UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
Amendment No. 1
| [X] | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the fiscal year ended December 31, 2008
OR
| [ ] | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from ________________ to ________________ |
Commission file number 1-12522 |
EMPIRE RESORTS, INC. | |
| (Exact name of registrant as specified in its charter) | |
Delaware | 13-4141279 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
701 N. Green Valley Parkway, Suite 200, Henderson, NV 89074 | |
| (Address of principal executive offices) (Zip Code) | |
| Registrant’s telephone number, including area code (702) 990-3355 | |
| Securities registered under Section 12(b) of the Act: | |
| Title of each class | Name of each exchange on which registered |
Common Stock, $.01 par value per share | Nasdaq Global Market |
| Rights to Purchase Series A Junior Participating Preferred Stock | Nasdaq Global Market |
5-1/2% Secured Convertible Notes Due 2014 | The PORTAL Market |
Securities registered under Section 12(g) of the Act: None | |
| (Title of class) | |
| Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. | Yes o No x |
| Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. | Yes o No x |
| 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 o |
| Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) 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 any amendment to this Form 10-K | o |
| Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one): |
Large accelerated filer o | Accelerated filer x | ||
Non-accelerated filer o | Smaller reporting company o |
| Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). | Yes o No x |
The aggregate market value of the issuer’s common equity held by non-affiliates, as of June 30, 2008 was $86,156,755, based on the closing price of the common stock on the Nasdaq Global Market.
As of March 12, 2009, there were 34,037,961 shares of the issuer’s common equity outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
None.
INDEX
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EXPLANATORY PARAGRAPH
The purpose of this Amendment No. 1 on Form 10-K/A (the “Amendment”) is to amend Part III of our previously filed Annual Report on Form 10-K for the year ended December 31, 2008, filed with the Securities Exchange Commission on March 13, 2009 (the “Original Form 10-K”), to include information previously omitted in reliance on General Instruction G to Form 10-K, which provides that registrants may incorporate by reference certain information from a definitive proxy statement prepared in connection with the election of directors. Empire Resorts, Inc. (the “Company”) has determined to include such Part III information by amendment of the Original Form 10-K rather than by incorporation by reference to the proxy statement. Accordingly, Parts III and IV of the Original Form 10-K are hereby amended as set forth below.
There are no other changes to the Original Form 10-K other than those outlined above and as set forth below. This Amendment does not reflect events occurring after the filing of the Original Form 10-K, nor does it modify or update disclosures therein in any way other than as required to reflect the amendment set forth below. Among other things, forward-looking statements made in the Original Form 10-K have not been revised to reflect events that occurred or facts that became known to us after the filing of the Original Form 10-K, and such forward looking statements should be read in their historical context.
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PART III
Item 11. | Executive Compensation. |
Compensation Discussion and Analysis
Objectives of Our Compensation Program
Our compensation programs are intended to encourage executives and other key personnel to create sustainable growth in value for our stockholders. In particular, the objectives of our programs are to:
| · | Attract, retain, and motivate superior talent; |
| · | Ensure that compensation is commensurate with our performance and stockholder returns; |
| · | Provide performance awards for the achievement of strategic objectives that are critical to our long term growth; and |
| · | Ensure that our executive officers and key personnel have financial incentives to achieve sustainable growth in stockholder value. |
Business Strategy
Our 2009 business strategy for building sustainable growth in stockholder value remains similar to the strategy we have employed for the past few years. Key components of the strategy are as follows:
| · | Improve our operating efficiencies to the point where we are once again profitable; |
| · | Enter into strategic joint ventures which help drive our growth; |
| · | Secure a Class III gaming license for a facility to be part of our existing New York operation; and |
| · | Take advantage of opportunities which can help us grow. |
Elements of Our Executive Compensation Structure
Our compensation structure consists of two tiers of remuneration. The first tier consists of base pay, and a suite of retirement, health, and welfare benefits. The second tier consists of both short and long term incentive compensation.
Base pay and benefits are designed to be sufficiently competitive to attract and retain world class executives.
Our short term incentive plan provides for cash bonuses to be paid to executives based on individual and corporate performance.
Commencing in 2008, the Compensation Committee began to implement preset goals, and amounts of short term incentive which will be paid for achieving those goals. Efforts to establish such goals and incentives are continuing.
