SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. ____)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, For Use
of the Commission
Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Under Rule 14a-12
TRUMP HOTELS & CASINO RESORTS, 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)
Payment of Filing Fee (Check the appropriate box):
[X] No Fee Required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee
is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] Fee paid previously with preliminary materials:
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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.
(1) Amount previously paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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TRUMP HOTELS & CASINO RESORTS, INC.
1000 Boardwalk at Virginia Avenue
Atlantic City, New Jersey 08401
----------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON
WEDNESDAY, JUNE 12, 2002 AT 2:00 P.M.
AT TRUMP TAJ MAHAL CASINO RESORT
----------
Dear Stockholder:
You are hereby cordially invited to attend the Annual Meeting of
Stockholders of TRUMP HOTELS & CASINO RESORTS, INC. (the "Company") which will
be held on Wednesday, June 12, 2002, at 2:00 p.m., local time, at the Trump Taj
Mahal Casino Resort, located at 1000 Boardwalk at Virginia Avenue, Atlantic
City, New Jersey (the "Annual Meeting").
The enclosed Notice and Proxy Statement contain details concerning the
business to come before the Annual Meeting. Please review this information
carefully. Please note that the Board of Directors of the Company recommends a
vote "FOR" each proposal listed in the Notice and Proxy Statement. Even if you
do not expect to attend the Annual Meeting, you are kindly requested to sign and
return your proxy card (the "Proxy Card") in the enclosed, postage-prepaid
envelope at your earliest convenience to ensure that your shares will be duly
represented and voted at the Annual Meeting.
Thank you for your continued support of the Company.
By Order of the Board of Directors,
/s/ DONALD J. TRUMP
-------------------
Donald J. Trump
Chairman of the Board of Directors,
President and Chief Executive Officer
New York, New York
April 26, 2002
TRUMP HOTELS & CASINO RESORTS, INC.
1000 Boardwalk at Virginia Avenue
Atlantic City, New Jersey 08401
____________
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON WEDNESDAY, JUNE 12, 2002
____________
TO THE STOCKHOLDERS OF TRUMP HOTELS & CASINO RESORTS, INC.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of TRUMP
HOTELS & CASINO RESORTS, INC. (the "Company") will be held on Wednesday, June
12, 2002, commencing at 2:00 p.m., local time, at the Trump Taj Mahal Casino
Resort, located at 1000 Boardwalk at Virginia Avenue, Atlantic City, New Jersey
(the "Annual Meeting"), for the following purposes:
1. To elect five (5) members to the Company's board of directors (the
"Board of Directors") for a term of one (1) year or until each
director's successor is elected and qualifies; and
2. To act upon such other business as may properly come before the
Annual Meeting or any adjournment or postponement thereof.
The Board of Directors has fixed the close of business on April 17,
2002 as the record date for the determination of Stockholders entitled to notice
of, and to vote at, the Annual Meeting (the "Record Date"). The transfer books
of the Company will remain open following the Record Date.
All Stockholders are cordially invited to attend the Annual Meeting.
Whether or not you expect to attend, you are kindly requested to complete, sign
and date and promptly return the enclosed proxy card (the "Proxy Card"). A
return envelope which requires no postage if mailed within the United States has
been enclosed for your convenience. Stockholders who execute Proxy Cards retain
the right to revoke them at any time prior to the voting thereof at the Annual
Meeting by one of the following methods: (i) by filing written notice of such
revocation, (ii) by submitting a duly executed Proxy Card bearing a later date
or (iii) by voting in person at the Annual Meeting. Please note that attendance
at the Annual Meeting will not in and of itself constitute a revocation of a
proxy. Any written notice revoking a proxy should be sent to the attention of
the undersigned Executive Officer of the Company at the address above.
Your vote is important! Thank you for your participation and support of
the Company.
By Order of the Board of Directors,
/S/ ROBERT M. PICKUS
--------------------
Robert M. Pickus
Executive Vice President, Secretary
and General Counsel
Atlantic City, New Jersey
April 26, 2002
TRUMP HOTELS & CASINO RESORTS, INC.
1000 Boardwalk
Atlantic City, New Jersey 08401
________________________
PROXY STATEMENT
________________________
Annual Meeting of Stockholders
To Be Held at 2:00 p.m., Local Time,
On Wednesday, June 12, 2002
At the Trump Taj Mahal Casino Resort
1000 Boardwalk at Virginia Avenue,
Atlantic City, New Jersey
This proxy statement (the "Proxy Statement") is furnished in connection
with the solicitation of proxies by the board of directors (the "Board of
Directors") of TRUMP HOTELS & CASINO RESORTS, INC. ("THCR" or the "Company"), to
be voted at the annual meeting of stockholders (the "Stockholders") of the
Company to be held on Wednesday, June 12, 2002, at 2:00 p.m., local time, at the
Trump Taj Mahal Casino Resort, located at 1000 Boardwalk at Virginia Avenue,
Atlantic City, New Jersey (the "Taj Mahal"), and at any adjournment or
postponement thereof (the "Annual Meeting").
Properly executed proxies received prior to the Annual Meeting, unless
revoked, will be voted in accordance with the instructions specified therein.
Regarding the election of directors (the "Directors"), Stockholders may (i) vote
in favor of all five (5) nominees, (ii) withhold their votes as to all five (5)
nominees or (iii) withhold their votes as to any one or more specific nominees.
With respect to all other proposals to be voted upon, Stockholders may (i) vote
in favor of a proposal, (ii) vote against a proposal or (iii) abstain from
voting. Stockholders are requested to clearly specify their choices on the
enclosed proxy card (the "Proxy Card"). If no instructions are given with
respect to the matters to be acted upon at the Annual Meeting, the persons named
on the Proxy Cards solicited by the Company's Board of Directors intend to vote
"FOR" the proposals contained herein. If any other matter should be presented at
the Annual Meeting upon which a vote may properly be taken at the Annual
Meeting, the shares represented by the Proxy Cards will be voted with respect
thereto by the person or persons holding such proxies as in their judgment is in
the best interests of the Stockholders and the Company. The Company does not
know of any matters other than the proposals contained herein that are to come
before the Annual Meeting.
Stockholders may vote by one (1) of the following methods: (i) by
completing and returning the enclosed Proxy Card prior to the Annual Meeting,
(ii) by voting in person at the Annual Meeting or (iii) by submitting a signed
Proxy Card at the Annual Meeting. Stockholders who execute Proxy Cards may
revoke them at any time before they are voted at the Annual Meeting by (i)
providing written notice of such revocation to the Secretary of the Company at
the Company's executive offices, (ii) submitting a new Proxy Card bearing a
later date or (iii) by voting at the Annual Meeting. Please note that a
Stockholder's attendance at the Annual Meeting will not in and of itself
constitute a revocation of his or her Proxy Card.
The principal executive offices of the Company are located in the Taj Mahal
at 1000 Boardwalk at Virginia Avenue, Atlantic City, New Jersey 08401. The main
telephone number of the Company is (609) 449-6515. A copy of the Company's
Annual Report to Stockholders for the fiscal year ended December 31, 2001, this
Proxy Statement and the accompanying Proxy Card are first being sent or given to
Stockholders on or about April 26, 2002.
Trump Hotels & Casino Resorts, Inc.
2002 Annual Stockholders Meeting
June 12, 2002
Page 3
EXPLANATORY NOTE
Arthur Andersen, LLP. Arthur Andersen, LLP ("Arthur Andersen") has been the
independent auditors of THCR and its subsidiaries since THCR's initial public
offering in June 1995, and has audited the financial statements included in the
Company's Annual Report on Form 10-K for the fiscal year ended December 31,
2001. On March 14, 2002, a federal indictment of Arthur Andersen was unsealed
and made public in connection with matters unrelated to Arthur Andersen's past
and current services to THCR and its subsidiaries. On the Motion of the New
Jersey Division of Gaming Enforcement based upon the pendency of the indictment,
the New Jersey Casino Control Commission (the "CCC"), at a public meeting held
on March 27, 2002: (a) rescinded Arthur Andersen's exemption from licensure and
required it to file a completed application for casino service industry
licensure by April 27, 2002 and (b) entered a temporary prohibitory order
prohibiting all New Jersey casino licensees and their holding, intermediary and
subsidiary companies from conducting any direct or indirect business with Arthur
Andersen and requiring that they terminate any ongoing business with Arthur
Andersen by May 15, 2002. In its ruling, the CCC expressly stated that its
objective was to allow a reasonable time to conclude pending business
transactions and to provide New Jersey casino licensees with an opportunity to
seek an extension of the deadline for terminating Arthur Andersen's services to
prevent undue economic hardship. The Board of Directors and the Audit Committee
will undertake to change the appointment of Andersen as the independent auditors
of THCR and its subsidiaries for the year ending December 31, 2002 within the
timeframe required by the CCC.
In order to allow the Company's Audit Committee and Board of Directors to
carefully consider the selection of Arthur Andersen's replacement as the
independent auditors of the Company and its subsidiaries for 2002, the Audit
Committee and the Board of Directors have determined that it is in the best
interests of the Company and the Stockholders to defer the Stockholders'
ratification of the independent auditors until further information is known
about the status of Arthur Andersen and its replacement is chosen. For this
reason, unlike at prior Stockholders' Annual Meetings, Stockholders will not be
asked at the Annual Meeting to ratify the appointment of the Company's
independent auditors for the fiscal year ending December 31, 2002.
One or more representatives of Arthur Andersen are expected to be present
at the Annual Meeting to answer appropriate questions and will have the
opportunity to make a statement if they desire to do so.
VOTING SECURITIES
The Board of Directors has established April 17, 2002 as the record date
(the "Record Date") for the determination of Stockholders entitled to notice of,
and to vote at, the Annual Meeting. As of the close of business on the Record
Date, there were issued and outstanding (i) 22,010,027 shares of common stock,
par value $.01 per share (the "Common Stock"), of THCR and (ii) 1,000 shares of
Class B common stock, par value $.01 per share (the "Class B Common Stock"), of
THCR entitled to notice of, and to vote at, the Annual Meeting. Each share of
Common Stock entitles the holder thereof to one (1) vote on each proposal to be
acted upon at the Annual Meeting. The 1,000 shares of Class B Common Stock, all
of which are beneficially owned by Donald J. Trump ("Trump"), the Company's
Chairman, President and Chief Executive Officer, are entitled to an aggregate of
13,918,723 votes on each proposal to be acted upon at the Annual Meeting. The
voting power of the Class B Common Stock equals the voting power of the number
of shares of Common Stock issuable upon the conversion of the limited
partnership interests in Trump Hotels & Casino Resorts Holdings, L.P., of which
THCR is the sole general partner ("THCR Holdings"), held by (i) Trump, (ii)
Trump Casinos, Inc., an affiliate of Trump ("TCI"), and (iii) Trump Casinos II,
Inc., an affiliate of Trump ("TCI-II"). The Class B Common Stock provides the
holders thereof with a voting interest in the Company which is proportionate to
such holders' equity interest in THCR Holdings' assets represented by limited
partnership interests. Pursuant to the Bylaws of the Company, the Common Stock
and the Class B Common Stock will vote as a single class on the proposals
contained in this Proxy Statement.
Trump Hotels & Casino Resorts, Inc.
