SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
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 Pursuant to Section 240.14a-12
MONARCH CASINO & RESORT, INC.
(Name of Registrant as Specified In Its Charter)
(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.
[ ] 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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(4) Date Filed:
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MONARCH CASINO & RESORT, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
May 23, 2006
To the Stockholders of Monarch Casino & Resort, Inc.:
The Annual Meeting of Stockholders of Monarch Casino & Resort, Inc. (the
"Company") will be held at the Atlantis Casino Resort, 3800 South Virginia
Street, Reno, Nevada 89502, on Tuesday, May 23, 2006, at 10:00 a.m. local
time, for the following purposes:
1. To elect John Farahi, Craig F. Sullivan and Charles W. Scharer as
directors of the Company;
2. To transact such other business as may properly come before the
meeting.
Only stockholders of record at the close of business on April 6, 2006 are
entitled to notice of, and to vote, at the annual meeting. The stock transfer
books will not be closed.
Stockholders are cordially invited to attend the annual meeting in
person. STOCKHOLDERS DESIRING TO VOTE IN PERSON MUST REGISTER AT THE ANNUAL
MEETING WITH THE INSPECTORS OF ELECTION PRIOR TO COMMENCEMENT OF THE ANNUAL
MEETING. IF YOU WILL NOT BE ABLE TO ATTEND THE ANNUAL MEETING IN PERSON, YOU
ARE REQUESTED TO EXECUTE AND DATE THE ENCLOSED FORM OF PROXY AND TO FORWARD IT
TO THE SECRETARY OF THE COMPANY WITHOUT DELAY SO THAT YOUR SHARES MAY BE
REGULARLY VOTED AT THE ANNUAL MEETING.
A copy of the 2005 Annual Report to Stockholders, including financial
statements for the year ended December 31, 2005, is enclosed.
/s/ Ben Farahi
--------------
BEN FARAHI
Secretary
MONARCH CASINO & RESORT, INC.
PROXY STATEMENT
TABLE OF CONTENTS
Page
VOTING SECURITIES 1
SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN OTHER BENEFICIAL OWNERS 2
ELECTION OF DIRECTORS 3
Directors and Nominees 4
Certain Officers of Subsidiary 6
Committees of the Board 6
Board Meetings 9
Annual Meetings 9
Communication with Directors 10
Compensation of Non-Employee Directors 10
COMPENSATION OF EXECUTIVE OFFICERS 11
Summary Compensation Table 11
Option Grants in 2005 11
Aggregated Option Exercises in 2005 and Fiscal Year-End Option
Values 12
Compensation Committee Report on Executive Compensation 12
Audit Committee Report 14
Stock Performance Chart 15
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 15
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 17
AUDIT AND RELATED FEES 17
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE 18
CODE OF ETHICS 18
VOTING PROCEDURES 18
2007 ANNUAL MEETING OF STOCKHOLDERS 19
OTHER BUSINESS 19
MONARCH CASINO & RESORT, INC.
3800 South Virginia Street
Reno, Nevada 89502
PROXY STATEMENT
This Proxy Statement is furnished to the stockholders of Monarch Casino &
Resort, Inc. (the "Company") in connection with the annual meeting of
stockholders of the Company to be held at the Atlantis Casino Resort, 3800
South Virginia Street, Reno, Nevada 89502, on Tuesday, May 23, 2006, at 10:00
a.m. local time, and any adjournment thereof, for the purposes indicated in
the Notice of Annual Meeting of Stockholders.
The accompanying proxy is solicited by the Board of Directors of the
Company (the "Board"). This Proxy Statement and the accompanying form of
proxy are being mailed to stockholders on or about April 21, 2006. Any
stockholder giving a proxy has the power to revoke it prospectively by giving
written notice to the Company, addressed to Ben Farahi, Secretary, at the
Company's principal address at 1175 W. Moana Lane, Suite 200, Reno, Nevada
89509 before the annual meeting, by delivering to the Company a duly executed
proxy bearing a later date, by notifying the Company at the annual meeting
prior to the commencement of the annual meeting. The shares represented by
the enclosed proxy will be voted if the proxy is properly executed and
received by the Company prior to the commencement of the annual meeting, or
any adjournment thereof.
None of the proposals to be voted on at the annual meeting creates a
right of appraisal under Nevada law. A vote "FOR" or "AGAINST" any of the
proposals set forth herein will only affect the outcome of the proposal.
The expenses of making the solicitation will consist of the costs of
preparing, printing, and mailing the proxies and proxy statements and the
charges and expenses of brokerage firms, custodians, nominees or fiduciaries
for forwarding such documents to security owners. These are the only
contemplated expenses of solicitation, and they will be paid by the Company.
VOTING SECURITIES
The close of business on April 6, 2006 has been fixed by the Board as the
record date for determination of stockholders entitled to vote at the annual
meeting. The securities entitled to vote at the annual meeting consist of
shares of common stock, par value $.01 ("Common Stock"), of the Company, with
each share entitling its owner to one vote. Common Stock is the only
outstanding class of voting securities authorized by the Company's Articles of
Incorporation. The Company's Articles of Incorporation authorize the Company
to issue 10,000,000 shares of preferred stock, par value $.01 ("Preferred
Stock"). None of the Preferred Stock is issued or outstanding, and the
Company has no present plans to issue shares of Preferred Stock.
The Board is empowered to issue one or more series of Preferred Stock
with such rights, preferences, restrictions, and privileges as may be fixed by
the Board, without further action by the Company's stockholders. The issuance
of the Preferred Stock could adversely affect the rights, including voting
rights, of the holders of the Common Stock and could impede an attempted
takeover of the Company. The Preferred Stock does not presently possess
general voting rights.
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The number of outstanding shares of Common Stock at the close of business
on March 31, 2006, was 18,886,642. The number of shares outstanding may
change between such date and April 6, 2005, if any currently exercisable
options to purchase Common Stock are exercised, if the Company elects to
repurchase and cancel any shares in open market or privately negotiated
transactions, or if the Company otherwise authorizes the issuance of any
shares. The stockholders do not possess the right to cumulate their votes for
the election of directors.
