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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
(Amendment No. 1)
FOR ANNUAL AND TRANSITION REPORTS
PURSUANT TO SECTIONS 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Mark One)
[X] Annual report pursuant to section 13 or 15(d) of the Securities Exchange Act
of 1934 [No Fee Required] For the fiscal year ended December 31, 2002
[ ] Transition report pursuant to sections 13 or 15(d) of the Securities
Exchange Act of 1934 [Fee Required] For the transition period from to
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Commission file number 000-21430
RIVIERA HOLDINGS CORPORATION
(Exact name of Registrant as specified in its charter)
Nevada 88-0296885
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(State of Incorporation) (IRS Employer Identification No.)
2901 Las Vegas Boulevard South
Las Vegas, Nevada 89109
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (702) 734-5110
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Securities registered pursuant to Section 12(b) of the Act:Common Stock, $.001
par value -------------------
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Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $.001 par value
(Title of class)
Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
YES X NO _____
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Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or amendment
to this Form 10-K.[X}
Based on the reported closing price for the Registrant's common stock
on the American Stock Exchange as of June 28, 2002 the aggregate market value of
the voting stock held by non-affiliates of the Registrant was approximately
$14,476,293. As of April 25, 2003, the number of outstanding shares of the
Registrant's common stock was 3,606,155.
Documents incorporated by reference:None
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EXPLANATORY NOTE
The purpose of this amendment is to amend Part III, Items 10, 11, 12 and 13 in
their entirety pursuant to General Instruction G.(3) to Form 10-K, file
additional exhibits under item 15 and change the reporting date and valuation of
the voting stock held by non-affiliates on the cover page of this Form 10-K.
PART III
Item 10. Directors and Executive Officers of the Registrant
The following table sets forth certain information as of April 25, 2003
regarding our directors and the directors of Riviera Operating Corporation
("ROC"), our wholly-owned subsidiary.
Name Age Position
William L. Westerman 71 Our and ROC's Chairman of the Board and Chief
Executive Officer, and our President
Robert R. Barengo 61 Our and ROC's Director, and Director of Government
and Public Affairs of ROC
Jeffrey A. Silver 57 Our and ROC's Director
Paul A. Harvey 65 Our and ROC's Director
Vincent L. DiVito 43 Our and ROC's Director
William L. Westerman has been our Chairman of the Board and Chief Executive
Officer since February, 1993. Mr. Westerman was a consultant to Riviera, Inc.
(our predecessor company) from July 1, 1991 until he was appointed Chairman of
the Board and Chief Executive Officer of Riviera, Inc. on January 1, 1992. From
1973 to June 30, 1991, Mr. Westerman was President and Chief Executive Officer
of Cellu-Craft Inc., a manufacturer of flexible packaging primarily for food
products, and then later had several positions with Alusuisse, a multi-national
aluminum and chemical company, following its acquisition of Cellu-Craft in 1989.
Mr. Westerman was on the Board of Managers of Peninsula Gaming Partners, LLC
from June, 1999 to December, 2000.
Robert R. Barengo has been one of our and ROC's Directors since February
1993. Mr. Barengo was a consultant to Riviera, Inc. from January 1993 until June
30, 1993. Since 1972, Mr. Barengo has been engaged in the private practice of
law in Reno, Nevada. Mr. Barengo was elected to the Nevada Assembly in 1972 and
served until 1982. In 1979, Mr. Barengo was elected Speaker Pro Tempore and in
1981 Mr. Barengo was elected Speaker of the Assembly. From October 1992 to May
1996, Mr. Barengo was a director and 10% shareholder of Leroy's Horse & Sports
Place, Inc. ("Leroy's"). In May 1996, Leroy's became a wholly owned subsidiary
of American Wagering, Inc. ("AWI"), a publicly held corporation listed on
NASDAQ. From May 1996 to March, 2000 Mr. Barengo was a director and is currently
a 7% shareholder of AWI. Since 1993, Mr. Barengo has been the President and the
sole stockholder of Silver State Disseminators Company, a company licensed by
Nevada gaming authorities to disseminate racing information in the State of
Nevada. In October 1992, the Governor appointed Mr. Barengo as a member of the
State of Nevada Dairy Commission and in July 1993, the Governor appointed Mr.
Barengo as Chairman of the State of Nevada Dairy Commission, a position he still
holds. Mr. Barengo was also a director of Saxton, Inc., until he resigned from
that position on April 12, 2000. Mr Barengo currently is the Chairman of the
Board and a Director of Western Thrift and Loan, a Thrift Company licensed and
regulated by the Commissioner of Financial Institutions, Department of business
and Industry, State of Nevada. Mr. Barengo accepted the position of Director of
Government and Public Affairs with ROC effective January 1, 2001, in addition to
his duties as one of our and ROC's directors.
Jeffrey A. Silver has been one of our and ROC's Directors since February
26, 2001. Mr. Silver is currently a shareholder with Gordon & Silver, Ltd., a
law firm located in Las Vegas, Nevada. Mr. Silver served as the Chief Deputy
District Attorney, Clark County, Nevada from 1972 to 1975 and was a Board Member
with the Nevada Gaming Control Board from 1975 to 1978 before engaging in the
private practice of law from 1979 to 1981 and 1984 to the present. Mr. Silver
was the Chief Operating Officer and General Counsel of the Landmark Hotel &
Casino from 1981 to 1983, CEO of the Riviera Hotel & Casino from 1983 to 1984
and Senior Vice President at Caesars Palace in 1984. Mr. Silver served on the
Board of the Las Vegas Convention and Visitors Authority from 1989 to 1992 as
Secretary/Treasurer where he also served as trustee. He was a member of the
Board of Directors of the Greater Las Vegas Chamber of Commerce from 1988 to
1995 and in 1988 was its Chairman. Mr. Silver served for four years as a member
of the United States Travel and Tourism Advisory Board. He was President of the
International Association of Gaming Attorneys from 1992 to 1994 and Chairman of
the ABA Section of Gaming Law from 1994 to 1996.
Major General Paul A. Harvey USAF (Ret) has been one our and ROC's
Directors since May 18, 2001. Mr. Harvey is currently a consultant to the
gaming, hotel and resort industry and serves as Chairman of the Board of the
National Center for Responsible Gaming. Mr. Harvey spent 32 years on active duty
in the United States Air Force where he held numerous command positions
throughout the United States, Europe, Africa and the Middle East. He flew 160
combat missions in Vietnam and Southeast Asia before retiring at the rank of
Major General in 1991. Mr. Harvey was the Executive Director of the Mississippi
Gaming Commission from 1993 through 1998 before becoming President and CEO of
Signature Works, Inc., which is the largest employer of blind and visually
impaired people in the world. The company merged with LCI, Inc. and he is
currently on the Board of Directors of LC Industries.
Vincent L. DiVito was appointed as one of our and ROC's Directors effective
June 14, 2002. Mr. DiVito is currently Vice President, Chief Financial Officer
and Treasurer of Lonza, Inc., a global specialities chemical business
headquartered in Fair Lawn, New Jersey. Lonza, Inc. is part of Lonza Group,
which is traded on the Swiss Stock Exchange. Prior to September 2000, Mr. DiVito
was the Vice President and Chief Financial Officer of Algroup Wheaton, a global
pharmaceutical and cosmetics packaging company, after having served as the
Director of Business Development. From 1984 to 1990 Mr. DiVito was the Vice
President of Miracle Adhesives Corp. (a division of Pratt & Lambert, an American
Stock Exchange-listed manufacturer of paints, coatings and adhesives). Prior to
1984, Mr. DiVito spent two years on the audit team at Ernst & Whinney (now Ernst
& Young). Mr. DiVito is a certified public accountant and certified management
accountant.
Executive Officers
The following table sets forth certain information as of April 25, 2003
regarding our and ROC's executive officers:
Name Age Position
William L. Westerman 71 Our and ROC's Chairman of the Board and Chief
Executive Officer, and our President
Duane R. Krohn 57 Our and ROC's Treasurer and CFO, and Executive
Vice President of Finance of ROC
Tullio J. Marchionne 48 Our and ROC's Secretary and General Counsel,
and Vice President of ROC
Robert A. Vannucci 55 President and Chief Operating Officer of ROC
Ronald P. Johnson 54 Executive Vice President of Gaming Operations
of ROC
Jerome P. Grippe 60 Executive Vice President of Operations of ROC
For a description of the business experience of William L. Westerman,
see "Directors."