2002 Annual Stockholders Meeting
June 12, 2002
Page 4
VOTES REQUIRED
The presence in person or by proxy of the holders of a majority of the
outstanding voting power of the Common Stock and the Class B Common Stock is
necessary to constitute a quorum in connection with the transaction of business
at the Annual Meeting. The affirmative vote of a plurality of shares of Common
Stock and Class B Common Stock present in person or by proxy and entitled to
vote at the Annual Meeting is required for the election of Directors. The
affirmative vote of a majority of shares of Common Stock and Class B Common
Stock present in person or by proxy and entitled to vote at the Annual Meeting
is required for any other proposal which comes before the Annual Meeting. Broker
"non-votes" (i.e., proxies from brokers or nominees indicating that such persons
have not received instructions from the beneficial owner or other persons
entitled to vote shares as to a matter with respect to which the brokers or
nominees do not have discretionary power to vote) and shares for which duly
executed Proxy Cards have been received but with respect to which holders of
shares have abstained from voting will be treated as present for purposes of
determining the presence of a quorum at the Annual Meeting. Broker "non-votes"
will have no effect on the outcome of the votes on the proposals to be acted
upon at the Annual Meeting. With respect to matters, other than Proposal 1,
which properly come before the Annual Meeting, abstentions will have the effect
of a negative vote.
GENERAL INFORMATION
THCR is the sole general partner of THCR Holdings. THCR Holdings'
partnership agreement, dated as of June 12, 1995, as amended (the "THCR Holdings
Partnership Agreement"), requires that all business activities of THCR be
conducted through THCR Holdings or a subsidiary of THCR Holdings. Trump and
certain entities wholly-owned by Trump are limited partners of THCR Holdings. As
the sole general partner of THCR Holdings, THCR generally has the exclusive
rights, responsibilities and discretion as to the management and control of THCR
Holdings.
THCR, through THCR Holdings and several wholly-owned subsidiaries of THCR
Holdings, owns and operates a total of four casino properties, three of which
are casino hotels located in Atlantic City, New Jersey, and the fourth of which
is a riverboat casino docked in Buffington Harbor on Lake Michigan in the State
of Indiana. The three properties located in Atlantic City, New Jersey are: (i)
the Trump Plaza Hotel and Casino (the "Trump Plaza"), (ii) the Taj Mahal and
(iii) the Trump Marina Hotel Casino ("Trump Marina," and together with the Trump
Plaza and the Taj Mahal, the "Trump Atlantic City Properties"). The fourth
gaming property owned and operated by THCR through THCR Holdings is an
approximately 280-foot luxury yacht docked in Buffington Harbor on Lake Michigan
in the State of Indiana, located approximately 25 miles from Chicago, Illinois.
THCR, through THCR Management, also manages Trump 29 Casino located in
Coachella, Southern California ("Trump 29 Casino"), pursuant to a five-year
management agreement with the Twenty-Nine Palms Band of Luiseno Mission Indians
of California, a sovereign Native American nation (the "Tribe"). THCR continues
to be the exclusive vehicle through which Trump engages in gaming activities in
both emerging and established gaming jurisdictions.
PROPOSAL ONE
ELECTION OF DIRECTORS
Five (5) nominees are to be elected to the Company's Board of Directors at
the Annual Meeting. Each Director is expected to hold office until the next
annual meeting of Stockholders of the Company or until his successor has been
duly elected and qualifies. If a Proxy Card is executed in such a manner as not
to withhold authority for the election of any or all of the nominees to the
Company's Board of Directors, the persons named on the Proxy Card will vote the
shares represented by the Proxy Card "FOR" the election of the following five
(5) nominees as Directors to the Company's Board of Directors. If the Proxy Card
indicates that the Stockholder wishes to withhold a vote from one or more
specific nominee(s) as Director(s), such instructions will be followed by the
persons named on the Proxy Card.
Trump Hotels & Casino Resorts, Inc.
2002 Annual Stockholders Meeting
June 12, 2002
Page 5
All of the nominees listed below are currently members of the Company's
Board of Directors. This year, the Company's Board of Directors will continue to
consist of five (5) members.
Should any one or more of the nominees become unable to serve for any
reason or will not serve, neither of which is anticipated, the Board of
Directors may, unless the Board of Directors by resolution provides for a lesser
number of Directors, designate substitute nominees, in which event the persons
named on the Proxy Card will vote "FOR" the election of such substitute nominee
or nominees.
The following table sets forth the name and age of each nominee and the
year during which such individual commenced serving as a member of the Company's
Board of Directors:
Name Age Director Since
---- --- --------------
Donald J. Trump ................. 55 1995
Wallace B. Askins ............... 71 1995
Don M. Thomas ................... 71 1995
Peter M. Ryan ................... 64 1995
Robert J. McGuire ............... 65 2001
For ease of reference, the table below sets forth abbreviations of certain
subsidiaries of THCR, as of the Record Date, referred to herein:
THCR Subsidiary: Abbreviation used herein:
---------------- -------------------------
THCR Enterprises, LLC ..................................................................THCR Enterprises
THCR Enterprises, Inc. .................................................................Enterprises Inc.
THCR Holding Corp. ...................................................................THCR Holding Corp.
THCR/LP Corporation .............................................................................THCR/LP
THCR Management Services, LLC ...........................................................THCR Management
Trump Atlantic City Associates .................................................................Trump AC
Trump Atlantic City Corporation ....................................................................TACC
Trump Atlantic City Funding, Inc. ......................................................Trump AC Funding
Trump Atlantic City Funding II, Inc. .........................................................Funding II
Trump Atlantic City Funding III, Inc. .......................................................Funding III
Trump Atlantic City Holding, Inc. ......................................................Trump AC Holding
Trump Hotels & Casino Resorts Development Company, LLC .........................THCR Development Company
Trump Hotels & Casino Resorts Funding, Inc. ................................................THCR Funding
Trump Hotels & Casino Resorts Holdings, L.P. ..............................................THCR Holdings
Trump Indiana, Inc. .......................................................................Trump Indiana
Trump Plaza Associates .................................................................Plaza Associates
Trump Plaza Funding, Inc. .................................................................Plaza Funding
Trump Taj Mahal Associates ...............................................................Taj Associates
Trump Taj Mahal Realty Corp. ...............................................................Realty Corp.
Trump's Castle Associates, L.P. .......................................................Castle Associates
Trump's Castle Funding, Inc. .............................................................Castle Funding
Trump's Castle Hotel & Casino, Inc. ................................................................TCHI
Trump Hotels & Casino Resorts, Inc.
2002 Annual Stockholders Meeting
June 12, 2002
Page 6
Below is a brief summary of the business background of each nominee named
above:
Donald J. Trump has been serving as the President and Chief Executive
---------------
Officer of each of THCR, THCR Holdings and THCR Funding since June 2000. Also
since June 2000, Trump has been serving as the (i) President of each of Trump AC
Holding, Trump AC, Trump AC Funding, Funding II, Funding III, TACC and
Enterprises Inc.; (ii) President and Chief Executive Officer of each of Castle
Funding and TCHI; (iii) President of Trump Indiana; (iv) President and Treasurer
of THCR/LP; and (v) Chief Executive Officer of Taj Associates. Since June 1998,
Trump has been serving as the President, Treasurer and sole director of TCI.
Until April 1998, Trump served as the President and Treasurer of Castle Funding.
Since November 1997, Trump has been serving as the Chairman of each of Funding
II and Funding III, and as the Chairman of Enterprises Inc. since January 1997.
Since January 1996, he has been serving as the Chairman of Trump AC Funding.
Since March 1995, Trump has been the Chairman of each of THCR, THCR Funding and
THCR Holdings. Since February 1993, Trump has been the Chairman of Trump AC
Holding. Since December 1992, Trump has been serving as the sole director of
Trump Indiana. Since May 1992, Trump has been the Chairman of the Board of
Partner Representatives of Castle Associates. Since November 1991, Trump has
been serving as the President, Treasurer and sole director of TCI-II. Since
October 1991, he has been the Chairman of each of THCR Holding Corp. and
THCR/LP. Since March 1991, Trump has been the President and Treasurer of THCR
Holding Corp. and the sole director of TACC. Since May 1986, he has been serving
as the President and sole director of Realty Corp. Since March 1986, he has been
the Chairman, President and Treasurer of Plaza Funding. Since March 1985, Trump
has been the Chairman of TCHI. From February 1993 through December 1997, Trump
served as the President of Trump AC Holding. From March 1991 through December
1997, Trump served as the President and Treasurer of TACC. Trump has also been
the President and Chief Executive Officer of The Trump Organization, Inc. which
is in the business , through its affiliates and subsidiaries, of acquiring,
developing and managing real estate properties.
Wallace B. Askins has been serving as a Director of each of THCR and THCR
-----------------
Funding since June 1995. Since December 1997, Mr. Askins as been a director of
Funding II and Funding III. Since April 1996, he has been serving as a director
of Trump AC Funding. Since April 1994, Mr. Askins has been serving as a director
of Trump AC Holding. From June 1984 to November 1992, Mr. Askins served as the
Chief Financial Officer and as an Executive Vice President and director of
Armco, Inc. From 1978 to July 2001, Mr. Askins served as a director of
EnviroSource, Inc.
Don M. Thomas has been serving as a Director of each of THCR and THCR
-------------
Funding since June 1995. Since December 1997, Mr. Thomas has been serving as a
director of each of Funding II and Funding III. Since April 1996, he has been a
director of Trump AC Funding. Since 1993, Mr. Thomas has been a director of
Trump AC Holding. Since January 1985, Mr. Thomas has been serving as the Senior
Vice President of Corporate Affairs of the Pepsi-Cola Bottling Co. of New York.
From 1985 through 1987, Mr. Thomas served as a Commissioner and the acting
Chairman of the CRDA, and a Commissioner of the CCC from 1980 through 1984
during a portion of which time Mr. Thomas also served as the acting Chairman.
Mr. Thomas is an attorney licensed to practice law in the State of New York.
Peter M. Ryan has been serving as a Director of each of THCR and THCR
-------------
Funding since June 1995. He has also been the President of each of The Marlin
Group, LLC and The Brookwood Carrington Fund, LLC, real estate financial
advisory groups, since January 1995. Prior to that, Mr. Ryan was the Senior Vice
President of The Chase Manhattan Bank for more than five years.
Robert J. McGuire has been a Director of THCR and THCR Funding since July
-----------------
2001. Mr. McGuire has been Counsel to the New York law firm of Morvillo,
Abramowitz, Grand, Iason & Silberberg, P.C. since 1981. As an Assistant United
States Attorney from 1962 through 1966, Mr. McGuire prosecuted cases in the
Southern District of New York. In 1969, he established his own law firm of
McGuire and Lawler where he worked until his appointment as New York City Police
Commissioner. Mr. McGuire served as New York City Police Commissioner from 1978
to 1983. In 1984, Mr. McGuire was elected Chairman and Chief Executive Officer
of Pinkerton's, Inc. where he remained for four years before joining Kroll
Associates. Mr. McGuire resigned as President of Kroll Associates in 1997. Mr.
McGuire serves on numerous Boards and is the President of the Police Athletic
League.
All of the persons listed above are citizens of the United States and have
been qualified or licensed by the CCC.
Trump Hotels & Casino Resorts, Inc.
2002 Annual Stockholders Meeting
June 12, 2002
Page 7
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE "FOR"
THE ELECTION OF THE ABOVE-NAMED NOMINEES TO THE COMPANY'S BOARD OF DIRECTORS.