SECURITY OWNERSHIP OF MANAGEMENT
AND CERTAIN OTHER BENEFICIAL OWNERS
The following is a list of persons who beneficially owned more than 5% of
the outstanding Common Stock of the Company and the ownership of all executive
officers, directors, director nominees, and executive officers and directors
as a group at the close of business on March 31, 2006, according to record
ownership listings as of that date, according to the Securities and Exchange
Commission Forms 3, 4 and 5 and Schedules 13D and 13G of which the Company has
received copies, and according to verifications as of March 31, 2006, which
the Company solicited and received from each executive officer and director:
Title of Amount and Nature Percent of
Class Beneficial Owner of Beneficial Ownership Class
(1),(2)
-------- ---------------- ----------------------- ----------
Common Ben Farahi 3,329,218 (3) 17.6%
1175 W. Moana Lane,
Suite 200
Reno, NV 89509
Common John Farahi 2,895,224 15.3%
1175 W. Moana Lane,
Suite 200
Reno, NV 89509
Common Bob Farahi 2,243,410 11.9%
1175 W. Moana Lane,
Suite 200
Reno, NV 89509
Common Jila Farahi Trust 941,232 5.0%
1175 W. Moana Lane,
Suite 200
Reno, NV 89509
Common Craig F. Sullivan 6,100 (4) *
Common Ronald R. Zideck 12,200 (5) *
Common Charles W. Scharer 6,100 (6) *
Common Akre Capital Management, LLC 1,931,000 (7) 10.2%
Charles T. Akre, Jr.
2 West Marshall Street
PO Box 998
Middleburg, VA 20118
Common FMR Corp. 1,070,398 (8) 5.7%
82 Devonshire Street
Boston, MA 02109
Common All executive officers and
Directors as a group
(6 persons) 8,492,252 45.0%
* Less than 1%.
(1) Unless otherwise noted, the persons identified in this table have sole
voting and sole investment power with regard to the shares beneficially owned
by them.
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(2) Includes shares issuable upon exercise of options which are exercisable
within 60 days of April 6, 2006.
(3) Includes shared voting power for 941,232 shares registered under the Jila
Farahi Trust, of which Mr. Ben Farahi was a trustee. On April 1, 2006, Mr. Ben
Farahi resigned his position as co-trustee of the Jila Farahi Trust. Had Mr.
Farahi resigned as of March 31, 2006, the beneficial ownership reported in the
table above would report shares beneficially owned of 2,387,986, or 12.6% of
shares outstanding.
(4) Includes options to purchase 6,100 shares under the 1993 Directors' Stock
Option Plan (the "Directors' Plan").
(5) Includes options to purchase 12,200 shares under the Directors' Plan.
(6) Includes options to purchase 6,100 shares under the Directors' Plan.
(7) Akre Capital Management, LLC and Charles T. Akre, Jr. ("Akre") reported on
a Schedule 13G/A dated February 1, 2006, that it has shared voting and
dispositive power with respect to all such shares. Akre reported on a
Schedule 13G/A dated February 1, 2006, that it beneficially owns 1,931,000
shares.
(8) FMR Corp. ("FMR") ") reported on a Schedule 13G dated February 14, 2006,
that it has sole voting power with respect to 199,200 shares and that it has
dispositive power with respect to 1,070,398 shares. FMR reported on a
Schedule 13G dated February 14, 2006, that it beneficially owns 1,070,398
shares.
ELECTION OF DIRECTORS
The Board is comprised of six persons. The Bylaws of the Company provide
for a board of directors consisting of three to twelve persons who are elected
generally for a term of two years. Directors are to serve until their
successors are elected and have qualified.
If the enclosed proxy is duly executed and received in time for the
annual meeting and if no contrary specification is made as provided therein,
the proxy will be voted in favor of electing the nominees John Farahi, Craig
F. Sullivan and Charles W. Scharer for terms of office expiring in 2008. If
any such nominee shall decline or be unable to serve, the proxy will be voted
for such person as shall be designated by the Board to replace any such
nominee. The Board presently has no knowledge or reason to believe that any
of the nominees will refuse or be unable to serve.
Any vacancies on the Board which occur during the year will be filled, if
at all, by the Board through an appointment of an individual to serve only
until the next annual meeting of stockholders.
The Company, through a wholly owned subsidiary, Golden Road Motor Inn,
Inc. ("Golden Road"), owns and operates the Atlantis Casino Resort (the
"Atlantis") in Reno, Nevada. Accordingly, the Company, each director who has
been required by the Nevada Gaming Authorities (as defined below) to be found
suitable, each executive officer, and each controlling person have been "found
suitable" by the Nevada State Gaming Control Board and Nevada Gaming
Commission (collectively, the "Nevada Gaming Authorities"). Future new
members of the Board, if any, may be required to be found suitable in the
discretion of the Nevada Gaming Authorities. Should any such new director not
be found suitable or should any director later be found not to be suitable by
the Nevada Gaming Authorities, that person will not be eligible to continue
serving on the Board and a majority of the remaining directors may appoint a
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qualified replacement to serve as a director until the next annual meeting of
stockholders.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF THE ELECTION OF MESSRS.
JOHN FARAHI, CRAIG F. SULLIVAN AND CHARES W. SCHARER TO THE BOARD OF
DIRECTORS.
The following information is furnished with respect to each member of the
Board or nominee thereto. Similar information is provided for the Company's
executive officers and certain significant employees who are not directors.
John Farahi, Bob Farahi and Ben Farahi are brothers. There are no other
family relationships between or among any directors, nominees to the Board, or
executive officers of the Company. The statements as to beneficial ownership
of Common Stock as to each director or nominee to the Board are based upon
information furnished by him.
Directors and Nominees
Director
Name Age Since Position
-------------------- ---- -------- ----------------------------
John Farahi 58 1993 Co-Chairman of the Board,
(Nominee for term Chief Operating Officer, and
expiring in 2008) Director
Bob Farahi 55 1993 Co-Chairman of the Board,
(Term expires in President, and Director
2007)
Ben Farahi 53 1993 Co-Chairman of the Board,
(Term expires in Chief Financial Officer,
2007) Secretary, Treasurer and
Director
Craig F. Sullivan 59 1998 Director
(Nominee for term
expiring in 2008)
Ronald R. Zideck 68 2000 Director
(Term expires in
2007)
Charles W. Scharer 51 2001 Director
(Nominee for term
expiring in 2008)
JOHN FARAHI has been Co-Chairman of the Board, Chief Executive Officer,
and Chief Operating Officer of the Company since its inception, and of Golden
Road since June 1993. From 1973 until June 1993, Mr. Farahi was President,
Director, and General Manager of Golden Road. Mr. Farahi is a partner in
Farahi Investment Company ("FIC") which is engaged in real estate investment
and development. Mr. Farahi served on the Washoe County Airport Authority as
a Trustee from July 1997 until June 2005. Mr. Farahi is a former member of
the Nevada Commission on Tourism and is presently a Board Member of the Reno-
Sparks Convention and Visitors' Authority. Mr. Farahi holds a political
science degree from the California State University, Hayward.
