000 to July 2005. Mr. Perry brings more than 25 years of
industry experience to the Board and his day-to-day leadership of the Company
provides our Board of Directors with intimate knowledge of all aspects of our
business. He also has extensive
experience in executive management and strategic planning.
Robert S. Goldstein
has been a
director since February 1993 and was named Vice Chairman of the Board in March 2008.
Prior to being named Vice Chairman, Mr. Goldstein was Executive Vice
Chairman from October 2005 to March 2008. Mr. Goldstein is the
Chairman, Chief Executive Officer and President of Alter Trading Corporation, a
company engaged in the business of scrap metal recycling, and has been
associated with that company since 1977. Mr. Goldstein serves as Chairman
and Chief Executive Officer of Goldstein Group, Inc., a private company.
Additionally, Mr. Goldstein was a director, officer, and stockholder of
the Steamboat Companies and has been an officer of several affiliated companies
engaged in river transportation, stevedoring and equipment leasing since 1980.
Mr. Goldstein is the brother of Jeffrey D. Goldstein and Richard A.
Goldstein. Mr. Goldstein has
extensive experience in management of operations, corporate governance and
strategic planning. Mr. Goldstein
has served as a member of our Board for more than 16 years and brings to the
Board an in-depth understanding of the Companys business, history and
organization.
W. Randolph Baker
has been a
director since September 1997. In July 2008, Mr. Baker resigned
from his position as Chair of the Sycuan Institute on Tribal Gaming at San
Diego State University, the nations first academic program dedicated to the
study of tribal gaming, where he served since August 2006. He is currently
a principal in Randolph Baker & Associates, a consulting firm located
in San Antonio, Texas. Previously Mr. Baker served as Executive Director
of the Shelby County Schools Education Foundation, a nonprofit organization
dedicated to enhancing the quality of K-12 education in Shelby County,
Tennessee. From June 1996 to Spring 2004, he served as Vice Chairman and
Chief Executive Officer of Thompson Baker & Berry, a regional public
relations and public affairs firm located in Memphis, Tennessee. Prior to that,
Mr. Baker served as the Harrahs Visiting Professor of Gaming Studies in
the College of Business at the University of Nevada, Reno, and as Director of
Public Affairs for The Promus Companies Incorporated, then a holding company
for casino
5
and hotel brands (including
Harrahs casino hotels) in Memphis, Tennessee.
Mr. Baker has extensive experience in management of operations,
regulatory matters, public policy, corporate governance, corporate finance and
accounting and brings to the Board a significant level of knowledge regarding tribal
gaming.
Alan J. Glazer
has been a
director since November 1996 and in October 2009, was named Lead
Director. He is currently a Senior
Principal of Morris Anderson & Associates, Ltd., a national
management consulting firm, where he has worked since 1984. Prior to joining
Morris Andersen, Mr. Glazer was Senior Vice President and Chief Financial
Officer for Consolidated Foods Corp., a large international manufacturer and
distributor of branded consumer products.
Before joining CFC, Mr. Glazer spent 13 years at Arthur Andersen &
Co., the last five as a General Partner.
Mr. Glazer also serves as a director of Goldstein Group, Inc.,
a private company owned by the Goldstein family. Mr. Glazer has extensive experience in
management of operations, corporate finance and accounting and brings to the
Board extensive knowledge of the financial and accounting issues facing public
companies. The Board has designated Mr. Glazer
as an audit committee financial expert as that term is defined in the SECs rules adopted
pursuant to the Sarbanes-Oxley Act of 2002.
Jeffrey D. Goldstein
has been a
director since October 2001. Mr. Goldstein is Chairman and President
of Alter Company and its related barge and other transportation entities.
Mr. Goldstein has been associated with Alter Company for over thirty
years, serving in various management roles. Mr. Goldstein serves as a
director of Goldstein Group, Inc., a private company. Additionally,
Mr. Goldstein was a director, officer, and stockholder of the Steamboat
Companies. Mr. Goldstein is the brother of Robert S. Goldstein and Richard
A. Goldstein. Mr. Goldstein has
extensive experience in management of operations, corporate governance and
strategic planning and brings to the Board invaluable perspectives on all
aspects of the Companys business.
Richard A. Goldstein
has been a
director since October 2009. Mr. Goldstein serves on the Board of
Directors, and is an Executive Vice President, of Alter Trading Corporation, a
company engaged in the business of scrap metal recycling, and has been
associated with that company since 1983. Mr. Goldstein also serves as the
President of Alter Energy, LLC, and serves on the Board of Directors, and
is an Executive Vice President, of Alter Company. Mr. Goldstein serves as
a director and Executive Vice President of Goldstein Group, Inc., a
private company. Mr. Goldstein was a director, officer and stockholder of
the Steamboat Companies. Mr. Goldstein is the brother of Jeffrey D.
Goldstein and Robert S. Goldstein.
Mr. Goldstein has extensive experience in management of operations,
corporate governance and strategic planning and brings to the Board invaluable
perspectives on all aspects of the Companys business.
Shaun R. Hayes
has been a
director since January 2006. Since August 2008, Mr. Hayes has
served as President and CEO of Sun Security Bank, a wholly-owned subsidiary of
Sun Financial, a Missouri-based bank holding company. Mr. Hayes was
president and chief executive officer of Missouri banking for National City
Bank from April 2004 to July 2008.
Mr. Hayes has extensive experience in management of operations,
banking, corporate finance and accounting and his experience and expertise have
proven especially valuable to the Board in its financing matters.
Gregory J. Kozicz
has been a director since January 2010. Mr. Kozicz is president and chief
executive officer of Alberici Corporation, a St. Louis-based diversified
construction, engineering and steel fabrication company, and Alberici
Constructors Inc., a wholly-owned subsidiary of Alberici Corporation. He
also serves on the Eighth District Real Estate Industry Council of the Federal
Reserve Bank of St. Louis. He has served as president and chief executive
officer of Alberici Corporation and Alberici Constructors since 2005 and June 2004,
respectively. Prior to his current roles, Kozicz was president of
Alberici Constructors Ltd. (Canada). Before joining Alberici in 2001,
Kozicz served as a corporate officer and divisional president for Aecon, a
publicly-traded construction, engineering and fabrication company. Mr. Kozicz has extensive experience in
management of operations, the construction industry, real estate investments,
corporate governance and strategic planning.
Mr. Kozicz brings to the Board a wide range of experience, particularly
with respect to construction and development matters.
Lee S. Wielansky
has been a
director since February 2007. Since March 2003, Mr. Wielansky
has served as Chairman and Chief Executive Officer of Midland Development
Group, Inc., a commercial real estate development company with locations
in St. Louis, Missouri and Jacksonville, Florida. From November 2000
to March 2003, Mr. Wielansky served as President and Chief Executive
Officer of JDN Development Company, Inc., a wholly owned subsidiary of JDN
Corporation, a publicly traded real estate investment trust engaged in the
development of retail shopping centers. From 1998 to 2000, Mr. Wielansky
was a Managing Director of Regency Centers Corporation, a publicly traded real
estate investment trust. In 1983, Mr. Wielansky co-founded Midland
Development Group, Inc. and served as Chief Executive Officer until 1998
when the company was acquired by Regency Centers Corporation.
Mr. Wielansky serves as Chairman of the Board of Directors of Pulaski
Financial Corp., the holding company for Pulaski Bank, and serves as a director
of Acadia Realty Trust, a real estate investment trust. Mr. Wielansky has extensive experience
in management of operations, real estate investments
6
and management, corporate
governance, corporate finance and accounting.
Mr. Wielansky brings to the Board important perspectives with
respect to real estate and developments.
With
respect to each of our current directors, we own a majority interest in Blue
Chip Casinos Plc, a United Kingdom entity which owns and operates two
casinos in the United Kingdom. In March of 2009, Blue Chip filed for
Administration in the United Kingdom under the Insolvency Act 1986. During fiscal year 2010, we completed the
sale of our Blue Chip casino properties under a plan of administration and have
no continuing involvement in its operation.
Board
Leadership Structure
Mr. Perry
is our Chairman and Chief Executive Officer and leads our Board. Mr. Perry
has general charge and management of the affairs, property and business of the
Company, under the oversight, and subject to the review and direction, of the
Board of Directors. He also serves as a valuable bridge between the Board and
our management. He presides at all
meetings of stockholders and the Board.
Mr. Glazer is our Lead Director.
He has, in addition to the powers and authorities of any member of our
Board of Directors, the power and authority to chair executive sessions and to
work closely with the Chairman in determining the appropriate schedule for the
Board meetings and assessing the quality, quantity and timeliness of
information provided from our management to the Board. The Lead Director
position is at all times held by a director who is independent as defined in
Nasdaq Rule 5605(a)(2). The Board
of Directors believes that the current leadership structure is appropriate at
this time based on the Boards understanding of corporate governance best
practice. The Board of Directors does not have a policy specifying a particular
leadership structure as it believes that it should have the flexibility to
choose the appropriate structure as circumstances change. Our independent directors meet in regular
executive sessions without management being present. Additionally, each of the Stock Option and
Compensation Committee, Audit Committee and Nominating Committee is composed
entirely of independent directors.
Boards
Role in Risk Oversight
Our
Board of Directors recognizes that, although risk management is primarily the
responsibility of the Companys management team, the Board of Directors plays a
critical role in the oversight of risk, including the identification and
management of risk. The Board of Directors believes that an important part of its
responsibilities is to assess the major risks we face and review our strategies
for monitoring and controlling these risks. The Board of Directors involvement
in risk oversight involves the full Board of Directors, the Stock Option and
Compensation Committee, the Audit Committee, the Nominating Committee and the
Compliance Committee. The Stock Option
and Compensation Committee considers the level of risk implied by our
compensation programs, including incentive compensation programs in which the
Chief Executive Officer and other employees participate. The Audit Committee
regularly considers major financial risk exposures and the steps taken to
monitor and control such exposures, including our risk assessment and risk
management policies. The Audit Committee also reviews risks associated with our
financial accounting and reporting processes, litigation matters, and our
compliance with legal and regulatory requirements. The Nominating Committee monitors potential
risks to the effectiveness of the Board of Directors, notably Director
succession and Board of Directors composition.
The Compliance Committee reviews potential regulatory compliance risks
with various jurisdictions and evaluates the Companys risks with potential
business transactions.
Independence
The
Board of Directors has determined that the following directors are independent
as defined in Nasdaq Rule 5605(a)(2):
W. Randolph Baker
John G. Brackenbury
Alan J. Glazer
Shaun R. Hayes
Gregory J. Kozicz
Lee S. Wielansky
Meetings
During
the fiscal year ended April 25, 2010, which we refer to as fiscal 2010,
the Board of Directors met in person or telephonically twelve times. During
fiscal 2010, each of our directors attended at least 75% of the aggregate of
(i) the total number of meetings of the Board (held during the period for
which he severed as a director) and (ii) the total number of meetings held
by all committees of the Board during which period he served. Directors are
expected to attend each Annual
7
Meeting of Stockholders.
Each member of the current Board of Directors that was a member of the Board in
October 2009 attended last years Annual Meeting of Stockholders.
Committees
The
Board of Directors has three standing committees: the Stock Option and
Compensation Committee, the Audit Committee, and the Nominating Committee.
During fiscal 2010, the Stock Option and Compensation Committee met five times,
the Audit Committee met ten times and the Nominating Committee met on an informal
basis from time to time.
Stock Option and Compensation Committee.
Messrs. Hayes, Glazer, Baker,
Brackenbury, Wielansky and Kozicz are members of the Stock Option and
Compensation Committee. Mr. Hayes acts as chairman of the Stock Option and
Compensation Committee. The Stock Option and Compensation Committee acts as an
advisory committee to the full Board with respect to compensation of our
executive officers and other key employees, including administration of the
long-term incentive plan, option and restricted stock grants, and bonuses.
Additional information regarding the policies of the Committee is set forth in
the Stock Option and Compensation Committee Report on Executive Compensation
included in this proxy statement. In accordance with Nasdaq
Rule 5605(d)(1)(B), each member of the Stock Option and Compensation
Committee is independent as defined in Nasdaq Rule 5605(a)(2). The Stock
Option and Compensation Committee Charter is posted on the Companys website at
www.islecorp.com
under Investor
RelationsCorporate Governance.
Audit Committee.
Messrs. Glazer, Baker, Hayes and
Wielansky are members of the Audit Committee. Mr. Glazer acts as chairman
of the Audit Committee. The Audit Committees responsibilities include
selecting our independent registered public accounting firm, reviewing the
plan, scope and results of the independent audit, reviewing the fees for the
audit services performed, reviewing and pre-approving the fees for the
non-audit services to be performed and reviewing all financial statements.
Information regarding the functions performed by the Audit Committee during the
fiscal year is set forth in the Report of the Audit Committee, included in
this proxy statement. Each member of the Audit Committee is independent as
defined in Nasdaq Rule 5605(a)(2). The Board has determined that each
member of the Audit Committee is free from any relationship that would
interfere with the exercise of independent judgment as a committee member.
Mr. Glazer has been designated as our audit committee financial expert
under the SEC Rules. The Audit Committee is governed by a written charter
approved by the Board of Directors. The Audit Committee Charter is posted on
the Companys website at
www.islecorp.com
under Investor RelationsCorporate Governance.
Nominating Committee.
Messrs. Glazer and Hayes are members of
the Nominating Committee. Mr. Glazer acts as chairman of the Nominating
Committee. The Nominating Committee considers and makes recommendations
concerning the size and composition of the Board of Directors, the number of
non-executive members of the Board of Directors, and membership of committees
of the Board of Directors. As a policy, the Nominating Committee generally does
not consider nominees recommended by the Companys stockholders. In determining
the criteria for membership on the Board of Directors, the Nominating Committee
considers the skills and personal characteristics required in light of the
then-current makeup of the Board and in the context of the perceived needs of
the Company at the time, including the following attributes: financial acumen,
general business experience, industry knowledge, leadership abilities, high
ethical standards and independence. The
Company does not have a formal policy on diversity; however, the Nominating
Committee believes that nominees should reflect over time a diversity of
experience, gender, race, ethnicity and age.
In accordance with Nasdaq Rule 5605(e)(1)(B), Messrs. Glazer
and Hayes are independent as defined in Nasdaq Rule 5605(a)(2). The
Nominating Committee Charter is posted on the Companys website at
www.islecorp.com
under Investor
RelationsCorporate Governance.
In
addition to the foregoing committees of the Board of Directors, we also
maintain a Compliance Committee that is made up of both directors and
non-directors. Messrs. Baker and Kozicz are members of the Compliance
Committee, along with Messrs. Harry Redmond and Steve DuCharme and
Ms. Virginia McDowell, our President and Chief Operating Officer. Mr. Baker acts as chairman and
Messrs. Redmond and DuCharme are independent members. The Compliance
Committees responsibilities include maintaining compliance with the regulatory
requirements imposed upon the Company by the jurisdictions in which it operates
and evaluating relationships between the Company and persons and entities with
whom the Company proposes to do business.
Compensation of Directors
For
the one-year term that commenced October 6, 2009, our non-employee
directors received a $50,000 annual retainer, additional compensation of $4,000
for each in-person board meeting attended, $2,000 for each in-person meeting
with management that they were required to attend and $1,000 for any other
in-person meeting they were required to attend; provided, however, that the Vice
Chairman of the Board received an annual retainer of $100,000 in lieu of the
standard
8
annual retainer and per
meeting fees. The Chairmen of the Companys Audit Committee and Stock Option
and Compensation Committee each receive an additional annual retainer of
$25,000 and $7,500, respectively, for chairing those Committees, and the
Chairman of the Companys Compliance Committee receives a fee of $2,000 per
meeting. Directors are also eligible for annual long-term incentive awards. For
the one-year term that commenced October 6, 2009, each non-employee
director at-large was awarded 13,202 shares of restricted stock, our Vice
Chairman was awarded 24,204 shares of restricted stock. The awards vest 50% upon
issuance and 50% on the one-year anniversary of issuance. Directors who are our
employees (i.e., our Chairman) receive no additional compensation for serving
as directors. All directors are reimbursed for travel and other expenses
incurred in connection with attending board meetings and meetings with
management that they may be required to attend.
Director
compensation for the one-year term commencing October 5, 2010 has not yet
been set.
Fiscal 2010 Director Compensation
The
following table sets forth information with respect to all compensation awarded
the Companys directors during fiscal 2010:
Name(1)
|
|
Fees earned
or paid in
cash
($)
|
|
Stock Awards
($)(2)
|
|
All other
compensation
($)(3)
|
|
Total
($)
|
|
W.
Randolph Baker
|
|
72,000
|
|
150,173
|
|
|
|
222,173
|
|
John
G. Brackenbury(4)
|
|
70,000
|
|
150,173
|
|
60,000
|
|
280,173
|
|
Alan
J. Glazer
|
|
100,000
|
|
165,199
|
|
|
|
265,199
|
|
Jeffery
D. Goldstein
|
|
78,000
|
|
150,173
|
|
|
|
228,173
|
|
Richard
A. Goldstein
|
|
71,000
|
|
188,086
|
|
|
|
259,086
|
|
Robert
S. Goldstein
|
|
100,000
|
|
275,321
|
|
|
|
375,321
|
|
Shaun
R. Hayes
|
|
86,500
|
|
160,194
|
|
|
|
246,694
|
|
Gregory
J. Kozicz(5)
|
|
43,000
|
|
28,181
|
|
|
|
71,181
|
|
Lee
S. Wielansky
|
|
75,000
|
|
150,173
|
|
|
|
225,173
|
|
(1)
James B. Perry,
our Chief Executive Officer and the Chairman of our Board of Directors, is a
Named Executive Officer and his compensation as Chief Executive Officer is
included in the Summary Compensation Table. He does not receive additional
compensation for his service as a director.