PROXIES SOLICITED BY THE BOARD OF DIRECTORS WILL BE SO VOTED UNLESS
STOCKHOLDERS SPECIFY OTHERWISE ON THEIR PROXY CARDS.
Management of THCR
The following persons currently serve as the executive officers (the
"Executive Officers") of the Company:
Name: Position:
---- --------
Donald J. Trump ............ Chairman of the Board of Directors,
President and Chief Executive Officer
Mark A. Brown .............. Chief Operating Officer
Robert M. Pickus ........... Executive Vice President, Secretary and
General Counsel
Francis X. McCarthy, Jr. ... Executive Vice President of Corporate
Finance and Chief Financial Officer
John P. Burke .............. Executive Vice President and Corporate
Treasurer
Joseph A. Fusco ............ Executive Vice President of Government
Relations and Regulatory Affairs
The Executive Officers of the Company serve at the pleasure of the Board of
Directors, subject to any contractual rights contained in any employment
agreement between the Company and the Executive Officers. The respective ages,
positions with the Company and its subsidiaries, business experience during the
past five (5) years and directorships in other companies of Messrs. Brown,
Pickus, McCarthy, Burke and Fusco are set forth below. See "Employment
Agreements, Termination of Employment and Change-in-Control Arrangements."
Mark A. Brown (41 years old) has been serving as the Chief Operating
-------------
Officer of each of THCR and Trump AC since June 2000. Also since June 2000, Mr.
Brown has been serving as the Chief Executive Officer of each of Taj Associates,
Plaza Associates, Castle Associates and Trump Indiana. Since January 2000, Mr.
Brown has been serving as the Chief Operating Officer of Taj Associates. Until
January 2000, he served as a Vice President of TCHI. From November 1997 to
January 2000, Mr. Brown served as the President and Chief Operating Officer of
Castle Associates. From July 1995 to November 1997, he served as the Executive
Vice President of Operations of Castle Associates.
Robert M. Pickus (47 years old) has been the Executive Vice President,
----------------
Secretary and General Counsel of THCR since March 1995. Since June 2000, Mr.
Pickus has been the Secretary and Vice President of THCR/LP. Since April 2000,
he has been serving as the Executive Vice President and General Counsel of each
of THCR Holdings and Trump AC. Since April 1998, Mr. Pickus has been the
Secretary of Castle Funding. Since February 1998, he has been serving as the (i)
Secretary of each of TACC and Trump AC Holding and (ii) Assistant Secretary and
a director of TCHI. Until February 1998, Mr. Pickus served as the Assistant
Secretary of TACC. Since January 1997, Mr. Pickus has been serving as the (i)
Secretary of THCR Holding Corp. and (ii) Vice President, Secretary and a
director of Enterprises Inc. Since November 1997, he has been serving as a
director of each of Funding II and Funding III. Since February 1996, Mr. Pickus
has been serving as the Secretary of Castle Associates. Since January 1996, he
has been serving as the Secretary and a director of Trump AC Funding. Since
October 1995, Mr. Pickus has been serving as a member of the Board of Partner
Representatives of Castle Associates. Since February 1995, he has been serving
as the Executive Vice President of Corporate and Legal Affairs of each of Taj
Associates, Plaza Associates and Castle Associates. Since December 1992, Mr.
Pickus has been serving as the Executive Vice President and Secretary of Trump
Indiana. Since March 1986, Mr. Pickus has been serving as the Vice President and
Secretary of Plaza Funding. From April to December 2000, Mr. Pickus
Trump Hotels & Casino Resorts, Inc.
2002 Annual Stockholders Meeting
June 12, 2002
Page 8
served as the President of Trump Casino Services, LLC ("TCS"). From June 1996 to
April 2000, he served as the Executive Vice President of TCS. From November 1995
to May 2000, Mr. Pickus served as a director of each of THCR Holding Corp. and
THCR/LP. From April 1994 to February 1998, he served as the Assistant Secretary
of Trump AC Holding. Mr. Pickus has been admitted to practice law in the States
of New York and New Jersey since 1980, and in the Commonwealth of Pennsylvania
since 1981.
Francis X. McCarthy, Jr. (49 years old) has been serving as the Executive
-----------------------
Vice President of Corporate Finance and Chief Financial Officer of each of THCR,
THCR Holdings and THCR Funding since September 1998. Since August 2000, Mr.
McCarthy has been the (i) Chief Financial Officer of Castle Associates and (ii)
Chief Financial Officer, Chief Accounting Officer and Assistant Treasurer of
Castle Funding. Since September 1998, he has been the Chief Financial Officer of
each of Trump AC, Trump AC Funding, Funding II and Funding III. From October
1996 to December 2000, Mr. McCarthy served as the Executive Vice President of
Corporate Finance of TCS.
John P. Burke (54 years old) has been serving as the Executive Vice
-------------
President of each of THCR, THCR Holdings, THCR Funding and Trump AC since
January 1999. Since April 1998, he has been serving as the Assistant Treasurer
of TCHI. Since February 1998, Mr. Burke has been the (i) Assistant Treasurer of
each of THCR Holding Corp. and THCR/LP and (ii) Treasurer of TACC. Since
November 1997, he has been serving as the Treasurer of each of Funding II and
Funding III. Since March 1997, Mr. Burke has been serving as a member of the
Board of Partner Representatives of Castle Associates. Since January 1997, he
has been a Vice President and the Treasurer of Enterprises Inc. Since January
1996, Mr. Burke has been the Treasurer of Trump AC Funding. Since March 1995, he
has been serving as the Corporate Treasurer of each of THCR, THCR Holdings, THCR
Funding and Trump AC. Since December 1993, Mr. Burke has been serving as a Vice
President of each of Castle Associates, Castle Funding, TCI-II and TCHI. Since
December 1992, Mr. Burke has been the Treasurer of Trump Indiana. Since October
1991, he has been the Corporate Treasurer of each of Taj Associates, Plaza
Associates and Castle Associates. From June 1997 to January 1999, Mr. Burke
served as a Senior Vice President of each of THCR, THCR Holdings and THCR
Funding. From January 1996 to June 1997, he served as the Senior Vice President
of Corporate Finance of THCR.
Joseph A. Fusco (58 years old) has been serving as the Executive Vice
---------------
President of Government Relations & Regulatory Affairs of each of THCR, THCR
Holdings and Trump AC since June 1996 and of TCS from July 1996 until December
2000. From August 1985 to June 1996, Mr. Fusco practiced law as a partner in
various Atlantic City law firms specializing in New Jersey casino regulatory,
commercial and administrative law matters, most recently from January 1994 to
June 1996 as a partner in the law firm of Sterns & Weinroth, P.C., located in
Atlantic City. Mr. Fusco previously served as Atlantic County Prosecutor, a
Gubernatorial appointment, from April 1981 to July 1985 and as Special Counsel
for Licensing for the CCC from the inception of that agency in September 1977 to
March 1981. Mr. Fusco has been admitted to practice law in the State of New
Jersey since 1969.
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Trump Hotels & Casino Resorts, Inc.
2002 Annual Stockholders Meeting
June 12, 2002
Page 9
Security Ownership of Certain Beneficial Owners and Management
Generally, under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), a person is deemed to "beneficially own" a security at to which
that person has sole or shared voting power or investment power and also any
security as to which that person has the right to acquire within 60 days (i)
through the exercise of any option, warrant or right, (ii) through the
conversion of a security or (iii) pursuant to the power to revoke, or the
automatic termination of, a trust, discretionary account or similar arrangement.
The following table sets forth certain information regarding the beneficial
ownership of THCR's Common Stock and Class B Common Stock as of the Record Date
by (i) each Named Executive Officer (as defined herein), (ii) each Director of
THCR, (iii) each person deemed to be the beneficial owner of more than five
percent (5.0%) of any class of THCR's voting securities and (iv) all of the
Executive Officers and Directors of THCR as a group, without naming them. In the
case of persons other than Executive Officers and Directors of THCR, such
information is based solely upon a review of Schedules 13D or 13G, as amended,
which have been filed by such persons with the Securities and Exchange
Commission (the "SEC"). Unless otherwise indicated, each person named in the
following table is assumed to have sole voting power and investment power with
respect to all shares of Common Stock and Class B Common Stock listed as owned
by such person.
Common Stock Class B Common Stock
----------------------------- ----------------------------
Number of Shares Number of Shares
Beneficially Percent of Beneficially Percent of
Name of Beneficial Owner (1) Owned Class(2) Owned Class (3)
---------------------------- ----- -------- ----- ---------
Donald J. Trump ........................ 16,846,541 (4) 45.4% 1,000 (5) 100.0%
Mark A. Brown .......................... 11,000 (6) * - -
Robert M. Pickus ....................... 32,000 (7) * - -
Francis X. McCarthy, Jr. ............... 13,648 (8) * - -
Joseph A. Fusco ........................ 20,000 (9) * - -
Wallace B. Askins ...................... 12,500 (10) * - -
Don M. Thomas .......................... 5,000 (11) * - -
Peter M. Ryan .......................... 12,500 (12) * - -
Robert J. McGuire ...................... 0 - - -
Conseco, Inc. .......................... 2,010,000 (13) 9.1% - -
Bay Harbour Management, L.C. ........... 1,392,000 (14) 6.3% - -
All Executive Officers and Directors
of THCR as a group, without
naming them (10 persons) ............... 16,986,182 (15) 45.7% 1,000 100.0%
________________________________________
* Represents less than 1.0%
(1) Unless otherwise noted, the address of each beneficial owner is c/o Trump
Taj Mahal Casino Resort, 1000 Boardwalk, Atlantic City, New Jersey 08401.
(2) Based upon 22,010,027 shares of THCR's Common Stock issued and outstanding
as of the Record Date. Pursuant to Rule 13d-3 promulgated under the
Exchange Act, shares of Common Stock which are issuable upon the exercise
of options, warrants, rights or conversion privileges are deemed to be
outstanding for purposes of computing the percentage of outstanding Common
Stock owned by a
Trump Hotels & Casino Resorts, Inc.
2002 Annual Stockholders Meeting
June 12, 2002
Page 10
person but are not deemed to be outstanding for purposes of computing the
ownership percentage of any other person.
(3) Based upon 1,000 shares of THCR's Class B Common Stock issued and
outstanding as of the Record Date.
(4) Includes (i) 1,761,000 shares of Common Stock held directly by Mr. Trump,
(ii) 150 shares of Common Stock held by Mr. Trump as custodian for his
children, (iii) 500,000 shares of Common Stock issuable upon the exercise
of options currently exercisable at an exercise price of $4.625 per share,
(iv) 333,334 shares of Common Stock issuable upon the exercise of options
currently exercisable at an exercise price of $2.625 per share, (v) 333,334
shares of Common Stock issuable upon the exercise of options currently
exercisable at an exercise price of $2.20 per share, (vi) 10,300,456 shares
of Common Stock issuable upon the conversion of limited partnership
interests of THCR Holdings held directly by Mr. Trump, (vii) 1,407,017
shares of Common Stock issuable upon the conversion of limited partnership
interests of THCR Holdings held by TCI, an affiliate of Trump, (viii)
2,211,250 shares of Common Stock issuable upon the conversion of limited
partnership interests of THCR Holdings held by TCI-II, an affiliate of
Trump. Does not include 333,332 shares of Common Stock issuable upon the
exercise of options not exercisable within 60 days from the date hereof.