No bonuses were paid with respect to the 2007 or 2008 fiscal years. A bonus of $10,000 was paid in 2007 to our Chief Compliance Officer with respect to the 2006 fiscal year. No other bonuses were paid with respect to the 2006 fiscal year.
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Our long term incentive plan provides for awards of stock options, restricted stock, and other equity based incentives. These are designed to reward executives for the achievement of longer term objectives which result in an increase in share value.
Reasons for the Current Incentive Plan Structure
In 2009, the Company will continue to focus on our racing and video gaming businesses and we will continue to pursue property development opportunities through strategic alliances. In addition, we will continue to pursue a Class III gaming license. If successfully pursued, this strategy will eventually result in the creation of additional and sustainable share value.
Our short term incentive plan will reward executives for the achievement of milestones which are critical to our business strategy, coupled with cost cutting and other ways of improving our operating efficiency. Bonuses will only be paid to the extent objectives are achieved and the operating performance of the Company so warrants.
Awards outstanding under the long term incentive plan currently consist of stock options, as well as restricted stock. In future years, we may also make grants of other equity based awards. The long term incentive plan is designed to reward executives for increasing long term share value. This will be accomplished by the successful execution of the Company’s business objectives, coupled with the consistent achievement of profitability goals. The long term incentive plan will keep executives focused on both revenue and profit growth, and it can potentially be a very significant source of compensation for executive officers in the long term.
How We Determine to Pay What We Pay
Our cash compensation policy is based on:
| · | The Company’s philosophy of providing significant pay at risk |
| · | Internal equity |
| · | Individual and corporate performance |
In setting base pay, the Compensation Committee pays at a level which is necessary to attract and retain the level of talent it needs. Compensation for the Company’s chief executive officer (“CEO”), whose employment with the Company terminated on April 13, 2009, and chief financial officer (“CFO”), whose employment with the Company will terminate on June 30, 2009, was first set in their three year employment contracts, entered into on May 23, 2005. The employment contracts state that the Compensation Committee shall review base pay annually, and make upward adjustments, as it deems appropriate. The CEO’s salary was set at $500,000, and it stayed at that level since the inception of the employment contract. The CFO’s salary was set at $275,000 in his employment contract. In 2007, the Compensation Committee exercised its discretion and raised the CFO’s base pay from $275,000 to $310,000. These employment agreements expired on June 23, 2008.
Exceptional individual and corporate performance is rewarded via the annual bonus program, and is not reflected in base pay. The Compensation Committee pays close attention to internal equity when it sets pay. In particular, it takes into account the relative value of its individual executive officer jobs, as well as the value of the jobs immediately below the executive officer level. Periodically, the Compensation Committee references base pay practices at public companies of a similar size, to help ensure base pay remains broadly within a competitive range.
In the future, the Compensation Committee intends to set annual cash bonus opportunity by (1) setting predetermined goals connected to the Company’s business strategy, and (2) specifying the amount of bonus which will be paid if the Company achieves some or all of those goals. In setting the annual cash bonus opportunity, the Compensation Committee will abide by the philosophy that cash bonuses might be substantial if individual and corporate performance reaches predetermined levels. In recent years, material cash bonuses have not been paid, because corporate performance has not warranted it.
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Overall, our cash compensation practices reflect our long held philosophy that annual cash compensation shall consist of (1) base pay at the level to attract and retain the caliber of talent we need and (2) bonus compensation which is entirely performance based.
Our Compensation Committee takes into account several factors in determining the level of long term incentive opportunity to grant to our executive officers. In 2008, the Compensation Committee took the following factors into account
| · | Individual executive performance; |
| · | Equity compensation grants which have been granted previously; |
| · | The effect of equity compensation grants on fully diluted earnings per share; |
| · | Each executive officer’s portion of the total number of options being granted to employees in fiscal 2008; and |
| · | The level of grants necessary to keep our executive officers focused and motivated in the coming year. |
In considering the level of option grants required to keep our executive officers focused and motivated, the Compensation Committee periodically makes reference to equity compensation practices at similar sized public companies. However, no effort is made to make grants at a particular percentile of the market range.
In February 2008, the Compensation Committee retained Denver Management Advisors, Inc. to provide market data and recommendations to the Compensation Committee regarding compensation for executive officer positions.