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BOB FARAHI has been Co-Chairman of the Board and President of the Company
since its inception, and of Golden Road since 1993. From 1973 until June
1993, Mr. Farahi was Vice President and a Director of Golden Road. Mr. Farahi
divides his working time between the Company and the other companies with
which he is involved. Mr. Farahi is a partner in FIC. Mr. Farahi holds a
biochemistry degree from the University of California at Berkeley.
BEN FARAHI has been Co-Chairman of the Board, Chief Financial Officer,
Secretary, and Treasurer of the Company since its inception, and of Golden
Road since June 1993. From 1973 until June 1993, Mr. Farahi was Secretary,
Treasurer, and a Director of Golden Road in charge of financial planning and
construction for the Company. Mr. Farahi is a partner in FIC. Mr. Farahi is
also the managing partner of Maxum LLC, a Nevada limited-liability company,
which, as of January 1, 2002, acquired all general partnership interests of
Biggest Little Investments L.P. (formerly Resources Accrued Mortgage Investors
2, L.P.), a Delaware limited partnership that invests in first and junior
mortgage loans and owns the shopping center adjacent to the Atlantis (see
"Certain Relationships and Related Transactions). Mr. Farahi has also been a
limited partner of Biggest Little Investments, L.P. since 1996. Mr. Farahi
divides his working time between the Company and the other companies with
which he is involved. Mr. Farahi is a director of the Bank of North Las
Vegas. Mr. Farahi holds a mechanical engineering degree from the University of
California at Berkeley and a MBA degree in accounting from the California
State University, Hayward.
CRAIG F. SULLIVAN has been a member of the Board since September 1998.
Since March 1998, Mr. Sullivan has been President of Sullivan & Associates, a
strategic and financial consulting firm geared to companies in the gaming
industry. From April 1995 to March 1998, Mr. Sullivan served as Chief
Financial Officer and Treasurer of Primadonna Resorts, Inc., and from February
1990 to April 1995, Mr. Sullivan served as Treasurer of Aztar Corporation.
Mr. Sullivan also served on the Board of New York-New York Hotel & Casino from
March 1996 to June 1998. Mr. Sullivan holds a degree in economics from The
George Washington University and holds a master's degree in international
management from the American Graduate School of International Management.
RONALD R. ZIDECK has been a member of the Board since March 2000. From
August 1981 to August 1997, he was Managing Partner for the Reno office of the
national accounting firm of Grant Thornton, LLP and served on that firm's
National Executive Committee. He also served as a director at Harveys Casino
Resorts from May 1997 to February 1999 and as a director of planned giving for
the University of Nevada, Reno from March 2003 to March 2006. On March 1,
2006, Mr. Zideck became Vice President of Business Development for The
Whittier Trust Company of Nevada. Mr. Zideck is a certified public accountant
with a bachelor's degree in business administration from the University of
Nevada.
CHARLES W. SCHARER has been a member of the Board since July 2001. Mr.
Scharer ended an eighteen-year career with Harveys Casino Resorts in January
2001, serving as Harveys' Chairman, President and Chief Executive Officer from
1995 until his retirement in January 2001 and as Chief Financial Officer from
1988 to 1995. Mr. Scharer is serving his third term as a commissioner of the
Nevada Commission on Tourism, having been appointed by Governor Kenny C. Guinn
in November 1999. Mr. Scharer also is a member of the Board of Directors of
Barton Healthcare System of South Lake Tahoe, California and is a member of
the Board of Advisors of InfomaCorp, LLC, a provider of High Speed Internet
Access and related products primarily to the lodging industry. Mr. Scharer, a
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certified public accountant, graduated from San Jose State University in 1979.
The Company's Bylaws, as amended, currently provide for a staggered board
of directors divided into two categories: Category A consisting of three
directors and Category B consisting of three directors. Each director serves
two-year terms. A staggered board of directors may have the effect of
delaying or preventing a change of control of the Company. Executive officers
serve at the pleasure of the Board.
Certain Officers of Subsidiary
DARLYNE SULLIVAN, age 51, has been the General Manager of Golden Road
since February 2006 and Executive Vice President of Operations of Golden Road
since 2004. From June 1993 until 2004, Mrs. Sullivan was Vice President of
Sales and Marketing and Assistant General Manager of Golden Road. Mrs.
Sullivan has held positions including Assistant General Manager/Director of
Sales and Marketing, Reservations and Sales Manager, Front Desk Manager, Hotel
Manager and Assistant Hotel Manager for Golden Road from May 1977 through June
1993.
RICHARD COOLEY, age 58, has been Vice President of Finance of Golden Road
since May 2001. Mr. Cooley was Vice President of Administration of Golden
Road from March 2001 through May 2001, and served as Vice President of
Operations of Golden Road from July 1995 through March 2001. Mr. Cooley
served as Vice President of Finance of Golden Road from June 1993 through July
1995, and served as Controller of Golden Road from March 1993 through March
1994. Mr. Cooley was President and General Manager of the Reno Ramada Hotel
Casino from May 1988 to March 1993, and he was Chief Financial Officer and
Assistant General Manager from 1981 to 1988. From July 1977 to June 1981, Mr.
Cooley was Controller and Co-General Manager of the Shy Clown Casino in Reno.
Mr. Cooley has a bachelor's degree in Business Administration from the
University of Nevada.
Committees of the Board
The Board has certain standing committees including the Audit Committee,
the Compensation Committee, the 1993 Executive Long-Term Incentive Plan
Committee (the "Incentive Plan Committee"), the 1993 Directors' Stock Option
Plan Committee (the "Directors' Plan Committee") and the Operations Committee.