Also, Mr. Trump has stated in his Schedule 13D, amendment No. 6, dated June
28, 2001, filed with the SEC that he may effect, from time to time, open
market and privately negotiated purchases of equity and/or debt securities
of THCR and/or its subsidiaries.
(5) Includes (i) 850 shares of Class B Common Stock held directly by Mr. Trump,
(ii) 50 shares of Class B Common Stock held by TCI, an affiliate of Trump,
and (iii) 100 shares held by TCI-II, an affiliate of Trump.
(6) Includes (i) 3,000 shares of Common Stock and (ii) 8,000 shares of Common
Stock issuable upon the exercise of options currently exercisable at an
exercise price of $4.625 per share.
(7) Includes (i) 2,000 shares of Common Stock and (ii) 30,000 shares of Common
Stock issuable upon the exercise of options currently exercisable at an
exercise price of $4.625 per share.
(8) Includes (i) 3,648 shares of Common Stock in the Reporting Person's 401K
Plan account and (ii) 10,000 shares of Common Stock issuable upon the
exercise of options currently exercisable at an exercise price of $4.625
per share.
(9) Includes 20,000 shares of Common Stock issuable upon the exercise of
options currently exercisable at an exercise price of $4.625 per share.
(10) Includes (i) 10,000 shares of Common Stock and (ii) 2,500 shares of Common
Stock issuable upon the exercise of options currently exercisable at an
exercise price of $4.625 per share.
(11) Includes (i) 2,500 shares of Common Stock and (ii) 2,500 shares of Common
Stock issuable upon the exercise of options currently exercisable at an
exercise price of $4.625 per share.
(12) Includes (i) 10,000 shares of Common Stock and (ii) 2,500 shares of Common
Stock issuable upon the exercise of options currently exercisable at an
exercise price of $4.625 per share.
(13) 11825 North Pennsylvania Street, Carmel, Indiana 46032. These shares are
beneficially owned by Bankers Life and Casualty Company, an insurance
company, of which Conseco, Inc. is the parent holding company.
(14) 777 South Harbour Island Boulevard, Suite 270, Tampa, Florida 33602. Bay
Harbour Management, L.C. is an investment advisor formed under the laws of
Florida ("Bay Harbour"), and claims beneficial ownership of these shares
which it holds for the account of investment funds and managed accounts.
Trump Hotels & Casino Resorts, Inc.
2002 Annual Stockholders Meeting
June 12, 2002
Page 11
Tower Investment Group, Inc. ("Tower") is the majority stockholder of Bay
Harbour. Mr. Steven A. Dyke is a stockholder and President of Tower. Mr.
Douglas A. Teitelbaum is a stockholder of Tower.
(15) Includes (i) 1,795,291 shares of Common Stock, (ii) 1,272,168 shares of
Common Stock issuable upon the exercise of options currently exercisable
and (iii) 13,918,723 shares of Common Stock issuable upon the conversion of
limited partnership interests of THCR Holdings.
THCR Holdings. THCR Holdings is a limited partnership of which (i) THCR is
a 59.87743% general partner, (ii) Trump is a 27.06457% limited partner, (iii)
THCR/LP is a 3.55096% limited partner, (iv) TCI is a 3.69695% limited partner
and (v) TCI-II is a 5.81009% limited partner. Trump owns 100.0% of each of TCI
and TCI-II.
THCR Funding. THCR Holdings beneficially owns 100.0% of the issued and
outstanding common stock of THCR Funding.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) promulgated under the Exchange Act requires the Directors and
Executive Officers of THCR, as well as any person who becomes the beneficial
owner of more than ten percent (10.0%) of a registered class of the Company's
equity securities (collectively, the "Reporting Persons"), to file with the SEC
initial reports of ownership and reports of changes in ownership of Common Stock
and equity securities of the Company. The Reporting Persons are required to
furnish the Company with all Section 16(a) forms they file.
To THCR's knowledge, based solely upon its review of copies of such reports
furnished to THCR by or on behalf of the Reporting Persons, all Section 16(a)
filing requirements applicable to the Reporting Persons have been complied with
during the fiscal year ended December 31, 2001.
In addition, Mr. Trump has stated in his Schedule 13D, amendment No. 6,
dated June 28, 2001, filed with the SEC that he may effect, from time to time,
open market and privately negotiated purchases of equity and/or debt securities
of THCR and/or its subsidiaries.
[Remainder of Page Intentionally Left Blank]
Trump Hotels & Casino Resorts, Inc.
2002 Annual Stockholders Meeting
June 12, 2002
Page 12
EXECUTIVE COMPENSATION
Summary Compensation Table. The following table sets forth information
regarding compensation paid to or accrued by the Chief Executive Officer of
THCR, and any person who served in such or similar capacity during the fiscal
year ended December 31, 2001, and the four (4) most highly compensated Executive
Officers of THCR whose total annual salary and bonus during the last fiscal year
exceeded $100,000 (collectively, the "Named Executive Officers") for each of the
last three (3) completed fiscal years. Compensation accrued during one (1) year
and paid in another is recorded under the year of accrual. All cash compensation
paid to the Named Executive Officers in consideration for services rendered by
such persons to THCR and its subsidiaries are paid by THCR Holdings in
accordance with the THCR Holdings Partnership Agreement.
Annual Compensation Long-Term Compensation Awards
------------------------------------ ----------------------------------
Securities
Underlying All Other
Name and Principal Position Year Salary ($) Bonus ($) Options (#)(1) Compensation ($)
--------------------------- ---- ---------- --------- -------------- ----------------
Donald J. Trump .................................. 2001 $1,500,000 - 500,000 $2,417,541 (2)
-Chairman of the Board, President 2000 $1,250,000 - 500,000 $2,414,266 (2)
and Chief Executive Officer 1999 $1,000,000 - - $2,648,000 (2)
Mark A. Brown .................................... 2001 $1,146,462 - - $ 4,500 (3)
-Chief Operating Officer 2000 $ 807,657 $175,036 - $ 4,500 (3)
1999 $ 487,762 $109,410 - $ 4,286 (3)
Robert M. Pickus ................................. 2001 $ 360,175 - - $ 4,500 (3)
-Executive Vice President, General 2000 $ 338,790 - - $ 4,500 (3)
Counsel and Secretary 1999 $ 324,653 $ 50,000 - $ 4,800 (3)
Francis X. McCarthy, Jr. ......................... 2001 $ 354,186 - - $ 5,100 (3)
-Executive Vice President of Corp. Fin. 2000 $ 333,120 - - 4,800 (3)
and Chief Financial Officer 1999 $ 320,073 - - $ 4,800 (3)
Joseph A. Fusco .................................. 2001 $ 356,700 - - $ 5,100 (3)
-Executive Vice President of 2000 $ 335,639 - - $ 4,800 (3)
Government Relations and Regulatory Affairs 1999 $ 324,510 $ 36,470 - $ 4,800 (3)
________________________
(1) Options granted under THCR's 1995 Stock Plan. Options vest in three equal
installments, one-third on the date of grant and on each of the first two
anniversary dates of the date of grant.
(2) The amounts listed in 2001, 2000 and 1999 include $2.207 million, $2.306
million and $2.258 million, respectively, recorded pursuant to the Castle
Services Agreement (as defined herein) in addition to reimbursement of
expenses pursuant to the Executive Agreement, as amended, between Mr. Trump
and THCR and THCR Holdings. See "Compensation Committee Interlocks and
Insider Participation; Certain Related Party Transactions; Castle
Associates."
(3) Represents vested and unvested contributions made by Plaza Associates, Taj
Associates, Castle Associates and/or TCS to Trump Plaza Hotel and Casino
Retirement Savings Plan, Trump Taj Mahal Retirement Savings Plan, Trump's
Castle Hotel and Casino Retirement Savings Plan and Trump Casino Services
Retirement Savings Plan, respectively. Funds accumulated for an employee
under these plans consisting of a certain percentage of the employee's
compensation plus the employer matching contributions equaling 50.0% of the
participant's contributions, are retained until termination of employment,
attainment of age 59-1/2 or financial hardship, at which time the employee
may withdraw his or her vested funds.
Trump Hotels & Casino Resorts, Inc.
2002 Annual Stockholders Meeting
June 12, 2002
Page 13
1995 Stock Incentive Plan. In June 1995, the Board of Directors adopted the
1995 Stock Incentive Plan (the "1995 Stock Plan") which was subsequently
approved by the stockholders of the Company. Pursuant to the 1995 Stock Plan,
directors, employees and consultants of THCR and certain of its subsidiaries and
affiliates who have been selected as participants are eligible to receive awards
of various forms of equity-based incentive compensation, including stock options
which are intended to qualify as incentive stock options ("ISOs") under Section
422 of the Internal Revenue Code of 1986, as amended (the "Code"), as well as
stock options not intended to so qualify ("NQSOs"), stock-appreciation rights
("SARs"), stock bonuses, restricted stock awards, performance units and phantom
stock, and awards consisting of combinations of such incentives. In 1996, THCR
obtained approval from its stockholders to increase the number of shares of THCR
Common Stock authorized for issuance under the 1995 Stock Plan from 1.0 million
to 4.0 million. The 1995 Stock Plan is administered by the Stock Incentive Plan
Committee of the Board of Directors of THCR consisting of Messrs. Trump, Askins,
Ryan and Thomas (the "Stock Incentive Plan Committee"). Subject to the
provisions of the 1995 Stock Plan, the Stock Incentive Plan Committee has sole
discretionary authority to interpret the 1995 Stock Plan and to determine the
type of awards to grant, when, if and to whom awards are granted, the number of
shares covered by each award and the terms and conditions of the award.
Generally, options granted under the 1995 Stock Plan vest in three equal
installments, one-third (1) on the date of grant and on each of the first two
(2) anniversaries of the date of grant. As required by the Code, the exercise
price per share of Common Stock underlying an ISO cannot be less than 100.0% of
the fair market value of the Common Stock on the date of grant (or 110.0% in the
case of an ISO granted to a Stockholder who beneficially owns more than 10.0% of
the Company's outstanding voting securities) and options may not be exercisable
for more than 10 years after the date of grant (or 5 years in the case of an ISO
granted to a greater-than-10.0% Stockholder). See "Board of Directors and
Committees of the Board of Directors; Committees; Stock Incentive Plan
Committee."
Option Grants in Fiscal 2001. The following table sets forth certain
information with respect to options granted to the Named Executive Officers
during the fiscal year ended December 31, 2001:
OPTION/SAR GRANTS IN LAST FISCAL YEAR
Individual Grants
Percent of Total
Number of Securities Options/SARs Grant
Underlying Granted to Exercise or Date
Options/SARs Employees in Base Present
Name Granted (#) Fiscal Year Price ($/Sh) Expiration Date Value ($)
---- ----------- ----------- ------------ --------------- ---------
Donald J. Trump
-Chairman of the Board,
President and Chief Executive
Officer 500,000 (1) 100.0% $2.20 June 18, 2011 $450,000 (2)
(1) NQSO granted to Trump by the Company's Board of Directors on June 19, 2001.
One-third of option vests on the date of grant and on each of the first two
(2) anniversary dates of the date of grant, provided that with each
installment, Trump's employment with THCR has not been terminated prior to
the installment date.
