UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------
FORM 10-K/A
AMENDMENT NO. 1
<Table>
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 28, 2003
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM TO
</Table>
COMMISSION FILE NO. 0-24993
---------------------
LAKES ENTERTAINMENT, INC.
(Exact name of registrant as specified in its charter)
<Table>
MINNESOTA 41-1913991
(State or other jurisdiction (I.R.S., Employer
of incorporation or organization) Identification No.)
130 CHESHIRE LANE, SUITE 101, MINNETONKA, MINNESOTA 55305
(Address of principal executive offices)
(952) 449-9092
(Registrant's telephone number, including area code)
</Table>
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
NONE.
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
<Table>
<Caption>
TITLE OF EACH CLASS NAME OF EACH EXCHANGE ON WHICH REGISTERED
------------------- -----------------------------------------
Common Stock, $0.01 par value NASDAQ National Market
</Table>
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 [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of the 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. [X]
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act). Yes [ ] No [X]
As of April 16, 2004, 11,103,817 shares of the Registrant's Common Stock
were outstanding. Based upon the last sale price of the Common Stock as reported
on the NASDAQ National Market on June 27, 2003 (the last business day of our
most recently completed second quarter), the aggregate market value of the
Common Stock held by non-affiliates of the Registrant as of such date was
$62,584,711.
DOCUMENTS INCORPORATED BY REFERENCE
None.
EXPLANATORY NOTE
Lakes Entertainment, Inc. amends its Annual Report on Form 10-K for the
fiscal year ended December 28, 2003 (filed on March 29, 2004), as set forth in
this Form 10-K/A (Amendment No. 1), to include the information required in Items
10, 11, 12, 13 and 14 of Part III.
1
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
DIRECTORS OF LAKES ENTERTAINMENT, INC.
Our Board of Directors currently consists of six (6) directors. The names
and ages of our directors, and their principal occupations and tenure as
directors, which are set forth below, are based upon information furnished to us
by each director.
<Table>
<Caption>
NAME AND AGE OF
DIRECTOR AND/OR PRINCIPAL OCCUPATION, BUSINESS EXPERIENCE DIRECTOR
NOMINEE FOR PAST FIVE YEARS AND DIRECTORSHIPS OF PUBLIC COMPANIES SINCE
- --------------- --------------------------------------------------------- --------
Lyle Berman Chairman of the Board and Chief Executive Officer of Lakes
Age 62 Entertainment, Inc. since January 1999 and Chairman of the 1998
Board of Directors of Grand Casinos, Inc. (the predecessor
to Lakes Entertainment) from October 1991 through December
of 1998. Mr. Berman served as President of Lakes
Entertainment from November 1999 until May 2003. Mr. Berman
also serves as a governor of World Poker Tour, LLC, a
company in which Lakes Entertainment owns a majority
interest. Mr. Berman is also a director of Wilsons The
Leather Experts Inc. Mr. Berman served as Chief Executive
Officer of Rainforest Cafe, Inc. from February 1993 until
December 2000.
Timothy J. Cope President of Lakes Entertainment, Inc. since May 12, 2003
Age 52 and Chief Financial Officer, Treasurer, Secretary and a 1998
director of Lakes Entertainment since June 1998. Mr. Cope
also serves as Chief Financial Manager and a governor of
World Poker Tour, LLC. Mr. Cope served as an Executive Vice
President of Lakes Entertainment from June 1998 until May
11, 2003.
Morris Goldfarb Director of Lakes Entertainment, Inc. since June 1998. Mr.
Age 52 Goldfarb is a director, Co-Chairman of the Board and Chief 1998
Executive Officer of G-III Apparel Group Ltd. Mr. Goldfarb
has served as either the President or Vice President of
G-III and its predecessors since its formation in 1974.
Ronald J. Kramer Director of Lakes Entertainment, Inc. since June 1998. Mr.
Age 45 Kramer is President of Wynn Resorts and has been employed in 1998
that capacity since April 2002. Mr. Kramer previously served
as a Managing Director at the investment banking firm of
Dresdner Kleinwort Wasserstein beginning in July 1999. From
February 1986 to July 1999, Mr. Kramer was the Chairman of
the Board and Chief Executive Officer of Ladenburg Thalmann
Group Inc. Mr. Kramer is also a director of Griffon
Corporation, New Valley Corporation Limited and Monster
Worldwide Inc.
Ray Moberg Director of Lakes Entertainment, Inc. since December 2003.
Age 55 Mr. Moberg retired from Ernst & Young in 2003 after serving 2003
for 33 years, including as managing partner of its Reno
office from 1987 until his retirement.
Neil I. Sell Director of Lakes Entertainment, Inc. since June 1998. Since
Age 62 1968, Mr. Sell has been engaged in the practice of law in 1998
Minneapolis, Minnesota with the firm of Maslon Edelman
Borman & Brand, LLP, which has rendered legal services to
Lakes Entertainment.
</Table>
2
EXECUTIVE OFFICERS OF LAKES ENTERTAINMENT, INC.
<Table>
<Caption>
NAME AGE POSITION(S) WITH LAKES ENTERTAINMENT
- ---- --- --------------------------------------
Lyle Berman........................... 62 See "Directors of Lakes Entertainment,
Inc." -- above.
Timothy J. Cope....................... 52 See "Directors of Lakes Entertainment,
Inc." -- above.
Joseph Galvin......................... 65 Chief Operating Officer of Lakes
Entertainment, Inc. since January
1999, Executive Vice President since
June 2, 2003, and Chief Administrative
Officer of Grand Casinos, Inc. from
November 1996 through December 1998,
and prior thereto, Vice President of
Security of Grand.
</Table>
AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
The Board of Directors has established a four member audit committee that
consists of Chairman Ray Moberg and Messrs. Morris Goldfarb, Ronald J. Kramer
and Neil I. Sell. Commencing on June 11, 2004, the date of our 2004 annual
shareholders' meeting, Mr. Sell will no longer serve on the audit committee. The
audit committee operates under a written charter adopted by the Board of
Directors, which charter was attached as Appendix C to the proxy statement for
our Annual Meeting of Shareholders held June 2, 2003. The primary functions of
the audit committee are (i) to serve as an independent and objective party to
monitor our financial reporting process and internal control system, (ii) to
review and appraise the audit efforts of our independent auditors, and (iii) to
provide an open avenue of communication among the independent auditors,
financial and senior management and the Board of Directors. The charter also
requires that the audit committee (or designated members of the audit committee)
review and pre-approve the performance of all audit and non-audit accounting
services to be performed by our independent auditors, other than certain de
minimus exceptions permitted by Section 202 of the Sarbanes-Oxley Act of 2002.
The Board of Directors has determined that at least one member of the audit
committee, Ray Moberg, is an "audit committee financial expert" as that term is
defined in Item 401(h)(2) of Regulation S-K promulgated under the Securities
Exchange Act of 1934, as amended. In addition, each member of the audit
committee is an "independent director," as such term is defined in Section
4200(a)(15) of National Association of Securities Dealers' listing standards.
The Board of Directors has also determined that each of the audit committee
members is able to read and understand fundamental financial statements and that
at least one member of the audit committee has past employment experience in
finance or accounting.
NOMINATING COMMITTEE OF THE BOARD OF DIRECTORS
The Board of Directors has established a two member nominating committee
that consists of Messrs. Morris Goldfarb and Neil I. Sell, each of whom
satisfies the independence requirements of the NASDAQ Stock Market rules.
The primary role of the nominating committee is to consider and make
recommendations to the full Board of Directors concerning the appropriate size,
function and needs of the Board, including establishing criteria for Board
membership and considering, recruiting and recommending candidates (including
those recommended by shareholders) to fill new Board positions. The nominating
committee (or a subcommittee thereof) recruits and considers director candidates
and presents qualified candidates to the full Board for consideration. Qualified
candidates will be considered without regard to race, color, religion, sex,
ancestry, national origin or disability.
The nominating committee will consider each candidate's general business
and industry experience, his or her ability to act on behalf of shareholders,
overall Board diversity, potential concerns regarding independence or conflicts
of interest and other factors relevant in evaluating Board nominees. If the
nominating committee approves a candidate for further review following an
initial screening, the nominating committee will establish
3
an interview process for the candidate. Generally, the candidate will meet with
the members of the nominating committee, along with our Chief Executive Officer.