Prior to December 14, 2005, the Company was considered a "Controlled
Company" under Nasdaq rules because more than fifty percent (50%) of the
Company's voting power was held by the Farahi family, including John Farahi,
Bob Farahi, Ben Farahi and the Jila Farahi Trust. Accordingly, prior to
December 14, 2005, the Company was exempt from Nasdaq requirements to have a
majority of independent directors and to have a director nominee selected by
either a majority of independent directors or by a nominating committee
consisting solely of independent directors. On December 14, 2005, the Jila
Farahi Trust sold 22,500 shares of the Company, causing the Farahi family's
voting power in the Company to drop below 50%. As such, pursuant to Nasdaq
rules, the Company is required to have a majority of independent directors by
December 14, 2006.
The Audit Committee, comprised of Craig F. Sullivan and Charles W.
Scharer, and chaired by Ronald R. Zideck, met 5 times during the fiscal year
ended December 31, 2005. The Audit Committee is comprised exclusively of
directors who are not salaried employees and a majority of whom are, in the
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opinion of the Board, free from any relationship that would interfere with the
exercise of independent judgment as a committee member. The Audit Committee's
function is to review reports of the auditors to the Company; to review
Company financial practices, internal controls and policies with officers and
key employees; to review such matters with the Company's auditors to determine
scope of compliance and any deficiencies; to consider selection of independent
public accountants; to review and approve certain related party transactions;
and to make periodic reports on such matters to the Board. The Audit Committee
adopted an Audit Committee Charter on June 14, 2000, and subsequently amended
it effective June 7, 2001 and April 9, 2004.
All members of the Audit Committee are "independent" directors, as such
term is defined in Rule 4200(a)(15) of the National Association of Securities
Dealers' Listings Standard.
The Company believes that each member of the Audit Committee is a
financial expert, as defined by the SEC rules applied pursuant to the
Sarbanes-Oxley Act of 2002, and as defined in Regulation S-K, Item 401(h)(2).
The relevant experience of such directors is summarized under "Election of
Directions - Directors and Nominees" above.
The Compensation Committee, comprised of Ronald R. Zideck and Charles W.
Scharer, and chaired by Craig F. Sullivan, met 5 times during the fiscal year
ended December 31, 2005. The Compensation Committee's function is to review
and make recommendations to the Board with respect to the salaries and bonuses
of the Company's executive officers and to administer the 1993 Employee Stock
Option Plan (the "Employee Plan").
The Incentive Plan Committee, comprised of Craig F. Sullivan, Ronald R.
Zideck and Charles W. Scharer, met once during the fiscal year ended December
31, 2005. The Incentive Plan Committee's function is to administer the 1993
Executive Long-Term Incentive Plan (the "Incentive Plan"), including
determining such matters as the persons to whom awards shall be granted, the
number of shares to be awarded, when the awards shall be granted, when the
awards shall vest, and the terms and provisions of the instruments evidencing
the awards, interpreting the Incentive Plan and notifying the Board of all
decisions concerning awards granted to Incentive Plan participants.
The Directors' Plan Committee, comprised of John Farahi and Bob Farahi,
met once during the fiscal year ended December 31, 2005. Neither John Farahi
nor Bob Farahi is eligible to participate in the Directors' Plan. The
Directors' Plan Committee consists of not less than 2 directors of the Company
selected by, and serving at the pleasure of, the Board and its function is to
administer the 1993 Directors' Stock Option Plan (the "Directors' Plan"). The
Directors' Plan Committee has the authority to interpret the Directors' Plan
and make all determinations necessary or advisable for its administration.
All decisions of the Directors' Plan Committee are subject to approval by the
Board.
The Operations Committee, comprised of John Farahi, Darlyne Sullivan and
Richard Cooley, and chaired by Charles W. Scharer, did not meet during the
fiscal year ended December 31, 2005. The purpose of the Operations Committee
is to provide a formal communication link between Golden Road management and
the Monarch Board and to facilitate examination of, and feedback regarding,
various operational issues.
-7-
The Company does not have a standing Nominating Committee, nor has the
Board of Directors adopted a charter addressing the director nomination
process. The Board of Directors believes that it is appropriate for the
Company not to have a nominating committee because the entire Board of
Directors can adequately serve the function of considering potential director
nominees from time to time as needed.
For future stockholder meetings at which directors are to be elected, in
compliance with NASD rule 4350(c)(4) director nominees will be recommended for
the Board's nomination by a majority of the independent directors. In making
such recommendation, the qualifications of the prospective nominee which will
be considered include the nominee's personal and professional integrity,
experience, skills, ability and willingness to devote the time and effort
necessary to be an effective board member, and commitment to act in the best
interests of the Company and its stockholders.
The requirements for nomination by a security holder of a person to the
Company's Board of Directors are set forth in Article II, Section 16 of the
Company's Bylaws and the qualifications for a person to be a director of the
Company are set forth in Article II, Section 14 of the Bylaws. Both sections
of the Bylaws are set forth below.
14. Eligibility of Directors. No Director is eligible to continue
to serve as a Director of the Corporation who is required under
Nevada gaming laws to be found suitable to serve as a director and
who is not found suitable or whose finding of suitability is
suspended or revoked by Nevada gaming authorities. Such
eligibility shall cease immediately following whatever act or event
terminates the director's eligibility under the laws and gaming
regulations of the State of Nevada.
16. Nomination of Directors. Only persons who are nominated in
accordance with the procedures set forth in this Section 16 of
Article II shall be eligible for election as Directors.