Policy for Allocating Between Long Term and Current Compensation
Our policy for allocating between long term and current compensation for our executive officers is as follows:
| · | We expect that in the long run the bulk of total compensation paid to executive officers will come from stock options and other equity based long term incentives. Executive officers would only enjoy rewards to the extent they create commensurate value for stockholders. This would be in keeping with our philosophy of utilizing executive compensation to create sustained increases in value for our stockholders. |
| · | We recognize that to create sustainable increases in share value, increases in growth and profitability are necessary. Accordingly, it is our intention to provide competitive cash bonus opportunities. However, annual bonuses will only be paid to the extent short term objectives are achieved or exceeded. |
| · | Finally, we recognize that in order to attract and retain the kind of talent necessary to build share value, we must pay competitive base salary and benefits. |
Benchmarking of Compensation
Our compensation philosophy does not include an effort to pay executive officers at a particular percentile of the market range. Accordingly, we did not select a group of peer companies with an eye toward using their executive officer pay as a benchmark against which to set our compensation. As stated above, we take several factors into account in determining base pay, short term incentive opportunity, and long term incentive opportunity, including individual and corporate performance, changes in position responsibility, and internal equity.
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Nevertheless, we understand that there are several companies which are competitors for executive officer talent, and we view it as useful to examine their pay practices from time to time. In the course of determining cash compensation for our executive officers in 2008, we looked at publicly traded gaming companies. For purposes of determining long term incentive grants, we looked at practices in a wide variety of companies, both in and outside of the industry. For the limited purpose of the analysis set forth below, the compensation paid to the executive officers of these positions is referred to as “market”.
Based on our review of the data, it appeared that all of our executive officers, other than our former CEO, were at, or slightly below, the midpoint of the market range, when base salary, bonus opportunity, and long term incentives were taken into account.
Long Term Incentive Opportunity – Basis for Reward and Downside Risk
To date, the Compensation Committee has awarded stock options and restricted stock under our 2004 Stock Option Plan and the 2005 Equity Incentive Plan. The Compensation Committee may consider using other equity based incentives in the future. Options bear a relationship to the achievement of our long term goals in that they increase in value as our stock increases in value.
Our executive officers are exposed to downside risk through the shares of the Company they own outright and/or through the options they hold. Declines in the stock price will result in the shares they hold outright becoming less valuable, and the options becoming less valuable, or worthless.
The Compensation Committee carefully evaluates the cost of options and restricted stock it grants to its executive officers, in terms of their impact on fully diluted earnings per share. The Compensation Committee will continue to evaluate the cost of options and other forms of equity compensation against the benefit those vehicles are likely to yield in building sustainable growth in stockholder value.
Equity Grants and Market Timing
We do not grant options in coordination with the release of material, non-public information, and we do not intend to adopt such a practice in the future. During 2008, annual awards of stock options to our executive officers and key employees were usually made at regularly scheduled Compensation Committee meetings. Exceptions would include grants made to new hires, grants made as a result of promotions, and other extraordinary circumstances.
We have properly accounted for all of our option grants. When we award options and set the exercise price, the exercise price is based on the fair market value of our stock on the grant date. Our 2005 Equity Incentive Plan defines “fair market value” as the closing price of publicly traded shares of Stock on the principal securities exchange on which shares of stock are listed, or on the NASDAQ Stock Market (if shares are regularly quoted on the NASDAQ Stock Market), or, if such bid and asked prices shall not be available, as reported by any nationally recognized quotation service selected by the Company or as determined by the Compensation Committee in a manner consistent with the provisions of United States Internal Revenue Code of 1986, as amended (the “Code”).
Specific Forms of Compensation and the Role of Committee Discretion
In the past, the Compensation Committee has retained the discretion to review executive officer base pay, and to make increases based on executive performance and market norms. The Compensation Committee has also recommended increases when executives have been promoted, or their responsibilities have otherwise been expanded. In addition, the Compensation Committee has retained the discretion to make long term incentive grants based on several factors detailed in this Compensation Discussion and Analysis. The Compensation Committee intends to retain the discretion to make decisions about executive officer base compensation and certain levels of stock option grants and restricted stock grants without predetermined performance goals or metrics.