Contemporaneously with the interview process, the corporate governance committee
will conduct a comprehensive conflicts-of-interest assessment of the candidate.
The nominating committee will consider reports of the interviews and the
conflicts-of-interest assessment to determine whether to recommend the candidate
to the full Board of Directors. The nominating committee will also take into
consideration the candidate's personal attributes, including, without
limitation, personal integrity, loyalty to us and concern for our success and
welfare, willingness to apply sound and independent business judgment, awareness
of a director's vital part in good corporate citizenship and image, time
available for meetings and consultation on Company matters and willingness to
assume broad, fiduciary responsibility.
Recommendations for candidates to be considered for election to the Board
at our annual shareholder meetings may be submitted to the nominating committee
by our shareholders. Candidates recommended by our shareholders will be
considered under the same standards as candidates that are identified by the
nominating committee. In order to make such a recommendation, a shareholder must
submit the recommendation in writing to the nominating committee, in care of our
Secretary at our headquarters address, at least 120 days prior to the mailing
date of the previous year's annual meeting proxy statement. To enable the
committee to evaluate the candidate's qualifications, shareholder
recommendations must include the following information:
- The name and address of the nominating shareholder and of the director
candidate;
- A representation that the nominating shareholder is a holder of record of
our common stock and entitled to vote at the current year's annual
meeting;
- A description of any arrangements or understandings between the
nominating shareholder and the director candidate or candidates being
recommended pursuant to which the nomination or nominations are to be
made by the shareholder;
- A resume detailing the educational, professional and other information
necessary to determine if the nominee is qualified to hold a Board
position;
- Such other information regarding each nominee proposed by such
shareholder as would have been required to be included in a proxy
statement filed pursuant to the proxy rules of the Securities and
Exchange Commission had each nominee been nominated by the Board of
Directors; and
- The consent of each nominee to serve as a director if so elected.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires our officers
and directors, and persons who own more than ten percent of a registered class
of our equity securities, to file reports of ownership and changes in ownership
with the Securities and Exchange Commission (the "SEC") and the NASDAQ National
Market. Officers, directors and greater than ten percent shareholders are
required by SEC regulation to furnish us with copies of all Section 16(a) forms
they file.
Based solely upon a review of the copies of such forms furnished to us, or
written representations that no Form 5(s) were required, we believe that during
the fiscal year ended December 28, 2003, all Section 16(a) filing requirements
applicable to its officers, directors and greater than ten-percent beneficial
owners were satisfied.
4
ITEM 11. EXECUTIVE COMPENSATION
The following table sets forth the cash and non-cash compensation for each
of the last three fiscal years awarded to or earned by (i) each individual that
served as our Chief Executive Officer during fiscal 2003; and (ii) each
individual who served as an executive officer at the end of fiscal 2003 who
received in excess of $100,000 in salary and bonus during fiscal 2003 (the Chief
Executive Officer and the other executive officers are collectively referred to
herein as the "Named Executive Officers").
SUMMARY COMPENSATION TABLE
<Table>
<Caption>
ANNUAL COMPENSATION
-----------------------------------------
OTHER ANNUAL ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY($)(1) BONUS($) COMPENSATION($) COMPENSATION($)(3)
- --------------------------- ---- ------------ -------- --------------- ------------------
Lyle Berman....................... 2003 400,000 100,000 63,179(2) 10,742
Chairman, Chief Executive
Officer 2002 400,000 0 101,204(2) 10,707
2001 400,000 0(4) 0 9,507
Timothy J. Cope................... 2003 250,000 100,000 0 8,861
President, Chief Financial
Officer, 2002 250,000 50,000 0 8,813
Treasurer and Secretary 2001 250,000 50,000(4) 0 7,469
Joseph Galvin..................... 2003 225,000 0 0 9,811
Chief Operating Officer and 2002 225,000 0 0 9,775
Executive Vice President 2001 225,000 0(4) 0 8,575
</Table>
- ---------------
(1) Includes cash compensation deferred at the election of the executive officer
under the terms of the Company's 401(k) Savings Incentive Plan.
(2) Amount represents the value of personal use of the Company's corporate jet
based upon the Standard Industry Fare Level (SIFL) rates as published by the
United States Department of Transportation for the period from July 1 to
December 31 of 2002 or 2003, as applicable.
(3) Amounts shown in this column represent matching contributions by the Company
under the Company's 401(k) Savings Incentive Plan and payment by the Company
of term life insurance premiums.
(4) Represents bonus amount paid (if any) in 2002 based on fiscal 2001.
AGGREGATED OPTION EXERCISES IN THE LAST FISCAL YEAR AND
FISCAL YEAR END OPTION VALUES
The following table summarizes information with respect to options held by
the Named Executive Officers, and the value of the options held by such persons
at the end of fiscal 2003.
<Table>
<Caption>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
SHARES OPTIONS AT FY-END(#)(1) AT FY-END($)(2)
ACQUIRED ON VALUE --------------------------- ---------------------------
NAME EXERCISE(#)(1) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- -------------- ----------- ----------- ------------- ----------- -------------
Lyle Berman............ -- N/A 650,000 100,000 3,812,300 700,500
Timothy J. Cope........ -- N/A 190,000 40,000 1,248,800 280,200
Joseph Galvin.......... -- N/A 189,250 40,000 1,153,515 257,700
</Table>
- ---------------
(1) Share amounts do not reflect the adjustments automatically taken as a result
of the Stock Split.
(2) The closing sale price of the Company's common stock on December 26, 2003,
the last trading day prior to the end of the Company's fiscal year, was
$15.38.
EMPLOYMENT AGREEMENTS
Effective February 21, 2002, we entered into an executive employment
agreement for an indefinite term with each of Timothy J. Cope, our President,
Chief Financial Officer, Treasurer and Secretary, and Joseph Galvin, our Chief
Operating Officer and Executive Vice President, each subject to early
termination by either
5
party for any reason or no reason. The employment agreements provide for annual
base salaries of $250,000 and $225,000 to Messrs. Cope and Galvin, respectively,
or such higher amount as determined by our Board of Directors. In addition, we
pay each executive an additional $600 per month to cover travel and other
expenses and provide the executives with customary benefits. The employment
agreements provide that if we terminate either executive without "cause" or if
either executive resigns for "good reason," such executive will continue to
receive his base salary and the two-year average of his average of his
bonus/incentive compensation for a period of twelve months. If such termination
occurs within two years following a "change of control," as defined in the
employment agreements, the executive will instead be entitled to a lump-sum
severance payment equal to twice his annual base salary and bonus/incentive
compensation along with insurance costs, 401k matching contributions and certain
other benefits. In either case, all options to purchase shares of our common
stock held by the executive at the time of his termination will immediately vest
in their entirety and remain exercisable for a period of two years thereafter.
The employment agreements provide that neither executive will compete with us
for two years after the termination of his employment.
We have not entered into employment agreements with any of our other
executive officers.
DIRECTOR COMPENSATION
We pay an annual fee of $24,000 to each of our directors who is not
otherwise employed by us or our subsidiaries (a "Non-Employee Director"). We
also pay each Non-Employee Director a fee of $1,000 for each meeting of the
Board of Directors attended and $1,000 for each committee meeting of the Board
of Directors attended. We also pay the Chairman of our Audit Committee an
additional annual fee of $3,000 for serving in such capacity.
In addition, the Lakes Entertainment, Inc. 1998 Director Stock Option Plan
(the "Director Plan") provides that each Non-Employee Director who was in office
at the time of our inception, and each subsequent Non-Employee Director at the
time of his or her initial election to the Board of Directors, receives a
non-qualified stock option to purchase up to 12,500 shares of our common stock
at an option exercise price equal to the fair market value of the shares on the
grant date. Each option will have a ten-year term and will generally become
exercisable in five equal installments commencing on the first anniversary of
the grant date. If the proposed amendments to the Director Plan are approved by
our shareholders at the annual meeting (see Proposal Three below), the number of
shares subject to this initial stock option grant will increase to 25,000 to
adjust the grant for the Stock Split.