Duane R. Krohn, CPA, assumed the position of our and ROC's Treasurer on
June 30, 1993 and was elected Vice President of Finance of ROC on April 26,
1994, and Executive Vice President of Finance of ROC on July 1, 1998 and served
as Secretary from June 8, 1999 to February 17, 2000. Mr. Krohn was initially
employed by Riviera, Inc. in April 1990, as Director of Corporate Finance and
served as Vice President-Finance from March 1992 to June 30, 1993. Prior to
1990, Mr. Krohn was Chief Financial Officer of the Imperial Palace, the Mint and
the Dunes in Las Vegas, Nevada, and Bally's Park Place in Atlantic City, New
Jersey.
Tullio J. Marchionne assumed the position of our and ROC's General Counsel
on January 10, 2000, was appointed as our and ROC's Secretary on February 17,
2000 and elected Vice President of ROC on February 26, 2001. Mr. Marchionne was
initially employed by Riviera, Inc., in June 1986 as a Casino Games Dealer and
served in various capacities including Pit Manager, General Counsel and Director
of Gaming Administration until September 1996, when we and ROC transferred Mr.
Marchionne to the Four Queens Hotel and Casino as Director of Casino Operations
pursuant to the management agreement we had with the Four Queens at that time
through our wholly-owned subsidiary, Riviera Gaming Management-Elsinore. He
served in that position until May 1997. Mr. Marchionne served as the General
Manager of the Regency Casino Thessaloniki, located in Thessaloniki, Greece,
from June 1997 until December 1997. Mr. Marchionne served as a Casino Supervisor
with Bally's, Las Vegas, from February 1998 until June 1998, Director of Casino
Operations at the Maxim Hotel and Casino in Las Vegas from June 1998 until
November 1998 and Director of Table Games at the Resort At Summerlin (a
casino/hotel operated in Las Vegas) from November 1998 until December 1999.
Robert A. Vannucci was elected Vice President of Marketing and
Entertainment of ROC on April 26, 1994, Executive Vice President of Marketing
and Entertainment on July 1, 1998 and President of ROC on October 1, 2000. Mr.
Vannucci had been Director of Marketing of ROC since July 19, 1993. Mr. Vannucci
was Senior Vice President of Marketing and Operations at the Sands Casino Hotel
in Las Vegas from April 1991 to February 1993. Mr. Vannucci was Vice President
and General Manager of Fitzgerald's Las Vegas (a casino/hotel operator) from
1988 to January 1991.
Ronald P. Johnson became Vice President of Gaming Operations of ROC in
September 1994, Executive Vice President of Gaming Operations of ROC on July 1,
1998, and on February 10, 1999, President of Riviera Black Hawk, Inc., our
wholly-owned subsidiary which owns and operates the Riviera Black Hawk Casino.
He holds that position concurrently with his Executive Vice President of ROC
position. Mr. Johnson became Director of Slots on June 30, 1993 and was elected
Vice President of Slot Operations and Marketing on April 26, 1994. Mr. Johnson
was Vice President-Slot Operations and Marketing of Riviera, Inc. from April
1991 until June 30, 1993. Mr. Johnson was Vice President-Slot Operations for
Sands Hotel and Casino Inc. from September 1989 until he joined Riviera, Inc.
Jerome P. Grippe was elected Vice President of Operations of ROC on April
26, 1994, Senior Vice President of Operations of ROC on July 1, 1998 and
Executive Vice President of ROC on September 1, 2000. Mr. Grippe served as
General Manager of the Four Queens Hotel and Casino from June, 1998 to
September, 1999 pursuant to the management agreement we had with the Four Queens
at that time through our wholly-owned subsidiary, Riviera Gaming
Management-Elsinore. He served as General Manager of the Diamond Jo riverboat
casino located in Dubuque, Iowa from September, 1999 to July, 2000, pursuant to
a management agreement we had with Peninsula Gaming Company, LLC, which owns and
operates the Diamond Jo riverboat casino, and Riviera Gaming Management, one of
our wholly-owned subsidiaries. Mr. Grippe performed in the capacity as general
manager at these properties concurrently with his duties with us. Mr. Grippe
became Director of Operations of ROC on June 30, 1993. Mr. Grippe was Assistant
to the Chairman of the Board of Riviera, Inc. from July 1990 until May 1993. Mr.
Grippe had served in the United States Army from 1964 until his retirement as a
Colonel in July 1990.
Our and ROC's officers serve at the discretion of our and ROC's respective
Boards of Directors, and they are also subject to the licensing requirements of
the Nevada Gaming Commission.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires our directors and executive
officers and any persons who own more than 10% of our Common Stock to file with
the Securities and Exchange Commission various reports as to ownership of such
Common Stock. Such persons are also required to furnish us with copies of all
Section 16(a) forms they file. To our knowledge, the Section 16(a) filing
requirements of all other officers and directors and owners of more than 10% of
our common stock were met on a timely basis during 2002.
ITEM 11.EXECUTIVE COMPENSATION
Compensation of Executive Officers
The following table sets forth a summary of the compensation we paid in the
years ended December 31, 2000, 2001 and 2002, to our and ROC's Chief Executive
Officer, and to our four other most highly compensated executive officers who
received over $100,000 in compensation during 2002 from us (collectively, the
"Named Executive Officers").
Summary Compensation Table
Other Securities
Annual Underly- All Other
Name and Compen- ing options Compen-
Principal Position Year Salary($) Bonus($) sation($)(1) (# of shares) sation($)(2)
William L. Westerman 2002 $600,000 $0 (3) $542,899 (4) 0 $1,438
Our and ROC's Chairman of and 2001 $600,000 $400,000 (3) $293,211 (4) 50,000 $2,566
the Board and Chief Executive 2000 $600,000 $900,000 (3) $841,403 (4) 0 $2,566
Officer
Robert A. Vannucci 2002 $300,000 $0 (5) $103,000 (6) 20,000 $1,720
President and Chief Operating 2001 $300,000 $69,491 $157,425 (6) 20,000 $2,566
Officer of ROC 2000 $250,000 $236,166 $7,425 10,000 $1,438
Duane R. Krohn 2002 $250,000 $0 (5) $3,000 10,000 $1,438
Our Treasurer, 2001 $250,000 $69,491 $7,425 10,000 $1,438
and Executive Vice President 2000 $237,500 $236,166 $7,425 10,000 $1,438
of Finance and Treasurer of
ROC
Ronald P. Johnson 2002 $250,000 $0 (5) $10,500 (7) 10,000 $1,438
Executive Vice President of 2001 $250,000 $69,491 $7,425 10,000 $1,438
Gaming Operations of ROC 2000 $237,500 $236,166 $7,425 10,000 $1,438
Jerome P. Grippe 2002 $250,000 $0 (5) $3,000 10,000 $1,438
Executive Vice President of 2001 $250,000 $69,491 $7,425 10,000 $1,438
Operations of ROC 2000 $183,333 $211,166 $7,425 7,000 $1,062
(1) Includes amounts that we contributed under our Profit Sharing and 401(k)
Plans. We contributed for the account of each executive $3,000 in 2002,
$7,425 in 2001 and $7,425 in 2000.
(2) Includes premiums paid us for excess life insurance.
(3) See "Employment Agreements" below for a summary of certain of the
provisions of Mr. Westerman's employment agreement.
(4) Includes contributions to Mr. Westerman's retirement account of zero in
2002, zero in 2001 and $600,000 in 2000. Also includes interest computed at
the Company's average borrowing rate less the rate pursuant to Internal
Revenue Code 1274(d), of $539,899 in 2002, $285,786 in 2001 and $233,978 in
2000. Does not include interest earned on retirement account of $300,251 in
2002, $493,024 in 2001 and $413,440 in 2000. (See "Employment Agreements"
below)
(5) There was no incentive bonus award in 2002.
(6) Includes $100,000 award of Restricted Stock, $25,000 award per quarter,
pursuant to Mr. Vannucci's employment agreement. See"Restricted Stock Plan"
below for a summary of our Restricted Stock Plan.
(7) Includes $7,500 additional income to Mr. Johnson as compensation for a
planned vacation that we asked Mr. Johnson to forgo so he could participate
in the nationwide presentations to sell the our new senior secured notes.
Option Surrenders
On November 26, 1996, we granted 410,000 stock options to eighteen
executives at an option price of $13.625 per share, 320,000 of which were
granted to Mr. Westerman. Two of these executives' options totaling 11,000
shares were cancelled due to those executives leaving our employment, resulting
in a balance of 399,000 options at $13.625 per share held by sixteen of our
executives. The options of these sixteen executives were vested in their
entirety.