(2)
The amounts in
this column represent the aggregate grant date fair value of awards granted
during fiscal 2010 computed in accordance with Financial Accounting Standards
Board (FASB) Accounting Standards Codification (ASC) Topic 718,
Compensation - Stock Compensation. The assumptions used in the calculation of
these amounts for stock awards are disclosed in Note 10 to our
Consolidated Financial Statements included in our Annual Report on
Form 10-K/A for the fiscal year ended April 25, 2010 with the
exception that for the directors no forfeiture rate is applied.
(3)
Occasionally
the spouse of a director accompanies the director on travel to Board meetings
at our expense. This column does not include this cost, which is minimal.
(4)
Mr. Brackenbury
received $60,000 in fees for serving on the Board of Directors of The Isle Casinos
Limited.
(5)
Mr. Kozicz
joined the Board on January 27, 2010.
The amount included in the Stock Awards column for Mr. Kozicz
reflects his initial award of 3,333 shares of restricted stock for joining the
Board.
Stockholder Communications with the Board
The
Board provides a process for stockholders to send communications to the Board
or any of the directors, including the independent directors. All such
communications must be in writing and shall be addressed to the Corporate
Secretary, Isle of Capri Casinos, Inc., 600 Emerson Road,
St. Louis, Missouri 63141, Attention: Stockholder Communications. All
inquiries will be reviewed by the Secretary who will forward to the Board a
summary of all such correspondence and copies of all communications that he
determines require the attention of the Board. All communications will be
compiled and submitted to the Board or the individual directors on a regular
basis unless such communications are considered, in the reasonable discretion
of the Secretary, to be improper for submission to the intended recipients.
Examples
9
of communications that would
be deemed improper for submission include, without limitation, customer
complaints, solicitations, communications that do not relate directly or
indirectly to the Company or the Companys business or communications that
relate to irrelevant topics.
Executive Sessions
In
accordance with Nasdaq Rule 5605(b)(2), the Board currently schedules
regular meetings at which only independent directors are present. The executive
sessions generally are scheduled in conjunction with each Board meeting at
which the members of the Board of Directors meet in person. The Lead Director
presides over these sessions.
Code of Conduct
As
required by Nasdaq Rule 5610, the Board of Directors has adopted a Code of
Business Conduct that applies to all of the Companys directors, officers and
employees. In addition, the Company has adopted a Code of Ethics that applies
to its principal executive officer, principal financial officer, principal
accounting officer, controller and others performing similar functions and
specifies the legal and ethical conduct expected of such officers. The Companys
Code of Business Conduct and Code of Ethics are posted on the Companys website
at
www.islecorp.com
under
Investor RelationsCorporate Governance and will be provided free of charge
upon request to the Company.
Compensation Committee Interlocks and Insider Participation
There
are no Stock Option and Compensation Committee interlocks (i.e., none of
our executive officers serves as a member of the board of directors or the
compensation committee of another entity that has an executive officer serving
as a member of our Board or the Stock Option and Compensation Committee of our
Board).
10
OWNERSHIP OF OUR CAPITAL STOCK
The
following table sets forth information with respect to the beneficial ownership
of our common stock as of August 13, 2010 (unless otherwise indicated) by:
(1) each director and nominee for director, (2) the individuals named
in the Summary Compensation Table (i.e., the Named Executive Officers),
(3) all directors, nominees for director and executive officers (including
the Named Executive Officers) as a group, and (4) based on information
available to us and filings made under Sections 13(d) and 13(g) of
the Securities Exchange Act of 1934, as amended, each person known by us to be
the beneficial owner of more than 5% of our common stock. Unless otherwise
indicated, all persons listed have sole voting and dispositive power over the
shares beneficially owned.
Name and
Address of Beneficial Owners(1)
|
|
Number of Shares of
Common Stock
Beneficially Owned(2)
|
|
Percentage of
Outstanding
Shares Owned(2)
|
|
Robert S.
Goldstein(3)(4)
|
|
14,160,133
|
|
43.2
|
%
|
Jeffrey D.
Goldstein(3)(5)
|
|
13,642,746
|
|
41.6
|
%
|
Richard A.
Goldstein(3)(6)
|
|
13,495,126
|
|
41.2
|
%
|
B.I.J.R.R.
Isle, Inc.(3)(7)
|
|
9,273,115
|
|
28.3
|
%
|
B.I.
Isle Partnership, L.P.(3)(8)
|
|
4,502,625
|
|
13.7
|
%
|
Goldstein
Group, Inc.(3)(9)
|
|
2,898,243
|
|
8.8
|
%
|
Thompson,
Siegel & Walmsley LLC(10)
|
|
1,712,948
|
|
5.2
|
%
|
W. Randolph
Baker(11)
|
|
47,830
|
|
*
|
|
John G.
Brackenbury(12)
|
|
36,431
|
|
*
|
|
Alan J.
Glazer(13)
|
|
91,589
|
|
*
|
|
Shaun R.
Hayes(14)
|
|
34,123
|
|
*
|
|
Gregory
J. Kozicz (15)
|
|
3,333
|
|
*
|
|
James B.
Perry(16)
|
|
516,141
|
|
1.6
|
%
|
Lee S.
Wielansky(17)
|
|
37,237
|
|
*
|
|
Virginia M.
McDowell(18)
|
|
342,763
|
|
1.0
|
%
|
Dale R.
Black(19)
|
|
157,675
|
|
*
|
|
Arnold L.
Block(20)
|
|
32,020
|
|
*
|
|
R. Ronald
Burgess(21)
|
|
44,653
|
|
*
|
|
D. Douglas
Burkhalter(22)
|
|
60,353
|
|
*
|
|
Roger W.
Deaton (23)
|
|
140,774
|
|
*
|
|
Eric
L. Hausler (24)
|
|
40,422
|
|
*
|
|
Paul B.
Keller(25)
|
|
84,116
|
|
*
|
|
Donn R.
Mitchell, II(26)
|
|
97,851
|
|
*
|
|
Edmund L.
Quatmann, Jr.(27)
|
|
86,301
|
|
*
|
|
Jeanne-Marie
Wilkins(28)
|
|
58,512
|
|
*
|
|
Directors
and Executive Officers as a Group (21 persons)(29)
|
|
19,301,409
|
|
58.1
|
%
|
*
Less than 1%.
Notes:
(1)
Unless
otherwise indicated below, the business address for each member or affiliated
entity of the Goldstein family listed below is 2117 State Street, Bettendorf, Iowa
52722.
(2)
Calculated
pursuant to Rule 13d-3 under the Securities Exchange Act of 1934, as
amended. Under Rule 13d-3(d), shares not currently outstanding that are
subject to options, warrants, rights or conversion privileges exercisable
within 60 days of August 13, 2010, are deemed outstanding for the
purpose of calculating the number and percentage owned by such person, but are
not deemed outstanding for the purpose of calculating the percentage owned by
any other person listed.
(3)
Information regarding beneficial ownership of our common stock is
included herein in reliance on Schedule 13D/A as filed with the SEC on May 14,
2010 and June 29, 2010. Further, on
April 30, 2010, members of the Goldstein family, including Robert S.
Goldstein, Jeffrey D. Goldstein, Richard A. Goldstein and various family trusts
and other entities associated with members of the Goldstein family (the Goldstein
Group) entered into an Agreement related to their ownership of our common
stock (the Goldstein Family Agreement).
The Goldstein Family Agreement includes, among other things, an
agreement by the parties to coordinate their efforts with each other with
11
respect to their ownership of our common stock and
to ensure that the interests of the Goldstein Group are appropriately
considered by our Board of Directors. As
of June 29, 2010, the Goldstein Group beneficially owned in the aggregate
approximately 50.1% of the issued and outstanding shares of our common stock.
(4)
The number of
shares beneficially owned by Robert S. Goldstein includes 9,273,115 shares
of which Robert S. Goldstein, as Co-Chairman and Chief Executive Officer of
B.I.J.R.R. Isle, Inc., has indirect beneficial ownership, 2,898,243 shares
held by the Goldstein Group, Inc., of which Robert S. Goldstein has
indirect beneficial ownership, 540,000 shares held in the Richard A. Goldstein
Irrevocable Trust, of which Robert S. Goldstein, as co-trustee, has indirect
beneficial ownership, 540,000 shares held in the Jeffrey D. Goldstein
Irrevocable Trust, of which Robert S. Goldstein, as co-trustee, has indirect
beneficial ownership, 75,000 shares in a family private foundation of which he
is a director, 24,476 shares held in an IRA account over which Mr. Goldstein
has a power of attorney which includes voting and dispositive power and 28,333
shares of restricted stock subject to vesting.
Such indirect beneficial ownership arises from the power to vote or to
direct the vote or the power to dispose or direct the disposition of such
shares and does not necessarily constitute a personal ownership interest in
such shares. The business address of Robert S. Goldstein is 700 Office Parkway,
St. Louis, Missouri 63141.
(5)
The number of
shares beneficially owned by Jeffrey D. Goldstein includes 9,273,115
shares of which Jeffrey D. Goldstein, as Co-Chairman and Chief Executive
Officer of B.I.J.R.R. Isle, Inc. (the sole general partner of B.I. Isle
Partnership, L.P., Rob Isle Partnership, L.P., Rich Isle Partnership, L.P.,
Jeff Isle Partnership, L.P. and I.G. Isle Partnership, L.P.), has indirect
beneficial ownership, 2,898,243 shares held by the Goldstein Group, Inc.,
of which Jeffrey D. Goldstein has indirect beneficial ownership, 540,000 shares
held in the Richard A. Goldstein Irrevocable Trust, of which Jeffrey D.
Goldstein, as co-trustee, has indirect beneficial ownership, 75,000 shares in a
family private foundation of which he is a director, 24,476 shares held in an
IRA account over which Mr. Goldstein has a power of attorney which
includes voting and dispositive power and 14,803 shares of restricted stock
subject to vesting. Such indirect
beneficial ownership arises from the power to vote or to direct the vote or the
power to dispose or direct the disposition of such shares and does not
necessarily constitute a personal ownership interest in such shares. The
business address of Jeffrey D. Goldstein is 2117 State Street, Suite 300,
Bettendorf, Iowa 52722.
(6)
The number of
shares beneficially owned by Richard A. Goldstein includes 9,273,115
shares of which Richard A. Goldstein, as Co-Chairman and Chief Executive
Officer of B.I.J.R.R. Isle, Inc. has indirect beneficial ownership,
2,898,243 shares held by the Goldstein Group, Inc., of which Richard A.
Goldstein has indirect beneficial ownership, 540,000 shares held in the Jeffrey
D. Goldstein Irrevocable Trust, of which Richard A. Goldstein, as co-trustee,
has indirect beneficial ownership, 75,000 shares in a family private foundation
of which he is a director, 24,476 shares held in an IRA account over which Mr. Goldstein
has a power of attorney which includes voting and dispositive power and 8,268
shares of restricted stock subject to vesting.
Such indirect beneficial ownership arises from the power to vote or to
direct the vote or the power to dispose or direct the disposition of such
shares and does not necessarily constitute a personal ownership interest in
such shares. The business address of Richard A. Goldstein is 700 Office
Parkway, St. Louis, Missouri 63141.
(7)
B.I.J.R.R. Isle, Inc.
is the general partner of B.I. Isle Partnership, L.P., Rob Isle Partnership,
L.P., Rich Isle Partnership, L.P., Jeff Isle Partnership, L.P. and I.G. Isle
Partnership, L.P. and, as such, has indirect beneficial ownership of the shares
held by each limited partnership. Such indirect beneficial ownership
arises from the power to vote or to direct the vote or the power to dispose or
direct the disposition of such shares and does not necessarily constitute a
personal ownership interest in such shares. Jeffrey D. Goldstein, Richard A.
Goldstein, and Robert S. Goldstein, each as a Co-Chairman and Chief Executive
Officer of B.I.J.R.R. Isle, Inc., have indirect beneficial ownership and
report shared voting and dispositive power as to these shares. Such
indirect beneficial ownership arises from the power to vote or to direct the vote
or the power to dispose or direct the disposition of such shares and does not
necessarily constitute a personal ownership interest in such shares. The
address for B.I.J.R.R. Isle, Inc. is c/o Michael Newmark, Bryan Cave LLP,
211 N. Broadway, Ste. 3600, St. Louis, Missouri 63102.
(8)
Jeffrey D.
Goldstein, Richard A. Goldstein, and Robert S. Goldstein, each as a Co-Chairman
and Chief Executive Officer of B.I.J.R.R. Isle, Inc., have indirect
beneficial ownership and report shared voting and dispositive power as to these
shares. Such indirect beneficial ownership arises from the power to vote
or to direct the vote or the power to dispose or direct the disposition of such
shares and does not necessarily constitute a personal ownership interest in
such shares. The address of B.I. Isle Partnership is c/o Michael Newmark, Bryan
Cave LLP, 211 N. Broadway, Ste. 3600, St. Louis, Missouri 63102.
12
(9)
Shares owned by
Goldstein Group, Inc. are reported as beneficially owned by Jeffrey D.
Goldstein, Robert S. Goldstein and Richard A. Goldstein. The address for
Goldstein Group, Inc. is 2117 State Street, Suite 300, Bettendorf, Iowa
52722.
(10)
As reflected on
a Form 13F filed on May 14, 2010 by Thompson, Siegel & Walmsley
LLC. The address for Thompson, Siegel &
Walmsley LLC is 6806 Paragon Place, Suite 300, PO Box 6883, Richmond, VA
23230.
(11)
Includes
2,000 shares issuable upon the exercise of stock options that are
exercisable within 60 days and 14,622 shares of restricted stock subject
to vesting.
(12)
Includes 14,679
shares of restricted stock subject to vesting.
(13)
Includes
8,000 shares issuable upon the exercise of stock options that are
exercisable within 60 days, 16,577 shares of restricted stock subject to
vesting and 1,000 shares owned by Mr. Glazers wife.
(14)
Includes 13,331
shares of restricted stock subject to vesting.
(15)
Includes 1,666
shares of restricted stock subject to vesting.
(16)
Includes
200,000 shares issuable upon the exercise of stock options that are
exercisable within 60 days and 194,954 shares of restricted stock subject
to vesting.
(17)
Includes
9,885 shares of restricted stock subject to vesting.
(18)
Includes
242,678 shares of restricted stock subject to vesting.
(19)
Includes
117,544 shares of restricted stock subject to vesting.
(20)
Includes 24,123
shares of restricted stock subject to vesting.
(21)
Includes 38,895
shares of restricted stock subject to vesting.
(22)
Includes 38,895
shares of restricted stock subject to vesting.
(23)
Includes 80,975
shares issuable upon the exercise of stock options that are exercisable within
60 days and 22,154 shares of restricted stock subject to vesting.
(24)
Includes 20,000
shares issuable upon exercise of stock options that are exercisable within 60
days and 20,422 shares of restricted stock subject to vesting.
(25)
Includes 40,000
shares issuable upon exercise of stock options that are exercisable within
60 days and 37,579 shares of restricted stock subject to vesting.
(26)
Includes 30,700
shares issuable upon the exercise of stock options that are exercisable within
60 days and 34,705 shares of restricted stock subject to vesting.
(27)
Includes
44,000 shares issuable upon the exercise of stock options that are
exercisable within 60 days and 36,369 shares of restricted stock subject
to vesting.
(28)
Includes
40,000 shares issuable upon the exercise of stock options that are
exercisable within 60 days and 14,451 shares of restricted stock subject
to vesting.
(29)
Information
provided is for the individuals who were our executive officers, directors and
nominees for director on August 13, 2010, and includes 465,675 shares
issuable upon exercise of stock options that are exercisable within
60 days and 944,933 shares of restricted stock subject to vesting.
13
EXECUTIVE OFFICERS
Below
is a table that identifies our executive officers as of the date of this proxy
statement, other than Mr. Perry, who is identified in the section entitled
Election of Directors.
Name
|
|
Age
|
|
Position(s)
|
Virginia M. McDowell
|
|
52
|
|
President and Chief
Operating Officer
|
Dale R. Black
|
|
47
|
|
Senior Vice President and
Chief Financial Officer
|
Arnold L. Block
|
|
63
|
|
Senior Vice
President, Isle Operations
|
R. Ronald Burgess
|
|
66
|
|
Senior Vice President of
Human Resources
|
D. Douglas Burkhalter
|
|
43
|
|
Senior Vice President of
Marketing
|
Roger W. Deaton
|
|
63
|
|
Senior Vice President,
Lady Luck Operations
|
Eric L. Hausler
|
|
41
|
|
Senior Vice President,
Strategic Initiatives
|
Paul B. Keller
|
|
56
|
|
Senior Vice President and
Chief Development Officer
|
Donn R.
Mitchell, II
|
|
42
|
|
Senior Vice President
|
Edmund L.
Quatmann, Jr.
|
|
40
|
|
Senior Vice President,
General Counsel and Secretary
|
Jeanne-Marie Wilkins
|
|
51
|
|
Senior Vice President and
Chief Information Officer
|
Virginia M. McDowell
has been our
President and Chief Operating Officer since July 2007. From October 2005
to July 2007, Ms. McDowell served as Executive Vice President and
Chief Information Officer at Trump Entertainment Resorts, Inc., which
filed for Chapter 11 bankruptcy in February 2009. From 1997 through October 2005,
Ms. McDowell served in a variety of positions at Argosy Gaming Company,
including Vice President of Sales and Marketing, and Senior Vice President of
Operations. Prior to working at Argosy, Ms. McDowell served as the East
Coast General Manager for Casino Data Systems and held management positions at
a number of Atlantic City gaming properties beginning in 1981.
Dale R. Black
has been our
Senior Vice President and Chief Financial Officer since December 2007.
From November 2005 to December 2007, he served as Executive Vice
PresidentChief Financial Officer of Trump Entertainment Resorts, Inc.,
which filed for Chapter 11 bankruptcy in February 2009. From April 1993
through October 2005, Mr. Black worked at Argosy Gaming Company in
Alton, Illinois, becoming Chief Financial Officer in 1998 after serving as
Vice President and Corporate Controller. Prior to joining Argosy, he spent
seven years in the audit practice of Arthur Andersen LLP.