In addition to the initial option grants, Non-Employee Directors may be
granted, at the discretion of the Board of Directors, additional options to
purchase our common stock. These additional options, if granted, will contain
such terms and provisions as the Board of Directors determines at the time of
the grant. In addition to the 12,500 share option granted to Mr. Moberg upon his
appointment to the Board of Directors in December 2003, the Board made an
additional 17,500 share discretionary option grant to Mr. Moberg upon such
appointment. These options have an exercise price equal to the fair market value
of our common stock on the date of grant. Directors who are also our employees
or employees of our subsidiaries receive no options for their services as
directors.
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Decisions regarding the compensation of Lakes Entertainment, Inc.
executives are generally made by the compensation committee, each member of
which is a non-employee director. All decisions by the compensation committee
relating to the compensation of the executive officers are reviewed by the full
Board of Directors. Pursuant to rules designed to enhance disclosure of Lakes
Entertainment's policies toward executive compensation, set forth below is a
report prepared by the compensation committee addressing the compensation
policies for Lakes Entertainment and its subsidiaries.
The compensation committee's executive compensation policies are designed
to provide competitive levels of compensation that integrate pay with Lakes
Entertainment, Inc.'s annual objectives and long-term goals, reward
above-average corporate performance, recognize individual initiative and
achievements, and assist Lakes Entertainment in attracting and retaining
qualified executives. Executive compensation is set at
6
levels that the compensation committee believes to be consistent with other
companies in Lakes Entertainment's industry.
There are three elements in the executive compensation program, all
determined by individual and corporate performance.
- Base salary compensation
- Annual incentive compensation
- Stock options
Total compensation opportunities are competitive with those offered by
employers of comparable size, growth and profitability in the Lakes
Entertainment, Inc.'s industry.
Base salary compensation is determined by the potential impact the
individual has on Lakes Entertainment, Inc., the skills and experiences required
by the job, and the performance and potential of the incumbent in the job.
Annual incentive compensation for Lakes Entertainment, Inc. executives is
based primarily on corporate earnings and growth as measured by Lakes
Entertainment's EBITDA (Earnings Before Interest, Taxes, Depreciation and
Amortization) results and goals and Lakes Entertainment's positioning for future
results, but also includes an overall assessment by the compensation committee
of executive management's individual and collective performance, as well as
market conditions.
The annualized base salary during fiscal 2003 for Lyle Berman, Chief
Executive Officer and Chairman of the Board, was $400,000. The amount of Mr.
Berman's compensation resulted from the compensation committee's assessment of
Lakes Entertainment, Inc.'s performance and business development during fiscal
2003. The compensation committee believes that Mr. Berman's salary is
competitive with executives in other industry-related companies of similar size.
Mr. Berman received an incentive bonus of $100,000 for fiscal year 2003, based
on his achievement of individual performance goals set by the compensation
committee.
The Lakes Entertainment, Inc. 1998 Stock Option and Compensation Plan (the
"Employee Plan") permits the compensation committee to grant stock options to
executives of Lakes Entertainment, Inc. Awards of stock options under the
Employee Plan are designed to integrate compensation of executives with the
long-term interests of Lakes Entertainment and its shareholders and assist in
the retention of executives. Options become exercisable based upon criteria
established by compensation committee, as the administrator of the Employee
Plan. During fiscal 2003, there were no options issued by the compensation
committee pursuant to the Employee Plan.
While the value realizable from exercisable options is dependent upon the
extent to which Lakes Entertainment, Inc.'s performance is reflected in the
market price of Lakes Entertainment's common stock at any particular point in
time, the decision as to whether such value will be realized in any particular
year is determined by each individual executive and not by the compensation
committee. Accordingly, when the compensation committee recommends that an
option be granted to an executive, that recommendation does not take into
account any gains realized that year by that executive as a result of his or her
individual decision to exercise an option granted in a previous year.
The compensation committee does not anticipate that any of the compensation
payable to executive officers in the coming year will exceed the limits and
deductibilities set forth in section 162(m) of the Internal Revenue Code of
1986, as amended. The compensation committee has not yet established a policy
regarding compensation in excess of these limits, but Proposal Two of this
Annual Proxy proposes certain changes to the Employee Plan that will, among
other things, limit the compensation payable to executive officers in each
fiscal year to ensure that we do not exceed the limits and deductibilities
described above in future years.
MORRIS GOLDFARB
RONALD J. KRAMER
7
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Morris Goldfarb and Ronald J. Kramer served as the members of the
Compensation Committee for fiscal year 2003.
STOCK PERFORMANCE GRAPH
The Securities and Exchange Commission requires that we include in this
Proxy Statement a line-graph presentation comparing cumulative, five-year
shareholders' returns (based on appreciation of the market price of our common
stock) on an indexed basis with (i) a broad equity market index and (ii) an
appropriate published industry or line-of-business index, a peer group index
constructed by us, or issuers with similar market capitalizations. The following
presentation compares our common stock price during the period from January 4,
1999, to December 31, 2003, to the NASDAQ Stock Market and the Russell 2000
Index.
We do not feel that we can reasonably identify a peer group and we believe
there is no published industry or line-of-business index that provides a
meaningful comparison of shareholder returns. Therefore, we have elected to use
the Russell 2000 Index in compiling our stock performance graph because we
believe the Russell 2000 Index provides a better comparison of shareholder
returns for companies with market capitalizations similar to that of ours.
The presentation assumes that the value of an investment in each of our
common stock, the NASDAQ Stock Market and the Russell 2000 index was $100 on
January 4, 1999, and that dividends paid were reinvested in the same security.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL
RETURN* AMONG LAKES ENTERTAINMENT, INC., THE
NASDAQ STOCK MARKET (U.S.) INDEX
AND THE RUSSELL 2000 INDEX
[PERFORMANCE GRAPH]
<Table>
<Caption>
Cumulative Total Return
1/99 6/99 12/99 6/00 12/00 6/01 12/01 6/02 12/02 6/03 12/03
Lakes Entertainment, Inc 100.00 130.60 94.78 105.97 111.94 88.36 74.03 80.72 64.47 95.39 192.84
Nasdaq Stock Market (U.S.) 100.00 121.76 184.27 180.00 111.13 97.80 88.21 66.62 60.99 73.97 91.18
Russell 2000 100.00 109.45 121.44 125.13 117.77 125.85 120.70 115.03 95.98 113.14 141.33
</Table>
* $100 Invested on 1/4/99 in stock or index -- including reinvestment of
dividends.
Prices have not been adjusted to reflect the Stock Split.
8
CODE OF CONDUCT
We have adopted a code of ethics that applies to our principal executive,
financial and accounting officers and persons performing similar functions. Upon
request, we will deliver a copy of this code of ethics free of charge. Requests
for a copy of this code of ethics should be submitted in writing to our
Secretary at our headquarters address, 130 Cheshire Lane, Suite 101, Minnetonka,
Minnesota 55305.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
We have outstanding one class of voting securities, common stock, $0.01 par
value, of which 11,103,817 shares were issued and outstanding as of the close of
business on the April 16, 2004. Each share of our common stock is entitled to
one vote on all matters put to a vote of shareholders.
The following table sets forth, as of the April 16, 2004, certain
information regarding the beneficial ownership of our common stock by (i) all
persons known by us to be the owner (or deemed to be the owner pursuant to the
rules and regulations of the SEC), of record or beneficially, of more than 5% of
our outstanding common stock, (ii) each of the directors and nominees for
election to the Board of Directors, (iii) each Named Executive Officer, and (iv)
all directors and executive officers as a group, in each case based upon
beneficial ownership reporting of our common stock as of such date. The share
amounts set forth in the table do not reflect the adjustments automatically
taken as a result of the Stock Split. Except as otherwise indicated, the address
of each shareholder is 130 Cheshire Lane, Minnetonka, Minnesota 55305, and each
shareholder has sole voting and investment power with respect to the shares
beneficially owned.
<Table>
<Caption>
SHARES OF LAKES
ENTERTAINMENT
COMMON STOCK PERCENTAGE OF COMMON
NAME AND ADDRESS BENEFICIALLY OWNED STOCK OUTSTANDING
- ---------------- ------------------ --------------------
Lyle Berman(1)............................................ 2,522,336 21.3
Timothy J. Cope(2)........................................ 235,000 2.1
Joseph Galvin(3).......................................... 59,250 *
Morris Goldfarb(4)........................................ 51,830 *
Ronald J. Kramer.......................................... 0 0
Ray M. Moberg............................................. 0 0
Neil I. Sell(5)........................................... 972,299 8.8
All Lakes Entertainment, Inc. Directors and Executive
Officers as a Group (7 people including the
foregoing)(6)........................................... 3,840,715 31.0
FMR Corp.(7).............................................. 973,988 8.8
82 Devonshire Street
Boston, MA 02109
</Table>
- ---------------
* Less than one percent.