The Compensation Committee retains its right to make future grants of options, restricted stock, or other equity compensation based on Company and individual performance. At this time, it has not been determined whether it would exercise discretion to increase or reduce the size of an award or payout if the performance goals are met, or pay all or any portion of an award or payout despite the performance goals not being met.
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In the past, the Compensation Committee has retained the discretion to pay individual bonuses to the Chief Executive Officer and Named Executive Officers, based on corporate and individual performance. The determination whether a bonus was paid, as well as the amount, was left to the discretion of the Compensation Committee. The Chief Compliance Officer was paid $10,000 for her 2006 individual performance. No bonuses were paid to the Chief Executive Officer or to Named Executive Officers with respect to the 2008 or 2007 fiscal years.
In the future, the Compensation Committee intends to set predetermined goals, as well as predetermined bonus amounts for achieving such goals. These goals will be set as early as possible in the fiscal year for which the bonus is to be paid.
How Individual Forms of Compensation are Structured and Implemented to Reflect the Named Executive Officers’ Individual Performance and Contribution.
We are engaged in a concerted strategic effort to increase revenue, profit, and operating efficiency. The CEO and the Named Executive Officers work as a team to accomplish these goals. Their base pay, annual bonus opportunity, and respective long term incentive opportunity reflect their individual contribution to the Company and market practices.
In July 2008, the CFO received an option grant for 50,000 shares which vest over a three year period and the Chief Compliance Officer received an option grant for 12,500 shares which vest over three years. These grants were made pursuant to the Company’s 2005 Equity Incentive Plan. The amount of each individual grant reflects the Compensation Committee’s assessment of each individual’s contribution. As of the end of fiscal 2008, none of the July 2008 option grants were in the money.
Policies and Decisions Regarding Adjustment or Recovery of Awards or Payments if Relevant Performance Measures are Restated or Adjusted
We have not previously needed to adjust or recover awards or payments because relevant performance measures were restated or adjusted. If this occurred, we expect that we would take steps legally permissible to adjust or recover awards or payments in the event relevant performance measures upon which they were based were restated or otherwise adjusted in a manner that would reduce the size of an award or payment.
Factors Considered in Decisions to Increase or Decrease Compensation Materially
During the tenure of the current Compensation Committee, the Company has not previously materially increased or decreased compensation. We expect that the primary factor we would consider in such a case is a clear, sustained market trend.
Impact that Amounts Received or Realizable From Previously Earned Compensation Have on Other Compensation
We maintain no compensation plan programs where gains from prior compensation would directly influence amounts currently earned. The only factor where gains from prior awards are considered is where the Compensation Committee determines the appropriate size of long term incentive grants.
Impact of Accounting and Tax Treatment on Various Forms of Compensation
We take the impact of accounting and tax treatment on each particular form of compensation into account. Our incentive payments are designed so that they are deductible under Section 162(m) of the Code. We closely monitor the accounting treatment of our equity compensation plans, and in making future grants, we expect to take the accounting treatment into account.
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Ownership Requirements and Policies Regarding Hedging Risk in Company’s Equity Securities
Since a significant ownership stake in the Company by its directors and executive officers leads to a stronger alignment of interests with stockholders, the Board has encouraged stock ownership by non-employee directors and executive officers. However, there are currently no share ownership guidelines in place.
Our executive officers are not allowed to make a short sale of stock, which we define as any transaction whereby one may benefit from a decline in our stock price.
The Role of Executive Officers in Determining Compensation
In early 2008, our CEO supplied the Compensation Committee with his thoughts on what the personal goals of the Named Executive Officers should be, for purposes of the 2008 annual incentive plan. The CEO also apprised the Compensation Committee with his assessment of the performance of the Named Executive Officers in 2007, and the Committee took this information into account, among other information, in setting their base pay for 2008.
At the close of 2008, the CEO supplied the Compensation Committee with similar input, regarding 2008 performance of the Named Executive Officers, as well the CEO’s thoughts on individual objectives for the 2009 annual incentive plan.
Other than the input supplied above, neither the CEO nor any Named Executive Officer has played any role in determining executive officer compensation.
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Summary Compensation Table
The following table sets forth all information concerning the compensation received, for the fiscal year ended December 31, 2008, for services rendered to us by David P. Hanlon, our former chief executive officer, Ronald J. Radcliffe, our chief financial officer, and each of our three other most highly compensated executive officers.