Arnold L. Block
has been our
Senior Vice President, Isle Operations since December 2008. Prior to
that, Mr. Block served as senior vice president and general manager of the
Harrahs, St. Louis property from October 2005 to January 2008.
From July 1993 to October 2005, Mr. Block worked in a variety of
leadership capacities for Argosy Gaming Company, including serving as regional
vice president from June 2002 until October 2005 when the company was
sold. In that role, he was responsible for three Argosy properties;
Lawrenceburg, Indiana, Kansas City, Missouri, and Baton Rouge, Louisiana.
He began his career as general manager and later owner of a 150-room hotel in
Alton, Illinois and from 1986 to 1988 he owned and operated two
restaurants in St. Louis, Missouri.
R. Ronald Burgess
has been our
Senior Vice President of Human Resources since September 2007. From October 2005
to September 2007, Mr. Burgess served as a consultant to Norwegian
Cruise Lines and on the launch of gaming in Macau for Galaxy Entertainment.
From July 1999 through October 2005, Mr. Burgess served as
Senior Vice President of Human Resources for Argosy Gaming Company. From 1986
to 1999, Mr. Burgess was Corporate Director of Human Resources for Harrahs
Entertainment, Inc. Prior to joining Harrahs in 1986, he was responsible
for human resources at a major operating unit of RCA, ultimately managing the
merger with General Electric.
D. Douglas Burkhalter
has been our
Senior Vice President of Marketing since September 2007. From November 2005
to July 2007, Mr. Burkhalter served as Vice President of Marketing
Strategy for Trump Entertainment Resorts, Inc., which filed for Chapter 11
bankruptcy in February 2009. He
also held the position of Corporate Director of Marketing for Argosy Gaming
Company from June 2002 until November 2005.
Roger W. Deaton
has been our
Senior Vice President, Lady Luck Operations since December 2008.
Mr. Deaton joined us in 1992 and has served in a variety of roles
including regional vice president, vice president and general manager of the
Companys properties in Vicksburg, Mississippi, which was sold in July 2006,
and Lake Charles, Louisiana. Prior to his current position, Mr. Deaton
served as our Regional Vice President of Operations since February 2000.
Mr. Deaton spent the early years of his gaming career in Nevada in
positions with Nevada Lodge, Crystal Bay Club, Ponderosa Reno, Harveys Lake
Tahoe and Kings Castle before moving to Atlantic City as part of the original
Resorts International team.
14
Eric L. Hausler
has been our Senior Vice
President, Strategic Initiatives since September 2009. From October 2006
to August 2009, Mr. Hausler served as Senior Vice President of
Development for Trump Entertainment Resorts, Inc., which filed for Chapter
11 bankruptcy in February 2009.
From August 2005 to September 2006, Mr. Hausler served as
a Managing Director in Fixed Income Research, covering the gaming, lodging and
leisure industries for Bear Stearns & Co. Inc., and as a Vice
President in Equity Research from December 1999 to July 2002. From October 2003
to August 2005, Mr. Hausler served as the Senior Equity Analyst
covering the gaming industry for Susquehanna Financial Group. From July 2002
to September 2003, Mr. Hausler served as an Associate Analyst in
Equity Research covering the gaming and lodging industries for Deutsche Bank
Securities. From December 1996 to November 1999, Mr. Hausler
served as the Governmental and Community Relations Coordinator for the New
Jersey Casino Control Commission, among other positions.
Paul B. Keller
has been our
Senior Vice President and Chief Development Officer since May 2008. From September 2007
to May 2008, Mr. Keller was a consultant for us. From October 2005
to July 2007, Mr. Keller served as Executive Vice President of Design
and Construction for Trump Entertainment Resorts, Inc., which filed for
Chapter 11 bankruptcy in February 2009.
From September 1993 to October 2006, he served as Vice
President of Design and Construction for Argosy Gaming Company.
Donn R. Mitchell, II
has been our
Senior Vice President since December 2007. Previously, he served as Senior
Vice President, Chief Financial Officer and Treasurer from January 2006 to
December 2007. Mr. Mitchell joined us in June 1996 as Director
of Finance and served as Vice President of Finance from July 2001 to December 2005.
Mr. Mitchells prior experience includes serving as an audit manager for
Arthur Andersen LLP in New Orleans, Louisiana from July 1990 until June 1996.
Edmund L. Quatmann, Jr.
has been our
Senior Vice President, General Counsel and Secretary since July 2008.
Prior to joining us, Mr. Quatmann was the Senior Vice President and
General Counsel of iPCS, Inc., a wireless telecommunications company based
in Schaumburg, Illinois, where he was employed from November 2004 to June 2008.
Prior to that, Mr. Quatmann practiced law in the corporate and securities
groups of Mayer Brown LLP (October 1998 to November 2004) and
Bryan Cave LLP (September 1996 to October 1998).
Jeanne-Marie Wilkins
has been our
Senior Vice President and Chief Information Officer since April 2008.
Prior to that, she was a consultant to the Company from September 2007
until April 2008. From October 2005 to July 2007, Ms. Wilkins
served as Vice President of Business Strategy for Trump Entertainment
Resorts, Inc., which filed for Chapter 11 bankruptcy in February 2009. From May 2002 through September 2005,
she served as the business strategy leader for Argosy Gaming Company. She began
her gaming career working for Bally Technologies f/k/a Bally Gaming and Systems
as a consultant from March 1996 to March 1998. She served as a
regional manager for Bally Technologies from March 1998 to May 2002
in state regulated, tribal and international gaming jurisdictions.
15
EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
For
purposes of the following Compensation Discussion and Analysis, the terms executives
and executive officers refer to the Named Executive Officers of the Company
as set forth in the Summary Compensation Table, which appears on page [
·
] of this proxy statement, and the term the Committee
refers to the Stock Option and Compensation Committee.
Executive Summary
In
fiscal 2010 the Company reduced operating expenses, improved customer
satisfaction scores, improved its balance sheet and prudently explored options
for deploying capital, resulting in a management opportunity in Pennsylvania
and a strategic acquisition in Mississippi.
The Committee remains committed to its executive compensation philosophy
and key objectives, including relating total compensation opportunities for
executives to the Companys financial performance. The Committee believes that the compensation
paid to the executive officers in fiscal 2010 is commensurate with the Companys
performance in a challenging economic environment.
Company Performance
The
Committee believes that the Companys fiscal 2010 results show that it remains
committed to its goal of fiscal responsibility through this difficult economic
cycle. The Company re-engineered the costs associated with its business while
consistently improving the guest experience across its portfolio. Specifically,
the Company reduced property-level operating expenses by approximately $12.0
million, totaling over approximately $32.0 million in cost reductions over the
past two fiscal years, while increasing
See. Say. Smile.
customer satisfaction scores to approximately 90%, an increase from approximately
60% two years ago.
The
Company also continued to make efforts to improve its balance sheet, reducing
its outstanding debt from approximately $1.5 billion as of April 27, 2008
to approximately $1.2 billion as of April 25, 2010, a reduction of approximately
$300 million. In fiscal 2010 the Company entered into an amendment to its
senior secured credit facility that permits increased flexibility in operations
and capital spending.
The
Company actively explored options for deploying capital to maximize value for
its shareholders, including possible acquisitions, greenfield developments and
management opportunities in a variety of jurisdictions. Specifically,
·
The Company formed Isle
Gaming Management, a management and consulting division of the Company, to
leverage its experienced and respected management team and intellectual
property assets by managing and operating casinos owned by third parties in
exchange for management and other fees without requiring extensive capital
investment by the Company.
·
In January 2010, the
Company entered into a management agreement with Nemacolin Woodlands Resort,
located in southwestern Pennsylvania. Nemacolin is one of four applicants for
the one remaining resort casino license in Pennsylvania. If Nemacolin is awarded
the license and the Company is granted an operators license, the Company has
agreed to make certain improvements to an existing building at the resort,
which will house a Lady Luck casino that we will manage.
·
In April 2010, the
Company agreed to acquire Rainbow Casino in Vicksburg, Mississippi, for $80
million in cash. The acquisition closed in June 2010. We believe that
Rainbow will fit well into the Companys portfolio and will benefit from the
operational expertise of our management team.
Operating
free cash flow for fiscal 2010 was approximately $76.0 million, or
approximately 96% of the target established under our annual non-equity bonus
plan.
For
a complete discussion of the Companys performance in fiscal 2010, reference
should be made to Managements Discussion and Analysis of Financial Condition
and Results of Operations in the Companys Annual Report on Form 10-K/A
for the fiscal year ended April 25, 2010, a copy of which is included in
the Annual Report to Shareholders delivered in connection with this Proxy
Statement.
16
Peer Group
For
fiscal 2010, the Committee used a peer group consisting of comparably sized
gaming companies as well as a couple of companies in the broader hospitality/entertainment
business. The Committee believed that this peer group was appropriate for
determining relative industry performance as well as for recruiting and
retention purposes. Generally, the companies that make up the Companys peer
group are its business competitors as well as its primary source of, and
primary competition for, executive talent. Many of the Companys executives
have been recruited from other gaming operations. In addition, since gaming and
racing are highly regulated industries, it takes a high degree of experience
and prior knowledge to provide effective oversight to multiple gaming and
racing properties in a variety of jurisdictions. Also, the Companys executive
officers are required to submit to extensive investigations conducted by the
state police or an equivalent investigatory agency of their personal financial
records, their character and their competency in order to be found suitable
to serve in their respective capacities in each of the jurisdictions in which
the Company operates. Accordingly, the pool for executives capable and willing
to serve in an executive capacity in a publicly traded, multi jurisdictional
gaming and racing company tends to consist mostly of individuals who are
already working within the gaming industry and among our peer group.
For
fiscal 2010, the peer group used for benchmarking purposes consisted of the
following seven companies: Ameristar Casinos, Inc., Boyd Gaming Corp.,
Gaylord Entertainment, Co., Penn National Gaming, Inc., Pinnacle
Entertainment, Inc., Trump Entertainment Resorts and Vail Resorts, Inc.
As discussed below in Fiscal 2011 Compensation Actions the Committee revised
the peer group for fiscal 2011.
Executive Compensation Philosophy
The
Committee designed the executive compensation program to attract and retain
superior executive talent, incentivize our executives to drive profitable
growth and enhance long-term value for our shareholders. Key elements of the
program include base salary and performance-based incentives (including both cash
and equity opportunities).
Key
objectives of our executive compensation policy include:
·
Administering a competitive
executive compensation program in which total compensation opportunities will
be comparable to those in our peer group;
·
Relating total compensation
opportunities for executives to the financial performance of the Company, both
overall and in comparison to our industry; and
·
Establishing and ensuring
internal equity and measurements for organizational effectiveness/contribution
of executives.
The
executive compensation program is designed to reward the achievement of
difficult but fair performance criteria and enhance stock ownership among the
executive team. The following principles provide the framework for the Companys
executive compensation program:
·
Targeted total compensation
Overall
total compensation opportunities and individual program elements are compared
to our peer group. Actual pay may vary depending on the level of performance
achieved under the Companys short- and long-term incentive programs.
A
number of factors are considered when establishing targeted pay levels,
including the value to our shareholders, future leadership potential, level of
job responsibility, critical experience/skills, the level of sustained
performance, and the market demands for talent.
·
Stockholder
alignment
Total
compensation opportunities are tied to quantifiable performance metrics, such
as operating free cash flow, and, through the use of equity grants, the Companys
stock price.
17
·
Total
compensation mix
The
Companys targeted pay mix (salary vs. performance-based incentive pay) is
designed to reflect a combination of competitive market practices and strategic
business needs. The degree of performance-based incentive pay (at risk
compensation) and the level of total compensation opportunities should increase
with an executives responsibility level, because executives that are at higher
levels in the organization are more likely to affect the Companys results.
Accordingly, the Committee determined that the targeted total compensation mix
for the executive officers for fiscal 2010 were as follows: Messrs. Perry
and Black and Ms. McDowell, 25% of total compensation delivered in base
salary, 15% in bonus compensation and 60% in long-term incentive; and Messrs. Quatmann
and Keller: 40% of total compensation delivered in base salary, 20% in bonus
and 40% in long-term incentive.
The
Committee analyzes market data and evaluates individual executive performance
with a goal of setting compensation at levels it believes, based on its general
business and industry knowledge and experience, are comparable with
compensation levels of executives in other companies of similar size operating
in the gaming industry. The Committee engages compensation consulting firms to
provide guidance regarding competitive compensation practices, industry peer
analysis and recommendations. Using this guidance and peer group compensation
information as a point of reference, the Committee then focuses on the Companys
and executives individual performance in determining each component of annual
compensation.
Overview of Executive Compensation Elements
The
use of the below compensation elements enables the Company to reinforce its pay
for performance philosophy as well as strengthen its ability to attract and
retain high performing executive officers. The Company believes that this
combination of programs provides an appropriate mix of fixed and variable pay,
balances short-term operational performance with long-term shareholder value
creation, and facilitates executive recruitment and retention in a
high-performance culture.
The
Committee reviews pay competitiveness from a total compensation perspective.
The Company relies primarily on market data to determine pay opportunities for
each component.
The
principle elements of the Companys executive compensation program are
described below. Please see Analysis of
Fiscal 2010 Compensation below for a discussion of the specific actions taken
with respect to executive compensation for fiscal 2010.
Base
Salary
. Base salary pays for
competence in the executive role. Base salary levels at the Company reflect a
combination of factors, including competitive pay levels, the executives
experience and tenure, internal pay equity, the need to attract and retain
excellent management talent, the Companys overall annual budget for merit
increases and the executives individual performance.
Annual
Incentive/Non-Equity
. The purpose
of the Companys annual incentive plan is to tie compensation directly to
specific business goals and management objectives. The Committee believes that
basing annual cash bonuses for executive officers on pre-determined company
performance metrics establishes a direct and powerful link between our
executives pay and our financial and operational success. The Committee
further believes that the achievement of the goals for these operating
performance metrics are closely correlated to the creation of long-term shareholder
value.
Annual
incentive opportunities are expressed as a percentage of base salary and are
initially set forth in each executives employment agreement. Targets are
developed considering competitive practices and consistency with the Companys
internal structure. Executives are grouped together in our internal structure
according to their position and relative importance to the Company. The
Committee sets the ranges of bonuses payable for each executive as a percentage
of base salary, taking into consideration the incentive programs and practices
used by the Companys peer group. For fiscal 2010, the target for each
executive as a percentage of base salary was 60%. For the executives, the
target annual incentive opportunity as a percentage of base salary is generally
the median of market practices.
The
Committee sets the ranges of bonuses payable for each executive as a percentage
of base salary, consistent with the incentive programs and practices used by
the Companys peer group. For fiscal 2010, the target for each executive as a
percentage of base salary was 60%.
18
Long-Term
Incentive/Equity.
The primary
long-term incentive for executives is shares of restricted stock vesting
ratably over three years. Until the
shares vest they remain subject to forfeiture upon termination of employment or
position as a director and restrictions on transfer. If and when the shares
vest, they are no longer restricted, and the recipient is free to hold,
transfer or sell them, subject to required tax withholding and compliance with
applicable securities laws, our securities trading policy, our holding policy
and any other legal requirements. The Committees practice is to deliver 25% of
the value of the long-term incentive in cash and 75% in shares of restricted
stock. The rationale for paying 25% of the long-term incentive in cash is to
promote and facilitate retention of the shares of restricted stock by providing
cash to enable the award recipient to pay taxes if he or she chooses to do so.
Long-term incentive awards with respect to a particular fiscal year are
typically made within the first three months of the succeeding fiscal year. For
example, the long-term incentive award for fiscal 2010 (i.e., the year ended April 25,
2010) was awarded in July 2010 (during fiscal 2011). The long-term
incentive amount for each executive, as described in further detail below, is
based on the Company meeting a certain threshold level of performance.
Deferred
Compensation.
The Company
does not maintain any defined benefit pension programs for its executives.
Instead, consistent with the competitive practices of the Companys peer group,
the Company maintains an elective non-qualified deferred compensation plan for
executives. The plan is unfunded and benefits are paid from the Companys
general assets. The Company generally sets aside separately the amounts
deferred by the executives and the matching contributions thereon. None of the
executives participate in this plan.
Benefits
and Perquisites.
The
Committee believes that executives should be offered customary benefits and
perquisites that are reasonable relative to the benefits provided to all
employees and consistent with competitive practices among the Companys peer
group. The standard benefits offered to all of the Companys employees include
medical, dental and vision insurance, group life insurance, short and long-term
disability and a 401(k) with certain contributions matched by the Company.
In addition, all executives are enrolled in the Medical Executive Reimbursement
Plan (the MERP) in which an allocation in amount up to 5% of each executives
base salary aids with payment of certain medical expenses other than premiums.
All such supplemental benefits and perquisites are subject to applicable
federal, state and local taxation. The benefit paid under the MERP is
grossed-up for taxes.
Role of Executive Officers and Board of Directors in
Compensation Decisions
The
Chief Executive Officer assists the Committee in making compensation decisions
for the executives primarily by making recommendations and evaluating
day-to-day performance of the executives. The Chief Executive Officer and other
executives do not play a role in determining their own compensation and are not
present at the executive sessions in which their pay is discussed.
The
Committees analysis and recommendations are presented to the Board of
Directors for ratification.
Role of Compensation Consultant
Since 2008, the Committee has engaged the firm of
Towers Watson (formerly known as Watson Wyatt) as the Committees independent
compensation consultant. Generally Towers Watson performs the following duties
for the Committee:
·
Review of compensation philosophy, peer group and competitive positioning
for reasonableness and appropriateness;
·
Review of executive compensation program and plans or practices that
might be changed to improve effectiveness;
·
Select and review the peer group and survey data for competitive
comparisons;
·
Review the Compensation Discussion and Analysis and compensation tables
for inclusion in our proxy statement; and
·
Advise the Committee on best-practice ideas for executive compensation as
well as areas of concern and risk in the Companys program.