(1) Includes 11,403 shares held by Berman Consulting Corporation, a corporation
wholly owned by Mr. Berman, and 161,500 shares owned by Mr. Berman through a
Berman Consulting Corporation profit sharing plan. Also includes options to
purchase 750,000 shares and a 200,000 share option held by Berman Consulting
Corporation as security for a loan transaction.
(2) Includes options to purchase 230,000 shares.
(3) Includes options to purchase 59,250 shares.
(4) Includes options to purchase 32,000 shares.
(5) Includes an aggregate of 968,100 shares held by four irrevocable trusts for
the benefit of Lyle Berman's children with respect to which Mr. Sell has
shared voting and dispositive powers as a co-trustee. Mr. Sell has
disclaimed beneficial ownership of such shares.
9
(6) Includes shares held by corporations controlled by such officers and
directors and shares held by trusts of which such officers and directors are
trustees. Also includes options to purchase 1,271,250 shares.
(7) Based solely upon the most recent Schedule 13G on file with the Securities
and Exchange Commission. FMR Corp. does not have sole voting power with
respect to any of such shares but has sole dispositive power with respect to
all 973,988 shares.
The foregoing footnotes are provided for informational purposes only and
each person disclaims beneficial ownership of shares owned by any member of his
or her family or held in trust for any other person, including family members.
SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS
We maintain the Employee Plan and the Director Plan, which were approved to
grant up to a maximum of 2,500,000 shares and 200,000 shares of common stock,
respectively, as of the end of fiscal 2003.
The Employee Plan is designed to integrate compensation of our executives
(including officers and directors but excluding directors who are not also
full-time employees) with our long-term interests and those of our shareholders
and to assist in the retention of executives and other key personnel. Under the
Director Plan, we may issue equity awards to members of our Board of Directors
who are not also our employees or employees of our subsidiaries. The Employee
Plan and the Director Plan have each been approved by our shareholders.
In connection with our establishment as a public corporation, which
occurred pursuant to a distribution of our common stock to the then shareholders
of Grand Casinos, Inc. (the "Distribution"), we issued options to purchase our
common stock to the holders of then-outstanding options to purchase common stock
of Grand Casinos. These Distribution-related options were treated as awards
granted outside of the Employee Plan and the Director Plan, and we did not seek
shareholder approval for the Distribution-related option grants apart from the
approval obtained from the shareholders of Grand Casinos for the overall public
distribution of our common stock.
The following table sets forth certain information as of December 28, 2003
with respect to the Employee Plan, the Director Plan and the options related to
the Distribution:
<Table>
<Caption>
NUMBER OF
SECURITIES
REMAINING
AVAILABLE FOR
NUMBER OF FUTURE ISSUANCES
SECURITIES TO BE UNDER EQUITY
ISSUED UPON WEIGHTED-AVERAGE COMPENSATION
EXERCISE OF EXERCISE PRICE OF PLANS (EXCLUDING
OUTSTANDING OPTIONS OUTSTANDING OPTIONS SECURITIES REFLECTED
PLAN CATEGORY (A) (B) IN COLUMN (A))
- ------------- ------------------- ------------------- --------------------
Equity Compensation Plans Approved By
Security Holders:
1998 Stock Option and Compensation
Plan................................. 1,549,600 $ 8.40 873,400
1998 Director Stock Option Plan......... 162,500 $ 9.14 37,500
--------- ------ -------
Total:.................................. 1,712,100 $ 8.47 910,900
Equity Compensation Plans Not Approved By
Security Holders:
Distribution-related Stock Options...... 451,201 $11.12 0
--------- ------ -------
TOTAL:.................................... 2,163,301 $ 9.02 910.900
========= ====== =======
</Table>
10
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
PARK PLACE ENTERTAINMENT CORPORATION
Mr. Berman entered into an employment agreement with Park Place
Entertainment, Inc. as of January 1, 1999 pursuant to which he served as a
part-time employee of Park Place. The agreement contained a noncompetition
covenant under which Mr. Berman was prohibited, subject to certain exceptions,
from participating in the ownership, management or control of any business
engaged in a gaming enterprise that competed with Park Place. Additionally, Mr.
Berman was required to give Park Place a right of first offer on all gaming
opportunities and projects, subject to certain exceptions. These covenants
substantially limited the number and scope of opportunities that Lakes
Entertainment was able to consider and pursue. The agreement, which originally
had a four year term ending January 1, 2003 and was renewed for an additional
one year term, expired on January 1, 2004. Mr. Berman received compensation
during 2003 of Ten Thousand Dollars ($10,000).
LOANS TO VIATICARE FINANCIAL SERVICES, LLC; LIVING BENEFITS FINANCIAL SERVICES,
LLC
During 2000 and 2001, we made a total of $4.0 million in unsecured loans to
ViatiCare Financial Services, LLC ("ViatiCare"), which has since been acquired
by Living Benefits Financial Services, LLC ("Living Benefits"). In connection
with the Living Benefits' acquisition of Viaticare, Living Benefits provided an
unsecured guarantee of ViatiCare's obligations to Lakes Entertainment, Inc. In
March 2001, our Board of Directors determined not to make further loans to
ViatiCare. Due to our management's determination that repayment of the $4.0
million loan was not likely to occur, we recorded a $4.0 million reserve in the
financial results for the quarter ended June 30, 2002.
Subsequent to our decision not to make further loans to ViatiCare, Mr.
Berman and LB Acquisitions LLC, a limited liability company wholly-owned by Mr.
Berman, have made loans or other advances to Living Benefits from time to time
totaling approximately $7.43 million. As an incentive to make an initial $5.6
million loan, LB Acquisitions was granted a 9 percent voting interest in Living
Benefits and was given an option (the "LB Option") to convert the $5.6 million
loan balance into an additional 46 percent of the voting interest in Living
Benefits. To secure the repayment of the LB Acquisitions loans, which become due
commencing in 2005, Living Benefits granted LB Acquisitions a security interest
in its personal property, including the right of Living Benefits to receive
payments from profits on life insurance policies acquired by Living Benefits on
or after June 15, 2001. LB Acquisitions made an additional loan of approximately
$400,000 to Living Benefits in May 2002. On July 1, 2002, Mr. Berman advanced an
additional $763,000 to Living Benefits in exchange for a portion of Living
Benefits' rights in 50% of a trust holding the distribution rights from certain
life insurance policies (the "Trust"), which Mr. Berman later transferred to LB
Acquisitions. As an inducement for this further advance, Living Benefits agreed
to amend the LB Option to permit the exercise thereof by LB Acquisitions for
$1.00 rather than requiring LB Acquisitions to convert $5.6 million of its loan
amounts. Between October 2002 and February 2003, Mr. Berman and LB Acquisitions
made additional loans to Living Benefits totaling approximately $350,000 and
acquired approximately $230,000 in existing debt previously held by other
investors.
On April 7, 2003, Living Benefits transferred its entire interest in the
Trust (which constitutes the substantial majority of Living Benefits' assets) to
LB Acquisitions in exchange for the forgiveness by LB Acquisitions of $6.9
million of Living Benefits' debt obligations. Formal transfer to LB Acquisitions
of certificates evidencing the Trust interests is subject to the consent of the
third party holding the remaining 50% Trust interest.
TRANSACTIONS WITH SKLANSKY GAMES, LLC AND WORLD POKER TOUR, LLC
We are currently in the process of negotiating a license agreement with
Sklansky Games, LLC ("Sklansky") and World Poker Tour, LLC pursuant to which we
will develop a casino table game jointly with Sklansky utilizing the World Poker
Tour brand name. Sklansky, through a joint venture with an unrelated third
party, is also in negotiations to license the World Poker Tour brand in
connection with the joint venture's development of an electronic poker-related
gaming machine. In addition to our indirect majority ownership of
11
in World Poker Tour LLC through one of our wholly owned subsidiaries, Mr. Berman
and his son, Brad Berman, each own an equity interest in Sklansky.
LICENSE AGREEMENT WITH G-III APPAREL GROUP, LTD.