SUMMARY COMPENSATION TABLE
Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($) (1) | Option Awards ($) (1) | All Other Compensation ($) (2) | Total ($) | ||||||||||||||||||
David P. Hanlon (3) Chief Executive Officer | 2008 | 500,000 | - | - | - | 30,875 | 530,875 | ||||||||||||||||||
| 2007 | 500,000 | - | 109,411 | 389,762 | 9,000 | 1,008,173 | |||||||||||||||||||
| 2006 | 500,000 | - | 529,633 | 1,377,829 | 8,800 | 2,416,262 | |||||||||||||||||||
Cliff A. Ehrlich Executive Vice President and Gen. Mgr. – MRMI | 2008 | 178,077 | - | - | 49,854 | 7,123 | 235,054 | ||||||||||||||||||
Ronald J. Radcliffe (4) Chief Financial Officer | 2008 | 310,000 | - | - | 169,902 | 9,200 | 489,102 | ||||||||||||||||||
| 2007 | 295,596 | - | - | 324,766 | 9,000 | 629,362 | |||||||||||||||||||
| 2006 | 275,000 | - | - | 352,269 | 8,800 | 636,069 | |||||||||||||||||||
Hilda Manuel Sr. VP for Native American Affairs | 2008 | 180,000 | - | - | 69,333 | 5,200 | 254,533 | ||||||||||||||||||
| 2007 | 180,000 | 10,000 | - | 146,272 | 5,400 | 341,672 | |||||||||||||||||||
| 2006 | 160,192 | - | - | 159,724 | 2,000 | 321,916 | |||||||||||||||||||
Charles Degliomini Senior Vice President, Governmental Relations and Corporate Communications | 2008 | 220,000 | (5) | - | - | 174,274 | - | 394,274 | |||||||||||||||||
| (1) | These amounts represent the dollar amount recognized for financial reporting purposes for the years ended December 31, 2008, December 31, 2007 and December 31, 2006, as applicable, for the value of prior year and current year grants of restricted stock and stock options allocable to that year and are computed in accordance with SFAS No. 123R. Please see Notes B and I to our consolidated financial statements contained in our Form 10-K for the fiscal year ended December 31, 2008 for more information on these issues. |
| (2) | These amounts reflect the Company matching contributions associated with amounts contributed by the individuals to our 401(k) benefit plan and the cost of a life insurance policy for Mr. Hanlon in 2008. See Note L to our consolidated financial statements contained in our Form 10-K for the fiscal year ended December 31, 2008 for more information on the 401(k) plan. |
| (3) | On April 13, 2009, Mr. Hanlon entered into a separation agreement with the Company pursuant to which Mr. Hanlon’s employment with the Company terminated as of April 13, 2009. |
| (4) | On April 14, 2009, Mr. Radcliffe tendered his resignation, effective June 30, 2009. Mr. Radcliffe and the Company entered into a separation agreement with respect to Mr. Radcliffe’s resignation. |
| (5) | Represents payments made to Mr. Degliomini pursuant to a consulting agreement. |
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Grant of Plan-Based Awards
The following table sets forth information concerning grants of plan-based awards made by us during 2008, to each of the named executive officers:
Name | Grant Date | All Other Option Awards: Number of Securities Underlying Options | Exercise or Base Price of Option Awards ($) | Grant Date Fair Value of Stock and Option Awards ($) (1) | ||||||||||||
| David P. Hanlon | - | - | - | - | ||||||||||||
| Ronald J. Radcliffe | 7/21/08 | 50,000 | 2.98 | 116,500 | ||||||||||||
| Hilda Manuel | 7/21/08 | 12,500 | 2.98 | 29,125 | ||||||||||||
| Charles Degliomini | - | - | - | - | ||||||||||||
| Cliff A. Ehrlich | - | - | - | - | ||||||||||||
| (1) | These amounts reflect the aggregate grant date fair value of options granted in the year ended December 31, 2008 under our 2005 Equity Incentive Plan computed in accordance with SFAS No. 123R. Please see Notes B and I to our consolidated financial statements contained in our Form 10-K for the fiscal year ended December 31, 2008 for more information. |
Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table
Employment Agreements
On May 23, 2005, we entered into an employment agreement with David P. Hanlon which set forth terms and provisions governing Mr. Hanlon’s employment as our former Chief Executive Officer and President. This agreement provided for an initial term of three years at an annual base salary of $500,000. In addition, Mr. Hanlon was entitled to participate in any annual bonus plan or equity based incentive programs maintained by us for our senior executives. In connection with his employment, Mr. Hanlon received an option grant of a 10-year non-qualified stock option to purchase 1,044,092 shares of our Common Stock pursuant to the 2005 Equity Incentive Plan, subject to stockholder approval, at an exercise price per share of $3.99, vesting 33% 90 days following the grant date, 33% on the first anniversary of the grant and 34% on the second anniversary of the grant, which approval was received on August 17, 2005. We also granted Mr. Hanlon 261,023 restricted shares, pursuant to our 2005 Equity Incentive Plan, vesting 33% on the grant date, 33% on the first anniversary of grant, and 34% on the second anniversary of the grant. We agreed to provide certain benefits to Mr. Hanlon, including maintaining a term life insurance policy on the life of Mr. Hanlon in the amount of $2,000,000 and reimbursement for relocation expenses and expenses for temporary housing.