19
Towers Watson receives no fees or compensation from
the Company for services other than for its services as compensation
consultant.
Analysis of Fiscal 2010 Compensation
Base
Salary
. Early in fiscal 2010, we
determined that the fiscal 2009 base salary of each executive officer generally
continued to be competitive, fair and reasonable after reviewing the base
salaries of the Companys peer group and consideration of the other factors
noted above. The Committee deemed it
appropriate to increase each executive officers base salary for fiscal 2010 by
3%. The Committee arrived at its decision based on its view that it was
important to convey that, despite the general economic conditions and the
impact of the economy on the Companys results of operations, the Company
remained healthy, financially secure and committed to paying competitive compensation
to its current employees and to future candidates for employment with the
Company.
In
November 2008, Mr. Perry and Ms. McDowell voluntarily requested
a 25% reduction in their base salaries for one year. In making their request, Mr. Perry
and Ms. McDowell expressed, among other things, their desire to accentuate
the greater prominence the Committee is placing on the long-term performance
based aspect of their overall compensation. On December 12, 2008, the
Committee ratified the request and, effective November 1, 2008, their
salaries were reduced by 25%. Ms. McDowells salary was restored to 100%
on November 2, 2009, but Mr. Perry and the Committee agreed to
continue Mr. Perrys salary reduction for another year.
Annual
Incentive/Non-Equity
. During fiscal
2009, the Committee established criteria for the annual non-equity incentive
plan for five fiscal years for the executives in order to incent them to take a
long-term view of the business and to encourage retention. The Committee
determined that operating free cash flow growth was the appropriate criteria
for the executives because it takes into consideration financing decisions and
capital allocation as well as operating results. The Committee established fiscal 2008
operating free cash flow of approximately $63 million as the base and set a
target for each of the next five years of 12% compounded growth in operating
free cash flow. For each fiscal year in which operating free cash flow growth
is at least target, then the bonus payout to the chief executive officer and
his direct reports shall be at target. Measurements would be made quarterly and
payments would be made quarterly at 80% of the calculated result. A final
calculation would be made at fiscal year-end and the payments trued-up to
actual, if necessary. The Committee retained discretion to increase the amount
actually paid by up to 25% of the bonus amount based on individual performance.
In the event that actual operating free cash flow growth for any fiscal year
exceeds target, then the chief executive officer and his direct reports will
earn a percentage of each executives salary, which will be banked. If
operating free cash flow for fiscal 2013 meets or exceeds the established
target, then the chief executive officer and his direct reports will be paid
target for fiscal 2013, plus the entire banked amount.
Long-Term Incentive/Equity
.
As discussed above,
long-term incentive awards made during fiscal 2010 were based on performance
during fiscal 2009. Based on performance
in fiscal 2009 the Committee granted restricted stock to the executives in July 2009
as follows:
Executive
|
|
Shares(#)
|
|
Cash($)
|
|
Total
Value($)
|
|
Mr. Perry
|
|
175,612
|
|
$
|
762,454
|
|
$
|
3,049,800
|
|
Mr. Black
|
|
61,464
|
|
266,861
|
|
1,067,430
|
|
Ms. McDowell
|
|
107,065
|
|
464,839
|
|
1,859,361
|
|
Mr. Quatmann
|
|
17,795
|
|
77,266
|
|
309,046
|
|
Mr. Keller
|
|
19,610
|
|
85,141
|
|
340,561
|
|
|
|
|
|
|
|
|
|
|
|
Each executives fiscal 2009
award was at target based on the targeted total compensation mix established by
the Committee. The awards for fiscal 2009 were at target because the Companys
growth in operating free cash flow in fiscal 2009 met target. 75% of such value
was delivered in shares of restricted stock and 25% in cash. The shares of
restricted stock vest in three (3) equal annual installments beginning on July 23,
2010. The dollar value of each executives award was determined based on
Company performance in fiscal 2009 and Mr. Perrys recommendation.
Based on performance in
fiscal 2010 the Committee granted restricted stock to the executives in July 2010
as follows:
Executive
|
|
Shares(#)
|
|
Cash($)
|
|
Total
Value($)
|
|
Mr. Perry
|
|
49,012
|
|
$
|
142,380
|
|
$
|
569,520
|
|
Mr. Black
|
|
24,506
|
|
71,190
|
|
284,760
|
|
Ms. McDowell
|
|
40,843
|
|
118,653
|
|
474,600
|
|
Mr. Quatmann
|
|
24,506
|
|
71,190
|
|
284,760
|
|
Mr. Keller
|
|
24,506
|
|
71,190
|
|
284,760
|
|
|
|
|
|
|
|
|
|
|
|
20
The basis for each executives
fiscal 2010 award was a targeted total compensation mix established by the
Committee (see discussion above), adjusted so that the two-year average value
of each executives long-term incentive award approximated the median for the
peer group. Consistent with past practice, 75% of such value was delivered in
shares of restricted stock and 25% in cash. The shares of restricted stock vest
in three (3) equal annual installments beginning on July 26, 2011.
The dollar value of each executives award was determined based on Company
performance in fiscal 2010 and Mr. Perrys recommendation.
Employment Agreements
The Company generally seeks
to enter into employment agreements with corporate executives having the title
of vice president and above and with the general manager of each of its gaming
properties. In arriving at this determination, the Company sought to minimize
the number of individuals with whom it had employment agreements while at the
same time achieving the objectives set forth below. Relevant to this approach,
the Company considers the standard competitive practices in the gaming
industry.
There are a number of
strategic objectives that the Company expects to achieve by entering into
employment agreements with certain key employees:
·
Attract and retain talented
executives;
·
Limit potential liability
emanating from the termination of executives, including the total severance
that may be paid to an executive in the event that the Company elects to
terminate him or her without cause;
·
Provide an effective
retention mechanism; and
·
Provide the Company with
effective and comprehensive protection of its strategic plans, intellectual
property and human capital.
Some of the key terms of the
Companys employment agreements with Named Executive Officers are:
Term.
The initial term of the employment agreements
for the Named Executive Officers is one year; provided however that the
Chairman and Chief Executive Officer is two years. The employment agreements
renew for successive one-year terms unless notice is provided or the agreement
is terminated earlier. The Company
believes that the term of each employment term represents a reasonable period
for which the Company and the executive will mutually commit to maintain the
employment relationship. For the Company, this provides stability and
predictability among its leadership ranks. For the executive, this provides a
reasonable but limited assurance of job security designed to foster an
environment of entrepreneurial risk taking where the executive can focus on
building long-term shareholder value.
Termination and Restrictive
Covenants
. The Company
offers certain additional payments to its Named Executive Officers if the
Company elects to terminate the executives employment without cause or as a
result of death or total disability. Each employment agreement contains a set
of restrictive covenants designed to provide the Company with a reasonable
degree of protection of its strategic plans, intellectual property and human
capital. Generally, each employment agreement contains prohibitions on (i) competition,
(ii) solicitation of employees, and (iii) disclosure and use of
confidential information, which prohibitions remain in place for one year
following termination. The Board selected this time period based on its
determination about the extent to which each individuals tenure with, and
knowledge of, the Company might be used to adversely impact the Companys
strategic plans, intellectual property or human capital.
Change in Control.
In the event of a change in control, each
Named Executive Officer is entitled to receive certain additional payments if
employment is terminated. The Company
believes that these payments provide an effective retention mechanism in
connection with a change in control.
For a detailed discussion of
the terms contained in each Named Executive Officers employment agreement,
please refer to page [
·
] below.
21
Other Compensation Policies
Equity Grant Policy
The
Committees procedure for timing of equity grants help to provide assurance
that grants are never manipulated or timed to result in favorable pricing for
executives. The Company schedules Board and Committee meetings in advance.
Meeting schedules and award decisions are made without regard to the timing of
Company SEC filings or press releases.
Equity
awards are granted on the date approved by the Committee or, in the case of new
hires, pursuant to the terms of an employment agreement. If the equity award is
a stock option, the stock option exercise price is based on the average market
price of the trading date on which the options are granted. The average price
is calculated by adding the highest and lowest price for that date and dividing
by two.
Stock
Holding Policy
The
Committee encourages executives to manage from an owners perspective by having
and maintaining an equity stake in the Company. To that end, all of our
executives are also stockholders of the Company. In January 2009, the
Board adopted the Isle of Capri Casinos, Inc. Stock Holding Policy. The
Stock Holding Policy provides that members of the Board of Directors and
certain members of management are required to hold a certain percentage of the
shares of our common stock received by them upon lapse of the restrictions on
restricted stock and upon exercise of stock options (net of any shares utilized
to pay for tax withholding and the exercise price of the option). The
percentage ranges from 20% for our general managers to 50% for members of our
Board of Directors, our chief executive officer and his direct reports.
Impact of Prior Compensation
Amounts
realized from prior compensation grants did not serve to increase or decrease,
fiscal 2010 compensation grants or amounts. The Companys and the Committees
primary focus is competitive pay opportunities on an annual basis.
Risk Management Practices and Risk-Taking
Incentives
In
fiscal 2010 we reviewed our material compensation policies and practices and
reported to the Committee that we concluded that these policies and practices
do not entail risks reasonably likely to have a material adverse effect on the
Company.
Tax Deductibility of Compensation Programs
Section 162(m) of
the Code limits our deduction for compensation paid to the Named Executive
Officers to $1 million unless certain requirements are met. The policy of
the Committee with regard to Section 162(m) of the Code is to
establish and maintain a compensation program that will optimize the
deductibility of compensation. The Committee reserves the right to use its
judgment, where merited by the Committees need for flexibility to respond to
changing business conditions or by an executives individual performance, to
authorize compensation that may not, in a specific case, be fully deductible.
Fiscal 2011 Compensation Actions
In
April 2010, the Committee reviewed the peer group to determine whether any
changes were warranted from the prior years peer group. For fiscal 2011, the
Committee determined, based on Towers Watsons recommendation, that the peer
group to be used for benchmarking purposes would consist of the following
publicly traded gaming/entertainment companies: Ameristar Casinos, Inc.,
Boyd Gaming Corp., Gaylord Entertainment, Co., Las Vegas Sands Corp., MGM
Mirage, MTR Gaming Group, Inc., Penn National Gaming, Inc., Pinnacle
Entertainment, Inc., Vail Resorts, Inc. and Wynn Resorts Ltd. In
addition, the Committee will take into consideration any available compensation
data from the following privately held companies: Harrahs Entertainment, Inc.,
Jacobs Entertainment Inc., Mohegan Tribal Gaming Authority and Peninsula Gaming
LLC.
22
Stock Option and Compensation Committee Report on Executive
Compensation
The
Stock Option and Compensation Committee has reviewed and discussed the
Compensation Discussion and Analysis contained in this Proxy Statement and,
based on such review and discussions, the Stock Option and Compensation
Committee recommended that the Compensation Discussion and Analysis be included
in this Proxy Statement.
By: The Stock Option and
Compensation Committee:
Shaun R. Hayes, Chair
W. Randolph Baker
John G. Brackenbury
Alan J. Glazer
Gregory J. Kozicz
Lee S. Wielansky
23
Summary Compensation Table
The
following table sets forth information concerning the compensation earned
during the fiscal year ended April 25, 2010 by the Companys principal
executive officer, principal financial officer, and three other most highly
compensated individuals serving as executive officers on the last day of such
fiscal year (collectively, the Named Executive Officers). Additionally, to
the extent the Named Executive Officer was included in last years table, the
table also includes compensation earned during the fiscal years ended April 25,
2010, April 26, 2009 and April 27, 2008:
Name & Principal Position
|
|
Fiscal
Year
|
|
Salary
($)
|
|
Bonus
($)(1)
|
|
Stock
Awards
($)(2)
|
|
Options
Awards
($)(2)
|
|
Non-Equity
Incentive Plan
Compensation
($)(3)
|
|
All
Other
Compensation
($)(4)
|
|
Total
($)
|
|
James B Perry
|
|
2010
|
|
617,308
|
|
762,454
|
|
2,287,346
|
|
|
|
462,025
|
|
|
|
4,129,133
|
|
Chairman and Chief
|
|
2009
|
|
707,692
|
|
78,421
|
|
235,259
|
|
|
|
480,000
|
|
|
|
1,501,372
|
|
Executive Officer(5)
|
|
2008
|
|
92,308
|
|
|
|
|
|
1,865,797
|
|
|
|
560
|
|
1,958,665
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dale R. Black
|
|
2010
|
|
462,987
|
|
266,861
|
|
800,569
|
|
|
|
267,686
|
|
12,739
|
|
1,810,842
|
|
Senior Vice President
and
|
|
2009
|
|
436,538
|
|
75,286
|
|
225,847
|
|
|
|
262,500
|
|
139,081
|
|
1,139,252
|
|
Chief Financial
Officer(6)
|
|
2008
|
|
138,462
|
|
|
|
|
|
681,313
|
|
57,067
|
|
2,547
|
|
879,389
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Virginia M. McDowell
|
|
2010
|
|
596,576
|
|
464,839
|
|
1,394,522
|
|
|
|
398,496
|
|
|
|
2,854,433
|
|
President and Chief
|
|
2009
|
|
587,385
|
|
275,251
|
|
825,766
|
|
|
|
399,000
|
|
|
|
2,087,402
|
|
Operating Officer(7)
|
|
2008
|
|
475,000
|
|
|
|
|
|
2,552,400
|
|
208,650
|
|
7,563
|
|
3,243,613
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Edmund L.
Quatmann, Jr.
|
|
2010
|
|
375,578
|
|
77,266
|
|
231,780
|
|
|
|
217,152
|
|
44,851
|
|
946,627
|
|
Senior Vice President,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General Counsel and
Secretary
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Paul B. Keller
|
|
2010
|
|
344,624
|
|
85,141
|
|
255,420
|
|
|
|
199,248
|
|
14,492
|
|
898,925
|
|
Senior Vice President
and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chief Development
Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
The amounts in
this column relate to cash awards granted under the annual long-term incentive
plan.
(2)
The amounts in
this column represent the aggregate grant date fair value of awards granted
during the respective fiscal year computed in accordance with FASB ASC Topic
718, Compensation - Stock Compensation. The awards granted in fiscal 2010 were
for performance in fiscal 2009. The
assumptions used in the calculation of these amounts are disclosed in Note 10
to our Consolidated Financial Statements included in our Annual Report on Form 10-K/A
for the fiscal year ended April 25, 2010 with the exception that for the
employees no forfeiture rate is applied.
(3)
The amounts in this column
relate to cash awards granted under the annual incentive bonus plan.
(4)
Other compensation less than
$10,000 total for the 2010 fiscal year is not included. The amounts in this
column consist of the following: for Mr. Black, $4,125 in matching
contributions under the 401(k) plan, $4,591 in expenses reimbursed under
the MERP, $90 in company-paid life insurance premiums, $3,933 in tax gross-up
expenses; for Mr. Quatmann, $4,125 in matching contributions under the 401(k) plan,
$810 in expenses reimbursed under the MERP, $56 in company-paid life insurance
premiums, $33,333 in sign-on incentives, $512 in tax gross-up expenses, $6,015
in relocation reimbursements; and for Mr. Keller, $4,858 in matching
contributions under the 401(k) plan, $5,610 in expenses reimbursed under
the MERP, $258 in company-paid life insurance premiums, $3,766 in tax gross-up
expenses.
(5)
Mr. Perry began serving
as our Chief Executive Officer effective March 10, 2008.
(6)
Mr. Black joined the
Company on December 12, 2007.
(7)
Ms. McDowell joined the
Company on July 30, 2007.
Grants of Plan-Based Awards
The
following table sets forth certain information regarding grants of plan-based
awards during fiscal 2010:
24
|
|
|
|
Estimated future payments under
non-equity incentive plan awards(1)
|
|
All other stock
awards;
number of
|
|
Grant date fair
value of stock
|
|
Name
|
|
Grant
Date
|
|
Threshold
($)
|
|
Target
($)
|
|
Maximum
($)
|
|
shares of stock
or units (#)(2)
|
|
and option
awards($)(3)
|
|
James
B. Perry
|
|
4/27/2009
|
|
384,000
|
|
480,000
|
|
N/A
|
|
|
|
|
|
|
|
7/23/2009
|
|
|
|
|
|
|
|
175,612
|
|
2,287,346
|
|
Dale
R. Black
|
|
4/27/2009
|
|
222,480
|
|
278,100
|
|
N/A
|
|
|
|
|
|
|
|
7/23/2009
|
|
|
|
|
|
|
|
61,464
|
|
800,569
|
|
Virginia
M. McDowell
|
|
4/27/2009
|
|
331,200
|
|
414,000
|
|
N/A
|
|
|
|
|
|
|
|
7/23/2009
|
|
|
|
|
|
|
|
107,065
|
|
1,394,522
|
|
Edmund
L. Quatmann, Jr.
|
|
4/27/2009
|
|
180,480
|
|
225,600
|
|
N/A
|
|
|
|
|
|
|
|
7/23/2009
|
|
|
|
|
|
|
|
17,795
|
|
231,780
|
|
Paul
B. Keller
|
|
4/27/2009
|
|
165,600
|
|
207,000
|
|
N/A
|
|
|
|
|
|
|
|
7/23/2009
|
|
|
|
|
|
|
|
19,610
|
|
255,420
|
|
(1)
These amounts
reflect awards for fiscal 2010 pursuant to the Companys annual incentive plan,
which provides for the payment of incentive compensation upon the Companys
achievement of a pre-established goal. Based on the Companys operating free
cash flow for fiscal 2010, the executives received 96% of the annual target as
a payout. See the discussion in Compensation Discussion and Analysis
beginning on page [
·
].