Our majority-owned subsidiary, World Poker Tour, LLC, intends to enter into
a non-exclusive license agreement with G-III Apparel Group, Ltd. ("G-III").
G-III will license intellectual property rights from World Poker Tour to produce
certain types of licensed apparel for distribution in authorized channels within
the United States, its territories and possessions and, in certain
circumstances, Canada. G-III will pay royalties and certain other fees to World
Poker Tour. Morris Goldfarb, a director of the Company, is a director,
Co-Chairman of the Board and Chief Executive Officer of G-III.
LEGAL SERVICES
Neil I. Sell is a partner in the law firm of Maslon Edelman Borman & Brand,
LLP, which renders legal services to us from time to time.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
FEES BILLED TO COMPANY BY ITS INDEPENDENT AUDITORS
The following table presents fees for professional audit and other services
rendered by Deloitte & Touche LLP and Arthur Andersen LLP, as applicable, during
fiscal 2003 and fiscal 2002.
<Table>
<Caption>
FEES FOR 2003 FEES FOR 2002
----------------- -----------------------------------
DELOITTE & TOUCHE DELOITTE & TOUCHE ARTHUR ANDERSEN
----------------- ----------------- ---------------
Audit Fees............................. $104,000 $197,500 $ 21,010
Audit-Related Fees(1).................. -- -- --
Tax Fees(2)............................ $343,072 $ 94,700 $123,775
All Other Fees(3)...................... $ 44,122 -- --
-------- -------- --------
Total Fees............................. $491,194 $219,700 $144,785
======== ======== ========
</Table>
- ---------------
(1) Audit-Related Fees consist principally of assurance and related services
that are reasonably related to the performance of the audit or review of the
Company's financial statements but not reported under the caption Audit Fees
above.
(2) Fees for tax services consisted of tax compliance services, tax transaction
support services and other tax services. Fees for tax compliance services
totaled $213,970 for 2003. Tax compliance services are services rendered
based upon facts already in existence or transactions that have already
occurred to document, compute, and obtain government approval for amounts to
be included in tax filings. The services consisted of federal, state and
local income tax return assistance, sales and use, property and other tax
return assistance and assistance with tax audits and appeals. Fees for tax
transaction support services totaled $95,827 for 2003. Tax transaction
support services are services rendered in support of proposed transactions
such as acquisitions, divestitures, joint ventures, partnerships and
contractual matters. Fees for other tax services totaled $33,275 for 2003.
Other tax services are all other tax planning and consulting services
rendered.
(3) All Other Fees in fiscal 2003 consist of fees for permitted non-audit
products and services provided which included transaction related
consultation.
The audit committee of the Board of Directors has reviewed the fees billed
by Deloitte & Touche LLP during fiscal year 2003 and, after consideration, has
determined that the receipt of these fees by Deloitte & Touche LLP is compatible
with the provision of independent audit services. The audit committee discussed
these services and fees with Deloitte & Touche LLP and our management to
determine that they are permitted under the rules and regulations concerning
auditor independence promulgated by the
12
U.S. Securities and Exchange Commission to implement the Sarbanes-Oxley Act of
2002, as well as the American Institute of Certified Public Accountants.
PRE-APPROVAL OF SERVICES BY INDEPENDENT AUDITORS
As permitted under applicable law, our audit committee may pre-approve from
time to time certain types of services, including tax services, to be provided
by our independent auditors. As provided in the charter of the audit committee,
and in order to maintain control and oversight over the services provided by our
independent auditors, it is the policy of the audit committee to pre-approve all
audit and non-audit services to be provided by the independent auditors (other
than with respect to de minimus exceptions permitted by the Sarbanes-Oxley Act
of 2002), and not to engage the independent auditors to provide any non-audit
services prohibited by law or regulation. For administrative convenience, the
audit committee may delegate pre-approval authority to audit committee members
who are also independent member of the Board of Directors, but any decision by
such a member on pre-approval must be reported to the full audit committee at
its next regularly scheduled meeting.
PART IV
ITEM 15. EXHIBIT, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a)(3)
See Exhibit Index
(b) Reports on Form 8-K.
(i) A Form 8-K, Item 7, Financial Statements, Pro Forma Financial
Information and Exhibits, and Item 9. Regulation FD Disclosure was filed on
October 8, 2003.
(ii) A Form 8-K, Item 7, Financial Statements, Pro Forma Financial
Information and Exhibits, Item 9. Regulation FD Disclosure and Item 12.
Results of Operations and Financial Condition was filed on October 24,
2003.
(iii) A Form 8-K, Item 7, Financial Statements, Pro Forma Financial
Information and Exhibits, and Item 9. Regulation FD Disclosure was filed on
November 20, 2003.
(iv) A Form 8-K, Item 7, Financial Statements, Pro Forma Financial
Information and Exhibits, and Item 9. Regulation FD Disclosure was filed on
December 10, 2003.
(v) A Form 8-K, Item 7, Financial Statements, Pro Forma Financial
Information and Exhibits, and Item 9. Regulation FD Disclosure was filed on
December 18, 2003.
(vi) A Form 8-K, Item 7. Financial Statements, Pro Forma Financial
Information and Exhibits and Item 9. Regulation FD Disclosure was filed on
December 22, 2003.
13
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
LAKES ENTERTAINMENT, INC.
Registrant
By: /s/ LYLE BERMAN
------------------------------------
Name: Lyle Berman
Title: Chairman of the Board and
Chief Executive Officer
Dated as of April 30, 2004
14
EXHIBIT INDEX
<Table>
<Caption>
EXHIBITS DESCRIPTION
- -------- -----------
2.1 Agreement and Plan of Merger by and among Hilton, Park Place
Entertainment Corporation, Gaming Acquisition Corporation,
Lakes Gaming, Inc. and Grand Casinos, Inc. dated as of June
30, 1998. (Incorporated herein by reference to Exhibit 2.2
to Lakes' Form 10 Registration Statement as filed with the
Securities and Exchange Commission (the "Commission") on
October 23, 1998.) (the "Lakes Form 10")
3.1 Articles of Incorporation of Lakes Gaming, Inc.
(Incorporated herein by reference to Exhibit 3.1 to the
Lakes Form 10.)
3.2 By-laws of Lakes Gaming, Inc. (Incorporated herein by
reference to Exhibit 3.2 to the Lakes Form 10.)
10.1 Distribution Agreement by and between Grand Casinos, Inc.
and Lakes Gaming, Inc., dated as of December 31, 1998.
(Incorporated herein by reference to Exhibit 10.1 to Lakes'
Form 8-K dated January 8, 1999.)
10.2 Employee Benefits and Other Employment Matters Allocation
Agreement by and between Grand Casinos, Inc. and Lakes
Gaming, Inc., dated as of December 31, 1998. (Incorporated
herein by reference to Exhibit 10.2 to Lakes' Form 8-K dated
January 8, 1999.)
10.3 Intellectual Property License Agreement by and between Grand
Casinos, Inc. and Lakes Gaming, Inc., dated as of December
31, 1998. (Incorporated herein by reference to Exhibit 10.5
to Lakes' Form 8-K dated January 8, 1999.)
10.4 Tax Allocation and Indemnity Agreement by and between Grand
Casinos, Inc. and Lakes Gaming, Inc., dated as of December
31, 1998. (Incorporated herein by reference to Exhibit 10.3
to Lakes' Form 8-K dated January 8, 1999.)
10.5 Tax Escrow Agreement by and among Grand Casinos, Inc., Lakes
Gaming, Inc., and First Union National Bank as Escrow Agent,
dated as of December 31, 1998. (Incorporated herein by
reference to Exhibit 10.4 to Lakes' Form 8-K dated January
8, 1999.)
10.6 Trust Agreement dated as of December 31, 1998 entered into
by and among Lakes Gaming, Inc., Grand Casinos, Inc. and
First Union National Bank, as Trustee. (Incorporated herein
by reference to Exhibit 10.7 to Lakes' Form 10-K dated March
26, 1999).
10.7 Pledge and Security Agreement dated as of December 31, 1998
entered into by and among Lakes Gaming, Inc., as Debtor and
First Union National Bank (the "Trustee") pursuant to the
Trust Agreement executed in favor of Grand Casinos, Inc.
(the "Secured Party"). (Incorporated herein by reference to
Exhibit 10.8 to Lakes' Form 10-K dated March 26, 1999.)