On January 16, 2001, We approved a Stock Option Surrender Plan under which
each executive could surrender all or any portion of his/her $13.625
options. Further, we could, but were not obligated to, grant new options in an
amount no less than the shares surrendered. The new options would be issued no
sooner than six months and a day after the surrender of the $13.625 options. Any
new options granted would be at the price of our common stock on the date of
grant and subject to the vesting requirements of our Employee Stock Option Plan.
All sixteen of our executives surrendered the entire balance of 399,000 of
the $13.625 options effective January 31, 2001.
In August 2001, we granted 107,500 stock options to 15 of our 16 executives
who surrendered options on January 31, 2001. The August option grant was not
premised on the January 31 option surrender but made pursuant to our Board of
Directors' customary annual grant of stock options.
Option Grants
The number of shares available for purchase under our 1993 Employee Stock
Option Plan, as amended (the "Stock Option Plan") is 1,000,000. Excluding the
options surrendered pursuant to the Stock Surrender Plan discussed above,
options for an aggregate of 901,000 shares have been granted under our Stock
Option Plan as of December 31, 2002. During our 2002 fiscal year 130,500 options
were granted under our Stock Option Plan.
The number of options available under each of our stock option plans, as
specified above, is subject to antidilution adjustments.
Option Exercises, Year-End Options Values and Option Grants in 2002
The following table presents at December 31, 2002 the value of
unexercised in-the-money options held by the Named Executive Officers. There
were no options exercised in 2002.
Number of Value of Unexercised,
Unexercised Options In-The-Money Options
Name Vested Not Vested Vested Not Vested
William L. Westerman 25,000 25,000 $0 $0
Robert A. Vannucci 50,000 20,000 0 0
Duane R. Krohn 40,000 10,000 0 0
Ronald P. Johnson 40,000 10,000 0 0
Jerome P. Grippe 31,000 10,000 0 0
The following table presents options granted during 2002.
Individual Grants
------------------
Potential
Realizable
Percent of Value at Assumed
Total Annual Rates of
Number of Options Exercise Stock Price
Underlying Granted to or Base Appreciation for
Options Employees Price Expiration Option Term
Name Granted in 2002 Per Share Date --------------
---- 5% 10%
------- ---------- ---------- ----------- ---- -----
William L. Westerman 0 0% N/A N/A N/A N/A
Robert A. Vannucci 20,000 15.3% $7.35 5/14/12 $239,448 $381,280
Duane R. Krohn 10,000 7.7% 7.35 5/14/12 119,724 190,640
Ronald P. Johnson 10,000 7.7% 7.35 5/14/12 119,724 190,640
Jerome P. Grippe 10,000 7.7% 7.35 5/14/12 119,724 190,640
Employment Agreements
William L. Westerman serves as our Chairman of the Board, President and
Chief Executive Officer, and as Chairman of the Board and Chief Executive
Officer of ROC.
Mr. Westerman's existing employment agreement, which was last amended on
December 6, 2000, automatically renews each year on December 31st subject to
termination by us upon three months notice or by Mr. Westerman upon six months
notice. Mr. Westerman's base compensation is $600,000.
Under his employment agreement, Mr. Westerman is entitled to participate in
our Senior Management Compensation Plan or such other executive bonus plan as
shall be established by our Board of Directors (collectively the "Plan"). If at
least 80% of net targeted operating results, as defined by the Plan, is met, Mr.
Westerman is entitled to receive a bonus under the Plan expressed as a
percentage of his $600,000 base salary. Mr. Westerman's bonus depends on the
percentage of targeted results of operations realized by us in a particular
year, with a maximum bonus of $900,000. According to a December 6, 2000
amendment, to the extent Mr. Westerman's bonus exceeds $400,000 in 2001 and each
succeeding year, the excess amount will be deducted from the principal balance
of his retirement account at the time the bonus is paid. Mr. Westerman received
an incentive bonus of $900,000 for 2001, $500,000 of which was deducted from the
principal balance of his retirement account resulting in a net bonus of
$400,000. Mr. Westerman was entitled to an incentive bonus of $900,000 for 2002,
including $500,000 which was to be paid from the principal balance of his
retirement account and $400,000, which was to be paid by the Company. Mr.
Westerman waived the $400,000 Company bonus payment and elected to have that
amount paid from the principal balance of his retirement account. On April 1,
2003, $1,373,329 was distributed to Mr. Westerman from his retirement account;
$900,000 representing his 2002 bonus; $250,000 representing a quarterly
distribution from principal; and $223,329 representing a quarterly distribution
of interest in arrears for the first quarter of 2003.
The employment agreement provides that we fund a retirement account for Mr.
Westerman. Pursuant to the employment agreement, an aggregate net amount of
$6,812,123 had been credited to the retirement account from its inception
through December 31, 2001. Under the employment agreement, each year that Mr.
Westerman continues to be employed, an amount equal to Mr. Westerman's base
salary for that year was credited to the account on January 1 of that year.
According to a December 6, 2000 amendment to Mr. Westerman's employment
agreement, the January 1, 2001 contribution was the final principal contribution
to the retirement account. As of December 31, 2002, no portion of this account
had been funded.
We retain beneficial ownership of the retirement account, which is
earmarked to pay Mr. Westerman's retirement benefits. However, upon (1) the vote
of a majority of the outstanding shares of Common Stock approving a "Change of
Control" (as defined below), (2) the occurrence of a Change of Control without
Mr. Westerman's consent, (3) a breach by us of a material term of the employment
agreement or (4) the expiration or earlier termination of the term of the
employment agreement for any reason other than cause, Mr. Westerman has the
right to require us to establish a "Rabbi Trust" for his benefit. He also has
the right to require us to fund such trust with an amount of cash equal to the
amount then credited to the retirement account, including any amount to be
credited to the retirement account upon a Change of Control.
On February 5, 1998, our stockholders by a majority vote approved the
Agreement and the Plan of Merger with R&E Gaming Corp. and its wholly-owned
subsidiary Riviera Acquisition Sub, Inc. Such stockholder approval constituted a
Change of Control. On March 5, 1998, subsequent to this Change of Control, Mr.
Westerman exercised his right to require us to establish and fund a Rabbi Trust
for his benefit. On March 20, 1998, Mr. Westerman entered into an agreement with
us whereby Mr. Westerman waived his right to have us fund the Rabbi Trust in
exchange for us agreeing to fund such Rabbi Trust within five business days
after notice from Mr. Westerman.
In the event that Mr. Westerman is no longer employed by us (except for
termination for cause, in which case Mr. Westerman would forfeit all rights to
monies in the retirement account), Mr. Westerman will be entitled to receive the
amount in the retirement account (principal and current interest) in 20 equal
quarterly installments as of the date he ceases to be employed by us. In the
event that Mr. Westerman's Rabbi Trust has not yet been funded, the balance of
principal and interest of the retirement account shall be paid directly to Mr.
Westerman upon his retirement, termination (except for cause) or upon a change
in control.
Pursuant to the employment agreement, the retirement account was credited
quarterly with interest and will be credited with additional amounts on the
first day of each succeeding calendar quarter equal to the product of:
o our average borrowing cost for the immediately preceding
fiscal year, as determined by our chief financial officer and
o the average outstanding balance in the retirement account
during the preceding calendar quarter.
This interest continues to accrue pursuant to the December 6, 2000
amendment. Interest computed at our average borrowing rate less the rate
pursuant to Internal Revenue Code 1274d was $539,899 in 2002 $285,786 in 2001,
and $233,978 in 2000. Interest computed at the rate pursuant to Internal Revenue
Code 1274d was $300,251 in 2002, $493,024 in 2001 and $413,440 in 2000. In the
event the Rabbi Trust has been funded, upon Mr. Westerman's death, an amount
equal to the applicable federal estate tax on the retirement account will be
pre-paid prior to the date or dates such taxes are due.
Mr. Westerman's employment agreement provides (a) that the sum of Mr.
Westerman's base salary, bonus, and credits to his Retirement Account in any one
year must not exceed that which would have been payable under his previous
employment agreement with us, and (b) that Mr. Westerman shall instruct us of
any reductions in base salary, bonus, and credits to his retirement account
necessary to comply with this limitation. We determined that for the year 1999,
a reduction of $467,000 would be necessary to comply with this provision. Prior
to December 31, 1999, and December 31, 1998, Mr. Westerman instructed us that
this be applied to reduce the amount to be credited to his retirement account
from $600,000 to $133,000.