(2)
The awards
granted in fiscal 2010 were for performance in fiscal 2009. The restrictions on
the restricted stock awards lapse in 33.33% installments on each of the first,
second and third anniversaries of the date of grant. In the event of a change
of control, the forfeiture restrictions on restricted stock lapse immediately.
(3)
The amounts in
this column represent the aggregate grant date fair value of awards granted
during the 2010 fiscal year computed in accordance with FASB ASC Topic 718,
Compensation - Stock Compensation. The assumptions used in the calculation of
these amounts for stock option awards are disclosed in Note 10 to our
Consolidated Financial Statements included in our Annual Report on Form 10-K/A
for the fiscal year ended April 25, 2010 with the exception that for the
employees no forfeiture rate is applied.
25
Outstanding Equity Awards at Fiscal
Year-End
The
following table sets forth information concerning outstanding equity awards as
of April 25, 2010, the last day of fiscal 2010:
|
|
Option awards
|
|
Stock awards
|
|
Name
|
|
Number of Securities
Underlying
Unexercised
Options
Exercisable (#)(1)
|
|
Number of Securities
Underlying
Unexercised
Options
Unexercisable (#)(1)
|
|
Option
Exercise
Price
($)
|
|
Option
Expiration
Date
|
|
Number of
shares or
units of
stock that
have not
vested
(#)(2)
|
|
Market value
of shares or
units of stock
that have not
vested ($)(3)
|
|
James B.
Perry
|
|
200,000
|
|
300,000
|
|
$8.44
|
|
3/10/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
25,296
|
|
$295,457
|
|
|
|
|
|
|
|
|
|
|
|
3,572
|
|
41,721
|
|
|
|
|
|
|
|
|
|
|
|
175,612
|
|
2,051,148
|
|
Dale R.
Black
|
|
|
|
|
|
|
|
|
|
24,284
|
|
283,637
|
|
|
|
|
|
|
|
|
|
|
|
27,778
|
|
324,447
|
|
|
|
|
|
|
|
|
|
|
|
61,464
|
|
717,900
|
|
Virginia M.
McDowell
|
|
|
|
|
|
|
|
|
|
88,792
|
|
1,037,091
|
|
|
|
|
|
|
|
|
|
|
|
41,667
|
|
486,671
|
|
|
|
|
|
|
|
|
|
|
|
107,065
|
|
1,250,519
|
|
Edmund
L. Quatmann, Jr.
|
|
22,000
|
|
88,000
|
|
4.62
|
|
7/1/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
17,795
|
|
207,846
|
|
Paul
B. Keller
|
|
20,000
|
|
80,000
|
|
6.69
|
|
5/1/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
19,610
|
|
229,045
|
|
(1)
The vesting
schedule for the options is five years with the first vesting occurring on the
one year anniversary of the grant date and then annually thereafter.
(2)
Set forth below
is the grant date, vesting schedule and the date each award is vested in full
for the stock that has not vested:
Name
|
|
Number of
shares of
stock that
have not
vested (#)
|
|
Grant Date
|
|
Vesting Schedule
|
|
Vesting Date (date
award is vested in
full)
|
|
James B.
Perry
|
|
25,296
|
|
10/6/08
|
|
Ratably over 3 years
|
|
10/6/2011
|
|
|
|
3,572
|
|
10/8/08
|
|
100% in Year 3
|
|
10/8/2011
|
|
|
|
175,612
|
|
7/23/09
|
|
Ratably over 3 years
|
|
7/23/2012
|
|
Dale R.
Black
|
|
24,284
|
|
10/6/08
|
|
Ratably over 3 years
|
|
10/6/2011
|
|
|
|
27,778
|
|
10/8/08
|
|
100% in Year 3
|
|
10/8/2011
|
|
|
|
61,464
|
|
7/23/09
|
|
Ratably over 3 years
|
|
7/23/2012
|
|
Virginia M.
McDowell
|
|
88,792
|
|
10/6/08
|
|
Ratably over 3 years
|
|
10/6/2011
|
|
|
|
41,667
|
|
10/8/08
|
|
100% in Year 3
|
|
10/8/2011
|
|
|
|
107,065
|
|
7/23/09
|
|
Ratably over 3 years
|
|
7/23/2012
|
|
Edmund
L. Quatmann, Jr.
|
|
17,795
|
|
7/23/09
|
|
Ratably over 3 years
|
|
7/23/2012
|
|
Paul
B. Keller
|
|
19,610
|
|
7/23/09
|
|
Ratably over 3 years
|
|
7/23/2012
|
|
(3)
The aggregate
market value of the shares of stock that have not vested was computed by
multiplying $11.68 (the closing market price of a share of Company common stock
on April 23, 2010) by the number of unvested shares outstanding as of
April 25, 2010, for such executive.
Potential Payments Upon Termination or Change of Control
The
information below describes and quantifies compensation that would become
payable under existing arrangements in the event of a termination of each Named
Executive Officers employment under several different circumstances or a
change in control. The amounts shown
assume that such termination or change in control was effective as of
April 25, 2010, and thus include amounts earned through such time and are
estimates of the amounts that would be paid to the Named Executive Officers
upon their termination or a change in control.
The actual amounts to be paid can only be determined at the time of such
Named Executive Officers separation from the Company or a change in control.
The
following tables quantify the amounts payable to each of the Named Executive
Officers under the described termination circumstances and upon a change in
control.
26
James B. Perry
|
|
Voluntary
Resignation
|
|
Resignation
for Good
Reason
|
|
Involuntary
Termination
For Cause
|
|
Involuntary
Termination
w/o Cause
|
|
Death
|
|
Disability
|
|
Change
In
Control
Only
|
|
Change
In
Control and
Termination
|
|
Vested Stock Option
Spread Value
|
|
$
|
648,000
|
|
$
|
648,000
|
|
$
|
648,000
|
|
$
|
648,000
|
|
$
|
648,000
|
|
$
|
648,000
|
|
$
|
648,000
|
|
$
|
648,000
|
|
Unvested Stock Option
Spread Value
|
|
|
|
|
|
|
|
$
|
324,000
|
|
$
|
972,000
|
|
$
|
972,000
|
|
$
|
972,000
|
|
$
|
972,000
|
|
Restricted Stock Value
|
|
|
|
|
|
|
|
|
|
$
|
2,388,326
|
|
$
|
2,388,326
|
|
$
|
2,388,326
|
|
$
|
2,388,326
|
|
Cash SeveranceSalary
Continuation
|
|
|
|
|
|
|
|
$
|
800,000
|
|
$
|
800,000
|
|
$
|
800,000
|
|
|
|
$
|
1,600,000
|
|
Cash SeveranceAnnual
Bonus(1)
|
|
|
|
|
|
|
|
|
|
$
|
240,000
|
|
$
|
240,000
|
|
|
|
$
|
240,000
|
|
Bonus for Year of
Termination(2)
|
|
|
|
|
|
|
|
$
|
462,025
|
|
$
|
462,025
|
|
$
|
462,025
|
|
|
|
$
|
462,025
|
|
Continued Health and
Welfare
|
|
|
|
|
|
|
|
$
|
42,994
|
|
$
|
42,994
|
|
$
|
42,994
|
|
|
|
$
|
85,988
|
|
Total
|
|
$
|
648,000
|
|
$
|
648,000
|
|
$
|
648,000
|
|
$
|
2,277,019
|
|
$
|
5,553,345
|
|
$
|
5,553,345
|
|
$
|
4,008,326
|
|
$
|
6,396,339
|
|
Dale R. Black
|
|
Voluntary
Resignation
|
|
Resignation
for Good
Reason
|
|
Involuntary
Termination
For Cause
|
|
Involuntary
Termination
w/o Cause
|
|
Death
|
|
Disability
|
|
Change
In
Control
Only
|
|
Change
In
Control and Termination
|
|
Vested Stock Option
Spread Value
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
Unvested Stock Option
Spread Value
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restricted Stock Value
|
|
|
|
|
|
|
|
|
|
$
|
1,325,984
|
|
$
|
1,325,984
|
|
$
|
1,325,984
|
|
$
|
1,325,984
|
|
Cash SeveranceSalary
Continuation
|
|
|
|
|
|
|
|
$
|
463,500
|
|
$
|
463,500
|
|
$
|
463,500
|
|
|
|
$
|
927,000
|
|
Cash SeveranceAnnual
Bonus(1)
|
|
|
|
|
|
|
|
|
|
$
|
199,730
|
|
$
|
199,730
|
|
|
|
$
|
199,730
|
|
Bonus for Year of
Termination(2)
|
|
|
|
|
|
|
|
$
|
267,686
|
|
$
|
267,686
|
|
$
|
267,686
|
|
|
|
$
|
267,686
|
|
Continued Health and
Welfare
|
|
|
|
|
|
|
|
$
|
35,269
|
|
$
|
35,269
|
|
$
|
35,269
|
|
|
|
$
|
70,538
|
|
Total
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
766,455
|
|
$
|
2,292,170
|
|
$
|
2,292,170
|
|
$
|
1,325,984
|
|
$
|
2,790,939
|
|
Virginia M. McDowell
|
|
Voluntary
Resignation
|
|
Resignation
for Good
Reason
|
|
Involuntary
Termination
For Cause
|
|
Involuntary
Termination
w/o Cause
|
|
Death
|
|
Disability
|
|
Change
In
Control
Only
|
|
Change
In
Control and
Termination
|
|
Vested Stock Option
Spread Value
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
Unvested Stock Option
Spread Value
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restricted Stock Value
|
|
|
|
|
|
|
|
|
|
$
|
2,774,280
|
|
$
|
2,774,280
|
|
$
|
2,774,280
|
|
$
|
2,774,280
|
|
Cash SeveranceSalary
Continuation
|
|
|
|
|
|
|
|
$
|
690,000
|
|
$
|
690,000
|
|
$
|
690,000
|
|
|
|
$
|
1,380,000
|
|
Cash SeveranceAnnual
Bonus(1)
|
|
|
|
|
|
|
|
|
|
$
|
331,279
|
|
$
|
331,279
|
|
|
|
$
|
331,279
|
|
Bonus for Year of
Termination(2)
|
|
|
|
|
|
|
|
$
|
398,496
|
|
$
|
398,496
|
|
$
|
398,496
|
|
|
|
$
|
398,496
|
|
Continued Health and
Welfare
|
|
|
|
|
|
|
|
$
|
48,036
|
|
$
|
48,036
|
|
$
|
48,036
|
|
|
|
$
|
96,073
|
|
Total
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
1,136,532
|
|
$
|
4,242,091
|
|
$
|
4,242,091
|
|
$
|
2,774,280
|
|
$
|
4,980,128
|
|
Edmund L. Quatmann, Jr.
|
|
Voluntary
Resignation
|
|
Resignation
for Good
Reason
|
|
Involuntary
Termination
For Cause
|
|
Involuntary
Termination
w/o Cause
|
|
Death
|
|
Disability
|
|
Change
In
Control
Only
|
|
Change
In
Control and Termination
|
|
Vested Stock Option
Spread Value
|
|
$
|
155,320
|
|
$
|
155,320
|
|
$
|
155,320
|
|
$
|
155,320
|
|
$
|
155,320
|
|
$
|
155,320
|
|
$
|
155,320
|
|
$
|
155,320
|
|
Unvested Stock Option
Spread Value
|
|
|
|
|
|
|
|
$
|
155,320
|
|
$
|
621,280
|
|
$
|
621,280
|
|
$
|
621,280
|
|
$
|
621,280
|
|
Restricted Stock Value
|
|
|
|
|
|
|
|
|
|
$
|
207,846
|
|
$
|
207,846
|
|
$
|
207,846
|
|
$
|
207,846
|
|
Cash SeveranceSalary
Continuation
|
|
|
|
|
|
|
|
$
|
376,000
|
|
$
|
376,000
|
|
$
|
376,000
|
|
|
|
$
|
752,000
|
|
Cash SeveranceAnnual
Bonus(1)
|
|
|
|
|
|
|
|
|
|
$
|
182,500
|
|
$
|
182,500
|
|
|
|
$
|
182,500
|
|
Bonus for Year of
Termination(2)
|
|
|
|
|
|
|
|
$
|
217,152
|
|
$
|
217,152
|
|
$
|
217,152
|
|
|
|
$
|
217,152
|
|
Continued Health and
Welfare
|
|
|
|
|
|
|
|
$
|
30,894
|
|
$
|
30,894
|
|
$
|
30,894
|
|
|
|
$
|
61,778
|
|
Total
|
|
$
|
155,320
|
|
$
|
155,320
|
|
$
|
155,320
|
|
$
|
934,686
|
|
$
|
1,790,992
|
|
$
|
1,790,992
|
|
$
|
984,446
|
|
$
|
2,197,886
|
|
27
Paul B. Keller
|
|
Voluntary
Resignation
|
|
Resignation
for Good
Reason
|
|
Involuntary
Termination
For Cause
|
|
Involuntary
Termination
w/o Cause
|
|
Death
|
|
Disability
|
|
Change
In
Control
Only
|
|
Change
In
Control and Termination
|
|
Vested Stock Option
Spread Value
|
|
$
|
99,900
|
|
$
|
99,900
|
|
$
|
99,900
|
|
$
|
99,900
|
|
$
|
99,900
|
|
$
|
99,900
|
|
$
|
99,900
|
|
$
|
99,900
|
|
Unvested Stock Option
Spread Value
|
|
|
|
|
|
|
|
|
|
$
|
399,600
|
|
$
|
399,600
|
|
$
|
399,600
|
|
$
|
399,600
|
|
Restricted Stock Value
|
|
|
|
|
|
|
|
|
|
$
|
229,045
|
|
$
|
229,045
|
|
$
|
229,045
|
|
$
|
229,045
|
|
Cash SeveranceSalary
Continuation
|
|
|
|
|
|
|
|
$
|
345,000
|
|
$
|
345,000
|
|
$
|
345,000
|
|
|
|
$
|
690,000
|
|
Cash SeveranceAnnual
Bonus(1)
|
|
|
|
|
|
|
|
|
|
$
|
201,000
|
|
$
|
201,000
|
|
|
|
$
|
201,000
|
|
Bonus for Year of
Termination(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continued Health and
Welfare
|
|
|
|
|
|
|
|
$
|
30,786
|
|
$
|
30,786
|
|
$
|
30,786
|
|
|
|
$
|
46,180
|
|
Total
|
|
$
|
99,900
|
|
$
|
99,900
|
|
$
|
99,900
|
|
$
|
475,686
|
|
$
|
1,305,331
|
|
$
|
1,305,331
|
|
$
|
728,545
|
|
$
|
1,665,725
|
|
Note: No retirement scenario shown as no executive
is retirement eligible.
(1) Partial year bonuses have been annualized for purposes of the
calculation of the three-year average
(2) Based on actual bonus paid for FY10 performance
Employment Contracts
We
have employment agreements with each of our Named Executives Officers. Below is
a summary of each agreement as currently in effect:
In
July 2007, we entered into an employment agreement with Virginia M.
McDowell, our current President and Chief Operating Officer. The material terms
of Ms. McDowells employment agreement are set forth below:
·
One-year term
that continues for a series of successive one-year terms unless earlier
terminated pursuant to the terms of the agreement.
·
An initial base
salary of $650,000 and eligibility for an annual incentive bonus of 60% of
annual base salary if she meets minimum targets. Ms. McDowell also
received an initial stock option grant to purchase 250,000 of the Companys
common stock, vesting over a five-year period.
·
If employee voluntarily
terminates the term of employment due to Retirement (as defined in the
employment agreement), then all stock options shall become fully vested and
exercisable and employees deferred bonus payments shall be fully vested and
paid.
·
The maximum period
of salary and benefit continuation in the event of termination, death or
disability is 12 months, and the agreement provides for severance payments
equal to two times annual base salary in the event of termination following a
change of control, plus all stock options shall become fully vested and
exercisable.
In
December 2007, we entered into an employment agreement with Dale R.
Black, our current Senior Vice President and Chief Financial Officer. The
material terms of Mr. Blacks employment agreement are substantially the
same as Ms. McDowells agreement. Mr. Blacks initial annual base
salary was $400,000 and he is eligible for an annual incentive bonus of 60% of
his annual base salary. Mr. Black also received an initial stock option
grant to purchase 125,000 shares of the Companys common stock, vesting
over a five-year period.
In
March 2008, we entered into an employment agreement with James B.
Perry, our current Chief Executive Officer. The material terms of
Mr. Perrys employment agreement are substantially the same as
Ms. McDowells agreement; provided, however, that Mr. Perrys initial
term was two years. Mr. Perrys initial annual base salary was $800,000.
Mr. Perry also received an initial stock option grant to purchase
500,000 shares of the Companys common stock, vesting over a five-year
period. Mr. Perrys agreement also provides that, in the event of a
termination without cause, any unvested stock options that would have vested
had employee remained employed for one year following the date of termination
shall vest and become exercisable.
In
May 2008, we entered into an employment agreement with Paul B. Keller, our
current Senior Vice President and Chief Development Officer. The material terms
of the employment agreement are as follows:
28
·
One-year term
that continues for a series of successive one-year terms unless earlier
terminated pursuant to the terms of the agreement.
·
An initial
annual base salary of $335,000 and eligibility for an annual incentive bonus of
50% of annual base salary.
·
If employee
dies or becomes disabled during the employment term, employee (or employees
estate) is entitled to Basic Severance (consisting of (i) the
continuation of employees annualized base compensation for 12 months, (ii) the
bonus due under the Companys annual incentive plan with respect to the Companys
most recently completed fiscal year to the extent such bonus has not already
been paid and (iii) subject to employee making a timely election to
continue coverage, a monthly amount equal to the Companys portion of employees
premium or similar contribution required under the Companys group medical
plan, such amount to be paid for the 12-month period following the termination
date).
·
If we terminate
the term of employment without cause (as defined in the employment
agreement), employee is entitled to Basic Severance in the event that employee
executes a general release.