10.8 Lakes Gaming, Inc. 1998 Stock Option and Compensation Plan.
(Incorporated herein by reference to Annex G to the Joint
Proxy Statement/Prospectus of Hilton Hotels Corporation and
Grand dated and filed with the Commission on October 14,
1998 (the "Joint Proxy Statement") which is attached to the
Lakes Form 10 as Annex A.)*
10.9 Lakes Gaming, Inc. 1998 Director Stock Option Plan.
(Incorporated herein by reference to Annex H to the Joint
Proxy Statement/Prospectus of Hilton Hotels Corporation and
Grand dated and filed with the Commission on October 14,
1998 (the "Joint Proxy Statement") which is attached to the
Lakes Form 10 as Annex A.)*
10.10 Indemnification Agreement, dated as of December 31, 1997, by
and between Grand Casinos, Inc. and Lyle Berman.
(Incorporated herein by reference to Exhibit 10.79 to
Grand's Report on Form 10-K for the fiscal year ended
December 28, 1997.)
10.11 Non-competition Agreement made and entered into as of
December 31, 1998, by and between Lyle Berman and Park Place
Entertainment Corporation (f/k/a Gaming Co., Inc.) a
Delaware corporation. (Incorporated herein by reference to
Exhibit 10.21 to Lakes' Report on Form 10-Q for the quarter
ended April 4, 1999.)
10.12 Development Agreement dated as of the 8th day of July, 1999
by and between the Pokagon Band of Potawatomi Indians and
Lakes Gaming, Inc., a Minnesota corporation. (Incorporated
herein by reference to Exhibit 10.61 to Lakes' Report on
Form 10-K for the fiscal year ended December 31, 2000.)
</Table>
15
<Table>
<Caption>
EXHIBITS DESCRIPTION
- -------- -----------
10.13 Management Agreement dated as of July 8, 1999, by and
between the Pokagon Band of Potawatomi Indians and Lakes
Gaming, Inc., a Minnesota corporation. (Incorporated herein
by reference to Exhibit 10.62 to Lakes' Report on Form 10-K
for the fiscal year ended December 31, 2000.)
10.14 Promissory Note (the "Lakes Note") dated as of July 8, 1999
by and among the Pokagon Band of Potawatomi Indians and
Lakes Gaming, Inc., a Minnesota corporation. (Incorporated
herein by reference to Exhibit 10.63 to Lakes' Report on
Form 10-K for the fiscal year ended December 31, 2000.)
10.15 Non-Gaming Land Acquisition Line of Credit Agreement dated
as of the 8th day of July, 1999, by and between the Pokagon
Band of Potawatomi Indians and Lakes Gaming, Inc., a
Minnesota corporation. (Incorporated herein by reference to
Exhibit 10.64 to Lakes' Report on Form 10-K for the fiscal
year ended December 31, 2000.)
10.16 Promissory Note (the "Transition Loan Note") dated as of
July 8, 1999 by and among the Pokagon Band of Potawatomi
Indians and Lakes Gaming, Inc., a Minnesota corporation.
(Incorporated herein by reference to Exhibit 10.65 to Lakes'
Report on Form 10-K for the fiscal year ended December 31,
2000.)
10.17 Account Control Agreement dated as of July 8, 1999 by and
among the Pokagon Band of Potawatomi Indians and Lakes
Gaming, Inc., a Minnesota corporation. (Incorporated herein
by reference to Exhibit 10.66 to Lakes' Report on Form 10-K
for the fiscal year ended December 31, 2000.)
10.18 Pledge and Security Agreement dated as of July 8, 1999 by
and among the Pokagon Band of Potawatomi Indians and Lakes
Gaming, Inc., a Minnesota corporation. (Incorporated herein
by reference to Exhibit 10.67 to Lakes' Report on Form 10-K
for the fiscal year ended December 31, 2000.)
10.19 Memorandum of Agreement Regarding Gaming Development and
Management Agreements dated as of the 15th day of February,
2000 by and between the Jamul Indian Village and Lakes
KAR -- California, LLC, a Delaware limited liability
company. (Incorporated herein by reference to Exhibit 10.68
to Lakes' Report on Form 10-K for the fiscal year ended
December 31, 2000.)
10.20 Operating Agreement of Lakes Kean Argovitz
Resorts -- California, LLC dated as of the 25th day of May,
1999 by and between Lakes Jamul, Inc. and Kean Argovitz
Resorts -- Jamul, LLC. (Incorporated herein by reference to
Exhibit 10.69 to Lakes' Report on Form 10-K for the fiscal
year ended December 31, 2000.)
10.21 Promissory Note dated as of the 15th day of February, 2000
by and among the Jamul Indian Village and Lakes
KAR -- California, LLC, a Delaware limited liability
company. (Incorporated herein by reference to Exhibit 10.70
to Lakes' Report on Form 10-K for the fiscal year ended
December 31, 2000.)
10.22 Security Agreement dated as of the 25th day of May, 1999 by
and between Lakes Jamul, Inc., a Minnesota corporation and
Lakes Kean Argovitz Resorts -- California, LLC, a Delaware
limited liability company. (Incorporated herein by reference
to Exhibit 10.71 to Lakes' Report on Form 10-K for the
fiscal year ended December 31, 2000.)
10.23 Management Agreement between the Shingle Springs Band of
Miwok Indians and Kean Argovitz Resorts -- Shingle Springs,
LLC, dated as of the 11th day of June, 1999. (Incorporated
herein by reference to Exhibit 10.72 to Lakes' Report on
Form 10-K for the fiscal year ended December 31, 2000.)
10.24 Development Agreement between the Shingle Springs Band of
Miwok Indians and Kean Argovitz Resorts -- Shingle Springs,
LLC, dated as of the 11th day of June, 1999. (Incorporated
herein by reference to Exhibit 10.73 to Lakes' Report on
Form 10-K for the fiscal year ended December 31, 2000.)
10.25 Management Agreement dated as of the 29th day of July, 1999
by and among Lakes Shingle Springs, Inc., a Minnesota
corporation and Lakes KAR -- Shingle Springs, LLC, a
Delaware limited liability company. (Incorporated herein by
reference to Exhibit 10.74 to Lakes' Report on Form 10-K for
the fiscal year ended December 31, 2000.)
</Table>
16
<Table>
<Caption>
EXHIBITS DESCRIPTION
- -------- -----------
10.26 Operating Agreement of Lakes KAR -- Shingle Springs, LLC
dated as of the 29th day of July, 1999 by Lakes Shingle
Springs, Inc. and Kean Argovitz Resorts -- Shingle Springs,
LLC. (Incorporated herein by reference to Exhibit 10.75 to
Lakes' Report on Form 10-K for the fiscal year ended
December 31, 2000.)
10.27 Assignment and Assumption Agreement between Kean Argovitz
Resorts -- Shingle Springs, LLC, a Nevada limited liability
company, and Lakes KAR -- Shingle Springs, LLC, a Delaware
limited liability company, dated as of the 11th day of June,
1999. (Incorporated herein by reference to Exhibit 10.76 to
Lakes' Report on Form 10-K for the fiscal year ended
December 31, 2000.)
10.28 Assignment and Assumption Agreement and Consent to
Assignment and Assumption, by and between Lakes Gaming,
Inc., a Minnesota corporation, and Kean Argovitz
Resorts -- Shingle Springs, LLC, a Nevada limited liability
company, dated as of the 11th day of June, 1999.
(Incorporated herein by reference to Exhibit 10.77 to Lakes'
Report on Form 10-K for the fiscal year ended December 31,
2000.)
10.29 Security Agreement dated as of the 29th day of July, 1999,
by and between Lakes Shingle Springs, Inc., a Minnesota
corporation, and Lakes KAR -- Shingle Springs, LLC, a
Delaware limited liability company. (Incorporated herein by
reference to Exhibit 10.78 to Lakes' Report on Form 10-K for
the fiscal year ended December 31, 2000.)
10.30 Promissory Note dated as of the 29th day of July, 1999, by
and among Kean Argovitz Resorts -- Shingle Springs, LLC, a
Nevada limited liability company, and Lakes Shingle Springs,
Inc., a Minnesota corporation. (Incorporated herein by
reference to Exhibit 10.79 to Lakes' Report on Form 10-K for
the fiscal year ended December 31, 2000.)