(2) Represents a fair value of approximately $0.90 per option, estimated using
the Black-Scholes option-pricing model based upon the weighted average
market price at grant date of $2.00 and the following weighted average
assumptions: risk-free interest rate of 4.39%, expected life of 3.0 years,
volatility of 67.0% and a dividend yield of 0%.
Trump Hotels & Casino Resorts, Inc.
2002 Annual Stockholders Meeting
June 12, 2002
Page 14
None of the Named Executive Officers exercised any stock options during the
fiscal year ended December 31, 2001. The following table sets forth information
concerning the fiscal year-end value of unexercised options provided on an
aggregate basis:
FISCAL YEAR-END OPTION VALUES (1)
---------------------------------
Number of Securities
Underlying Unexercised
Options at Fiscal Year End
--------------------------
Name Exercisable Unexercisable
---- ----------- -------------
Donald J. Trump ......................... 1,000,000 500,000
Mark A. Brown ........................... 8,000 0
Robert M. Pickus ........................ 30,000 0
Francis X. McCarthy, Jr. ................ 10,000 0
Joseph A. Fusco ......................... 20,000 0
___________________
(1) Based on a closing sale price of $1.15 per share of THCR's Common Stock on
December 31, 2001, all of the options reflected in the above table were
out-of-the-money (i.e., the exercise prices of the options exceeded the
fair market value of the underlying THCR's Common Stock).
Employment Agreements, Termination of Employment and Change-in-Control
Arrangements
Donald J. Trump. Mr. Trump serves as the Chairman of the Board of Directors
---------------
of THCR pursuant to an executive agreement, dated as of June 12, 1995 (the
"Trump Executive Agreement"), by and among Trump, THCR and THCR Holdings.
Pursuant to the Trump Executive Agreement, Trump has agreed to provide THCR,
THCR Holding and subsidiaries, from time to time when reasonably requested and
on a non-exclusive basis, consulting services relating to marketing,
advertising, promotional and other similar related services with respect to the
business and operations of THCR, THCR Holdings and subsidiaries. The initial
term of the Trump Executive Agreement is five years and thereafter for a
three-year rolling term which shall automatically be extended so that the
unexpired term on any date is always three years, until such time during such
rolling term that either party gives written notice to the other of its election
not to continue extending such term. In such case, the term shall end three
years from the date on which such notice is given. In consideration for Mr.
Trump's services under the Trump Executive Agreement, Trump received a yearly
fee of $1.0 million through June 30, 2000, plus reimbursement expenses upon
presentation of vouchers, payable in equal monthly installments. Effective
July 1, 2000, upon Mr. Trump's appointment as President and Chief Executive
Officer of THCR, the fee payable to Mr. Trump was increased to $1.5 million per
year, plus reimbursement expenses.
Mark A. Brown. Mr. Brown serves as the President and Chief Executive
-------------
Officer of each of Taj Associates, Plaza Associates, Castle Associates and Trump
Indiana (collectively, the "Trump Entities"), pursuant to an employment
agreement, dated August 2, 2000 (the "Brown Employment Agreement"), by and among
Mr. Brown and the Trump Entities. The Brown Employment Agreement, the term of
which was effective as of July 1, 2000 and expires on July 31, 2003, provides
for an annual salary of (i) $1.0 million for the 12-month period commencing July
1, 2000, (ii) $1.1 million for the 12-month period commencing July 1, 2001, and
(iii) $1.2 million for the 12-month period commencing January 1, 2002. Upon 180
days notice prior to the expiration date, the Brown Employment Agreement may be
extended at the sole discretion of the Trump Entities to July 31, 2005. If so
extended, Mr. Brown is to receive an annual salary of (i) $1.3 million for the
12-month period commencing August 1, 2003, and (ii) $1.4 million for the
12-month period commencing August 1, 2004. The Brown Employment Agreement may be
terminated by the Trump Entities for "Cause," defined in the Brown Employment
Agreement as (i) the revocation of Mr. Brown's casino key employee license, (ii)
Mr. Brown's conviction for certain crimes, (iii) Mr. Brown's disability or death
or (iv) Mr. Brown's breach of loyalty to the Trump Entities. Upon termination
for "Cause," Mr. Brown is entitled to receive compensation earned as of the date
of termination; provided, however, that if Mr. Brown's employment is terminated
due to Mr. Brown's death or disability, Mr. Brown or his estate, as the case may
be, will be entitled to a lump sum severance payment equal to six months'
Trump Hotels & Casino Resorts, Inc.
2002 Annual Stockholders Meeting
June 12, 2002
Page 15
compensation based on Mr. Brown's then current salary. Mr. Brown may terminate
the Brown Employment Agreement at any time following a "Change of Control,"
effective on the 30th day after such effective notice, and Mr. Brown shall be
entitled to receive a lump sum payment for the full amount of unpaid
compensation for the full term of the Brown Employment Agreement. "Change of
Control" is defined in the Brown Employment Agreement as (i) the acquisition of
(x) the Trump Entities or (y) more than thirty-five percent (35.0%) of THCR's
Common Stock, or equivalent limited partnership interests of THCR Holdings, by
an unrelated party or (ii) the sale or long-term lease of all or substantially
all of the assets of Trump Entities. Also, in the event Mr. Brown is transferred
to a position located outside of Atlantic City, New Jersey, Mr. Brown may
terminate the Brown Employment Agreement within seven days of the occurrence of
such transfer and be entitled to receive a severance payment equal to three
months' compensation based on his then current salary. During the term of the
Brown Employment Agreement, Mr. Brown has agreed not to obtain employment for or
on behalf of any other casino hotel located in Atlantic City, New Jersey.
Robert M. Pickus. On April 17, 2000, THCR, THCR Holdings, and Trump AC
----------------
(collectively, the "Trump Companies") entered into an employment agreement with
Mr. Pickus (the "Pickus Employment Agreement") pursuant to which Mr. Pickus
serves as Executive Vice President and General Counsel of the Trump Companies.
The Pickus Employment Agreement, the term of which expires on April 16, 2003, if
not otherwise extended, provides for annual compensation of not less than his
current salary and a discretionary annual bonus. Mr. Pickus's employment may be
terminated by the Trump Companies for "Cause," defined in the Pickus Employment
Agreement as (i) the revocation of Mr. Pickus's casino key employee license,
(ii) Mr. Pickus's conviction for certain crimes, (iii) Mr. Pickus's disability
or death or (iv) Mr. Pickus's breach of his duty to the Trump Companies. Upon
termination for "Cause," Mr. Pickus is entitled to receive compensation accrued
yet unpaid as of the date of termination. Mr. Pickus may terminate the Pickus
Employment Agreement at any time following a "Change of Control," effective on
the 30th day after such effective notice, and Mr. Pickus shall be entitled to
receive a lump sum payment for the full amount of unpaid compensation for the
full term of the Pickus Employment Agreement. The Pickus Employment Agreement
defines "Change of Control" as (i) the acquisition of (x) the Trump Companies or
(y) more than thirty-five percent (35.0%) of THCR's Common Stock, or equivalent
limited partnership interests of THCR Holdings, by an unrelated party or (ii)
the sale or long-term lease of all or substantially all of the assets of the
Trump Companies. During the term of the Pickus Employment Agreement, Mr. Pickus
has agreed to devote his full time, attention and efforts to the Trump
Companies, and not to accept employment, either as an employee, consultant or
independent contractor, with any other casino hotel located in Atlantic City,
New Jersey. Mr. Pickus has also agreed not to consult with or otherwise engage,
either directly or indirectly, in any other activities of a business nature for
any other person or entity without the Trump Companies' prior written consent.
Francis X. McCarthy, Jr. On April 17, 2000, the Trump Companies entered
-----------------------
into an employment agreement with Mr. McCarthy (the "McCarthy Employment
Agreement") pursuant to which Mr. McCarthy serves as Executive Vice President of
Corporate Finance of the Trump Companies. The McCarthy Employment Agreement, the
term of which expires on April 16, 2003, if not otherwise extended, provides for
annual compensation of not less than his current salary and a discretionary
annual bonus. Employment may be terminated for "Cause," defined in the McCarthy
Employment Agreement as (i) the revocation of Mr. McCarthy's casino key employee
license, (ii) Mr. McCarthy's conviction for certain crimes, (iii) Mr. McCarthy's
disability or death or (iv) the breach by Mr. McCarthy of his duty to the Trump
Companies. Upon termination for "Cause," Mr. McCarthy is entitled to receive
compensation accrued yet unpaid as of the date of termination. Mr. McCarthy may
terminate the McCarthy Employment Agreement at any time following a "Change of
Control," effective on the 30th day after such effective notice, and Mr.
McCarthy shall be entitled to receive a lump sum payment of the full amount of
the unpaid compensation for the full term of the McCarthy Employment Agreement.
The McCarthy Employment Agreement defines "Change of Control" as (i) the
acquisition of (x) the Trump Companies or (y) more than thirty-five percent
(35.0%) of THCR's Common Stock, or equivalent limited partnership interests of
THCR Holdings, by an unrelated party or (ii) the sale or long-term lease of all
or substantially all of the assets of the Trump Companies. During the term of
the McCarthy Employment Agreement, Mr. McCarthy has agreed to devote his full
time, attention and efforts to the Trump Companies, and not to accept
employment, either as an employee, consultant or independent contractor, with
any other casino hotel located in Atlantic City, New Jersey. Mr. McCarthy has
also agreed not to consult with or otherwise engage, either directly or
indirectly, in any other activities of a business nature for any other person or
entity without the Trump Companies' prior written consent.
Trump Hotels & Casino Resorts, Inc.
2002 Annual Stockholders Meeting
June 12, 2002
Page 16
Joseph A. Fusco. On April 17, 2000, the Trump Companies entered into an
---------------
employment agreement with Mr. Fusco (the "Fusco Employment Agreement") pursuant
to which Mr. Fusco serves as Executive Vice President of Government
Relations and Regulatory Affairs of the Trump Companies. The Fusco Employment
Agreement, the term of which expires on April 16, 2003, if not otherwise
extended, provides for annual compensation of not less than his current salary
and a discretionary annual bonus. Employment may be terminated for "Cause,"
defined in the Fusco Employment Agreement as (i) the revocation of Mr. Fusco's
casino key employee license, (ii) Mr. Fusco's conviction for certain crimes,
(iii) Mr. Fusco's disability or death or (iv) the breach by Mr. Fusco of his
duty to the Trump Companies. Upon termination for "Cause," Mr. Fusco is entitled
to receive compensation accrued yet unpaid as of the date of termination. Mr.
Fusco may terminate the Fusco Employment Agreement at any time following a
"Change of Control," effective on the 30th day after such notice and Mr. Fusco
shall be entitled to receive a lump sum payment of the full amount of the unpaid
compensation for the full term of the Fusco Employment Agreement. The Fusco
Employment Agreement defines "Change of Control" as (i) the acquisition of (x)
the Trump Companies or (y) more than thirty-five percent (35.0%) of THCR's
Common Stock, or equivalent limited partnership interests of THCR Holdings, by
an unrelated party or (ii) the sale or long-term lease of all or substantially
all of the assets of the Trump Companies. During the term of the Fusco
Employment Agreement, Mr. Fusco has agreed to devote his full time, attention
and efforts to the Trump Companies, and not to accept employment, either as an
employee, consultant or independent contractor, with any other casino hotel
located in Atlantic City, New Jersey. Mr. Fusco has also agreed not to consult
with or otherwise engage, either directly or indirectly, in any other activities
of a business nature for any other person or entity without the Trump Companies'
prior written consent.