On May 23, 2005, we entered into an employment agreement with Ronald J. Radcliffe which set forth terms and provisions governing Mr. Radcliffe’s employment as our Chief Financial Officer. This agreement provided for an initial term of three years at an annual base salary of $275,000. In addition, Mr. Radcliffe was entitled to participate in any annual bonus plan or equity based incentive programs maintained by us for our senior executives. In connection with his employment, Mr. Radcliffe received an option grant of a 10-year non-qualified stock option to purchase 150,000 shares of our Common Stock pursuant to our 2005 Equity Incentive Plan, subject to stockholder approval, at an exercise price per share of $3.99, vesting 33% 90 days following the grant date, 33% on the first anniversary of the grant and 34% on the second anniversary of the grant, which approval was obtained on August 17, 2005.
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On May 23, 2008, we entered into amendments to the employment agreements with Mr. Hanlon and Mr. Radcliffe, pursuant to which the initial term of each agreement was extended from May 23, 2008 to June 23, 2008. The agreements expired on June 23, 2008.
On April 13, 2009, Mr. Hanlon entered into a separation agreement with the Company pursuant to which Mr. Hanlon’s employment with the Company terminated as of April 13, 2009. On April 14, 2009, Mr. Radcliffe tendered his resignation, effective June 30, 2009.
Outstanding Equity Awards at Fiscal Year-End
The following table sets forth information concerning the outstanding equity awards of each of the named executive officers as of December 31, 2008:
Option Awards | |||||||||||||
Name | Number of Securities Underlying Unexercised Options: Exercisable | Number of Securities Underlying Unexercised Options: Unexercisable | Option Exercise Price ($) | Option Expiration Date | |||||||||
| David P. Hanlon | 7,500 | - | 7.00 | 8/15/13 (1) | |||||||||
| 5,000 | - | 11.97 | 3/24/14 (2) | ||||||||||
| 10,000 | - | 8.51 | 1/7/10 (3) | ||||||||||
| 1,044,092 | - | 3.99 | 5/23/15 (4) | ||||||||||
| Ronald J. Radcliffe | 120,000 | - | 3.99 | 5/23/15 (5) | |||||||||
| 60,000 | - | 5.53 | 8/10/16 (6) | ||||||||||
| 26,667 | 13,333 | 7.40 | 5/24/17 (10) | ||||||||||
| 16,667 | 33,333 | 2.98 | 7/21/13 (12) | ||||||||||
| Hilda Manuel | 30,000 | - | 8.26 | 3/18/15 (8) | |||||||||
| 8,500 | - | 6.75 | 12/16/15 (7) | ||||||||||
| 33,334 | - | 5.53 | 8/10/16 (9) | ||||||||||
| 3,333 | 6,667 | 8.74 | 1/30/17 (11) | ||||||||||
| 4,167 | 8,333 | 2.98 | 7/21/13 (12) | ||||||||||
Clifford A. Ehrlich | 25,000 | - | 6.75 | 12/16/15 (7) | |||||||||
| 20,000 | 10,000 | 5.53 | 8/10/16 (13) | ||||||||||
| Charles Degliomini | 50,000 | - | 6.75 | 12/16/15 (7) | |||||||||
| 25,000 | 50,000 | 7.40 | 5/24/17 (14) | ||||||||||
Unless otherwise noted, option grants have a term of ten years. Grants to Mr. Hanlon prior to May 23, 2005 were made to him in his capacity as a Director.