Nominations of persons for election to the Board of Directors of
the Corporation at the Annual Meeting may be made at a meeting of
stockholders by or at the direction of the Board of Directors by
any nominating committee or person appointed by the Board or by any
stockholder of the Corporation entitled to vote for the election of
Directors at the meeting who complies with the Notice procedures
set forth in this Section 16 of Article II. Such nominations,
other than those made by or at the direction of the Board, shall be
made pursuant to timely notice in writing to the secretary of the
Corporation. To be timely, unless waived by the Board of
Directors, no person not already a Director shall be eligible to be
elected or to serve as a Director unless such person's notice of
nomination shall be received at the principal executive offices of
the Corporation at least seventy five (75) days before initiation
of solicitation to the stockholders for election in the event of an
election other than at an Annual Meeting and seventy five (75) days
before the corresponding date that had been the record date for the
previous year's Annual Meeting or seventy five (75) days before the
date of the next Annual Meeting of shareholders announced in the
previous year's proxy materials in the event of an election at an
Annual Meeting. To be timely, no stockholder's notice shall be
received at the principal executive offices of the Corporation more
than ninety (90) days before the meeting; provided, however, that
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in the event that less than ninety (90) days' notice or prior
public disclosure of the date of the meeting is given or made to
stockholders, notice by the stockholder to be timely must be
received not later than the close of business on the 15th day
following the day on which such notice of the date of the meeting
was mailed or such public disclosure was made, whichever first
occurs. The stockholder's notice to the Secretary shall set
forth (a) as to each person whom the stockholder proposes to
nominate for election or reelection as a Director, (i) the name,
age, business address and residence address of the person, (ii) the
principal occupation or employment of the person, (iii) the class
and number of shares of stocks of the Corporation which are
beneficially owned by the person, (iv) a description of all
arrangements or understandings between the stockholder and each
nominee and any other person or persons (naming such person or
persons) pursuant to which the nomination or nominations are to be
made by the stockholder, and (b) any other information relating to
the person that is required to be disclosed in solicitations for
proxies for election of Directors pursuant to Regulation 14A under
the Securities Exchange Act of 1934, as amended (vi) the consent of
such nominee to serve as Director of the Corporation, if he is so
elected; and (c) as to the stockholder giving the notice, (i) the
name and record address of stockholder, and (ii) the class and
number of shares of stock of the Corporation which are beneficially
owned by the stockholder. The Corporation may require any proposed
nominee to furnish such other information as may reasonably be
required by the Corporation to determine the eligibility of such
proposed nominee to serve as Director of the Corporation. No
person shall be eligible for election as a Director of the
Corporation unless nominated in accordance with the procedures set
forth in this Article II, Section 16. The Chairman of the meeting
shall, if the facts warrant, determine and declare to the meeting
that a nomination was not made in accordance with the foregoing
procedure, and if he should so determine, he shall so declare to
the meeting and the defective nomination shall be disregarded.
The Company did not receive the names of any proposed director candidates
submitted by any stockholder for inclusion in this Proxy Statement under the
guidelines set forth above.
Board Meetings
The Board held 8 meetings in the fiscal year ended December 31, 2005.
All directors except Bob Farahi attended at least 75% of the Board of
Directors meetings and all committee members attended at least 75% of the
meetings for the committees on which they serve during the fiscal year ended
December 31, 2005.
Annual Meetings
The Board of Directors has a policy that requires all directors to attend
each Annual Meeting of Stockholders absent exigent circumstances. Four
directors attended the 2005 Annual Meeting of Stockholders. Two directors were
unable to attend the 2005 Annual Meeting of Stockholders due to exigent
circumstances.
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Communication with Directors
The Company's stockholders may contact directors by going to the
Company's web site, www.monarchcasinos.com, selecting "Company Info" and
then selecting "Board of Directors/Executive Officers." Each director's and
executive officer's email address is set forth and provides a means to contact
such person directly.
Compensation of Non-Employee Directors
Annual fees of $40,000 are paid to directors who are not employees of the
Company. Each non-employee director serving as the chairman of a committee of
the Board received an additional annual fee of $10,000 for each committee
chaired in 2005. Each director may be reimbursed for certain expenses
incurred in connection with attendance at Board and committee meetings.
Certain non-employee directors have been granted options to purchase Common
Stock under the Directors' Plan.
Directors' Stock Option Plan. The Directors' Plan is designed to
encourage non-employee directors to take a long-term view of the affairs of
the Company, to attract and retain superior non-employee directors and to aid
in compensating non-employee directors for their services to the Company. The
Company's non-employee directors for the year ended December 31, 2005 were
Craig F. Sullivan, Ronald R. Zideck and Charles W. Scharer.
An eligible director, upon becoming a member of the Board of Directors,
will receive an initial grant to purchase 4,800 shares of Common Stock
("Initial Director Grant"), plus an additional grant to purchase 1,300 shares
of Common Stock for each committee chaired. Thereafter, immediately following
the close of the annual stockholders' meeting, each eligible director will
receive an annual option grant to purchase 4,800 shares of Common Stock
("Annual Director Grant") plus an additional grant to purchase 1,300 shares of
Common Stock for each committee chaired for the first five years following
election to the Board. The Directors' Plan Committee may also recommend
discretionary grants of options on terms deemed appropriate by the Directors'
Plan Committee, subject to the approval of the Board.
The exercise price of all director option grants is 100% of the fair
market value of the Common Stock on the date of grant. Initial Director
Grants and Annual Director Grants may not be exercised until six months and
one day after the date of the grant. All options granted under the Directors'
Plan are non-qualified options, the tax treatment of which is determined under
Section 422 of the Internal Revenue Code of 1986, as amended. In 2003, the
Company's stockholders approved the extension of grants previously granted
under the Directors' Plan from five years to ten years.
In 2005, Craig F. Sullivan, Ronald R. Zideck and Charles W. Scharer each
received an Annual Director Grant of options to purchase 6,100 shares of
Common Stock in accordance with the Directors' Plan.
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COMPENSATION OF EXECUTIVE OFFICERS
Summary Compensation Table
Annual Compensation Awards
-------------------------- --------------
Securities
Name and Underlying All Other
Principal Positions Year Salary($) Bonus($) Options/SARs(#) Compensation($)(1)
------------------- ---- --------- -------- --------------- ------------------
John Farahi, Co-Chairman 2005 400,000 200,000 70,000 -
of the Board and 2004 386,155 200,000 200,000 -
Chief Executive Officer 2003 337,232 150,000 - 52,357
Bob Farahi, Co-Chairman 2005 240,000 50,000 10,000 13,143
of the Board and 2004 226,155 50,000 100,000 12,118
President 2003 182,770 75,000 - 17,588
Ben Farahi, Co-Chairman 2005 240,000 100,000 10,000 -
of the Board, Chief Financial 2004 226,155 100,000 100,000 2,034
Officer, Secretary and 2003 182,770 75,000 - 10,930
Treasurer
Darlyne Sullivan, Executive 2005 163,735 67,000 33,332 1,154
Vice-President - Operations 2004 173,371 36,000 100,000 667
and General Manager of 2003 176,793 35,000 - 529
Golden Road
Richard Cooley 2005 168,018 67,000 20,000 1,175
Vice-President - Finance 2004 165,092 36,000 60,000 1,013
of Golden Road 2003 142,220 35,000 - 936
(1) Amounts for John Farahi, Bob Farahi and Ben Farahi represent the lease value of automobiles
paid for by the Company, except the 2003 amount for John Farahi which represents a purchased
automobile. Amounts for Richard Cooley and Darlyne Sullivan represent the Company's contribution
to 401(k) plans.