Board of Directors and Committees of the Board of Directors
General. The Board of Directors met ten (10) times during 2001. During
2001, none of the Directors attended fewer than 75.0% of the aggregate of (i)
the total number of meetings of the Board of Directors and (ii) the total number
of meetings held by all committees of the Board of Directors on which such
individuals served.
Compensation of Directors. Mr. Trump, the Chairman of the Board of
Directors, President and Chief Executive Officer of THCR, received no
remuneration for serving on the Board of Directors of THCR for the fiscal year
ended December 31, 2001. Directors of THCR who are also employees or consultants
of THCR and its affiliates are not paid any fees. Non-employee Directors are
paid an annual stipend of $50,000, plus $2,000 per meeting attended and
reasonable out-of-pocket expenses incurred in attending such meetings. All such
fees are paid by THCR Holdings in accordance with the THCR Holdings Partnership
Agreement.
Committees. THCR has the following committees: (i) Executive Committee,
(ii) Audit Committee, (iii) Special Committee, (iv) Stock Incentive Plan
Committee and (v) Compensation Committee. The Company does not have a Nominating
Committee. Below is a brief description of the duties and responsibilities of
each of the foregoing committees and the names of the Directors comprising each
committee:
Executive Committee: Mr. Trump is currently the sole member of the
-------------------
Executive Committee. The Executive Committee has and exercises all of the powers
of the Board of Directors in the management of the business and affairs of the
Company, subject to any restrictions or limitations as the Board of Directors
may from time to time specify or as limited by the Delaware General Corporation
Law. At various times during 2001, Mr. Trump reviewed several matters on behalf
and in the name of the Executive Committee.
Audit Committee: The current members of the Audit Committee are Messrs.
---------------
Askins, Ryan, Thomas and McGuire, each of whom is an "independent director" of
the Company, as that term is defined in the New York Stock Exchange's listing
standards. The Audit Committee provides assistance to the Board of Directors
with respect to corporate accounting, reporting practices of the Company and the
quality and integrity of the financial reports of the Company. The Audit
Committee recommends to the Board of Directors the engagement of the independent
auditors of the Company and oversees audits and investigations of the business
and financial affairs of the Company, including, without limitation, any audits
or investigations which may be required by any governmental regulatory
authority. The Audit Committee met six (6) times during 2001. See "Explanatory
Note" and "Audit Committee Report."
Trump Hotels & Casino Resorts, Inc.
2002 Annual Stockholders Meeting
June 12, 2002
Page 17
Special Committee: The Special Committee was established pursuant to
-----------------
the THCR By-laws and the THCR Holdings Partnership Agreement, and is empowered
to vote on any matters which require approval of a majority of the independent
directors of THCR, including affiliated transactions. All proposed transactions
involving THCR or THCR Holdings in which Trump has a personal interest valued
over $200,000 or any transaction between THCR and any officer or director having
a value of at least $200,000 (other than transactions relating to salary or
other compensation paid in the ordinary course of business), shall be reviewed
by the Special Committee, which shall make findings and recommendations to the
Board with respect to such proposed transactions. At all times, the Special
Committee is required to be comprised of at least two (2) non-employee directors
and no employee directors. The current members of the Special Committee are
Messrs. Askins, Ryan, Thomas and McGuire. The Special Committee met three (3)
times during 2001.
Stock Incentive Plan Committee: The current members of the Stock
------------------------------
Incentive Plan Committee are Messrs. Trump, Askins, Ryan and Thomas. The Stock
Incentive Plan Committee is responsible for administering the 1995 Stock Plan,
and has the authority to grant awards to individuals pursuant to the 1995 Stock
Plan, to determine the number of awards to be so granted, the term of such
awards, any vesting requirements and any other administrative determinations
required in connection therewith. The Stock Incentive Plan Committee met once
during 2001. See "Executive Compensation; 1995 Stock Incentive Plan" and
"Compensation Committee and Stock Incentive Plan Committee Report on Executive
Compensation."
Compensation Committee: The current members of the Compensation
----------------------
Committee are Messrs. Trump, Askins and Thomas. The Compensation Committee
provides assistance to the Board of Directors to ensure that the Company's
officers, executives and Directors are compensated in accordance with the
Company's total compensation objectives and executive compensation policies,
strategies and pay levels necessary to support organizational objectives. The
Compensation Committee did not meet during 2001. See "Compensation Committee and
Stock Incentive Plan Committee on Executive Compensation" and "Compensation
Committee Interlocks and Insider Participation."
Compensation Committee and Stock Incentive Plan Committee Report on Executive
Compensation
General. The Stock Incentive Plan Committee was formed in June 1995,
and the Compensation Committee was formed in August 1995. Set forth below is a
description of the policies and practices that the Compensation Committee
implements with respect to compensation determinations.
Compensation Philosophy. The Company's compensation program is designed
to attract, reward and retain highly qualified executives and to encourage the
achievement of business objectives and superior corporate performance. The
program ensures the Board of Directors and Stockholders that (i) the achievement
of the overall goals and objectives of the Company can be supported by adopting
an appropriate executive compensation policy and implementing it through an
effective total compensation program and (ii) the total compensation program and
practices of the Company are designed with full consideration of all accounting,
tax, securities law and other regulatory requirements and are of the highest
quality.
The Company's executive compensation program consists of two key
elements: (i) an annual compensation component composed of base salary and bonus
and (ii) a long-term compensation component composed of equity-based awards
pursuant to the 1995 Stock Plan.
Annual Compensation. The Compensation Committee will generally target
annual salary and bonus levels to be competitive with other similarly sized
entities in the casino entertainment industry. Base salaries will be determined
by evaluating the responsibilities associated with the position being evaluated
and the individual's overall level of experience. Annual salary adjustments will
be determined by giving consideration to the Company's performance and the
individual's contribution to that performance.
Bonuses are based on the Compensation Committee's assessment of the
Company's performance and an individual's contribution to that performance.
Corporate performance is measured by various quantitative and qualitative
factors. The primary quantitative factors that will be reviewed by the
Compensation Committee include such performance measures as net income and
return on average common stockholders' equity, both as absolute measures and
relative to previous years. Significant qualitative factors that will be
evaluated by the Compensation
Trump Hotels & Casino Resorts, Inc.
2002 Annual Stockholders Meeting
June 12, 2002
Page 18
Committee include the Company's performance in relation to industry performance,
progress toward achievement of the Company's long-term business goals, the
quality of the Company's earnings and the overall business and economic
environment. The Compensation Committee believes that, in accordance with its
exercise of sound business judgment, the determination of annual salary and
bonus levels is inherently subjective and must include a review of all relevant
information, with no predetermined weight given to any of the factors
considered.
All of the Company's Named Executive Officers are currently under
employment contracts. The annual salary for these individuals is set by the
terms of their employment contracts and any increases in annual salary are
determined in the discretion of the Compensation Committee. See "Employment
Agreements, Termination of Employment and Change-in-Control Arrangements."
CEO Compensation. Mr. Trump is compensated pursuant to the terms of the
Trump Executive Agreement. In consideration for Mr. Trump's services rendered
pursuant to the Trump Executive Agreement, Trump received a salary of $1.0
million per year through June 30, 2000, plus reimbursement of expenses.
Effective July 1, 2000, upon Mr. Trump's appointment as President and Chief
Executive Officer of THCR, the fee was increased to $1.5 million per year.
Pursuant to the terms of the Trump Executive Agreement, Mr. Trump provides to
THCR and its subsidiaries, from time to time, when reasonably requested,
marketing, advertising, professional and other similar and related services with
respect to the operation and business of THCR. On June 19, 2001, the Board of
Directors granted to Mr. Trump options to acquire 500,000 shares of Common Stock
at a purchase price of $2.20 per share. The option vests in three equal
installments, one-third on the date of grant and one-third on each of the first
two (2) anniversary dates of the date of grant, provided that with each
installment, Mr. Trump's employment with THCR has not been terminated prior to
the installment date. See "Executive Compensation; Option Grants in Fiscal 2001"
and "Employment Agreements, Termination of Employment and Change-in-Control
Arrangements."
Long-Term Compensation. In order to align stockholder and executive
officer interests, the long-term component of the Company's executive
compensation program utilizes equity-based awards whose value is directly
related to the value of the Common Stock. These equity-based awards will be
granted by the Stock Incentive Plan Committee pursuant to the 1995 Stock Plan.
Individuals to whom equity-based awards are to be granted and the amount of
Common Stock related to equity-based awards will be determined solely at the
discretion of the Stock Incentive Plan Committee. Because individual
equity-based award levels will be based on a subjective evaluation of each
individual's overall past and expected future contribution, no specific formula
is used to determine such awards for any executive.
Tax Deductibility of Executive Compensation. Section 162(m) of the Code
limits the tax deductibility of compensation in excess of $1.0 million paid to
certain members of senior management, unless the payments are made under a
performance-based plan as defined in Section 162(m) of the Code. The 1995 Stock
Plan is designed to allow for the grant of equity-based awards that are
performance-based and therefore exempt from the application of Section 162(m) of
the Code. While the Compensation Committee considers the deductibility of senior
management compensation in making its decisions, it also believes it is
important to maintain the flexibility to take actions it considers to be in the
best interests of the Company and the stockholders, which may be based on
considerations in addition to Section 162(m) of the Code.
COMPENSATION COMMITTEE STOCK INCENTIVE PLAN COMMITTEE
Donald J. Trump Donald J. Trump
Wallace B. Askins Wallace B. Askins
Don M. Thomas Don M. Thomas
Peter M. Ryan
Trump Hotels & Casino Resorts, Inc.
2002 Annual Stockholders Meeting
June 12, 2002
Page 19
AUDIT COMMITTEE REPORT
The following Report of the Audit Committee does not constitute
soliciting material and should not be deemed filed or incorporated by reference
into any other Company filing under the Securities Act of 1933, as amended, or
the Exchange Act, except to the extent that the Company specifically
incorporates this Report by reference therein.
To the Board of Directors of Trump Hotels & Casino Resorts, Inc.:
The Audit Committee is appointed by the Board of Directors and consists
of four (4) members. Each member of the Audit Committee is independent, as
defined under the New York Stock Exchange listing standards. The Audit Committee
operates under a written charter that is adopted by the Board of Directors.
The responsibilities of the Audit Committee are to assist the Board of
Directors in fulfilling its oversight responsibilities as they relate to the
Company's accounting policies, internal controls, financial reporting practices
and regulatory compliance. The Audit Committee also recommends to the Board of
Directors the selection of the Company's independent auditors. The Audit
Committee fulfills its responsibilities through periodic meetings with the
Company's independent auditors, internal auditors and management. During 2001,
the Audit Committee met six (6) times, and the Audit Committee discussed the
interim financial information contained in each quarterly earnings announcement
with the Chief Financial Officer, the independent auditors and in-house counsel
prior to public release.
The Audit Committee monitors matters related to Arthur Andersen's
independence. The Audit Committee obtained a letter from Arthur Andersen
containing a description of all relationships between the auditors and the
Company. The Audit Committee has satisfied itself as to the auditors'
independence. Arthur Andersen has also confirmed in a letter to the Company that
in its judgment, it is independent of the Company within the requirements of
Independence Standards (IBS) Standard No. 1, Independence Discussion with Audit
Committees.