In addition to Mr. Westerman, one other executive, Robert Vannucci, has an
employment agreement with us.
Mr. Vannucci was appointed President of ROC effective October 1, 2000. Mr.
Vannucci's employment agreement was amended at that time to reflect this
appointment. Mr. Vannucci's base compensation is $300,000. Mr. Vannucci's
employment agreement contains a Salary Continuation Agreement. See "Salary
Continuation Agreements." It also provides for a "Normal Incentive Bonus"
entitling Mr. Vannucci to participate in our Incentive Compensation Plan whereby
he may share a portion of such plan's pool which provides for a target of $25
million EBITDA before deductions of incentives, as defined, for the years 2000
and 2001. Such amounts will be credited to the Incentive Compensation Plan's
pool up to a maximum of $1.2 million. Mr. Vannucci did not receive an incentive
bonus for the year 2002.
Mr. Vannucci also receives compensation in the form of restricted stock
pursuant to our Restricted Stock Plan. (See "Restricted Stock Plan") Mr.
Vannucci's agreement provides that he is to receive $25,000 in our restricted
common stock at market from treasury on the first business day of each quarter,
plus our restricted common stock at market value from treasury in the same
amount he receives pursuant to our Incentive Compensation Plan. Mr. Vannucci
received restricted stock valued at $100,000 in 2002. Pursuant to the Restricted
Stock Plan, Mr. Vannucci is presently entitled to all rights of stock ownership
with respect to the restricted shares, including the right to vote and receive
dividends. Mr. Vannucci may not, however sell, assign, pledge, encumber or
otherwise transfer any of the restricted shares so long as he is employed by us,
without our written consent. The restricted shares fully vest to Mr. Vannucci
upon his separation of employment from us, so long as such separation is not a
termination for cause. Mr. Vannucci's agreement was amended March 4, 2003 and
again March 24, 2003. Pursuant to the amendments, commencing with the restricted
stock award of April 1, 2003, and continuing for each quarter thereafter, Mr.
Vannucci, can choose between receiving $25,000 in cash or $25,000 in restricted
stock. Mr. Vannucci, also has the choice between cash and restricted stock to
match his annual incentive bonus award. Mr. Vannucci's agreement is effective
until December 31, 2003, and automatically renews annually subject to 120 days
prior written notice by either party.
Profit Sharing and 401(k) Plans
On June 30, 1993, we and ROC assumed the combined profit sharing and 401(k)
plans of Riviera, Inc. (the "Profit Sharing and 401(k) Plans") and we and ROC
continued the Profit Sharing and 401(k) Plans after June 30, 1993. We also
provided that all current employees of Riviera Las Vegas who were employed on
April 1, 1992, who were at least 21 years of age and who are not covered by a
collective bargaining agreement are immediately eligible to participate in the
Profit Sharing and 401(k) Plans. We further provided that all current employees
who were employed by Riviera Las Vegas after April 1, 1992, who are at least 21
years of age and who are not covered by a collective bargaining agreement are
eligible to participate after one year of service at the Riviera Las Vegas.
We have identical plans for our 100% indirectly owned subsidiary, Riviera
Black Hawk, Inc., which operates its casino in Black Hawk, Colorado. Employees
hired prior to June 30, 2000, who were at least 21 years of age and who were not
covered by a collective bargaining agreement were immediately eligible to
participate in the Profit Sharing and 401(k) Plans. After June 30, 2000, all new
employees who are at least 21 years of age and who are not covered by a
collective bargaining agreement are eligible to participate after one year of
service at Riviera Black Hawk.
We may make a matching contribution to the 401(k) component of the abpve
plan in an amount not to exceed 25% of the first 8% of each participant's
compensation, which is contributed as a salary deferral. Our common stock is not
an investment option to participants of the 401(k) component of the plan and any
of our contributions to the 401(k) component are made in the form of cash to be
invested in the participant's selected investment options.
The profit sharing component of the Profit Sharing and 401(k) Plans
provides that we will make a contribution equal to 1% of each eligible
employee's annual compensation if a prescribed annual operating earnings target
is attained and an additional 1% thereof for each $2 million by which operating
earnings is exceeded, up to a maximum of 3% thereof. We may elect not to
contribute to the Profit Sharing and 401(k) Plans if we notify our employees by
January of the Profit Sharing and 401(k) Plans year. An employee becomes vested
as to our contributions based on the employee's years of service. An employee
receives a year of vesting service for each plan year in which the employee
completed 1,000 hours of service. Vesting credit is allocated in 20% increments
for each year of service commencing with the attainment of two years of service.
An employee is fully vested following the completion of six years of service.
Effective January 1, 2000, we suspended contributions to the profit sharing
plan and substituted contributions to an Employee Stock Ownership Plan ("ESOP"),
which is discussed directly below.
Employee Stock Ownership Plan
We have an Employee Stock Ownership Plan ("ESOP"), which became effective
as of January 1, 2000 and replaced the profit sharing contribution component of
the Profit Sharing and 401(k) Plans. The 401(k) component remains unchanged.
This plan provides that all employees of Riviera Las Vegas and Riviera Black
Hawk employed in a plan year who completed a minimum of one thousand hours of
service in that year, were employed through December 31 of that year, were at
least 21 years of age and were not covered by a collective bargaining agreement
are eligible to participate in the plan. The ESOP provides that we will make a
contribution to the participants of its Las Vegas and Black Hawk properties
relative to the economic performance of each property. For Riviera Las Vegas, we
will make a contribution equal to 1% of each eligible employee's annual
compensation if a prescribed annual operating results target is attained and an
additional 1% thereof for each $2 million by which operating results are
exceeded, up to a maximum of 4% for 2000 and 5% thereafter. For Riviera Black
Hawk, we will make a contribution equal to 1% of each eligible employee's annual
compensation if a prescribed annual operating earnings target is attained and an
additional 1% thereof for each $1 million by which operating results are
exceeded, up to a maximum of 4% for 2000 and 5% thereafter. Under the ESOP, our
contribution will be made in cash which will be used to buy primarily our common
stock.
Incentive Compensation Programs
Approximately 70 executives and other significant employees at Riviera Las
Vegas and 20 at Riviera Black Hawk participate in incentive compensation
programs. Participants in each of the two programs receive an annual incentive
bonus based on predetermined financial targets at each location being met. An
aggregate of $0 and $260,440, respectively, was awarded to participants at
Riviera Las Vegas and Black Hawk under these programs in the year ended December
31, 2002.
Deferred Compensation Plan
On October 2, 2000, we adopted a Deferred Compensation Plan. The purpose of
this plan is to provide eligible employees the opportunity to defer the receipt
of cash compensation. Participation in this non-qualified plan is limited to
highly compensated employees who receive annual compensation of at least
$100,000. The deferred funds are maintained on our books as liabilities. All
elections to defer the receipt of compensation must be made no later than the
December 1st preceding each plan year to which the election relates and are
irrevocable for the duration of such year. Six of our executives are currently
participating in this plan.
Restricted Stock Plan
On October 2, 2000, we adopted a Restricted Stock Plan to provide
incentives to attract and retain highly competent persons as officers and key
employees by providing them opportunities to receive restricted shares of our
Common Stock. Participants will consist of such officers and key employees as
our Compensation Committee determines to be significantly responsible for our
success and future growth and profitability. Awards of restricted stock are
subject to such terms and conditions as we determine to be appropriate at the
time of the grant, including restrictions on the sale or other disposition of
such shares and the provisions for the forfeiture of such shares for partial or
no consideration upon termination of the participant's employment within
specified periods or under certain conditions. Mr. Vannucci and Mr. Grippe,
President and Executive Vice President, respectively, of our wholly-owned
subsidiary, ROC, are currently the only participants in the Restricted Stock
Plan.
Salary Continuation Agreements
Approximately 75 executive officers and significant employees (excluding
Mr. Westerman) of ROC have salary continuation agreements effective through
December 31, 2003, pursuant to which each of such employees will be entitled to
receive (1) either six months' or one year's base salary if their employment
with us is terminated, without cause, within 12 or 24 months of a change of
control of us or ROC; and (2) group health insurance for periods of either one
or two years. The base salary payments are payable in bi-weekly installments
subject to the employee's duty to mitigate by using his or her best efforts to
find employment. As of December 31, 2002, the total amount that would be payable
under all such agreements if all payment obligations were to be triggered was
approximately $6.0 million, including $1.4 million in benefits.