Option Grants in 2005
During the fiscal year ended December 31, 2005, the Company awarded the
following stock options to its executive officers:
Percentage Potential Realizable
of Total Value Assuming
Number Options -------------------------
of Granted
Options During Exercise Expiration 5% Annual 10% Annual
Name Awarded 2004 Price Date Increase Increase
---------------- -------- ----------- ---------- ---------- ----------- ----------
John Farahi 70,000 23.5% $18.06 10/21/2015 $ 795,000 $2,015,000
Bob Farahi 10,000 3.4% $18.06 10/21/2015 114,000 288,000
Ben Farahi 10,000 3.4% $18.06 10/21/2015 114,000 288,000
Darlyne Sullivan 33,332 11.2% $18.06 10/21/2015 379,000 960,000
Richard Cooley 20,000 6.7% $18.06 10/21/2015 228,000 576,000
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Aggregated Option Exercises in 2005 and Fiscal Year-End Option Values
Number of Securities
underlying unexercised Value of unexercised
Shares options at fiscal in-the-money options
acquired on Value year end(#) at fiscal year-end($)
Name exercise(#) realized($) Exercisable / Unexercisable Exercisable / Unexercisable
------------- ----------- ----------- --------------------------- ---------------------------
John Farahi - $ - 66,666 / 203,334 $ 728,000 / $1,773,000
Bob Farahi - - 33,332 / 76,668 364,000 / 774,000
Ben Farahi - - 33,332 / 76,668 364,000 / 774,000
Darlyne Sullivan - - 33,332 / 100,000 364,000 / 879,000
Richard Cooley - - 20,000 / 60,000 219,000 / 528,000
(1) Represents the difference between the last reported sale price (adjusted for stock split) of
the Common Stock reported on The Nasdaq Stock Market on December 30, 2005, and the exercise
price of the options.
Committee Reports
Notwithstanding any statement to the contrary set forth in any of the
Company's previous filings under the Securities Act of 1933, as amended, or
the Securities Exchange Act of 1934, as amended, that might incorporate future
filings, including this Proxy Statement, in whole or in part, the following
Compensation Committee Report on Executive Compensation and the Stock
Performance Chart presented shall not be incorporated by reference into any
such filings.
Compensation Committee Report on Executive Compensation
April 9, 2006
The Compensation Committee (the "Committee"), which is composed entirely
of directors who have never served as executive officers of the Company,
determines and administers the compensation of the Company's executive
officers.
Compensation Philosophy. The Committee seeks to compensate the Company's
executive officers in such a fashion that will attract and retain individuals
who are responsible for the management, growth, and success of the Company.
The Committee believes that executive compensation should be designed to
reward those individuals for their services to the Company and encourage them
to continue in its employ. The Committee's actions related to compensation of
the Company's executive officers are submitted to the full Board of Directors
for ratification and approval.
The Committee believes that the Company's overall financial performance
is an important factor in the compensation of the Company's executive officers
and, therefore, applies a quantitative formula in making compensation
decisions related to some bonus plans. The Committee also recognizes
qualitative factors such as successful supervision of the Company's
operations, development of corporate projects, promotion of the Company's
corporate image, and participation in industry and community activities.
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The Committee also evaluates the total compensation of the Company's
executive officers in light of the compensation practices and relative
corporate financial performance of other companies in the gaming industry
similar to the Company in terms of asset size and target market. The
Committee's goal is that the base salaries for the Chief Executive Officer and
other executive officers should be established at levels considered
appropriate in light of the duties and scope of responsibilities of each
officer's position. Salaries are reviewed annually and are warranted to
reflect sustained individual officer performance. The Chief Executive Officer
and other executive officers are also eligible to receive incentive
compensation in the form of stock options under the Incentive Plan (see
"Option Grants in 2005" table above).
Chief Executive Officer Compensation. Following the recommendation of
the Compensation Committee, the Board established the Chief Executive
Officer's salary at $400,000 for 2005. In determining the Chief Executive
Officer's salary, the Compensation Committee considered (a) the Chief
Executive Officer's record of leadership and service to the Company over the
past three years, (b) the growth of the Company during the same period, (c)
the Chief Executive Officer's pivotal role in overseeing the day-to-day
operations of the Company, (d) the Company's performance over the same period
in relation to its competitors in a very competitive environment, and (e) the
Chief Executive Officer's civic leadership in the Reno area.
COMPENSATION COMMITTEE
By: Craig F. Sullivan, Chairman
Ronald R. Zideck, Member
Charles W. Scharer, Member
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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 Securities Exchange Act of 1934, as amended, except to the
extent that the Company specifically incorporates this Report by reference
therein.
April 9, 2006
To the Board of Directors of Monarch Casino & Resort, Inc.:
Our role is to assist the Board of Directors in its oversight of the Company's
financial reporting process. As set forth in our charter, the Company's
management is responsible for the preparation, presentation and integrity of
our financial statements, and for maintaining appropriate accounting and
financial reporting principles and policies and internal controls and
procedures designed to assure compliance with accounting standards and
applicable laws and regulations. The independent auditors are responsible for
auditing our financial statements and expressing an opinion as to their
conformity with generally accepted accounting principles.
We have reviewed and discussed with management the Company's audited
financial statements as of and for the year ended December 31, 2005.
We have discussed with the independent auditors the matters required to
be discussed by Statement on Auditing Standards No. 61, Communication with
Audit Committees, as amended, by the Auditing Standards Board of the American
Institute of Certified Public Accountants.
We have received and reviewed the written disclosures and the letter from
the independent auditors required by Independence Standard No. 1, Independence
Discussions with Audit Committees, as amended, by the Independence Standards
Board, and have discussed with the auditors the auditors' independence.