The Audit Committee reviewed the audited financial statements of the
Company as of and for the fiscal year ended December 31, 2001 with management
and the independent auditors. Management has the responsibility for the
preparation and integrity of the Company's financial statements, the financial
process, the system of internal controls and of the financial information
presented in reports. The independent auditors have responsibility for
performing independent audits of the Company's consolidated financial statements
in accordance with generally accepted auditing standards and for issuing a
report thereon.
Based on the above-mentioned reviews, the Audit Committee has met and
held discussions with management and the independent auditors. Management
represented to the Audit Committee that the Company's consolidated financial
statements were prepared in accordance with generally accepted accounting
principles, and the Audit Committee has reviewed and discussed the consolidated
financial statements with management and the independent auditors. The Audit
Committee discussed with the independent auditors matters required to be
discussed by Statement on Auditing Standards No. 61, Communications with Audit
Committees, as amended. The Audit Committee recommended to the Board that the
Company's audited financial statements be included in the Company's Annual
Report on Form 10-K for the fiscal year ended December 31, 2001 for filing with
the Securities and Exchange Commission.
The Audit Committee does not recommend the reappointment of Arthur
Andersen as the independent auditors of the Company for the fiscal year ending
December 31, 2002. This is due to the recent Federal indictment of Arthur
Andersen regarding matters unrelated to past or current services rendered by
Arthur Andersen to the Company. The New Jersey Casino Control Commission at a
public hearing in March 2002: (i) rescinded Arthur Andersen's exemption from
licensure in New Jersey and (ii) prohibited all New Jersey Casino licensees
from conducting any direct or indirect business with Arthur Andersen and
requiring that they terminate any ongoing business with Arthur Andersen by May
15, 2002. The Audit Committee is currently seeking to replace Arthur Andersen.
The Audit Committee in performing all its functions acts only in an
oversight capacity and necessarily relies on the work and assurances of
Company's management and independent auditors, which in their report
Trump Hotels & Casino Resorts, Inc.
2002 Annual Stockholders Meeting
June 12, 2002
Page 20
express an opinion on the conformity of the Company's annual financial
statements to generally accepted accounting principles. It is not the duty of
the Audit Committee to plan or conduct audits, or accounting reviews or
procedures or to determine that the Company's financial statements are complete
and accurate and in accordance with accounting principals generally accepted in
the United States of America. That is the responsibility of management and the
Company's independent auditors. In giving the Audit Committee recommendation to
the Board of Directors, the Audit Committee has relied, without independent
verification, on (i) management's representations that such financial statements
have been prepared with integrity and objectivity and in conformity with
accounting principals generally accepted in the United States of America and
(ii) the report and discussions with the Company's independent auditors with
respect with such financial statements.
AUDIT COMMITTEE:
Wallace B. Askins
Don M. Thomas
Peter M. Ryan
Robert J. McGuire
Fiscal 2001 Audit Firm Fees Summary
During the fiscal year ended December 31, 2001, the Company incurred
the following fees for services rendered by Arthur Andersen:
Audit Fees. Arthur Andersen billed the Company and its affiliates an
aggregate of $645,600 in fees for professional services rendered in connection
with the audit of the Company's and its affiliates' financial statements for the
most recent fiscal year and the reviews of the financial statements included in
each of the Company's and its affiliates' Quarterly Reports on Form 10-Q during
the fiscal year ended December 31, 2001, including $300,000 for audits of the
Trump Savings Plan and Trump Capital Accumulation Plan.
Financial Information Systems Design and Implementation Fees. Arthur
Andersen did not provide the Company or its affiliates with any professional
services in connection with the design and implementation of financial
information systems during the fiscal year ended December 31, 2001.
All Other Fees. Arthur Andersen billed the Company and its affiliates
an aggregate of $1,336,129 in fees for other services rendered by Arthur
Andersen to the Company and its affiliates for the fiscal year ended December
31, 2001, consisting of (i) $326,000 for Tax Compliance, (ii) $836,129 for Tax
Consulting, (iii) $155,000 for Medical Benefits Consulting and (iv) $19,000 for
Real Estate Valuation Services.
Trump Hotels & Casino Resorts, Inc.
2002 Annual Stockholders Meeting
June 12, 2002
Page 21
Comparative Stock Price Performance Graph
The graph and chart below compare the yearly change in the cumulative
total stockholder return on the Company's Common Stock (NYSE: DJT) during the
five years ended December 31, 2001 with the Standard & Poor's ("S&P") 500 Index
and the Dow Jones Entertainment & Leisure-Casinos Index. The graph and chart are
based on an initial investment of $100 on December 31, 1996 in each of the
Common Stock and the foregoing indices and assumes the reinvestment of
dividends.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
AMONG TRUMP HOTELS & CASINO RESORTS, INC., THE S&P 500 INDEX
AND THE DOW JONES CASINOS INDEX
[PERFORMANCE GRAPH USING PLOT POINTS BELOW]
Cumulative Total Return
------------------------------------------------------------------------------------------
December 1996 December 1997 December 1998 December 1999 December 2000 December 2001
------------- ------------- ------------- ------------- ------------- -------------
DJT ......... $100.00 $ 55.73 $ 31.25 $ 28.13 $ 15.63 $ 9.58
S&P 500 ..... $100.00 $133.36 $171.47 $207.56 $188.66 $166.24
Dow Jones
Casinos ..... $100.00 $ 90.94 $ 65.07 $100.16 $109.51 $120.68
Trump Hotels & Casino Resorts, Inc.
2002 Annual Stockholders Meeting
June 12, 2002
Page 22
Compensation Committee Interlocks and Insider Participation
In general, the compensation of Executive Officers of THCR is
determined by the Compensation Committee of the THCR Board of Directors, which
currently consists of Messrs. Trump, Askins and Thomas. No officer or employee
of THCR, other than Mr. Trump who serves on the THCR Board of Directors,
participated in the deliberations of the THCR Board of Directors concerning
executive compensation.
Certain Related Party Transactions. THCR leases office space in Trump
Tower located in midtown Manhattan for general, executive and administrative
purposes pursuant to a lease, dated November 1, 1996, as amended (the "Trump
Tower Lease"), by and between Taj Associates, as tenant, and Trump Tower
Commercial LLC, as landlord which is also an affiliate of Trump ("Trump Tower
Commercial"). The Trump Tower Lease was assigned to THCR Holdings on August 24,
2000. The Trump Tower Lease terminates on August 31, 2010. The annual rent,
payable in equal monthly installments, during the three-year period from
September 1, 2000 to August 31, 2003 is $64,644.25. The annual rent for the
three-year period from September 1, 2003 to August 31, 2006 is $68,458.50. The
annual rent during the three-year period from September 1, 2006 to August 31,
2010 is $72,261.75. Pursuant to the Trump Tower Lease, THCR Holdings is also
obligated to pay a proportionate share of the imposed property taxes. During the
fiscal year ended December 31, 2001, an aggregate amount of $67,275, including
rent and property taxes, was paid to Trump Tower Commercial under the Trump
Tower Lease.
Beginning in late 1997, the Trump Atlantic City Properties began to
utilize certain facilities owned by Trump to entertain high-end customers.
Management believes that the ability to utilize these facilities enhances THCR's
revenues. During the fiscal year ended December 31, 2001, THCR incurred
approximately $0.6 million in customer costs associated with utilizing these
facilities. In exchange for having Trump's personal airplane available to
customers of the Trump Atlantic City Properties, THCR incurred pilot costs of
approximately $0.3 million for the fiscal year ended December 31, 2001.
Certain Related Party Transactions. On December 28, 1993, Castle
Associates entered into a Services Agreement (the "Castle Services Agreement")
with TCI-II, an entity wholly-owned by Trump. Pursuant to the Castle Services
Agreement, TCI-II has agreed to provide Castle Associates, from time-to-time
when reasonably requested, consulting services on a non-exclusive basis,
relating to marketing, advertising, promotional and other services (the "Castle
Services") with respect to the business and operations of Castle Associates, in
exchange for certain fees to be paid only in those years in which EBITDA (EBITDA
represents income from operations before depreciation, amortization, refinancing
costs and the non-cash write-down of CRDA investments) exceeds prescribed
amounts, as discussed below.
In consideration for the Castle Services rendered by TCI-II, Castle
Associates is required to pay TCI-II an annual fee (which is identical to the
fee which was payable under the previously existing management agreement) of
$1.5 million for each year in which EBITDA exceeds the following amounts for the
years indicated: (i) 1993 - $40.5 million; (ii) 1994 - $45.0 million; and (iii)
1995 and thereafter - $50.0 million. If EBITDA in any fiscal year does not
exceed the applicable amount, no annual fee is due. In addition to the annual
fee, TCI-II is entitled to receive an incentive fee equal to 10.0% of EBITDA in
excess of $45.0 million for such fiscal year. Castle Associates is also be
required to advance TCI-II $125,000 per month which is applied toward the annual
fee, provided, however, that no advances are made during any year if and for so
long as the Managing Partner (defined in the Castle Services Agreement as Trump)
determines, in his good faith reasonable judgment, that Castle Associates'
budget and year-to-date performance indicate that the minimum EBITDA levels (as
specified above) for such year will not be met. If for any year during which
annual fee advances have been made it is determined that the annual fee was not
earned, TCI-II is obligated to promptly repay any amounts previously advanced.
For purposes of calculating EBITDA under the Castle Services Agreement, any
incentive fees paid shall not be deducted in determining net income. Pursuant to
the Castle Services Agreement, Trump earned $2.258 million, $2.306 million and
$2.207 million, based on Castle Associates' EBITDA for the years ended December
31, 1999, 2000 and 2001, respectively. The Castle Services Agreement expires on
December 31, 2005.
Other Relationships. The SEC requires registrants to disclose the
existence of any other corporation in which both (i) an executive officer of the
registrant serves on the board of directors and/or compensation
Trump Hotels & Casino Resorts, Inc.
2002 Annual Stockholders Meeting
June 12, 2002
Page 23
committee and (ii) a director of the registrant serves as an executive officer.
Messrs. Pickus and Burke, both of whom are Executive Officers of THCR, have
served on the boards of directors of other entities in which members of the THCR
Board of Directors (namely, Mr. Trump) served and continue to serve as Executive
Officers. Management believes that such relationships have not affected the
compensation decisions made by the THCR Board of Directors in the last fiscal
year.
Certain Relationships and Related Transactions
Affiliate party transactions are governed by the provisions of the
indentures governing THCR Holdings' and THCR Funding's 15-1/2% Senior Notes due
2005 (the "Senior Notes") and each of (i) Trump AC's and Trump AC Funding's,
(ii) Trump AC's and Funding II's and (iii) Trump AC's and Funding III's 11-3/4%
Mortgage Notes due 2006, which provisions generally require that such
transactions be on terms as favorable as would be obtainable from an
unaffiliated party, and require the approval of a majority of the independent
directors of THCR for certain affiliated transactions. Affiliated transactions
with respect to Castle Associates are governed by the indentures under which
Castle Associates' public bonds were issued.
Trump and certain affiliates have engaged in certain related party
transactions with respect to THCR and its subsidiaries. See "Executive
Compensation; Compensation Committee Interlocks and Insider Participation."