Compensation of Directors
Messrs. Silver, Harvey and DiVito (effective as of his appointment in June
2002) are each paid an annual fee of $50,000 for serving as a Director of us and
ROC. Each Director is also reimbursed for expenses incurred in connection with
attendance at meetings of the Board of Directors.
On March 5, 1996 we adopted the Directors' Option Plan, which was approved
by our stockholders on May 10, 1996. Under the Directors' Option Plan, each
individual elected, re-elected or continuing as a non-employee director will
automatically receive a nonqualified stock option for 2,000 shares of our Common
Stock, with an exercise price equal to the fair market value of our Common Stock
on the date of grant. 50,000 shares have been reserved for issuance under the
Directors' Option Plan. Options to purchase 2,000 shares at $13.50 per share
were granted to Mr. Barengo on May 12, 1997, options to purchase 2,000 shares at
$9.00 per share were granted to him on May 11, 1998, options to purchase 2,000
shares at $4.88 per share were granted to him on May 10, 1999 and options to
purchase 2,000 shares at $7.75 per share were granted to him on May 10, 2000. No
options have been granted to Mr. Barengo under the Directors' Option Plan after
2000 due to his becoming an employee effective January 1, 2001. Mr. Barengo was
granted options to purchase 7,500 shares at $6.00 per share and 10,000 shares at
$7.35 on August 7, 2001 and May 14, 2002, respectively, pursuant to our Stock
Option Plan. Mr. Barengo's compensation in 2002 was $125,000.
Upon becoming a Director, Mr. Silver was granted options under the
Directors' Option Plan to purchase 2,000 shares at $7.05 per share on February
26, 2001. Mr. Silver was subsequently granted options to purchase 2,000 shares
at $6.55 per share on May 10, 2001 and 2,000 shares at $7.75 on May 10, 2002.
Upon becoming a Director, Mr. Harvey was granted options under the
Directors' Option Plan to purchase 2,000 shares at $6.60 per share on May 18,
2001. Mr. Harvey was subsequently granted options to purchase 2,000 shares at
$7.75 on May 10, 2002.
Upon becoming a Director, Mr. DiVito was granted options under the
Director's Option Plan, to purchase 2,000 shares at $5.60 per share on July 12,
2002.
Directors who are also our or ROC's officers or employees do not receive
additional compensation for services as a Director. Currently, Messrs. Westerman
and Barengo are such Directors.
Under our Stock Compensation Plan, the members of our Compensation
Committee have the right to receive all or part of their annual fees in the form
of our Common Stock having a fair market value equal to the amount of their
fees. Of the 50,000 shares available under this plan, we issued 3,103 shares to
Mr. Barengo for a portion of his director's fees in 1996 and 877 shares to him
for a portion of his fees in 1997.
Compensation Committee Report on Executive Compensation
The Compensation Committee endeavors to ensure that the compensation
program for our executive officers is effective in attracting and retaining key
executives responsible for our success of the Company and is tailored to promote
the long-term interests of the Company and its stockholders. The Company's
executive officer compensation program in its last completed fiscal year was
principally comprised of base salary, an executive incentive plan, a 401(k)
plan, a profit-sharing plan (revised to provide contributions to ESOP) and
long-term incentive compensation in the form of incentive stock options or
non-qualified stock options, a deferred compensation plan and a restricted stock
plan.
The Compensation Committee takes into account various qualitative and
quantitative indicators of corporate and individual performance in determining
the level and composition of compensation for the Company's Chief Executive
Officer and his recommendations regarding the other executive officers. In
particular, the Compensation Committee considers several financial performance
measures, including revenue growth and net income. However, the Compensation
Committee does not apply any specific quantitative formula in making
compensation decisions. The Committee also considers achievements that, while
difficult to quantify, are important to the Company's long-term success. The
Compensation Committee seeks to create a mutuality of interest between the
executive officers and the Company's stockholders by increasing the executive
officers' ownership of the Company's Common Stock through the Stock Option Plan,
ESOP, Deferred Compensation Plan and Restricted Stock Plan.
Salary levels for the Company's executive officers are significantly
influenced by the need to attract and retain management employees with high
levels of expertise. In each case, consideration is given both to personal
factors, such as the individual's experience, responsibilities and work
performance, and to external factors, such as salaries paid by comparable
companies in the gaming industry. With regard to the latter, it is important to
recognize that because of the opening of new properties on the Las Vegas Strip
in 1998, 1999 and 2000 and the growth of riverboat and dockside gaming, Native
American gaming operations and the proliferation of jurisdictions in which
gaming is permitted, the Company competes with numerous other companies for a
limited pool of experienced and skilled personnel. Therefore, it is critical
that the Company provide base salaries that are competitive in the casino
industry. With respect to the personal factors, the Compensation Committee makes
salary decisions in an annual review based on the recommendations of the Chief
Executive Officer. This annual review considers the decision-making
responsibilities of each position as well as the experience and work performance
of each executive. The Chief Executive Officer views work performance as the
single most important measurement factor. As a baseline measure, the
Compensation Committee engaged the services of an independent CPA firm, other
than Deloitte & Touche, LLP, which conducted a compensation survey of comparable
Las Vegas resorts. The CPA firm concluded that compensation of Company
executives was consistent with other members of the industry.
The compensation of Mr. Westerman for the Company's last completed fiscal
year was set pursuant to the employment agreement described in the "Compensation
of Executive Officers" section.
Date: February 28, 2003 Jeffrey A. Silver Chairman
Robert R. Barengo Member
Paul A. Harvey. Member
Vincent L. DiVito Member
Compensation Committee Interlocks And Insider Participation In Compensation
Decisions
Mr. Silver is a shareholder in the law firm of Gordon & Silver, Ltd. Which
has been engaged by the Company for various legal matters. Mr. Barengo has been
an employee of Riviera Operating Corporation since January 1, 2001.
Performance Graph
The following graph compares the annual change in the cumulative total
return, assuming reinvestment of dividends, on the Company's Common Stock with
the annual change in the cumulative total returns of the NASDAQ Broad Market,
the American Stock Exchange Index (the "AMEX Index"), the New York Stock
Exchange (the "NYSE") and the NASDAQ Amusement and Recreation Services Index
(the "NASDAQ 79xx"), which we consider to be our peer industry group. The graph
assumes an investment of $100 on December 31, 1997, in each of our Common Stock,
the stocks comprising the NASDAQ Broad Market, the stocks comprising the AMEX
Index and the stocks comprising the NASDAQ 79xx.
The graph is a Comparison of Cumulative Total Return Among us, NYSE/ AMEX/Nasdaq
Stock Market (US Companies) and Nasdaq stocks (SIC 7900 - 7999 US Companies
amusement and recreation services) (1).
Riviera NYSE/AMEX/Nasdaq Nasdaq
U.S. Companies (SIC 79xx)
US Amusement Companies
12/31/97 100.0 100.0 100.0
12/31/98 34.0 123.4 86.5
12/31/99 49.5 154.5 111.2
12/31/00 55.3 136.9 94.0
12/31/01 32.9 122.3 109.6
12/31/02 33.6 97.1 90.9
(1) Comprised of companies whose stock is traded on the Nasdaq National Market
and whose standard industrial classification is within 7900-7999. We do not
necessarily believe that this is an indication of the value of our stock.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS
The following table sets forth certain information regarding the beneficial
ownership of our Common Stock as of April 25, 2003, by (i) each person who, to
our knowledge of, beneficially owns more than 5% of our outstanding Common Stock
(based on reports filed with the Securities and Exchange Commission under the
Securities Exchange Act of 1934, or upon information furnished to us), (ii) our
directors and certain of our officers and (iii) all of our directors and
executive officers as a group. The percentage of our outstanding Common Stock
represented by each named person's stock ownership assumes the exercise by such
person of all stock options that are exerciseable within 60 days of April 25,
2003, but does not assume the exercise of stock options by any other persons.
The percentage of our outstanding common stock represented by the stock
ownership of all executive officers and directors as a group assumes the
exercise of stock options by all members of that group, but does not assume the
exercise of options by any persons outside of that group. Except as indicated in
the footnotes to the table, each person listed below has sole voting and
investment power with respect to the shares set forth opposite such person's
name.