·
If the Company
terminates employees employment without cause or if employee terminates
employees employment on account of Good Reason (as defined in the employment
agreement), in either case, within the 12-month period following the occurrence
of a Change of Control (as defined in the employment agreement) then the
employee shall be entitled to (1) an amount equal to 200% of employees
annualized base compensation, (2) the average of employees annual bonus
payable under the Companys annual incentive plan during the Companys three
most recently completed fiscal years (or such shorter period as employee has
been employed by the Company), (3) the bonus due under the Companys
annual incentive plan with respect to the Companys most recently completed
fiscal year to the extent such bonus has not already been paid, (4) subject
to employee making a timely election to continue coverage, a monthly amount
equal to the Companys portion of employees premium or similar contribution
required under the Companys group medical plan, such amount to be paid for the
18-month period following the termination date, (5) any stock options
granted to employee outstanding as of the occurrence of a Change of Control
shall be deemed fully vested.
In July 2008, we
entered into an employment agreement with Edmund L. Quatmann, Jr., our
current Senior Vice President, General Counsel and Secretary. The material
terms of the employment agreement are substantially the same as Ms. McDowells
agreement and Mr. Blacks agreement.
Mr. Quatmanns initial annual base salary was $365,000 and he is
eligible for an annual incentive bonus of 60% of his annual base salary. Mr. Quatmann
also received an initial stock option grant to purchase 110,000 shares of the
Companys common stock, vesting over a five-year period.
In December 2008, we
amended the employment agreements between us and each of Messrs. Perry,
Black and Quatmann and Ms. McDowell to comply with Section 409A of
the Internal Revenue Code of 1986, as amended.
CERTAIN RELATED PARTY TRANSACTIONS
Green
Bridge Company, a company that is indirectly wholly owned by members of the
Goldstein family, including Robert S. Goldstein, Jeffrey D. Goldstein
and Richard A. Goldstein, provides an easement to the Isle of Capri
Casino & Hotel in Bettendorf, Iowa for parking at an annual rent
of $60,000. Robert S. Goldstein, Jeffrey D. Goldstein and
Richard A. Goldstein are members of our Board of Directors. Robert S.
Goldstein is Vice Chairman of our Board of Directors.
It
is our written policy that the Company expects that any transaction,
arrangement or relationship or series of similar transactions, arrangements or
relationships (including any indebtedness or guarantee of indebtedness) in
which (1) the aggregate amount involved will or may be expected to exceed $120,000
in any calendar year, (2) the Company is a participant, and (3) any
related party has or will have a direct or indirect interest will be either
approved or ratified by the unrelated Directors of the Board of Directors. In
deciding whether to approve a related party transaction, the Board of Directors
will take into account, among other factors it deems appropriate, whether the
transaction is on terms no less favorable than terms generally available to an
unaffiliated third-party under the same or similar circumstances and the extent
of the related partys interest in the transaction. If a related party
transaction will be ongoing, the Board of Directors may establish guidelines
for the Companys management to follow in its ongoing dealings with the related
party. Thereafter, the Board of Directors, on at least an annual basis, would
review and assess ongoing relationships with the related party to see that the
transaction remains appropriate.
29
AUDIT COMMITTEE REPORT
The
Audit Committee oversees the Companys financial reporting process on behalf of
the Board of Directors. Management has the primary responsibility for the
financial statements and the reporting process, including the Companys internal
control over financial reporting. In fulfilling its oversight responsibilities,
the Committee reviewed and discussed with management the audited consolidated
financial statements in the Annual Report on Form 10-K/A for the fiscal
year ended April 25, 2010, including a discussion of the quality, not just
the acceptability, of the accounting principles, the reasonableness of
significant judgments, and the clarity of disclosures in the consolidated
financial statements.
The
Committee reviewed with our independent registered public accounting firm, who
is responsible for expressing an opinion on the conformity of those audited
consolidated financial statements with U.S. generally accepted accounting
principles, their judgments as to the quality, not just the acceptability, of
the Companys accounting principles and such other matters as are required to
be discussed with the Committee under the standards of the Public Company
Accounting Oversight Board (United States). In addition, the Committee has
discussed with our independent registered public accounting firm the accounting
firms independence from management and the Company, including the matters in
the written disclosures required by the Public Company Accounting Oversight
Board, considered the compatibility of non-audit services with the independent
registered public accounting firms independence and discussed matters required
under SAS 61, as amended (AICPA, Professional Standards, Vol. 1, AU
Section 380), as adopted by the Public Company Accounting Oversight Board
in Rule 3200T.
The
Companys management is responsible for the preparation and integrity of the
Companys financial statements, establishing and maintaining adequate internal
control over financial reporting, and for managements report on internal
control over financial reporting. The Companys independent registered public
accounting firm is responsible for attesting to the effectiveness of the
Companys internal control over financial reporting. The Committees
responsibility in this regard is to oversee the Companys financial reporting
process and internal control over financial reporting. Throughout the year the
Audit Committee monitored the Companys compliance with Section 404 of the
Sarbanes-Oxley Act of 2002, and was satisfied that the Company would conclude
that internal control over financial reporting would be effective as of
April 25, 2010. Management, in fact, concluded that the Companys internal
control over financial reporting was effective as of April 25, 2010. The
independent registered public accounting firm provided an attestation that the
Company maintained effective internal control over financial reporting in all
material respects as of April 25, 2010.
The
Committee discussed with the Companys internal auditors and independent
registered public accounting firm the overall scope and plans for their
respective audits. The Committee meets with the internal auditors and the
independent registered public accounting firm, with and without management
present, to discuss the results of their examinations, their evaluations of the
Companys internal control, and the overall quality of the Companys financial
reporting.
In
reliance on the reviews and discussions referenced above, the Committee
recommended to the Board of Directors (and the Board has approved) that the
audited consolidated financial statements be included in the Annual Report on
Form 10-K/A for the fiscal year ended April 25, 2010 for filing with
the Securities and Exchange Commission. The Committee also appointed, subject
to stockholder ratification, the Companys independent registered public
accounting firm for this year ended April 30, 2011.
By: The Audit Committee:
Alan J. Glazer, Chair
W. Randolph Baker
Shaun R. Hayes
Lee S. Wielansky
30
PROPOSAL 1
ELECTION OF DIRECTORS
The
Board of Directors has nominated the following persons, each of whom is
currently serving as a director of the Company, to be elected at the Annual
Meeting to serve as directors until the next annual meeting of stockholders or
until their respective successors have been elected and qualified:
W. Randolph Baker
Alan J. Glazer
Jeffrey D. Goldstein
Richard A. Goldstein
Robert S. Goldstein
Shaun R. Hayes
Gregory J. Kozicz
James B. Perry
Lee S. Wielansky
Each
nominee has consented to being named in this proxy statement and to serve if
elected. Unless otherwise instructed on such proxy, the persons named as
proxies intend to vote the shares represented by each properly executed proxy
for each of the nominees standing for election. If a proxy is executed in such
a manner as to withhold authority to vote for one or more nominees for
director, such instructions will be followed by the persons named as proxies.
While it is not anticipated that any of the nominees will be unable or
unwilling to serve, if any should be unable or unwilling to serve, the persons
named as proxies reserve the right to substitute any other person, in
accordance with applicable law and our governing documents.
Election
of the nine director nominees requires the affirmative vote of a plurality of
the shares of our common stock present at the Annual Meeting, in person or by
proxy, and entitled to vote on the proposal. Withheld votes, if any, will have
no effect on the proposal. Broker non-votes, if any, will have no effect on the
proposal.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR
THE ELECTION OF EACH OF THE NOMINEES TO THE BOARD OF DIRECTORS.
31
PROPOSAL 2
RATIFICATION OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM
Our
Audit Committee has selected Ernst & Young, LLP to serve as our
independent registered public accounting firm for the fiscal year ending
April 30, 2011, and has recommended to the Board of Directors that the
stockholders ratify such selection. Although stockholder ratification of our
Audit Committees action in this respect is not required, the Board of
Directors considers it desirable for stockholders to pass upon the selection of
our independent registered public accounting firm and, if the stockholders do
not ratify the selection, may reconsider its selection.
Ratification
of the appointment of an independent registered public accounting firm requires
the affirmative vote of at least a majority of the shares of our common stock
present at the Annual Meeting, in person or by proxy, and entitled to vote on
the proposal. Abstentions from voting will have the same effect as voting
against the proposal and broker non-votes, if any, will have no effect on the
vote for this proposal.
Representatives
of Ernst & Young, LLP, who are expected to be present at the
Annual Meeting, will have an opportunity to make a statement if they so desire,
and will be available to respond to appropriate questions from stockholders.
We
have been informed by Ernst & Young, LLP that neither the firm
nor any of its members or their associates has any direct financial interest or
material indirect financial interest in us or any of our affiliates.
The
following table summarizes the fees billed to the Company for professional
services by Ernst & Young, LLP for fiscal 2010 and 2009:
|
|
2010
|
|
2009
|
|
Audit
Fees
|
|
$
|
2,278,035
|
|
$
|
2,563,865
|
|
Audit-Related
Fees
|
|
49,500
|
|
22,825
|
|
Tax
Fees
|
|
10,000
|
|
|
|
All
Other Fees
|
|
|
|
|
|
|
|
$
|
2,337,535
|
|
$
|
2,586,690
|
|
Audit
fees include fees for professional services rendered for the audit of our
annual consolidated financial statements and reports on internal control over
financial reporting, the review procedures on the consolidated financial
statements included in our Forms 10-Q, as well as accounting
consultations, statutory audits, consents, and other services related to
Securities and Exchange Commission filings. Audit-related fees for 2010 include
fees for the audit of our employee benefit plan. Tax fees consist of amounts
billed for tax compliance assistance and tax planning and advice.
The
Audit Committee is responsible for reviewing and pre-approving any non-audit
services to be performed by the Companys outside accounting firm. The Audit
Committee may delegate its pre-approval authority to the Chairman of the Audit
Committee to act between meetings of the Audit Committee. Any pre-approval
given by the Chairman of the Audit Committee pursuant to this delegation is
presented to the full Audit Committee at its next regularly scheduled meeting.
The Audit Committee or Chairman of the Audit Committee reviews, and if
appropriate, approves all non-audit service engagements, taking into account
the proposed scope of the non-audit services, the proposed fees for the
non-audit services, whether the non-audit services are permissible under
applicable law or regulation, and the likely impact of the non-audit services
on the principal accountants independence.
The
Audit Committee pre-approved each engagement of the Companys independent
registered public accounting firm to perform non-audit related services during
fiscal year 2010.
The
Audit Committee has considered whether the provision of non-audit services is
compatible with maintaining the principal accountants independence and
believes the provision of the services referenced above is compatible.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR
THE RATIFICATION OF THE AUDIT COMMITTEES SELECTION OF ERNST &
YOUNG, LLP AS ISLE OF CAPRI CASINOS, INC. INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM.
32
PROPOSALS 3-10
PROPOSALS 3 THROUGH 10 ARE RELATED TO THE AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
The
Board of Directors has determined that it is in the best interests of the
Company and our stockholders to amend our Certificate of Incorporation to
increase the number of authorized shares our common stock. In connection with this proposed amendment,
the Board of Directors authorized management to review our Certificate of
Incorporation more generally in an effort to determine if any further changes
to the Certificate of Incorporation would be prudent. This effort resulted in various additional
proposed changes to our Certificate of Incorporation, both substantive and
ministerial. The proposed increase in
the authorized number of our shares of common stock as well as the other
proposed changes are summarized below and are reflected in the proposed form of
the Amended and Restated Certificate of Incorporation attached to this proxy
statement as Appendix A. The summary of
the proposed changes is qualified in its entirety by reference to Appendix A,
which you should read in its entirety.
If
any of the proposed amendments to our Certificate of Incorporation described
below are not approved, then that amendment will not be made, and the Amended
and Restated Certificate of Incorporation will retain the current provisions
governing the subject matter of that proposal.
33
PROPOSAL 3
AMENDMENT OF THE CERTIFICATE OF INCORPORATION TO INCREASE AUTHORIZED
COMMON STOCK
Pursuant
to our current Certificate of Incorporation, we are presently authorized to
issue 45,000,000 shares of Common Stock.
As of [ ],
2010, [ ] shares of Common Stock
were issued and outstanding and [ ] shares
have been reserved for issuance for
[ ].
This leaves only
[ ] shares of Common
Stock available for issuance. Consequently,
we may not have a sufficient number of authorized shares of Common Stock
available if necessary for future mergers and acquisitions, capital raising
activities, stock splits or other transactions that would benefit the Company
and our stockholders.
If
this proposal is approved by the holders of our Common Stock, our current
Certificate of Incorporation will be amended to provide that we have the
authority to issue 65,000,000 shares, consisting of 60,000,000 shares of Common
Stock, par value $0.01 per share, 3,000,000 shares of Class B Common
Stock, par value $0.01 per share, and 2,000,000 shares of Preferred Stock, par
value $0.01 per share. We currently have
the authority to issue 50,000,000 shares, consisting of 45,000,000 shares of
Common Stock, 3,000,000 shares of Class B Common Stock and 2,000,000
shares of Preferred Stock.
The
Board of Directors believes that it is in the best interests of the Company and
our stockholders to increase the number of authorized shares of Common
Stock. This will provide flexibility
with respect to future transactions, including acquisitions of other businesses
where we would have the option to use our Common Stock as consideration (rather
than cash), financing future growth, financing transactions, stock splits, employee
benefit plans and other corporate purposes.
Our
stockholders will not have any preemptive rights with respect to the additional
shares being authorized. No further
approval of our stockholders would be necessary prior to the issuance of any
additional shares of Common Stock, except as may be required by law or
applicable NASDAQ rules. In certain
circumstances, generally relating to the number of shares to be issued and the
identity of the recipient or the establishment of employee benefit plans that
provide for the issuance of shares of Common Stock or options to purchase
Common Stock, the NASDAQ rules require stockholder authorization in
connection with the issuance of such additional shares. Subject to applicable law and the NASDAQ
rules, the Board of Directors has the sole discretion to issue additional
shares of Common Stock on such terms and for such consideration as may be
determined by the Board of Directors.
The issuance of any additional shares of Common Stock may have the
effect of diluting the percentage of stock ownership of our present
stockholders.
We
have not proposed the increase to our authorized stock with the intention of
using the additional Common Stock for anti-takeover purposes, although we could
use the additional stock in the future to make it more difficult to acquire
control of the Company or otherwise discourage an attempt to acquire control of
the Company.
The
proposed amendment to the Certificate of Incorporation to increase the
authorized number of shares of Common Stock will be approved upon the
affirmative vote of at least a majority of the shares of our Common Stock that
are outstanding and entitled to vote on the proposal. Abstentions from voting
and broker non-votes, if any, will have the same effect as voting against the
proposal.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THE
PROPOSED AMENDMENT TO THE CERTIFICATE OF INCORPORATION TO INCREASE THE
AUTHORIZED NUMBER OF SHARES OF COMMON STOCK.
34
PROPOSAL 4
AMENDMENT OF THE CERTIFICATE OF INCORPORATION TO PROVIDE MORE DETAIL
WITH RESPECT TO THE POWERS OF THE BOARD OF DIRECTORS IN CONNECTION WITH ISSUING
PREFERRED STOCK
Our
current Certificate of Incorporation provides the Board of Directors with
authority to issue Preferred Stock and to fix the powers, preferences, rights
and limitations of any Preferred Stock so issued. This is often referred to as Blank Check
Preferred Stock.
In
reviewing our current Certificate of Incorporation in connection with the
preparation of the proposed Amended and Restated Certificate of Incorporation,
it was determined that it would be prudent to amend our Certificate of
Incorporation to make it clear that the Board of Directors rights to issue
Preferred Stock are to the fullest extent permitted now or in the future under
Delaware law and to provide a non-exhaustive list of the types of powers,
preferences, rights and limitations the Board of Directors would have the right
to consider in creating and issuing a particular class or series of Preferred
Stock. These include, among others, the
number of shares issued, the dividend rights of the shares and the voting
rights of the shares.
The
Board of Directors believes that it is in the best interests of the Company and
our stockholders to provide more detail with respect to the powers of the Board
of Directors in connection with issuing Preferred Stock. This will provide the Board of Directors with
flexibility in raising capital and power to the fullest extent provided now or
in the future under Delaware law to issue Preferred Stock.
This
proposal has not been made in response to, and is not being presented to deter,
any effort to obtain control of the Company and is not being proposed as an anti-takeover measure. We have no arrangements, agreements, or
understandings in place at the present time for the issuance or use of the
shares of Preferred Stock to be authorized by the proposed
amendment. Nevertheless, the issuance of
Preferred Stock could make a takeover attempt more difficult or costly. For
example, the issuance of Preferred Stock could dilute the stock ownership or
voting rights of a person seeking to obtain control of the Company, thereby
increasing the cost of acquiring effective control of the Company. This could
have the effect of deterring or rendering more difficult a merger, tender
offer, proxy contest or other change of control transaction.
The
proposed amendment to the Certificate of Incorporation to provide more detail
with respect to the powers of the Board of Directors in connection with issuing
Preferred Stock will be approved upon the affirmative vote of at least a
majority of the shares of our Common Stock that are outstanding and entitled to
vote on the proposal. Abstentions from voting and broker non-votes, if any,
will have the same effect as voting against the proposal.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THE
PROPOSED AMENDMENT TO THE CERTIFICATE OF INCORPORATION TO PROVIDE MORE DETAIL
WITH RESPECT TO THE POWERS OF THE BOARD OF DIRECTORS IN CONNECTION WITH ISSUING
PREFERRED STOCK.
35
PROPOSAL 5
AMENDMENT OF THE CERTIFICATE OF INCORPORATION TO FIX A RANGE FOR THE
NUMBER OF DIRECTORS
Our
current Certificate of Incorporation does not address the number of directors
on the Board of Directors. However, this
topic is addressed in our current Bylaws.