Indemnification Agreements. In addition to the indemnification
provisions in THCR's and its subsidiaries' employment agreements with its
officers, certain former and current directors of Plaza Funding have entered
into separate indemnification agreements in May 1992 and June 1993 with Plaza
Associates pursuant to which such persons are afforded the full benefits of the
indemnification provisions of the partnership agreement governing Plaza
Associates. Plaza Associates also entered into an indemnification trust
agreement in November 1992 with Midlantic (the "Indemnification Trustee")
pursuant to which the sum of $100,000 was deposited by Plaza Associates with the
Indemnification Trustee for the benefit of the directors of Plaza Funding and
certain former directors of Trump Plaza GP to provide a source for
indemnification for such persons if Plaza Associates, Plaza Funding or Trump
Plaza GP, as the case may be, fails to immediately honor a demand for
indemnification by such persons. The indemnification agreements with the
directors of Plaza Funding and directors of Trump Plaza GP were amended in June
1993 to provide, among other things, that Plaza Associates would (i) not
terminate, amend or modify certain agreements in a manner which may adversely
affect the rights or interests of such directors unless an additional sum of
$600,000 was first deposited with the Indemnification Trustee, and (ii) maintain
directors' and officers' insurance covering such persons during the ten-year
term (subject to extension) of the indemnification agreements; provided,
however, that if such insurance would not be available on a commercially
practicable basis, Plaza Associates could, in lieu of obtaining such insurance,
annually deposit an amount in a trust fund equal to $500,000 for the benefit of
such directors; provided further, that deposits relating to the failure to
obtain such insurance shall not exceed $2.5 million. Such directors are covered
by directors' and officers' insurance maintained by Plaza Associates. In June
1993, additional sum of $600,000 was deposited with the Indemnification Trustee
for the benefit of the directors of Plaza Funding and certain former directors
of Trump Plaza GP.
In connection with THCR's acquisition of the Taj Mahal in April 1996, Trump
AC had agreed to provide to the former officers and directors of THCR Holding
Corp. and THCR/LP (the "Taj Indemnified Parties"), including Messrs. Pickus and
Burke, indemnification as provided in the THCR's Amended and Restated
Certificate of Incorporation and Amended and Restated By-laws until April 17,
2002. In addition, THCR had agreed, and agreed to cause THCR Holding Corp. and
THCR/LP to agree, that until April 17, 2002, unless otherwise required by law,
the Certificate of Incorporation and By-laws of THCR Holding Corp. and THCR/LP
would not be amended, repealed or modified to reduce or limit the rights of
indemnity afforded to the former directors, officers and employees of THCR
Holding Corp. and THCR/LP or the ability of THCR Holding Corp. or THCR/LP to
indemnify such persons, nor to hinder, delay or make more difficult the exercise
of such rights of indemnity or the ability to indemnify. In addition, Trump AC
had also agreed to purchase and maintain in effect, until April 17, 2002,
directors' and officers' liability insurance policies covering the Taj
Indemnified Parties on terms no less favorable than the terms of the then
current insurance policies' coverage or, if such directors' and officers'
liability insurance is unavailable for an amount no greater than 150.0% of the
premium paid by THCR Holding Corp. (on an annualized basis) for directors' and
officers' liability insurance during the period from January 1, 1996, to April
17, 1996, Trump AC has agreed to obtain as much insurance as can be obtained for
a premium not in excess
Trump Hotels & Casino Resorts, Inc.
2002 Annual Stockholders Meeting
June 12, 2002
Page 24
(on an annualized basis) of such amount.
In March 2000, the Board of Directors of THCR authorized and directed
THCR to cause Taj Associates, Plaza Associates, Castle Associates and Trump
Indiana to enter into indemnification agreements with each of the Directors of
THCR in connection with the performance of their duties as Directors.
Twenty-Nine Palms Band of Luiseno Mission Indians of California; Trump
Guaranty and Indemnification. In November 2001, THCR Management borrowed $11.0
million from the Trust Company of the West and certain affiliates thereof (the
"TCW Lenders") to enable THCR Management to fund its participation in the
Tribe's construction loan of Trump 29 Casino and to pay fees and expenses
related thereto. As a part of the transaction, Trump unconditionally and
irrevocably guaranteed the full and punctual payment (whether as stated maturity
or acceleration) of THCR Management's obligations to pay principal, accrued
interest, fees and expenses under such loan agreement, including all reasonable
costs of collection and enforcement thereof and interest thereon which would be
owing by THCR Management (the "Trump Guaranty"). The guaranteed obligations
shall be proportionally reduced from and after the date on which THCR Management
has made prepayments of the borrowed sums aggregating $1.0 million or more.
In connection with the Trump Guaranty, THCR Enterprises has agreed to
indemnify and hold harmless Trump, and his successors, assigns, estate, heirs
and personal representatives, against any and all losses, costs or expenses
(including, without limitation, any reasonable legal, accounting and other
expenses) incurred by Trump or any of his successors, assigns, estate, heirs
and/or personal representatives under the provisions of the Trump Guaranty,
including any payments made by Trump thereunder. The indemnity obligation of
THCR Enterprises is secured by a pledge of 2,127,500 shares of Common Stock and
a principal amount of $35.5 million of Senior Notes held by THCR Enterprises.
Trump Hotels & Casino Resorts, Inc.
2002 Annual Stockholders Meeting
June 12, 2002
Page 25
STOCKHOLDER PROPOSALS - 2003 ANNUAL MEETING
Any proposals of Stockholders of the Company intended to be included in
the Company's Proxy Statement and form of proxy relating to the Company's 2003
Annual Meeting of Stockholders must be in writing and received by the Secretary
of the Company at the Company's executive office located at the Trump Taj Mahal
Casino Resort, 1000 Boardwalk at Virginia Avenue, Atlantic City, New Jersey
08401 no later than March 14, 2003.
In the event that the 2003 Annual Meeting of Stockholders is scheduled
for a date which is not within thirty (30) days before or after June 12, 2003,
in order to be timely, a stockholder proposal must be received by the Company's
Secretary no later than the earlier of: (i) the close of business on the tenth
(10th) day following the date on which notice of the 2003 Annual Meeting is
mailed or (ii) public disclosure of the scheduled date of the 2003 Annual
Meeting is made.
Any stockholder interested in making a proposal is referred to Article
II, Section 11 of the Company's Amended and Restated Bylaws as well as Section
14a-8 promulgated under Regulation 14A of the Exchange Act.
OTHER MATTERS
Management does not know of any matters other than the foregoing that
will be presented for consideration at the Annual Meeting. However, if other
matters properly come before the Annual Meeting, it is the intention of the
persons named on the enclosed Proxy Card to take such action as is in the best
interests of the Company and the Stockholders.
PROXY SOLICITATION
The entire cost of soliciting proxies from the Stockholders will be
borne by the Company. In addition to the use of the mails, proxies may be
solicited by personal interview, telephone or telegram by Directors, officers or
regular employees of the Company, who will not receive additional compensation
for such solicitation but may be reimbursed for reasonable out-of-pocket
expenses incurred in connection therewith. The Company has retained MacKenzie
Partners, Inc., a proxy soliciting firm, to assist in the solicitation of
proxies and will pay such firm a fee, estimated not to exceed $7,500 plus
reimbursement of reasonable out-of-pocket expenses, which are not expected to
exceed $7,500. Arrangements may also be made with brokerage firms and other
custodians, nominees and fiduciaries to forward proxy solicitation materials to
the beneficial owners of shares of Common Stock held of record by such persons,
in which case the Company will reimburse such brokerage firms, custodians,
nominees and fiduciaries for reasonable out-of-pocket expenses incurred by them
in connection therewith.
The Company will provide to any Stockholder of record and beneficial
owners as of the Record Date, without charge, upon written request to its
Secretary at 1000 Boardwalk at Virginia Avenue, Atlantic City, New Jersey 08401,
a copy of the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 2001. Exhibits to the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 2001 will be furnished upon request upon the
payment of specified reasonable fees limited to the Company's reasonable
expenses in furnishing such exhibits.
By Order of the Board of Directors,
/S/ ROBERT M. PICKUS
--------------------
Robert M. Pickus
Executive Vice President, Secretary
and General Counsel
TRUMP HOTELS & CASINO RESORTS, INC.
1000 Boardwalk at Virginia Avenue
Atlantic City, New Jersey 08401
PROXY FOR THE ANNUAL MEETING OF STOCKHOLDERS
To Be Held at the Trump Taj Mahal Casino Resort, 1000 Boardwalk at Virginia
Avenue, Atlantic City, New Jersey 08401
At 2:00 P.M., Local Time, on Wednesday, June 12, 2002
The undersigned hereby appoints Robert M. Pickus and Francis X. McCarthy,
Jr., and each of them (the "Proxies"), with full power of substitution, as
proxies of the undersigned to vote all shares of stock of TRUMP HOTELS & CASINO
RESORTS, INC. (the "Company"), which the undersigned is entitled in any
capacity to vote at the above-stated annual meeting, and at any and all
adjournments or postponements thereof (the "Annual Meeting"), on the matters
set forth on this proxy card (the "Proxy Card"), and, in their discretion, upon
all matters incident to the conduct of the Annual Meeting and upon such other
matters as may properly be brought before the Annual Meeting. This proxy
revokes all prior proxies given by the undersigned.
All properly executed proxies will be voted as directed. If no instructions
are indicated on a properly executed proxy, such proxy will be voted "FOR" the
election of each director-nominee listed in Proposal 1. All "ABSTAIN" votes
will be counted in determining the existence of a quorum at the Annual Meeting.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF TRUMP HOTELS &
CASINO RESORTS, INC.
Receipt of the Notice of Meeting and the Proxy Statement, dated April 26, 2002,
is hereby acknowledged.
PLEASE SIGN AND DATE WHERE INDICATED ON THE REVERSE SIDE OF THIS PROXY CARD
AND PROMPTLY MAIL THE PROXY CARD USING THE ENCLOSED ENVELOPE. NO POSTAGE IS
NECESSARY IF MAILED IN THE UNITED STATES.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF EACH
DIRECTOR-NOMINEE LISTED IN PROPOSAL 1.
(Please complete in blue or black ink.)
PROPOSAL 1. ELECTION OF DIRECTORS.
Nominees: Donald J. Trump, Wallace B. Askins, Don M. Thomas, Peter M. Ryan
and Robert J. McGuire
[_] FOR all nominees (except as marked to the contrary below) [_] WITHHOLDING
AUTHORITY as to all nominees
INSTRUCTION: To withhold your authority to vote for any one or more specific
nominee(s), print his (their) name(s) on the line below.
Authority withheld for: _____________________________________________________
(Continued on the Reverse Side)
PROPOSAL 2. MISCELLANEOUS.
In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the Annual Meeting. This proxy when
properly executed will be voted in the manner directed herein by the
undersigned stockholder.
Dated: ______________ , 2002
-----------------------------------
Title or Authority:
-----------------------------------
Signature:
-----------------------------------
Signature, if held jointly:
(Joint tenants should EACH sign.
Please sign EXACTLY as your name
appears on this card. When signing
as attorney, executor,
administrator, trustee or
guardian, partner or corporate
officer, please give FULL title as
such.)
YOUR VOTE IS IMPORTANT. PLEASE
SIGN, DATE AND MAIL THIS PROXY
CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.