Shares Beneficially Owned
Name Number Percentage
William L. Westerman(1)(2)(3) 673,628 18.7%
Robert R. Barengo(1)(4) 129,906 3.6
Jeffrey A. Silver (1)(5) 7,000 *
Paul A. Harvey(1)(6) 1,200 *
Vincent L. DiVito(1) 0 *
Robert A. Vannucci (1)(7) 145,411 4.0
Ronald P. Johnson(1)(8) 133,035 3.7
Duane R. Krohn(1)(9) 141,128 3.9
Jerome P. Grippe(1)(10) 84,584 2.3
Tullio J. Marchionne(1)(11) 9,426 *
Donald J. Trump(12) 358,000 9.9
Sun America Life Insurance Company(13) 345,900 9.6
Diversified Equity Ventures, LLC(14) 320,000 8.9
Employee Stock Ownership Plan (ESOP) other than
shares allocated to executive officers and
directors(15) 325,981 9.0
All executive officers and directors as a group
including shares allocated to them under the
ESOP(3)(17) 1,651,298 43.2
-------------------------------
* Less than 1%.
(1) The address for each of our and ROC's directors and officers is c/o
Riviera Holdings Corporation, 2901 Las Vegas Boulevard South, Las Vegas,
Nevada 89109.
(2) Includes 25,000 shares which may be acquired within 60 days of April 29,
2003, upon the exercise of outstanding options.
(3) Our articles of incorporation provide that no owner of our Common Stock
may vote more than 15% of the total number of outstanding shares of our
Common Stock, except under certain limited conditions or circumstances
that do not apply to Mr. Westerman's stock ownership. Consequently, of
the total number of shares of Common Stock that Mr. Westerman
beneficially owns, as reported in the table above, he can only vote the
shares that do not exceed 15% of our total outstanding shares as of the
shareholder vote in question. As of April 25, 2003, we had 3,606,155
shares outstanding, excluding shares that may be acquired within 60 days
through the exercise of stock options but that we have not issued. By
way of example, as of that date, Mr. Westerman had the power to vote
540,923 shares out of the 648,628 total shares that he beneficially
owned and were actually outstanding on that date(excluding shares that
he could acquire through the exercise of options) and all executive
officers and directors as a group had the power to vote 1,328,843 shares
out of 1,436,548 total shares that they beneficially owned and were
actually outstanding on that date (excluding shares that they could
acquire through the exercise of stock options).
(4) Includes 17,550 shares which may be acquired within 60 days of April 29,
2003, upon the exercise of outstanding options.
(5) Includes 2,000 shares which may be acquired within 60 days of April 29,
2003, upon the exercise of outstanding options.
(6) Includes 1,200 shares which may be acquired within 60 days of April 29,
2003, upon the exercise of outstanding options.
(7) Includes 50,000 shares which may be acquired within 60 days of April 29,
2003, upon the exercise of outstanding options, 60,277 shares under the
our Restricted Stock Plan and 19,404 shares under our Deferred
Compensation Plan.
(8) Includes 40,000 shares which may be acquired within 60 days of April 29,
2003, upon the exercise of outstanding options and 29,435 shares under
the our Deferred Compensation Plan.
(9) Includes 40,000 shares which may be acquired within 60 days of April 29,
2003, upon the exercise of outstanding options and 48,029 shares under
the our Deferred Compensation Plan.
(10) Includes 31,000 shares which may be acquired within 60 days of April 29,
2003, upon the exercise of outstanding options, 8,217 shares under the
our Restricted Stock Plan and 29,601 shares under the our Deferred
Compensation Plan.
(11) Includes 8,000 shares which may be acquired within 60 days of April 29,
2003, upon the exercise of outstanding options.
(12) The address for Donald J. Trump is 725 Fifth Avenue, New York, New York
10022. Trump Hotels & Casino Resorts Holdings, L.P. ("THCR Holdings")
has an option to purchase the shares of our Common Stock held by Mr.
Trump. Trump Hotels and Casino Resorts, Inc. ("THCR") is the sole
general partner of THCR Holdings. Both of THCR Holdings and THCR,
therefore, may also be deemed the beneficial owner of those shares. The
address for THCR Holdings and THCR is 1000 Boardwalk, Atlantic City, New
Jersey 08401.
(13) The address for SunAmerica Life Insurance Company ("SunAmerica") is One
SunAmerica Center, Los Angeles, California 90067.
(14) The address for Diversified Equity Ventures, LLC and its manager,
Jeffrey P. Jacobs, is 1231 Main Avenue, Cleveland, Ohio 44113.
(15) The Trustee of the ESOP and its address are Marshall & Ilsley Trust
Company, 1000 North Water Street, Milwaukee, Wisconsin 53202.
(16) Includes a total of 214,750 shares which may be acquired by directors
and exective officers as a group within 60 days of April 25, 2003, upon
the exercise of outstanding options.
We are a party to a registration rights agreement with, among others,
SunAmerica, which owns more than 5% of our Common Stock. Each of the three
largest holders of Common Stock can require us to file a registration statement
and holders of 51% or more of the shares of Common Stock then subject to the
equity registration rights agreement can require us to file two registration
statements, registering under the Securities Act, the offer and sale of Common
Stock owned by such persons. All other holders of registerable shares will be
entitled to have shares of Common Stock owned by them included in any such
registrations. In addition, the agreement grants to each party the right to have
included, subject to certain limitations, all shares of our Common Stock owned
by such party in any registration statement filed by us under the Securities
Act. Pursuant to the agreement, we will pay all costs and expenses, other than
underwriting discounts and commissions, in connection with the registration and
sale of Common Stock under the agreement.
Equity Compensation Plan Information
Number of securities
Number of securities remaining available for
to be issued Weighted-average future issuance under
upon exercise of outstanding options, exercise price of equity compensation plans
Plan Category warrants and rights outstanding options, (excluding securities
warrants and rights reflected in column (a))
(a) (b) (c)
Equity compensation Employee Options: 555,000 $6.32 128,500
plans approved by
security holders . Non Employee Director
Options: 24,000 $7.12 24,000
-----------------------------------------------------------------------------------------------------------------
Equity compensation
plans not approved 0 0 131,506
by security holders(1)
-----------------------------------------------------------------------------------------------------------------
Total 579,000 284,006
(1) The shares are issuable under our Restricted Stock Plan, which is described
under "Excutive Compensation-Restricted Stock Plan."
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Jeffrey A. Silver is a shareholder in the law firm of Gordon &
Silver, Ltd., which has been engaged by us for various legal matters.
PART IV
Item 15. Exhibits, Financial Statement Schedules and Reports on Form 8-K
(a)(1) List of Financial Statements
The following Independent Auditors' Report and the consolidated
Financial Statements of the Company are incorporated by reference into this Item
15 of Form 10-K from Item 8 hereof:
- Independent Auditors' Report.
- Consolidated Balance Sheets as of December 31, 2002 and 2001.
- Consolidated Statements of Operations for the Years Ended
December 31, 2002, 2001 and 2000.
- Consolidated Statements of Stockholders' Equity (Deficiency)
for the Years Ended December 31, 2002, 2001 and 2000. - Consolidated Statements
of Cash Flows for the Years Ended December 31, 2002, 2001
and 2000.
- Notes to Consolidated Financial Statements.
(a)(2) List of Financial Statement Schedules
No financial statement schedules have been filed herewith since they
are either not required, are not applicable, or the required information is
shown in the consolidated financial statements or related notes.
(a)(3) List of Exhibits
Exhibits required by Item 601 of Regulation S-K are listed in the
Exhibit Index herein, which information is in paragraph (c) of this Item 15.
(b) Reports on Form 8-K
During the last quarter of 2002, the Company filed the following reports on
Form 8-K:
1. October 22, 2002 (filed October 23, 2002) - Reporting under Item 5 (Other
Events) and Item 7 (Financial Statements, Pro Forma Financial Information
and Exhibits). Summary financial information (unaudited) as of, and for the
interim period ending on, September 30, 2002 was included in the filing.
2. October 24, 2002 (filed October 25, 2002) - Reporting under Item 5 (Other
Events).
3. December 4, 2002 (filed December 5, 2002) - Reporting under Item 5 (Other
Events)
(c) Exhibits
EXHIBIT INDEX
Exhibit Description
Number
3.1* Second Restated Articles of Incorporation of the Company (see Exhibit 3.1
to Registration Statement on Form S-4 filed with the Commission on
September 10, 1997, Commission File No. 0-21430)
3.2* Bylaws of the Company (see Exhibit 3.2 to Registration Statement on Form
S-4 filed with the Commission on September 10, 1997, Commission File No.