| (1) | Granted and vested 8/5/03. |
| (2) | Granted and vested 3/24/04. |
| (3) | Granted and vested 1/7/05 – five year term. |
| (4) | Grant date 5/23/05 effective upon stockholder approval received on 8/17/05; vesting 33% 90 days after grant, 33% one year after grant and 34% two years after grant. |
| (5) | Total options granted 5/23/05 – 150,000 effective upon stockholder approval received on 8/17/05; vesting 33% 90 days after grant, 33% one year after grant and 34% two years after grant. Options for 30,000 shares exercised on December 20, 2006. |
| (6) | Grant date 8/10/06; vesting 33.3% 90 days after grant, 33.3% one year after grant and 33.4% two years after grant. |
| (7) | Grant date 12/16/05; vesting 33.3% one year after grant, 33.3% two years after grant and 33.4% three years after grant. |
| (8) | Grant date 3/18/05; vesting one year after grant. |
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| (9) | Grant date 8/10/06; vesting 33.3% 90 days after grant, 33.3% one year after grant and 33.4% two years after grant. |
| (10) | Grant date 5/24/07; vesting 33.3% on date of grant, 33.3% one year after grant and 33.4% two years after grant. |
| (11) | Grant date 1/30/07; vesting 33.3% one year after grant, 33.3% two years after grant and 33.4% three years after grant. |
| (12) | Grant date 7/21/08; vesting 33.3% 90 days after grant, 33.3% one year after grant and 33.4% two years after grant. |
| (13) | Grant date 8/10/06; vesting 33.3% one year after grant; 33.3% two years after grant and 33.4% three years after grant. |
| (14) | Grant date 5/24/07; vesting 33.3% one year after grant; 33.3% two years after grant and 33.4% three years after grant. |
Option Exercises and Stock Vested
The following table sets forth information concerning the exercising of stock options of each of the named executive officers in the fiscal year ended December 31, 2008:
Option Awards | Stock Awards | |||||||||||||||
Name | Number of Shares Acquired on Exercise | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting | Value Realized on Vesting ($) | ||||||||||||
| David P. Hanlon | - | - | - | - | ||||||||||||
| Ronald J. Radcliffe | - | - | - | - | ||||||||||||
| Charles Degliomini | - | - | - | - | ||||||||||||
| Clifford A. Ehrlich | - | - | - | - | ||||||||||||
| Hilda Manuel | - | - | - | - | ||||||||||||
Director Compensation
Directors who are also our officers are not separately compensated for their service as directors. Our non-employee directors received the following aggregate amounts of compensation for 2008.
Name | Fees Paid in Cash ($) | Option Awards ($) | Total ($) | |||||||||
| John Sharpe | 56,500 | 22,445 | (1)(2) | 78,945 | ||||||||
| Bruce Berg (6) | 2,000 | 51,976 | (1)(3) | 53,976 | ||||||||
| Ralph J. Bernstein | - | - | - | |||||||||
| Frank Catania | 26,500 | 22,445 | (1)(2) | 48,945 | ||||||||
| Paul A. deBary | 46,750 | 22,445 | (1)(2) | 82,662 | ||||||||
| 13,467 | (1)(4) | |||||||||||
| Robert H. Friedman | 13,500 | 22,445 | (1)(2) | 35,945 | ||||||||
| Richard L. Robbins | 27,000 | 22,445 | (1)(2) | 49,445 | ||||||||
| James Simon | 27,000 | 22,445 | (1)(2) | 49,445 | ||||||||
| Kenneth Dreifach (7) | - | 32,063 | (1)(5) | 32,063 | ||||||||
| (1) | Grant date aggregate fair value of options granted in the year ended December 31, 2008 under our 2005 Equity Incentive Plan computed in accordance with SFAS No. 123R. Please see Notes B and I to our consolidated financial statements contained in our Form 10-K for the fiscal year ended December 31, 2008 for more information. |
| (2) | Grant date 1/15/08; securities underlying options – 10,000 with 10 year term and 15,000 with a 5 year term. |
| (3) | Grant date 7/02/08; securities underlying options – 15,000 with 10 year term and 7,500 with a 5 year term. |
| (4) | Grant date 1/15/08; securities underlying options – 15,000 with 10 year term. |
| (5) | Grant date 11/10/08; securities underlying options - 15,000 with 10 year term and 3,750 with a 5 year term. |
| (6) | Bruce Berg joined the Board on July 2, 2008. |
| (7) | Kenneth Dreifach joined the Board on November 11, 2008. |
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Cash Compensation
During 2008, each non-employee member of the Company’s Board of Directors received $1,000 per meeting attended in person and $500 per meeting attended telephonically. Directors that also serve on committees of the Board of Directors receive an additional $1,000 per committee meeting attended in person and $500 per meeting attended telephonically. The chairman of the audit committee receives an additional annual payment of $25,000.