10.31 Pledge Agreement dated as of the 29th day of July, 1999, by
and between Kean Argovitz Resorts -- Shingle Springs, LLC, a
Nevada limited liability company and Lakes Shingle Springs,
Inc., a Minnesota corporation. (Incorporated herein by
reference to Exhibit 10.80 to Lakes' Report on Form 10-K for
the fiscal year ended December 31, 2000.)
10.32 Joint Contribution Agreement by and between Grand Casinos
Nevada I, Inc., Metroplex, LLC, Lakes Gaming, Inc., and
Metroplex-Lakes, LLC dated as of April 25, 2000.
(Incorporated herein by reference to Exhibit 10.1 to Lakes'
Report on Form 10-Q for the quarter ended July 2, 2000.)
10.33 Member Control Agreement of Metroplex-Lakes, LLC, by and
between Grand Casinos Nevada I, Inc., Metroplex, LLC, and
Metroplex-Lakes, LLC dated as of April 25, 2000.
(Incorporated herein by reference to Exhibit 10.2 to Lakes'
Report on Form 10-Q for the quarter ended July 2, 2000.)
10.34 Real Estate Option Agreement by and between Grand Casinos
Nevada I, Inc., Metroplex-Lakes, LLC, and Metroplex, LLC
dated as of April 25, 2000. (Incorporated herein by
reference to Exhibit 10.3 to Lakes' Report on Form 10-Q for
the quarter ended July 2, 2000.)
10.35 Amended and Restated Option Agreement by and between Martin
J. Cable and Olga B. Cable, as Trustees of the Cable Family
Trust and Grand Casinos Nevada I, Inc. dated as of June 1,
2000. (Incorporated herein by reference to Exhibit 10.4 to
Lakes' Report on Form 10-Q for the quarter ended July 2,
2000.)
10.36 Acquisition and Participation Agreement, dated as of August
7, 2000, by and between MRD Gaming, LLC, a Nevada limited
liability company, and Lakes Gaming and Resorts, LLC, a
Minnesota limited liability company. (Incorporated herein by
reference to Exhibit 10.1 to Lakes' Report on Form 10-Q for
the quarter ended October 1, 2000.)
10.37 First Amendment to Acquisition and Participation Agreement,
dated as of October 12, 2000, by and between MRD Gaming,
LLC, a Nevada limited liability company, and Lakes Gaming
and Resorts, LLC, a Minnesota limited liability company.
(Incorporated herein by reference to Exhibit 10.2 to Lakes'
Report on Form 10-Q for the quarter ended October 1, 2000.)
10.38 Member Control Agreement of Pacific Coast Gaming -- Corning,
LLC. (Incorporated herein by reference to Exhibit 10.3 to
Lakes' Report on Form 10-Q for the quarter ended October 1,
2000.)
</Table>
17
<Table>
<Caption>
EXHIBITS DESCRIPTION
- -------- -----------
10.39 Member Control Agreement of Pacific Coast Gaming -- Santa
Rosa, LLC. (Incorporated herein by reference to Exhibit 10.4
to Lakes' Report on Form 10-Q for the quarter ended October
1, 2000.)
10.40 Promissory Note, dated as of October 12, 2000, by and
between Pacific Coast Gaming -- Corning, LLC, a Minnesota
limited liability company, and Lakes Corning, LLC, a
Minnesota limited liability company. (Incorporated herein by
reference to Exhibit 10.5 to Lakes' Report on Form 10-Q for
the quarter ended October 1, 2000.)
10.41 Promissory Note, dated as of October 12, 2000, by and
between Pacific Coast Gaming -- Santa Rosa, LLC, a Minnesota
limited liability company, and Lakes Cloverdale, LLC, a
Minnesota limited liability company. (Incorporated herein by
reference to Exhibit 10.6 to Lakes' Report on Form 10-Q for
the quarter ended October 1, 2000.)
10.42 Assignment and Assumption Agreement, dated as of October 16,
2000, by and among Great Lakes of Michigan, LLC, a Minnesota
limited liability company, Lakes Gaming, Inc., a Minnesota
corporation, and Pokagon Band of Potawatomi Indians.
(Incorporated herein by reference to Exhibit 10.7 to Lakes'
Report on Form 10-Q for the quarter ended October 1, 2000.)
10.43 First Amended and Restated Development Agreement, dated as
of October 16, 2000, by and between the Pokagon Band of
Potawatomi Indians and Great Lakes Gaming of Michigan, LLC,
a Minnesota limited liability company (f/k/a Great Lakes of
Michigan, LLC). (Incorporated herein by reference to Exhibit
10.8 to Lakes' Report on Form 10-Q for the quarter ended
October 1, 2000.)
10.44 First Amended and Restated Management Agreement, dated as of
October 16, 2000, by and between the Pokagon Band of
Potawatomi Indians and Great Lakes Gaming of Michigan, LLC,
a Minnesota limited liability company (f/k/a Great Lakes of
Michigan, LLC). (Incorporated herein by reference to Exhibit
10.9 to Lakes' Report on Form 10-Q for the quarter ended
October 1, 2000.)
10.45 First Amended and Restated Lakes Note, dated as of October
16, 2000, by and between the Pokagon Band of Potawatomi
Indians and Great Lakes of Michigan, LLC, a Minnesota
limited liability company. (Incorporated herein by reference
to Exhibit 10.10 to Lakes' Report on Form 10-Q for the
quarter ended October 1, 2000.)
10.46 First Amended and Restated Non-Gaming Land Acquisition Line
of Credit, dated as of October 16, 2000, by and between the
Pokagon Band of Potawatomi Indians and Great Lakes of
Michigan, LLC, a Minnesota limited liability company.
(Incorporated herein by reference to Exhibit 10.11 to Lakes'
Report on Form 10-Q for the quarter ended October 1, 2000.)
10.47 Amended and Restated Transition Loan Note, dated as of
October 16, 2000, by and between the Pokagon Band of
Potawatomi Indians and Great Lakes of Michigan, LLC, a
Minnesota limited liability company. (Incorporated herein by
reference to Exhibit 10.12 to Lakes' Report on Form 10-Q for
the quarter ended October 1, 2000.)
10.48 Amendment to Account Control Agreement, dated as of October
16, 2000, by and among Great Lakes of Michigan, LLC, a
Minnesota limited liability company, Lakes Gaming, Inc., a
Minnesota corporation, the Pokagon Band of Potawatomi
Indians, and Firstar Bank, N.A. f/k/a Firstar Bank of
Minnesota, N.A. (Incorporated herein by reference to Exhibit
10.13 to Lakes' Report on Form 10-Q for the quarter ended
October 1, 2000.)
10.49 Unlimited Guaranty, dated as of October 16, 2000, from Lakes
Gaming, Inc., a Minnesota corporation, and Great Lakes of
Michigan, LLC, a Minnesota limited liability company, to the
Pokagon Band of Potawatomi Indians. (Incorporated herein by
reference to Exhibit 10.14 to Lakes' Report on Form 10-Q for
the quarter ended October 1, 2000.)
10.50 Amendment to Pledge and Security Agreement, dated as of
October 16, 2000, by and among the Great Lakes of Michigan,
LLC, a Minnesota limited liability company, Lakes Gaming,
Inc., a Minnesota corporation, and the Pokagon Band of
Potawatomi Indians. (Incorporated herein by reference to
Exhibit 10.15 to Lakes' Report on Form 10-Q for the quarter
ended October 1, 2000.)
</Table>
18
<Table>
<Caption>
EXHIBITS DESCRIPTION
- -------- -----------
10.51 Gaming Development Agreement for Class III Gaming Facility
by and between The Nipmuc Nation and Lakes Nipmuc, LLC,
dated as of July 5, 2001. (Incorporated herein by reference
to Exhibit 10.1 to Lakes' Report on Form 10-Q for the
quarter ended July 1, 2001.)
10.52 Management Agreement for Class III Gaming Enterprise by and
between The Nipmuc Nation and Lakes Nipmuc, LLC, dated as of
July 5, 2001. (Incorporated herein by reference to Exhibit
10.2 to lakes' Report on Form 10-Q for the quarter ended
July 1, 2001.)
10.53 Interim Promissory Note, dated as of July 5, 2001, by and
between The Nipmuc Nation and Lakes Nipmuc, LLC.
(Incorporated herein by reference to Exhibit 10.3 to Lakes'
Report on Form 10-Q for the quarter ended July 1, 2001.)