Our current Bylaws provide that at each annual meeting the stockholders
will determine the number of directors.
In addition, if this proposal is approved, the Board of Directors
intends to promptly amend the Bylaws of the Company regarding the number of directors to be
consistent with the Amended and Restated Certificate of Incorporation.
The
proposed amendment to the Certificate of Incorporation allows the Board of
Directors to fix the number of directors from time to time, but says that there
shall not be less than five directors nor more than 15 directors. Pursuant to this proxy statement, nine
individuals are nominated for election as directors at the Annual Meeting.
The
Board of Directors believes that it is in the best interests of the Company and
our stockholders to fix the size of the Board of Directors in a range of
between five and 15 directors. The Board
of Directors considers this to be a reasonable size for the Company and thinks
that the stockholders should have the right to determine whether the Board of
Directors should have fewer than five directors or more than 15 directors (as
would be the case if the proposed amendment to our Certificate of Incorporation
is enacted since a further amendment to our Certificate of Incorporation to
eliminate or change this range would again require stockholder approval under
Delaware law).
This
proposal has not been made in response to, and is not being presented to deter,
any effort to obtain control of the Company and is not being proposed as an anti-takeover measure. The limitation on the total number of
directors may deter attempts to take control of the Board of Directors by
increasing its size and filling the resulting vacancies with individuals in
favor of the takeover. However, the
proposed amendment is not being proposed as a result of any current effort to
change the composition of the Board of Directors.
The
proposed amendment to the Certificate of Incorporation to fix a range for the
number of directors will be approved upon the affirmative vote of at least a
majority of the shares of our Common Stock that are outstanding and entitled to
vote on the proposal. Abstentions from voting and broker non-votes, if any,
will have the same effect as voting against the proposal.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THE
PROPOSED AMENDMENT TO THE CERTIFICATE OF INCORPORATION TO FIX A RANGE FOR THE
NUMBER OF DIRECTORS.
36
PROPOSAL 6
AMENDMENT OF THE CERTIFICATE OF INCORPORATION WITH RESPECT TO FILLING
VACANCIES ON THE BOARD OF DIRECTORS
Our
current Certificate of Incorporation does not address how vacancies on the
Board of Directors are filled. However,
this topic is addressed in our current Bylaws.
Our current Bylaws provides that vacancies by reason of death,
resignation, removal or otherwise, or on account of a newly created directorship,
shall be filled for the unexpired term by a majority of the directors then in
office or by the sole remaining director, even if less than a quorum exists. In
addition, if this proposal is approved, the Board of Directors intends to
promptly amend the Bylaws of the Company with respect to filling vacancies on the
Board of Directors to be consistent with the Amended and Restated Certificate of Incorporation.
Article FIFTH
of the proposed Amended and Restated Certificate of Incorporation includes a
provision with respect to the filling of director vacancies that is
substantively similar to the provisions in our current Bylaws, which
effectively restate the default rule under Delaware law.
The
Board of Directors believes that it is in the best interests of the Company and
our stockholders to establish the procedures for filling vacancies on our Board
of Directors in our Certificate of Incorporation so that these procedures can
not be changed without the approval of our stockholders.
This
proposal has not been made in response to, and is not being presented to deter,
any effort to obtain control of the Company and is not being proposed as an anti-takeover measure. The Directors right to fill vacancies on the Board of Directors
may deter attempts to take control of the Board of Directors by filling
vacancies with individuals in favor of the takeover. The Company has no present intention to use
the Directors right to fill vacancies
on the Board of Directors or to change the composition of the Board of Directors
for anti-takeover purposes.
The
proposed amendment to the Certificate of Incorporation with respect to filling
vacancies on the Board of Directors will be approved upon the affirmative vote
of at least a majority of the shares of our Common Stock that are outstanding
and entitled to vote on the proposal. Abstentions from voting and broker
non-votes, if any, will have the same effect as voting against the proposal.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THE
PROPOSED AMENDMENT TO THE CERTIFICATE OF INCORPORATION WITH RESPECT TO FILLING
VACANCIES ON THE BOARD OF DIRECTORS.
37
PROPOSAL 7
AMENDMENT OF THE CERTIFICATE OF INCORPORATION WITH RESPECT TO
INDEMNIFICATION OF DIRECTORS, OFFICERS, EMPLOYEES AND AGENTS
Our
current Certificate of Incorporation provides that the Company will indemnify
and advance expenses to our directors and officers in certain instances and
subject to certain conditions.
The
proposed Amended and Restated Certificate of Incorporation maintains these
general indemnification rights, but provides that indemnification is in the
discretion of the Board of Directors (rather than mandatory) in instances in
which the director or officer in question brings the action against the Company
either directly or as a derivative action.
The proposed Amended and Restated Certificate of Incorporation also
states that the Board of Directors, in its discretion, may indemnify and
advance expenses to employees and agents of the Corporation on similar terms to
the mandatory indemnification and advancement of expenses for directors and
officers. The proposed Amended and
Restated Certificate of Incorporation further clarifies that these rights will
continue after a person ceases to be a director, officer, employee or agent of
the Company and that amendments or repeals of the Certificate of Incorporation
will not reduce or limit any indemnification rights for acts or omissions
occurring prior to such amendment or repeal.
The
Board of Directors believes that it is in the best interests of the Company and
our stockholders to provide for these indemnification rights in order attract
and retain top-level talent as directors, officers, employees and agents of the
Company.
The
proposed amendment to the Certificate of Incorporation with respect to
indemnification of directors, officers, employees and agents will be approved
upon the affirmative vote of at least a majority of the shares of our Common
Stock that are outstanding and entitled to vote on the proposal. Abstentions
from voting and broker non-votes, if any, will have the same effect as voting
against the proposal.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THE
PROPOSED AMENDMENT TO THE CERTIFICATE OF INCORPORATION WITH RESPECT TO
INDEMNIFICATION OF DIRECTORS, OFFICERS, EMPLOYEES AND AGENTS.
38
PROPOSAL 8
AMENDMENT OF THE CERTIFICATE OF INCORPORATION WITH RESPECT TO CALLING
OF SPECIAL MEETINGS OF STOCKHOLDERS
Our
current Certificate of Incorporation does not address the calling of special
meetings of stockholders. However, our
current Bylaws provide that special meetings of stockholders may be called upon
the request of the Chairman of the Board, the President or a majority of the
Board of Directors.
In
reviewing this issue, our Board of Directors determined that it would be
desirable for the following to be able to call special meetings of
stockholders: (1) the Chairman of
the Board, (2) the Vice Chairman of the Board, (3) the Chief
Executive Officer, (4) the President or (5) a majority of the Board of
Directors. This is therefore the proposal
reflected in the proposed Amended and Restated Certificate of
Incorporation. In addition, if this
proposal is approved, the Board of Directors intends to promptly amend the Bylaws of the
Company with respect to the calling of special stockholder meetings to be
consistent with the Amended and Restated Certificate of Incorporation.
The
Board of Directors believes that it is in the best interests of the Company and
our stockholders for the Certificate of Incorporation to address calling
special meetings of stockholders and when such meetings can be called. In addition, it would relieve the Company of
the cost and burden of holding special meetings that are not called at
the Companys request.
This
proposal has not been made in response to, and is not being presented to deter,
any effort to obtain control of the Company and is not being proposed as an anti-takeover measure. This provision may discourage or deter a
potential acquirer from conducting a solicitation of proxies to elect the
acquirers own slate of directors, otherwise attempting to obtain control of
the Company. Further, it may also
prevent a potential acquirer from acting independently of management.
The
proposed amendment to the Certificate of Incorporation with respect to the
calling of special meetings of stockholders will be approved upon the
affirmative vote of at least a majority of the shares of our Common Stock that
are outstanding and entitled to vote on the proposal. Abstentions from voting
and broker non-votes, if any, will have the same effect as voting against the
proposal.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THE
PROPOSED AMENDMENT TO THE CERTIFICATE OF INCORPORATION WITH RESPECT TO THE
CALLING OF SPECIAL MEETINGS OF STOCKHOLDERS.
39
PROPOSAL 9
AMENDMENT OF THE CERTIFICATE OF INCORPORATION WITH RESPECT TO THE
REDEMPTION OF SHARES OF A DISQUALIFIED HOLDER
Our
current Certificate of Incorporation provides that any shares of capital stock
of the Company that are held by a person determined by the Board of Directors
to be a Disqualified Holder for purposes of our operating contracts and
applicable gaming regulations are subject to redemption by the Company, upon 30
days notice and at a price generally calculated as the average closing share
price for the 45 days prior to the notice of redemption, and payable in cash or
equity or debt securities of the Company. These provisions are designed to give
the Board of Directors a mechanism to preserve the Companys gaming licenses
and operations in the event that the ownership of Company stock by certain
persons threatens the status of Company contracts or its compliance with the
various gaming and licensing regulations to which the Company is subject.
The
proposed Amended and Restated Certificate of Incorporation maintains the
general redemption scheme and the related powers of the Board of Directors, but
eliminates the mandatory 30 day notice period and modifies the permissible
payment methods for redemption and the method of calculating the redemption
price. While the Company still must provide a Disqualified Holder with a notice
of redemption, the elimination of the 30 day notice period will provide the
Board of Directors with the ability to act quickly to redeem shares when it is
in the best interest of the Company to do so. Under the proposed amendments,
and subject to relevant law, the redemption price will be an amount deemed
reasonable by the Board of Directors and will not exceed the closing price of
the relevant class of shares on the date that the redemption notice is
delivered to the Disqualified Holder. This change will provide the Board of
Directors with greater flexibility in setting a redemption price that is in the
best interests of the Company and all of its stockholders. Under the proposed
amendments, the redemption price may be paid in cash or by promissory note, or
both. This change is intended to reflect the fact that the Company does not
currently intend to make a redemption payment in equity securities, and to
clarify that a promissory note will be the only type of debt security that may
be issued in exchange for a Disqualified Holders shares.
In
addition, the proposed amendments contain a new indemnification provision under
which a Disqualified Holder is required to indemnify the Company for losses and
expenses incurred by the Company as a result of such holders ownership or
control of Company stock.
The
Board of Directors believes that it is in the best interests of the Company and
our stockholders to amend the provisions described above to provide the Company
and the Board of Directors with a more effective and efficient means to redeem
Disqualified Holders and to preserve the Companys gaming licenses and recover
its costs and expenses in the event that a shareholder is deemed to be a
Disqualified Holder.
The
proposed amendments to the Certificate of Incorporation with respect to the
provisions dealing with the redemption of shares of a Disqualified Holder will
be approved upon the affirmative vote of at least a majority of the shares of
our Common Stock that are outstanding and entitled to vote on the proposal.
Abstentions from voting and broker non-votes, if any, will have the same effect
as voting against the proposal.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THE
PROPOSED AMENDMENT TO THE CERTIFICATE OF INCORPORATION WITH RESPECT TO THE
REDEMPTION OF SHARES OF A DISQUALIFIED HOLDER.
40
PROPOSAL 10
ADOPTION OF THE AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
In
addition to the proposed amendments described above in Proposals 3 through 9,
the proposed Amended and Restated Certificate of Incorporation contains certain
administrative, conforming and other changes that the Board of Directors does
not believe adversely impacts the rights of our stockholders in any material
respect. Our Certificate of
Incorporation was originally filed with the Delaware Secretary of State in
1990. It has subsequently undergone a
number of amendments. In an effort to
integrate these amendments into a single document as well as to clean-up and
update certain provisions of our Certificate of Incorporation (including
pursuant to the proposed amendments described above) we prepared the proposed
Amended and Restated Certificate of Incorporation.
The
Board of Directors believes that the Amended and Restated Certificate of
Incorporation is beneficial for the Company and that it is therefore in the
best interests of the Company and our stockholders to adopt the Amended and
Restated Certificate of Incorporation.
The
Amended and Restated Certificate of Incorporation will be approved upon the
affirmative vote of at least a majority of the shares of our Common Stock that
are outstanding and entitled to vote on the proposal. Abstentions from voting
and broker non-votes, if any, will have the same effect as voting against the
proposal.
THE
BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THE ADOPTION OF
THE AMENDED AND RESTATED CERTIFICATE OF INCORPORATION.
41
OTHER MATTERS
The
Board of Directors is not aware of any other business that may come before the
Annual Meeting. However, if additional matters properly come before the
meeting, proxies will be voted at the discretion of the proxyholders.
SECTION 16(A) BENEFICIAL
OWNERSHIP REPORTING COMPLIANCE
To
the Companys knowledge, with respect to the fiscal year ended April 25,
2010, the Companys directors, officers and 10% stockholders complied with all
applicable Section 16(a) filing requirements; provided, however, that
Form 4 filings for each of Arnold L. Block, Virginia M. McDowell and James
B. Perry reporting their respective fiscal 2009 long-term incentive awards were
filed late. The filings were due on July 27, 2009 and were filed on July 29,
2009.
STOCKHOLDER PROPOSALS
Stockholders
who, in accordance with Rule 14a-8 of the Securities and Exchange
Commission, wish to present proposals for inclusion in our proxy materials to
be distributed in connection with our 2011 Annual Meeting must submit their
proposals no later than April [
·
], 2011, at our
principal executive offices, Attention: Edmund L. Quatmann, Jr., Senior
Vice President, General Counsel and Secretary. As the rules of the
Commission make clear, simply submitting a proposal does not guarantee its
inclusion.
DELIVERY OF DOCUMENTS TO STOCKHOLDERS SHARING AN
ADDRESS
If
you share an address with any of our other stockholders, your household might
receive only one copy of the Notice of Internet Availability or our annual
report and proxy statement. This
delivery method is referred to as householding and can result in savings for
us. To take advantage of this opportunity, we deliver a single Notice of
Internet Availability of Proxy Materials to multiple stockholders who share an
address. If you prefer to receive separate copies of the Notice of Internet
Availability of Proxy Materials, either now or in the future, or if you
currently are a stockholder sharing an address with another stockholder and
wish to receive only one copy of future Notices of Internet Availability of
Proxy Materials for your household, please send your request in writing to us
at the following address: Isle of Capri Casinos, Inc., 600 Emerson Road,
Suite 300, St. Louis, Missouri 63141, Attention: Secretary.
ADDITIONAL INFORMATION
A
copy of our Annual Report on Form 10-K/A for the fiscal year ended
April 25, 2010, is being distributed concurrently with this proxy
statement to all stockholders entitled to notice of and to vote at the Annual
Meeting. Our Annual Report on Form 10-K/A is not incorporated into this
proxy statement and shall not be deemed to be solicitation material. We hereby
undertake to provide to any recipient of this proxy statement, upon his or her
request, a copy of any of the exhibits to our Annual Report on
Form 10-K/A. Requests for such copies should be directed in writing to
Edmund L. Quatmann, Jr., Senior Vice President, General Counsel and
Secretary, Isle of Capri Casinos, Inc., 600 Emerson Road,
Suite 300, St. Louis, Missouri 63141.
|
|
BY ORDER OF THE BOARD OF
DIRECTORS,
|
|
|
|
|
|
Edmund L.
Quatmann, Jr.
|
|
|
Senior
Vice President, General Counsel and Secretary
|
August [
·
], 2010
|
|
|
St. Louis,
Missouri
|
|
|
42
APPENDIX A
AMENDED AND
RESTATED
CERTIFICATE OF INCORPORATION
of
ISLE OF CAPRI CASINOS, INC.
Pursuant to Sections 242 and 245 of the General Corporation Law of
Delaware
Isle
of Capri Casinos, Inc., a corporation organized and existing under the
General Corporation Law of Delaware, does hereby certify as follows:
(1)
The name of the corporation
is Isle of Capri Casinos, Inc. The
name under which it was originally incorporated was Kana Corporation. The date of filing of its original
Certificate of Incorporation was February 14, 1990.
(2)
This Amended and Restated
Certificate of Incorporation was duly adopted by the Board of Directors of the
corporation and its stockholders in accordance with the provisions of Sections
242 and 245 of the General Corporation Law of Delaware.
(3)
This Amended and Restated
Certificate of Incorporation restates and integrates and further amends the
Certificate of Incorporation of the corporation, as heretofore amended or
supplemented.
(4)
The text of the Certificate
of Incorporation, as heretofore amended or supplemented, is amended and
restated in its entirety as follows:
FIRST:
The name of
the corporation is Isle of Capri Casinos, Inc. (hereinafter in this
Amended and Restated Certificate of Incorporation called the Corporation).
SECOND:
The
registered office of the Corporation in the State of Delaware is located at
1209 Orange Street in the City of Wilmington, County of New Castle. The name of the registered agent of the
Corporation is The Corporation Trust Company.
THIRD:
The purpose
of the Corporation is to engage in any lawful act or activity for which
corporations may be organized under the General Corporation Law of Delaware.
FOURTH:
The
aggregate number of shares the Corporation has authority to issue shall be
65,000,000 shares, of which 60,000,000 shares of the par value $.01 shall be
designated as Common Stock, 3,000,000 shares of the par value $.01 shall be
designated as Class B Common Stock, and 2,000,000 shares of the par
value $.01 shall be designated as Preferred Stock.
Authority
is hereby expressly granted to and vested in the Board of Directors of the
Corporation to provide for the issue of the Preferred Stock in one or more
series and in connection therewith to fix by resolutions providing for the
issue of such series the number of shares to be included in such series and the
designations and such voting powers, full or limited, or no voting powers, and
such of the preferences and relative, participating, optional or other special
rights, and the qualifications, limitations or restrictions thereof, of such
series of the Preferred Stock, to the full extent now or hereafter permitted by
the laws of the State of Delaware.
Without limiting the generality of the grant of authority contained in
the preceding sentence, the Board of Directors is authorized to determine any
or all of the following, and the shares of each series may vary from the shares
of any other series in any or all of the following respects:
1.