Stock Compensation
Each non-employee member of the Company’s Board of Directors receives an annual grant of options to purchase 25,000 shares of the Company’s Common Stock at the Common Stock’s then current fair market value, and since August 2003 each newly elected or appointed non-employee director received a one time grant of an option to purchase 15,000 shares of the Company’s Common Stock at the Common Stock’s then current fair market value. For 2008, Ralph J. Bernstein waived his right to receive such options. All stock options granted to the members of the Company’s Board of Directors vest immediately, except for the options issued in lieu of the annual cash compensation in 2008, where such options vested 25% on the grant date, 25% three months after the grant date, 25% six months after the grant date and 25% nine months after the grant date. The chairman of the audit committee receives an additional annual grant of an option to purchase 15,000 shares of the Company’s Common Stock.
Chairman Compensation
On May 23, 2005, the Company’s Board of Directors ratified the compensation committee’s approval of compensation of $50,000 per year for the position of non-executive Chairman of the Board and a grant of an option to purchase 50,000 shares of the Company’s Common Stock vesting immediately with a term of 10 years at the initiation of service for any new non-executive Chairman of the Board. John Sharpe, who became the Company’s Chairman of the Board on such date, abstained from all votes of the Board of Directors related to the establishment of this compensation.
Compensation Committee Interlocks and Insider Participation
There were no transactions between any member of the Compensation Committee and the Company during the fiscal year ended December 31, 2008. No member of the Compensation Committee was an officer or employee of the Company or any subsidiary of the Company during fiscal 2008.
Compensation Committee Report
The Compensation Committee of the Company has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with management and, based on such review and discussions, the Compensation Committee recommended to the Board that the Compensation Discussion and Analysis be included in this Annual Report on Form 10-K/A.
Compensation Committee Members:
James Simon, Chairman
Ralph J. Bernstein
Paul A. deBary
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PART IV
Item 15. | Exhibits and Financial Statement Schedules. |
Exhibits
| 31.1 | Section 302 Certification of Principal Executive Officer. |
| 31.2 | Section 302 Certification of Principal Financial Officer. |
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.
| EMPIRE RESORTS, INC. | |||
| By: | /s/ Charles Degliomini | ||
| Name: | Charles Degliomini | ||
| Title: | Senior Vice President, Governmental Relations and Corporate Communication | ||
| Date: | April 30, 2009 | ||
Pursuant to the requirements of the Securities Exchange Act of 1934, this report 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/ Charles Degliomini | Senior Vice President, Governmental Relations and Corporate Communication (Principal Executive Officer) | April 30, 2009 | ||
| Charles Degliomini | ||||
| /s/ Ronald J. Radcliffe | Chief Financial Officer (Principal Accounting and Financial Officer) | April 30, 2009 | ||
| Ronald J. Radcliffe | ||||
| /s/ Bruce Berg | Director | April 30, 2009 | ||
| Bruce Berg | ||||
| /s/ Ralph J. Bernstein | Director | April 30, 2009 | ||
| Ralph J. Bernstein | ||||
| /s/ Louis Cappelli | Director | April 30, 2009 | ||
| Louis Cappelli | ||||
| /s/ Paul A. deBary | Director | April 30, 2009 | ||
| Paul A. deBary | ||||
| /s/ James Simon | Director | April 30, 2009 | ||
| James Simon | ||||
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