Based on the reviews and discussions referred to above, we recommend to
the Board of Directors that the financial statements referred to above be
included in the Company's Annual Report on Form 10-K for the year ended
December 31, 2005.
By: Ronald R. Zideck, Chairman
Craig F. Sullivan, Member
Charles W. Scharer, Member
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Stock Performance Chart
The following chart reflects the cumulative total return (change in stock
price plus reinvested dividends) of a $100 investment in the Company's Common
Stock for the five year period from January 1, 2001, through December 31,
2005, in comparison to the Standard & Poor's 500 Composite Stock Index and an
industry peer group index. The comparisons are not intended to forecast or be
indicative of possible future performance of the Company's Common Stock.
MONARCH CASINO & RESORT, INC.
TOTAL RETURN
JANUARY 1, 2001 - DECEMBER 31, 2005
Base
Period
12/31/00 12/31/01 12/31/02
-------- -------- --------
Monarch Casino & Resort, Inc. 100 168.42 289.05
S&P 500 Index 100 88.11 68.64
Self Determined Peer Group (1) 100 129.62 142.80
12/31/03 12/31/04 12/31/05
-------- -------- --------
Monarch Casino & Resort, Inc. 234.74 853.68 951.58
S&P 500 Index 88.33 97.94 102.75
Self Determined Peer Group (1) 201.37 292.19 324.24
(1) The companies included in the peer group are as follows: Alliance Gaming
Corp.; Archon Corp.; Argosy Gaming Corp. (acquired by Penn National
Gaming, Oct. '05); Aztar Corp.; Black Hawk Gaming & Development Company,
Inc. (acquired by Gameco, Feb. '02); Harrah's Entertainment, Inc.;
Hollywood Casino Corporation-Cl. A (acquired by Penn National Gaming,
Mar. '03); Mandalay Resort Group (acquired by MGM Mirage, Apr. '05);
President Casinos, Inc.; Sands Regent; Station Casinos, Inc.; and Winwin
Gaming, Inc.
Note: For the companies that have been acquired, the peer line on the graph
includes the acquired company's performance up to the acquisition date,
and the acquiring company's performance since the acquisition date.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The three principal stockholders of the Company, John Farahi, Bob Farahi
and Ben Farahi, through their affiliates, directly or indirectly control the
ownership and management of the Sierra Marketplace Shopping Center directly
adjacent to the Atlantis (the "Shopping Center"). The Shopping Center
occupies 18.7 acres and consists of 213,000 square feet of retail space. The
Company does not have any ownership, options to purchase (except with respect
to the driveway discussed below) or first rights of refusal over or control of
the Shopping Center. The Company currently rents approximately 13,000 square
feet in the Shopping Center that it uses as office and storage space and paid
rent of approximately $85,730 plus common area expenses in 2005.
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In 2004, the Shopping Center constructed of a new driveway that is being
shared between the Atlantis and the Shopping Center. As part of this project,
the Company has leased a 37,368 square-foot corner section of the Shopping
Center for a minimum lease term of 15 years at a monthly rent of $25,000,
subject to increase every 60 months based on the Consumer Price Index. The
Company also uses part of the common area of the Shopping Center and pays its
proportional share of the common area expense of the Shopping Center. The
Company has the option to renew the lease for 3 five-year terms, and at the
end of the extension period, the Company has the option to purchase the leased
section of the Shopping Center at a price to be determined based on an MAI
Appraisal. The leased space is being used by the Company for pedestrian and
vehicle access to the Atlantis, and the Company has use of a portion of the
parking spaces at the Shopping Center. The total cost of the project was $2.0
million; the Company was responsible for two thirds of the total cost, or
$1.35 million. The project was completed, the driveway was put into use and
the Company began paying rent on September 30, 2004. During the year ended
December 31, 2005, the Company paid rent to the Shopping Center in connection
with the driveway of $300,000 plus common area expenses.
The Company is currently leasing billboard advertising space from
affiliates of its controlling stockholders for a total annual cost of $31,500
in 2005, $53,000 in 2004 and $54,000 in 2003.
The Company is currently renting office and storage space from a company
affiliated with Monarch's controlling stockholders and paid annual rent of
approximately $27,900 for these spaces for each of the years 2005, 2004 and
2003.
The Company is currently leasing sign space from the Shopping Center. The
lease took effect in March 2005 for a monthly cost of $1. The lease was
renewed for another year for a monthly lease of $1,000 effective January 1,
2006.
Indemnification of Directors and Officers
Section 78.751 of Chapter 78 of the Nevada Revised Statutes ("NRS"),
Article IX of the Company's Articles of Incorporation, and Article VII of the
Company's Bylaws contain provisions for indemnification of officers and
directors of the Company. The Articles of Incorporation require the Company
to indemnify such persons to the full extent permitted by Nevada law. Each
person will be indemnified in any proceeding provided that such person's acts
or omissions did not involve intentional misconduct, fraud or knowing
violation of law, or the payment of dividends in violation of NRS 78.300.
Indemnification would cover expenses, including attorneys' fees, judgments,
fines, and amounts paid in settlement
The Company's Articles of Incorporation also provide that the Board may
cause the Company to purchase and maintain insurance on behalf of any present
or past director or officer insuring against any liability asserted against
such person incurred in the capacity of director or officer or arising out of
such status, whether or not the corporation would have the power to indemnify
such person.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers, or persons controlling
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the Company pursuant to the foregoing provisions, the Company has been
informed that in the opinion of the Securities and Exchange Commission (the
"SEC") such indemnification is against public policy as expressed in the
Securities Act of 1933 and is therefore unenforceable.
Audit Committee Review
The Company requires that the Audit Committee of the Board review and
approve related party transactions.
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Company's independent registered public accounting firm, Ernst &
Young LLP, have audited the Company's financial statements for the fiscal year
ended December 31, 2005. Ernst & Young LLP is expected to have a
representative present at the annual meeting who will have the opportunity to
make a statement if such representative desires to do so and is expected to be
available to respond to appropriate questions.
The Audit Committee has not yet formally engaged an independent
registered public accounting firm to audit the Company's financial statements
for the fiscal year ending December 31, 2006, because it is in the process of
reviewing professional fees for the oncoming year. In the event the Audit
Committee selects a firm other than Ernst & Young LLP prior to the 2006 Annual
Meeting, a representative of that firm will be invited to the stockholders'
meeting.