0-21430)
3.3* Articles of Incorporation of Riviera Operating Corporation (see Exhibit 3.3
to Registration Statement on Form S-4 filed with the Commission on
September 10, 1997, Commission File No. 0-21430)
3.4* Bylaws of Riviera Operating Corporation (see Exhibit 3.4 to Registration
Statement on Form S-4 filed with the Commission on September 10, 1997,
Commission File No. 0-21430)
3.5* Articles of Incorporation of Riviera Gaming Management, Inc. (see Exhibit
3.5 to Registration Statement on Form S-4 filed with the Commission on
September 10, 1997, Commission File No. 0-21430)
3.6* Bylaws of Riviera Gaming Management, Inc. (see Exhibit 3.6 to Registration
Statement on Form S-4 filed with the Commission on September 10, 1997,
Commission File No. 0-21430)
3.7* Articles of Incorporation of Riviera Gaming Management-Elsinore, Inc. (see
Exhibit 3.7 to Registration Statement on Form S-4 filed with the Commission
on September 10, 1997, Commission File No. 0-21430)
3.8* Bylaws of Riviera Gaming Management - Elsinore, Inc. (see Exhibit 3.8 to
Registration Statement on Form S-4 filed with the Commission on September
10, 1997, Commission File No. 0-21430)
3.9* Articles of Amendment to the Articles of Incorporation of Riviera Black
Hawk, Inc. (see Exhibit 3.01 to Amendment No. 1 to Registration Statement
on Form S-4 filed by Riviera Black Hawk, Inc. with the Commission on August
31, 1999, Commission File No. 333-81613)
3.10*Articles of Incorporation of Riviera Black Hawk, Inc. (see Exhibit 3.02 to
Amendment No. 1 to Registration Statement on Form S-4 filed by Riviera
Black Hawk, Inc. with the Commission on August 31, 1999, Commission File
No. 333-81613)
3.11*Bylaws of Riviera Black Hawk, Inc. (see Exhibit 3.03 to Amendment No. 1 to
Registration Statement on Form S-4 filed by Riviera Black Hawk, Inc. with
the Commission on August 31, 1999, Commission File No. 333-81613)
4.1* Indenture dated as of June 26, 2002 among the Company, the Guarantors party
thereto and The Bank of New York, as trustee. (see Exhibit 4.1 to
Registration Statement on Form S-4 filed with the Commission on August 9,
2002, Commission File No. 333-97907)
4.2* Form of the Company's 11% Senior Secured Notes due 2010 (included in
Exhibit 4.1 to Registration Statement on Form S-4 filed with the Commission
on August 9, 2002, Commission File No. 333-97907)
10.1*Registration Rights Agreement dated as of June 26, 2002 by and among the
Company, the Guarantors party thereto, and Jefferies & Company, Inc.(see
Exhibit 10.1 to Registration Statement on Form S-4 filed with the
Commission on August 9, 2002, Commission File No. 333-97907)
10.2*Purchase Agreement dated June 19, 2002 among the Company, the Guarantors
party thereto, and Jefferies & Company, Inc. (see Exhibit 10.2 to
Registration Statement on Form S-4 filed with the Commission on August 9,
2002, Commission File No. 333-97907)
10.3*Amended and Restated Lease Agreement between Riviera Operating Corporation
and Mardi Gras Food Court, Inc. dated March 15, 1998. (see Exhibit 10.3 to
Registration Statement on Form S-4 filed with the Commission on August 9,
2002, Commission File No. 333-97907)
10.4* Lease Agreement between Riviera, Inc. and Leroy's Horse and Sports Place
(see Exhibit 10.3 to Form 10, Commission File No. 0-21430)
10.5*Indemnity Agreement, dated June 30, 1993, from Riviera, Inc. and Meshulam
Riklis in favor of the Company and Riviera Operating Corporation (see
Exhibit 10.7 to Registration Statement on Form S-1 filed with the
Commission on August 11, 1993, Commission File No. 33-67206)
10.6*Equity Registration Rights Agreement dated June 30, 1993, among the
Company and the Holders of Registerable Shares (see Exhibit 10.9 to
Registration Statement on Form S-1 filed with the Commission on August 11,
1993, Commission File No. 33-67206)
10.7*Operating Agreement dated June 30, 1993, between the Company and Riviera
Operating Corporation (see Exhibit 10.15 to Registration Statement on Form
S-1 filed with the Commission on August 11, 1993, Commission File No.
33-67206)
10.8*Adoption Agreement regarding Profit Sharing and 401(k) Plans of the
Company (see Exhibit 10.16 to Registration Statement on Form S-1 filed with
the Commission on August 11, 1993, Commission File No. 33-67206)
10.9*Merrill Lynch Special Prototype Defined Contribution Plan Adoption
Agreement dated June 29, 1993, as amended through November 15, 1996. (see
Exhibit 10.9 to Registration Statement on Form S-4 filed with the
Commission on August 9, 2002, Commission File No. 333-97907)
10.10*(A) Form of Termination Agreement with the Company dated June 11, 2002.
(see Exhibit 10.10 to Registration Statement on Form S-4 filed with the
Commission on August 9, 2002, Commission File No. 333-97907)
10.11* Tax Sharing Agreement between the Company and Riviera Operating
Corporation dated June 30, 1993 (see Exhibit 10.24 to Amendment No. 1 to
Registration Statement on Form S-1 filed with the Commission on August 19,
1993, Commission File No. 33-67206)
10.12* Tax Sharing Agreement between the Company and Riviera Black Hawk, Inc.
dated March 31, 1999. (see Exhibit 10.12 to Registration Statement on Form
S-4 filed with the Commission on August 9, 2002, Commission File No.
333-97907)
10.13*(A) The Company's 1993 Employee Stock Option Plan (see Exhibit 10.25 to
Amendment No. 1 to Registration Statement on Form S-1 filed with the
Commission on August 19, 1993, Commission File No. 33-67206)
10.14*(A) The Company's 1996 Non-Qualified Stock Option Plan. (see Exhibit 10.14
to Registration Statement on Form S-4 filed with the Commission on August
9, 2002, Commission File No. 333-97907)
10.15*(A) Employment Agreement dated as of November 21, 1996 by and between the
Company, Riviera Operating Corporation and William L. Westerman (see
Exhibit 10.31 to Form 10-K for the fiscal year ended December 31, 1996,
Commission File No. 0-21430)
10.16*(A) Employment Agreement between the Company and Robert A. Vannucci
effective July 1, 1998 (see Exhibit 10.36 to Form 10-Q filed November 6,
1998)
10.17*(A) Amendment to Employment Agreement between the Company and Robert A.
Vannucci effective October 1, 2000 (see Exhibit 10.39 to Form 10-K filed
March 23, 2001)
10.18*(A) Amendment to Employment Agreement between the Company and William L.
Westerman effective January 1, 2001 (see Exhibit 10.40 to Form 10-K filed
March 23, 2001)
10.19 (A) Deferred Compensation Plan dated November 1, 2000, adopted by the
Company on October 2, 2000 and amended by Unamimous Consent of Directors
effective as of December 15, 2001
10.20 (A) Restricted Stock Plan dated January 2, 2001, adopted by the Company on
October 2, 2000
10.21* Deed of Trust, Assignment of Rents, Leases, Fixture Filing and Security
Agreement dated June 26, 2002, executed by the Company for the benefit of
The Bank of New York. (see Exhibit 10.21 to Registration Statement on Form
S-4 filed with the Commission on August 9, 2002, Commission File No.
333-97907)
10.22* Deed of Trust to Public Trustee, Security Agreement, Fixture Filing and
Assignment of Rents, Leases and Leasehold Interests dated as of June 26,
2002, by Riviera Black Hawk, Inc. for the benefit of The Bank of New York.
(see Exhibit 10.22 to Registration Statement on Form S-4 filed with the
Commission on August 9, 2002, Commission File No. 333-97907)
10.23* Security Agreement dated June 26, 2002 by and among the Company, Riviera
Operating Corporation, Riviera Gaming Management, Inc., Riviera Gaming
Management of Colorado, Inc., Riviera Black Hawk, Inc, and The Bank of New
York. (see Exhibit 10.23 to Registration Statement on Form S-4 filed with
the Commission on August 9, 2002, Commission File No. 333-97907)
10.24* Assignment of Rents, Leases and Leasehold Interests dated as of June 26,
2002 by Riviera Black Hawk, Inc. for the benefit of The Bank of New York.