The number of shares of such
series (which may subsequently be increased, except as otherwise provided by
the resolutions of the Board of Directors providing for the issue of such
series, or decreased to a number not less than the number of shares then
outstanding) and the distinctive designation thereof;
2.
The dividend rights, if any,
of such series, the dividend preferences, if any, as between such series and
any other class or series of stock, whether and the extent to which shares of
such series shall be entitled to participate in dividends with shares of any
other series or class of stock, whether and the extent to which dividends on
such series shall be cumulative, and any limitations, restrictions or
conditions on the payment of such dividends;
43
3.
The time or times during
which, the price or prices at which, and any other terms or conditions on which
the shares of such series may be redeemed, if redeemable;
4.
The rights of such series,
and the preferences, if any, as between such series and any other class or
series of stock, in the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Corporation and whether and the extent to
which shares of any such series shall be entitled to participate in such event
with any other class or series of stock;
5.
The voting powers, if any,
in addition to the voting powers prescribed by law of shares of such series,
and the terms of exercise of such voting powers;
6.
Whether shares of such series
shall be convertible into or exchangeable for shares of any other series or
class of stock, or any other securities, and the terms and conditions, if any,
applicable to such rights; and
7.
The terms and conditions, if
any, of any purchase, retirement or sinking fund which may be provided for the
shares of such series.
Authority
is also hereby expressly granted to and vested in the Board of Directors of the
Corporation to establish, by resolution adopted and filed in the manner
provided by law, one or more series of Class B Common Stock and to fix the
powers, preferences, rights and limitations of such class or series.
FIFTH
: The number
of directors which shall constitute the whole Board of Directors of the
Corporation shall be the number from time to time fixed by the Board of
Directors but in no event shall be less than five or more than fifteen.
Any
vacancy on the Board of Directors, including any such vacancy that results from
an increase in the number of directors, may be filled by a majority of the
directors then in office, although less than a quorum, or by a sole remaining
director.
SIXTH
: The Board
of Directors shall have such powers as are permitted by the General Corporation
Law of Delaware, including without limitation and without the assent or vote of
the stockholders, to make, alter, amend, change, add to, or repeal the Bylaws
of the Corporation; to fix and vary the amount to be reserved as working
capital; to authorize and cause to be executed mortgages and liens upon all the
property of the Corporation, or any part thereof; to determine the use and
disposition of any surplus or net profits over and above the capital stock paid
in; and to fix the times for the declaration and payment of dividends.
SEVENTH
: To the
fullest extent permitted by the General Corporation Law of Delaware or any
other law of the State of Delaware as the same exists or may hereafter be
amended, a director of the Corporation shall not be liable to the Corporation
or its stockholders for monetary damages for breach of fiduciary duty as a
director.
EIGHTH
: The
Corporation shall indemnify and advance expenses to each person who serves as
an officer or director of the Corporation or a subsidiary of the Corporation
and each person who serves or may have served at the request of the Corporation
as a director, officer, employee, or agent of another corporation, partnership,
joint venture, trust or other enterprise from any liability incurred as a
result of such service to the fullest extent permitted by the General Corporation
Law of Delaware as it may from time to time be amended, except with respect to
an action commenced by such director or officer against the Corporation or by
such director or officer as a derivative action by or in the right of the
Corporation. Each person who is or was
an employee or agent of the Corporation and each officer or director who
commences any action against the Corporation or a derivative action by or in
the right of the Corporation may be similarly indemnified and receive an
advance of expenses at the discretion of the Board of Directors.
The
indemnification and advancement of expenses provided by, or granted pursuant
to, this Amended and Restated Certificate of Incorporation shall not be deemed
exclusive of any other rights to which those seeking indemnification or
advancement of expenses may be entitled under any agreement, vote of
stockholders or disinterested directors or otherwise, both as to action in his
official capacity and as to action in another capacity while holding such office.
The
Corporation may purchase and maintain insurance on behalf of any person who is
or was a director, officer, employee or agent of the Corporation, or is or was
serving at the request of the Corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise against any liability asserted against him and incurred by him in
any such capacity, or arising out of his status as such, whether or not the
Corporation would have the
44
power
to indemnify him against such liability under this Amended and Restated
Certificate of Incorporation or the laws of the State of Delaware.
The
indemnification and advancement of expenses provided by, or granted pursuant
to, the Amended and Restated Certificate of Incorporation shall continue as to
a person who has ceased to be a director, officer, employee or agent and shall
inure to the benefit of the heirs, executors and administrators of such a
person.
NINTH
: No
amendments to this Amended and Restated Certificate of Incorporation or repeal
of any Article of this Amended and Restated Certificate of Incorporation
shall increase the liability or alleged liability or reduce or limit the right
to indemnification of any directors, officers or employees of the Corporation
for acts or omissions of such person occurring prior to such amendment or
repeal.
TENTH
: Whenever a
compromise or arrangement is proposed between the Corporation and its creditors
or any class of them and/or between the Corporation and its stockholders or any
class of them, any court of equitable jurisdiction within the State of Delaware
may, on the application in a summary way of the Corporation or of any creditor
or stockholder thereof or on the application of any receiver or receivers
appointed for the Corporation under Section 291 of Title 8 of the Delaware
Code or on the application of trustees in dissolution or of any receiver or
receivers appointed for the Corporation under the provisions of Section 279
of Title 8 of the Delaware Code, order a meeting of the creditors or class of
creditors, and/or of the stockholders or class of stockholders of the
Corporation, as the case may be, to be summoned in such manner as the said
court directs. If a majority in number
representing three fourths in value of the creditors or class of creditors,
and/or of the stockholders or class of stockholders of the Corporation, as the
case may be, agree to any compromise or arrangement and to any reorganization of
the Corporation as consequence of such compromise or arrangement, the said
compromise or arrangement and the said reorganization shall, if sanctioned by
the court to which the said application has been made, be binding on all the
creditors or class of creditors, and/or on all the stockholders or class of
stockholders, of the Corporation, as the case may be, and also on the
Corporation.
ELEVENTH:
11.1)
No person may become the
Beneficial Owner of five percent (5%) or more of any class or series of the Corporations
issued and outstanding Capital Stock unless such Person agrees in writing to: (i) provide
to the Gaming Authorities information regarding such Person, including without
limitation thereto, information regarding other gaming-related activities of
such Person and financial statements, in such form, and with such updates, as
may be required by any Gaming Authority; (ii) respond to written or oral
questions that may be propounded by any Gaming Authority; and (iii) consent
to the performance of any background investigation that may be required by any
Gaming Authority, including without limitation thereto, an investigation of any
criminal record of such Person.
11.2)
Notwithstanding any other
provisions of this Amended and Restated Certificate of Incorporation, but
subject to the provisions of any resolution of the Board of Directors creating
any series of Class B Common Stock or any class or series of Preferred
Stock or any other class of stock which has a preference over Common Stock with
regard to dividends or upon liquidation, outstanding shares of Capital Stock
held by a Disqualified Holder shall be subject to redemption at any time by the
Corporation by action of the Board of Directors. The terms and conditions of each redemption
shall be as follows:
(a)
The Redemption Price of such
shares may be paid in cash, by promissory note, or both, as required by the
applicable Gaming Authority and, if not so required, as the Board of Directors
elects.
(b)
If less than all the shares
held by Disqualified Holders are to be redeemed, the shares to be redeemed
shall be selected in such manner as shall be determined by the Board of
Directors, which may include selection first of the most recently purchased
shares thereof, selection by lot, or selection in any other manner determined
by the Board of Directors.
(c)
If the Board of Directors
deems it necessary or advisable to redeem any shares of Capital Stock held by a
Disqualified Holder, the Corporation shall give a notice of redemption to the
Disqualified Holder which shall set forth the (i) Redemption Date, (ii) the
number of shares of Capital Stock to be redeemed and (iii) the Redemption
Price and the manner of payment therefor.
(d)
From and after the
Redemption Date or such earlier date as mandated by a Gaming Authority or
pertinent state or federal law, any and all rights of whatever nature which may
be held by the Beneficial Owners of shares selected for redemption (including
any rights to vote or participate in dividends declared on stock of the same class
or series
45
as
such shares) shall cease and terminate and they shall thenceforth be entitled
only to receive the cash or Redemption Securities payable upon redemption.
(e)
Such redemption shall be upon
such other terms and conditions as the Board of Directors shall determine.
11.3)
A Disqualified Holder shall
indemnify and hold harmless the Corporation and its Affiliates for any and all
losses, costs and expenses, including attorneys fees, incurred by the
Corporation or its Affiliates as a result of, or arising out of, such
Disqualified Holders ownership or control or failure to promptly divest itself
of any shares of Capital Stock.
11.4)
Capitalized terms used in
this Article ELEVENTH shall have the meanings provided below.
Affiliate
and Associate shall have the respective meanings ascribed to such terms in Rule 12b-2
under the General Rules and Regulations under the Securities Exchange Act of
1934, as amended (the Act). The term registrant
as used in said Rule 12b-2 shall mean the Corporation.
Beneficial
Owner shall mean any Person who, singly or together with any of such persons
Affiliates or Associates, directly or indirectly, has beneficial ownership of
Capital Stock (as determined pursuant to Rule 13d-3 of the Act).
Capital
Stock shall mean Common Stock, Class B Common Stock, Preferred Stock, or
any other class or series of stock of the Corporation.
Disqualified
Holder shall mean any Beneficial Owner of shares of Capital Stock of the
Corporation or any of its Subsidiaries, whose holding of shares of Capital
Stock, when taken together with the holding of shares of Capital Stock by any
other Beneficial Holder, may in the judgment of the Board of Directors, result
in (i) the disapproval, modification, or non-renewal of any contract under
which the Corporation or any Subsidiary has sole or shared authority to manage
any gaming operations, or (ii) the loss or non-reinstatement of any
license or franchise from any governmental agency held by the Corporation or
any Subsidiary to conduct any portion of the business of the Corporation or any
Subsidiary, which license or franchise is conditioned upon some or all of the
holders of Capital Stock meeting certain criteria.
Gaming
Authorities shall mean state gaming authorities, the National Indian Gaming
Commission, and any other tribal or governmental authority regulating any form
of gaming that has jurisdiction over the Corporation or any Subsidiary.
Person
shall mean any natural person, corporation, firm, partnership, association,
government, governmental agency, or any other entity, whether acting in an
individual, fiduciary, or any other capacity.
Redemption
Date shall mean the date fixed by the Board of Directors for the redemption of
any shares of Capital Stock of the Corporation pursuant to Section 11.2.
Redemption
Price shall mean the per share price for the redemption of any shares of
Capital Stock to be redeemed pursuant to Section 11.2, which shall be (A) that
price (if any) required to be paid by the applicable Gaming Authority or state
or federal law, or (B) if no such price is required, that amount deemed
reasonable by the Board of Directors (which may include, in the Corporations
discretion, the original purchase price per share of the securities to be
redeemed); provided, however, that the price per share represented by the
Redemption Price shall in no event be in excess of (i) the closing sales
price of the securities on the national securities exchange on which such
shares are then listed on the date the Redemption Notice is delivered to the
Disqualified Holder by the Corporation, or (ii) if the shares are not then
so listed, then the mean between the representative bid and the ask price as
quoted by any other generally recognized reporting system.
Subsidiary
shall mean any company of which a majority of any class of equity security is
beneficially owned by the Corporation.
TWELFTH:
Elections of
directors need not be by written ballot unless and except to the extent that
the Bylaws of the Corporation so provide.
THIRTEENTH:
Except as
otherwise may be required by law or pursuant to the rights of any series of
Preferred Stock or Class B Common Stock, special meetings of stockholders
may only be called by (i) the Chairman of the Board of Directors, if there
be one, (ii) the Vice Chairman of the Board of Directors, if there be one,
(iii) the Chief Executive Officer,
46
if
there be one, (iv) the President or (v) the Board of Directors, and
no special meeting of stockholders may be called by any other person or
persons.
FOURTEENTH:
The Corporation
hereby reserves the right to amend, alter, change or repeal any provision
contained in this Amended and Restated Certificate of Incorporation in the
manner now or hereafter prescribed by the General Corporation Law of Delaware
and all rights conferred on stockholders herein granted are subject to this
reservation.
IN WITNESS WHEREOF
, Isle of Capri Casinos, Inc.
has caused this Amended and Restated Certificate of Incorporation to be
executed on its behalf this day of
, 2010.
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ISLE
OF CAPRI CASINOS, INC.
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By:
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Name:
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Its:
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47
ISLE
OF CAPRI CASINOS, INC.
600 EMERSON ROAD, SUITE 300
ST. LOUIS, MO 63141
VOTE
BY INTERNET
- www.proxyvote.com
Use the Internet to transmit
your voting instructions and for electronic delivery of information up until
11:59 P.M. Eastern Time the day before the cut-off date or meeting
date. Have your proxy card in hand when you access the web site and follow the
instructions to obtain your records and to create an electronic voting instruction
form.
ELECTRONIC DELIVERY
OF FUTURE PROXY MATERIALS
If
you would like
to reduce the costs incurred by Isle of Capri Casinos, Inc. in mailing
proxy materials, you can consent to receiving all future proxy statements,
proxy cards and annual reports electronically via e-mail or the Internet. To
sign up for electronic delivery, please follow the instructions above to vote
using the Internet and, when prompted, indicate that you agree to receive or
access proxy materials electronically in future years.
VOTE
BY PHONE - 1-800-690-6903
Use any touch-tone telephone to transmit your voting instructions up until 11:59
P.M. Eastern Time the day before the cut-off date or meeting date. Have your
proxy card in hand when you call and then follow the instructions.
VOTE
BY MAIL
Mark, sign and date your proxy
card and return it in the postage-paid envelope we have provided or return it
to Isle of Capri Casinos, Inc., c/o Broadridge, 51 Mercedes Way, Edgewood, NY
11717.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS
FOLLOWS:
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M16750-P83621
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KEEP THIS PORTION
FOR YOUR RECORDS
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DETACH AND RETURN
THIS PORTION ONLY
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THIS
PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
ISLE OF CAPRI CASINOS, INC.
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For
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Withhold
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For All
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All
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All
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Except
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The
Board of Directors recommends that you vote
FOR the following:
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o
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o
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o
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V
ote
on
Directors
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1.
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T
o
elect nine persons to the Board of Directors.
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Nominees:
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01
)
W. Randolph Baker
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02
)
Alan J. Glazer
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03
)
Richard A. Goldstein
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04) Jeffrey D. Goldstein
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05) Robert S. Goldstein
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06
)
Shaun R. Hayes
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07) Gregory J. Kozicz
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08) James B. Perry
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09) Lee S. Wielansky
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The Board of Directors
recommends you vote FOR the following proposal(s):
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F
o
r
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Against
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Abstain
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V
ote
on
Proposals
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2.
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To ratify the Audit
Committees selection of Ernst & Young, LLP as our independent
registered public accounting firm for the 2011 fiscal year.
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o
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o
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o
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3.
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To
amend our Certificate of Incorporation to increase authorized common stock.
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o
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o
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o
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4.
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To
amend our Certificate of Incorporation to provide more detail with respect to
the powers of the Board of Directors in connection with issuing preferred
stock.
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o
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o
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o
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5.
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To
amend our Certificate of Incorporation to fix a range for the number of
Directors.
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o
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o
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o
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6.
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To
amend our Certificate of Incorporation with respect to filling vacancies on
the Board of Directors.
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o
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o
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o
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7.
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To
amend our Certificate of Incorporation with respect to indemnification of
directors, officers, employees and agents.
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o
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o
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o
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8.
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To
amend our Certificate of Incorporation with respect to calling of special
meetings of stockholders.
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o
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o
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o
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9.
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To
amend our Certificate of Incorporation with respect to the redemption of
shares of a disqualified holder.
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o
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o
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o
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10.
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To
adopt the Amended and Restated Certificate of Incorporation.
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o
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o
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o
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11.
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The proxies are authorized to
vote in their discretion, upon all such matters as may properly come before the
Annual Meeting.
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To withhold authority to vote
for any individual nominee(s), mark For All Except and write the number(s) of
the nominee(s) on the line below.
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Signature [PLEASE SIGN
WITHIN BOX]
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Date
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Signature (Joint Owners)
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Date
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Important
Notice Regarding the Availability of Proxy
Materials for the Annual Meeting:
The Notice and
Proxy Statement, Annual Report and Form 10-K are available at www.proxyvote.com.
M16751-P83621
NOTICE
OF ANNUAL MEETING OF STOCKHOLDERS
T
o
be Held on Tuesday, October 5, 2010
The undersigned stockholder(s) of
Isle of Capri Casinos, Inc., a Delaware corporation (the Company),
hereby appoint(s) James B. Perry, Virginia
M. McDowell, Dale R. Black and Edmund L.
Quatmann, Jr., and each of them, attorneys and proxies of the
undersigned, with full power of substitution, to vote all of the shares of
common stock of the Company which the undersigned is entitled to vote at the
Annual Meeting of Stockholders of the Company, to be held at 600 Emerson Road,
St. Louis, Missouri, on October 5, 2010 at 9:00 a.m., Central Time,
and at any and all adjournments, postponements, continuations or reschedulings thereof (the Annual
Meeting), with all the powers the undersigned would possess if personally
present at the Annual Meeting, as directed on this ballot.
THIS
PROXY
,
WHEN PROPERLY EXECUTED, WILL
BE VOTED AS DIRECTED BY THE
STOCKHOLDER(S). IF NO SUCH DIRECTIONS ARE MADE, THIS PROXY WILL BE VOTED FOR THE
ELECTION OF THE NOMINEES FOR THE BOARD OF DIRECTORS LISTED ON THE REVERSE SIDE,
AND FOR PROPOSALS 2 THROUGH 10.
PLEASE
MARK, SIGN, DATE AND RETURN THIS PROXY CARD USING THE
ENCLOSED REPLY ENVELOPE.
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