AUDIT AND RELATED FEES
Audit Fees. The aggregate fees billed by the Company's principal
accountants for the audit of the Company's annual financial statement and
review of financial statements included in the Company's Form 10-Q or services
that are normally provided by the accountant in connection with statutory and
regulatory filings or engagements were $94,400 for the year ended December 31,
2005 and $88,000 for the year ended December 31, 2004. The aggregate fees
billed for audit of internal control over financial reporting as required by
Section 404 of the Sarbanes-Oxley Act of 2002 totaled $273,861 for the year
ended December 31, 2005.
Audit Related Fees. The aggregate fees billed for assurance and related
services by the Company's principal accountant that are reasonably related to
the performance of the audit or review of the Company's financial statements
not included under "Audit Fees" above were $0 for the year ended December
31, 2005 and $0 for the year ended December 31, 2004.
Tax Fees. The aggregate fees billed for professional services rendered
by the Company's principal accountant for the compilation, tax advice and tax
planning were $17,950 for the year ended December 31, 2005 and $12,000 for the
year ended December 31, 2004. For 2005 and 2004, these services consisted of
the preparation of the Company's federal corporate tax return.
All Other Fees. There were no other fees billed by the Company's
principal accountants for the years ended December 31, 2005 and 2004.
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Audit Committee Pre-Approval Policies and Procedures
As required by the Audit Committee Charter, as revised on April 9, 2004,
all services proposed to be provided by outside independent auditors must be
approved in advance by the Audit Committee.
There were no non-audit services performed by the independent registered
public accounting firm in 2005 and 2004.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors and executive officers, and persons who own more than ten
percent of a registered class of the Company's equity securities, to file with
the SEC initial reports of ownership and reports of changes in ownership of
Common Stock and other equity securities of the Company. Officers, directors,
and stockholders holding more than 10% of the class of stock are required by
SEC regulation to furnish the Company with copies of all Section 16(a) forms
they file.
To the Company's knowledge, based solely on review of the copies of such
reports furnished to the Company and written representations that no other
reports were required, during 2005 all reports as required under Section 16(a)
filing requirements were filed as required.
As of March 29, 2006, Bob Farahi has filed one late Form 4 report with
respect to one transaction in the current fiscal year ending December 31,
2006. On March 13, 2006, Bob Farahi filed a Form 4 disclosing the repurchase
of call-options on February 22, 2006, to cancel a position he obtained by
writing identical call-options on January 30, 2006. Bob Farahi has voluntarily
disgorged any profits resulting from the cancellation of his short derivative
position.
CODE OF ETHICS
The Company adopted a Business Ethics Policy and Code of Conduct (Code of
Ethics), a copy of which may be reviewed on the Company's website,
www.monarchcasino.com.
VOTING PROCEDURES
A majority of a quorum of stockholders present in person or represented
by proxy voting "FOR" the election of the nominees to the Board is sufficient
to approve the election of the nominees to the Board. A quorum of
stockholders exists when a majority of the stock issued and outstanding and
entitled to vote at a meeting is present, in person, or represented by proxy,
at the meeting. Abstentions are effectively treated as votes "AGAINST" a
matter presented. Neither the Company's Articles of Incorporation, Bylaws, or
Nevada corporate statutes address the treatment and effect of abstentions and
broker non-votes.
The Company will appoint three inspectors of election to: determine the
number of shares outstanding and the voting power of each, the shares
represented at the meeting, the existence of a quorum, and the authenticity,
validity, and effect of a proxy; receive votes, ballots, or consents; hear and
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determine all challenges and questions in any way arising in connection with
the right to vote; count and tabulate all votes or consents; determine when
the polls shall close; determine the results; and do any other acts which may
be proper to conduct the election or vote with fairness to all stockholders.
2007 ANNUAL MEETING OF STOCKHOLDERS
The next annual meeting of stockholders is expected to be held on or
about May 23, 2007. Stockholders desiring to present proper proposals at that
meeting and to have their proposals included in the Company's proxy statement
and form of proxy for that meeting must meet the eligibility and other
criteria under Rule 14a-8 of the Securities Exchange Act of 1934 and must
submit the proposal to the Company. Such proposal must be received no later
than December 22, 2006. Unless a stockholder proposal for the Company's 2007
Annual Meeting of Stockholders is submitted to the Company prior to March 7,
2007, management may use its discretionary voting authority to vote management
proxies on the stockholder proposal without any discussion of the matter in
the proxy statement.
OTHER BUSINESS
The Board does not know of any other business which will be presented for
action by the stockholders at this annual meeting. However, if any business
other than that set forth in the Notice of Annual Meeting of Stockholders
should be presented at the annual meeting, the proxy committee named in the
enclosed proxy intends to take such action as will be in harmony with the
policies of the Board and will use their discretion and vote all proxies in
accordance with their judgment.
-19-
The Company's 2005 Annual Report to Stockholders, including financial
statements for the year ended December 31, 2005, accompanies these proxy
materials, which are being mailed on or about April 21, 2006, to all
stockholders of record of the Company as of April 6, 2006.
/s/ Ben Farahi
--------------
BEN FARAHI
Secretary
OUR ANNUAL REPORT ON SEC FORM 10-K, INCLUDING THE FINANCIAL
STATEMENTS AND THE SCHEDULES THERETO, FOR THE 12 MONTHS ENDED
DECEMBER 31, 2005, WILL BE FURNISHED WITHOUT CHARGE TO ANY
BENEFICIAL OWNER OF SECURITIES ENTITLED TO VOTE AT THIS ANNUAL
MEETING. TO OBTAIN A COPY OF THE FORM 10-K, WRITTEN REQUEST
MUST BE MADE TO MONARCH CASINO & RESORT, INC. AND THE
REQUESTING PERSON MUST REPRESENT IN WRITING THAT SUCH PERSON
WAS A BENEFICIAL OWNER OF OUR SECURITIES AS OF APRIL 6, 2006.
REQUESTS SHOULD BE ADDRESSED TO:
Monarch Casino & Resort, Inc.
Attention: Ben Farahi, Secretary
1175 W. Moana Lane, Suite 200
Reno, Nevada 89509
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