(see Exhibit 10.24 to Registration Statement on Form S-4 filed with the
Commission on August 9, 2002, Commission File No. 333-97907)
10.25* Stock Pledge and Security Agreement dated June 26, 2002, executed by the
Company. (see Exhibit 10.25 to Registration Statement on Form S-4 filed
with the Commission on August 9, 2002, Commission File No. 333-97907)
10.26* Stock Pledge and Security Agreement dated June 26, 2002, executed by
Riviera Operating Corporation. (see Exhibit 10.26 to Registration Statement
on Form S-4 filed with the Commission on August 9, 2002, Commission File
No. 333-97907)
10.27* Stock Pledge and Security Agreement dated June 26, 2002, executed by
Riviera Gaming Management, Inc. (see Exhibit 10.27 to Registration
Statement on Form S-4 filed with the Commission on August 9, 2002,
Commission File No. 333-97907)
39
10.28* Environmental Indemnity dated as of June 26, 2002 by and among the
Company and Riviera Black Hawk, Inc., as indemnitors, and The Bank of New
York, as trustee. (see Exhibit 10.28 to Registration Statement on Form S-4
filed with the Commission on August 9, 2002, Commission File No. 333-97907)
10.29* Environmental Indemnity dated as of June 26, 2002 by and between the
Company, as indemnitor, and The Bank of New York, as trustee. (see Exhibit
10.29 to Registration Statement on Form S-4 filed with the Commission on
August 9, 2002, Commission File No. 333-97907)
10.30* Loan and Security Agreement dated as of July 26, 2002 by and among the
Company and the other Borrower parties thereto, the Guarantors parties
thereto and Foothill Capital Corporation. (see Exhibit 10.30 to
Registration Statement on Form S-4 filed with the Commission on August 9,
2002, Commission File No. 333-97907)
10.31* Intercreditor Agreement dated as of July 26, 2002 by and between The Bank
of New York, as trustee, and Foothill Capital Corporation. (see Exhibit
10.31 to Registration Statement on Form S-4 filed with the Commission on
August 9, 2002, Commission File No. 333-97907)
10.32* Fee Letter, dated July 26, 2002, issued by the Company, Riviera Black
Hawk, Inc. and Riviera Operating Corporation to Foothill Capital
Corporation. (see Exhibit 10.32 to Registration Statement on Form S-4 filed
with the Commission on August 9, 2002, Commission File No. 333-97907)
10.33* Intellectual Property Security Agreement dated as of July 26, 2002 by and
between the Company and the other Debtors parties thereto, and Foothill
Capital Corporation. (see Exhibit 10.33 to Registration Statement on Form
S-4 filed with the Commission on August 9, 2002, Commission File No.
333-97907)
10.34* Deed of Trust, Assignment of Rents, Leases, Fixture Filing and Security
Agreement dated July 26, 2002, executed by the Company for the benefit of
Foothill Capital Corporation. (see Exhibit 10.34 to Registration Statement
on Form S-4 filed with the Commission on August 9, 2002, Commission File
No. 333-97907)
10.35* Environmental Indemnity dated July 26, 2002 from the Company in favor of
Foothill Capital Corporation. (see Exhibit 10.35 to Registration Statement
on Form S-4 filed with the Commission on August 9, 2002, Commission File
No. 333-97907)
10.36* Continuing Guaranty dated July 26, 2002 by and among the Company, the
other Borrowers parties thereto and the Guarantors parties thereto in favor
of Foothill Capital Corporation. (see Exhibit 10.36 to Registration
Statement on Form S-4 filed with the Commission on August 9, 2002,
Commission File No. 333-97907)
10.37* Subordination Agreement dated July 26, 2002 by and among the Company and
the other Creditors parties thereto in favor of Foothill Capital
Corporation. (see Exhibit 10.37 to Registration Statement on Form S-4 filed
with the Commission on August 9, 2002, Commission File No. 333-97907)
10.38* Stock Pledge and Security Agreement dated July 26, 2002, executed by the
Company. (see Exhibit 10.38 to Registration Statement on Form S-4 filed
with the Commission on August 9, 2002, Commission File No. 333-97907)
` 40
10.39* Stock Pledge and Security Agreement dated July 26, 2002, executed by
Riviera Operating Corporation. (see Exhibit 10.39 to Registration Statement
on Form S-4 filed with the Commission on August 9, 2002, Commission File
No. 333-97907)
10.40* Stock Pledge and Security Agreement dated July 26, 2002, executed by
Riviera Gaming Management, Inc. (see Exhibit 10.40 to Registration
Statement on Form S-4 filed with the Commission on August 9, 2002,
Commission File No. 333-97907)
10.41* Deed of Trust to Public Trustee, Security Agreement, Fixture Filing and
Assignment of Rents, Leases and Leasehold Interests dated July 26, 2002,
executed by Riviera Black Hawk, Inc. for the benefit of Foothill Capital
Corporation. (see Exhibit 10.41 to Registration Statement on Form S-4 filed
with the Commission on August 9, 2002, Commission File No. 333-97907)
10.42* Environmental Indemnity dated July 26, 2002 from the Company and Riviera
Black Hawk, Inc. in favor of Foothill Capital Corporation. (see Exhibit
10.42 to Registration Statement on Form S-4 filed with the Commission on
August 9, 2002, Commission File No. 333-97907)
10.43*(A) The Company's Stock Compensation Plan. (see Exhibit 10.43 to
Registration Statement on Form S-4 filed with the Commission on August 9,
2002, Commission File No. 333-97907)
10.44*(A)Second Amendment to Employment Agreement between the Company and Robert
Vannucci effective July 1, 2002. (included in original filing of Form 10-K
on March 17, 2003 prior to this Amendment No. 1)
10.45*(A)Third Amendment to Employment Agreement between the Company and Robert
Vannucci effective March 3, 2003.(included in original filing of Form 10-K
on March 17, 2003 prior to this Amendment No. 1)
10.46(A) Trust under the Company's Deferred Compensation Plan dated November 1,
2000, as amended May 8, 2001.
21.1*Subsidiaries of the Company. (see Exhibit 21.1 to Registration Statement
on Form S-4 filed with the Commission on August 9, 2002, Commission File
No. 333-97907)
99.1 Certification of Chief Executive Officer
99.2 Certification of Chief Financial Officer
* These are incorporated herein by reference as exhibits hereto. Following the
description of each such exhibit is a reference to it as it appeared in a
specified document previously filed with the Commission, to which there have
been no amendments or changes.
(A) Management contract or compensatory plan or arrangement
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
RIVIERA HOLDINGS CORPORATION
By:/s/ WILLIAM L. WESTERMAN
------------------------------
William L. Westerman
Chief Executive Officer and President
(Principal Executive Officer)
April 29, 2003
Pursuant to the requirements of the Securities Exchange Act of 1934,
this Amendment has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
Signature Title Date
/s/ WILLIAM L. WESTERMAN Chairman of the Board, Chief April 29, 2003
------------------------ Executive Officer and President
William L. Westerman
/s/ DUANE R. KROHN Treasurer (Principal Financial April 29, 2003
------------------------ and Accounting Officer)
Duane R. Krohn
/s/ ROBERT R. BARENGO Director April 29, 2003
------------------------
Robert R. Barengo
/s/ JEFFREY A. SILVER Director April 29, 2003
------------------------
Jeffrey A. Silver
/s/ PAUL A. HARVEY Director April 29, 2003
------------------------
Paul A. Harvey
/s/ VINCENT L. DIVITO Director April 29, 2003
------------------------
Vincent L. Divito
CERTIFICATIONS
I, William L. Westerman, the Chief Executive Officer of Riviera Holdings
Corporation, certify that:
1. I have reviewed this first amended annual report on Form 10-K of Riviera
Holdings Corporation;
2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities,
particularly during the period in which this annual report is being
prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
annual report (the "Evaluation Date"); and
c) presented in this annual report our conclusions about the effectiveness
of the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent
functions):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officers and I have indicated in this
annual report whether there were significant changes in internal controls or in
other factors that could significantly affect internal controls subsequent to
the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.
Date: April 29, 2003
WILLIAM L. WESTERMAN
--------------------
William L. Westerman
Chairman of the Board and
Chief Executive Officer
I, Duane R. Krohn, the Chief Financial Officer of Riviera Holdings Corporation,
certify that:
1. I have reviewed this first amended annual report on Form 10-K of Riviera
Holdings Corporation;
2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities,
particularly during the period in which this annual report is being
prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
annual report (the "Evaluation Date"); and
c) presented in this annual report our conclusions about the effectiveness
of the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent
functions):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officers and I have indicated in this
annual report whether there were significant changes in internal controls or in
other factors that could significantly affect internal controls subsequent to
the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.
Date: April 29, 2003
DUANE R. KROHN
----------------------------------
Duane R. Krohn Treasurer and
Chief Financial Officer