10.54 Security Agreement by and between The Nipmuc Nation and
Lakes Nipmuc, LLC, dated July 5, 2001. (Incorporated herein
by reference to Exhibit 10.4 to Lakes' Report on Form 10-Q
for the quarter ended July 1, 2001.)
10.55 Guaranty Agreement by Lakes Gaming, Inc. and agreed to by
The Nipmuc Nation, dated as of July 5, 2001. (Incorporated
herein by reference to Exhibit 10.5 to Lakes' Report on Form
10-Q for the quarter ended July 1, 2001.)
10.56 Purchase Agreement, dated as of December 28, 2001, by and
among Grand Casinos Nevada I, Inc., a Minnesota corporation,
and Metroflag Polo, LLC, a Nevada limited liability company.
(Incorporated herein by reference to Exhibit 10.56 to Lakes'
Report on Form 10-K for the fiscal year ended December 30,
2001.)
10.57 Promissory Note dated as of the 28th day of December 2001,
by and among Metroflag Polo, LLC, a Nevada limited liability
company, and Grand Casinos Nevada I, Inc., a Minnesota
corporation. (Incorporated herein by reference to Exhibit
10.57 to Lakes' Report on Form 10-K for the fiscal year
ended December 30, 2001.)
10.58 Deed of Trust, Assignment of Leases and Rents and Security
Agreement, dated December 28, 2001, by and among Metroflag
Polo, LLC, Lawyers Title of Nevada, Inc. as trusted, and
Grand Casinos Nevada I, Inc. as beneficiary. (Incorporated
herein by reference to Exhibit 10.58 to Lakes' Report on
Form 10-K for the fiscal year ended December 30, 2001.)
10.59 Purchase Agreement, dated as of December 28, 2001, by and
among Grand Casinos Nevada I, Inc., a Minnesota corporation,
and Metroflag BP, LLC, a Nevada limited liability company.
(Incorporated herein by reference to Exhibit 10.59 to Lakes'
Report on Form 10-K for the fiscal year ended December 30,
2001.)
10.60 Promissory Note dated as of the 28th day of December 2001,
by and among Metroflag BP, LLC, a Nevada limited liability
company and Grand Casinos Nevada I, Inc., a Minnesota
corporation. (Incorporated herein by reference to Exhibit
10.60 to Lakes' Report on Form 10-K for the fiscal year
ended December 30, 2001.)
10.61 Promissory Note dated as of the 28th day of December 2001,
by and among Metroflag BP, LLC, a Nevada limited liability
company, and Grand Casinos Nevada I, Inc., a Minnesota
corporation. (Incorporated herein by reference to Exhibit
10.61 to Lakes' Report on Form 10-K for the fiscal year
ended December 30, 2001.)
10.62 Leasehold Deed of Trust, Assignment of Leases and Rents and
Security Agreement, dated December 28, 2001, by and among
Metroflag BP, LLC, Lawyers Title of Nevada, Inc. as trustee,
and Grand Casinos Nevada I, Inc. and Grand Casinos, Inc. as
beneficiaries. (Incorporated herein by reference to Exhibit
10.62 to Lakes' Report on Form 10-K for the fiscal year
ended December 30, 2001.)
10.63 Leasehold Deed of Trust, Assignment of Leases and Rents and
Security Agreement, dated December 28, 2001 by and among
Metroflag BP, LLC, Lawyers Title of Nevada, Inc. as trustee,
and Grand Casinos Nevada I, Inc. as beneficiary.
(Incorporated herein by reference to Exhibit 10.63 to Lakes'
Report on Form 10-K for the fiscal year ended December 30,
2001.)
10.64 Buyout and Release Agreement (Shingle Springs Project) dated
as of January 30, 2003, by and among Kean Argovitz
Resorts -- Shingle Springs, L.L.C., Lakes KAR -- Shingle
Springs, L.L.C., Lakes Entertainment, Inc., a Minnesota
corporation, and Lakes Shingle Springs, Inc. (Incorporated
herein by reference to Exhibit 10.64 to Lakes' Report on
Form 10-K for the fiscal year ended December 29, 2002.)
</Table>
19
<Table>
<Caption>
EXHIBITS DESCRIPTION
- -------- -----------
10.65 Consent and Agreement to Buyout and Release
(Argovitz -- Shingle Springs Project) dated as of January
30, 2003, by and among Jerry A. Argovitz, Lakes
KAR -- Shingle Springs, L.L.C., Lakes Entertainment, Inc.
and Lakes Shingle Springs, Inc. (Incorporated herein by
reference to Exhibit 10.65 to Lakes' Report on Form 10-K for
the fiscal year ended December 29, 2002.)
10.66 Consent and Agreement to Buyout and Release (Kean -- Shingle
Springs Project) dated as of January 30, 2003, by and among
Kevin M. Kean, Lakes KAR -- Shingle Springs, L.L.C., Lakes
Entertainment, Inc. and Lakes Shingle Springs, Inc.
(Incorporated herein by reference to Exhibit 10.66 to Lakes'
Report on Form 10-K for the fiscal year ended December 29,
2002.)
10.67 Shingle Springs Consulting Agreement dated as of January 30,
2003, by and between Kevin M. Kean and Lakes KAR -- Shingle
Springs, L.L.C. (Incorporated herein by reference to Exhibit
10.67 to Lakes' Report on Form 10-K for the fiscal year
ended December 29, 2002.)
10.68 Buyout and Release Agreement (Jamul Project) dated as of
January 30, 2003, by and among Kean Argovitz
Resorts -- Jamul, L.L.C., Lakes Kean Argovitz
Resorts -- California, L.L.C., Lakes Entertainment, Inc., a
Minnesota corporation, and Lakes Jamul, Inc. (Incorporated
herein by reference to Exhibit 10.68 to Lakes' Report on
Form 10-K for the fiscal year ended December 29, 2002.)
10.69 Consent and Agreement to Buyout and Release
(Argovitz -- Jamul Project) dated as of January 30, 2003, by
and among Jerry A. Argovitz, Lakes Kean Argovitz
Resorts -- California, L.L.C., Lakes Entertainment, Inc., a
Minnesota corporation, and Lakes Jamul, Inc. (Incorporated
herein by reference to Exhibit 10.69 to Lakes' Report on
Form 10-K for the fiscal year ended December 29, 2002.)
10.70 Consent and Agreement to Buyout and Release (Kean -- Jamul
Project) dated as of January 30, 2003, by and among Kevin M.
Kean, Lakes Kean Argovitz Resorts -- California, L.L.C.,
Lakes Entertainment, Inc., a Minnesota corporation, and
Lakes Jamul, Inc. (Incorporated herein by reference to
Exhibit 10.70 to Lakes' Report on Form 10-K for the fiscal
year ended December 29, 2002.)
10.71 Jamul Consulting Agreement dated as of January 30, 2003, by
and between Kevin M. Kean and Lakes Kean Argovitz
Resorts -- California, L.L.C. (Incorporated herein by
reference to Exhibit 10.71 to Lakes' Report on Form 10-K for
the fiscal year ended December 29, 2002.)
10.72 Loan and Security Agreement dated as of January 30, 2003, by
and among Lakes California Land Development, Inc., Lakes
Entertainment, Inc., Lakes Shingle Springs, Inc., Lakes
Jamul, Inc., Lakes KAR Shingle Springs, L.L.C., Lakes Kean
Argovitz Resorts -- California, L.L.C. and Kevin M. Kean.
(Incorporated herein by reference to Exhibit 10.72 to Lakes'
Report on Form 10-K for the fiscal year ended December 29,
2002.)
10.73 Acquisition Master Agreement dated January 22, 2003, by and
between The Travel Channel, L.L.C. and World Poker Tour,
L.L.C. (portions of this exhibit have been omitted pursuant
to a request for confidential treatment and have been filed
separately with the Commission pursuant to Rule 24b-2 of the
Securities Exchange Act of 1934) (Incorporated herein by
reference to Exhibit 10.63 to Lakes' report on Form 10-Q for
the fiscal quarter ended March 30, 2003.)
10.74 Amendment to Member Control Agreement of Pacific Coast
Gaming -- Santa Rosa, LLC (Incorporated herein by reference
to Exhibit 10.63 to Lakes' Report on Form 10-Q for the
fiscal quarter ended March 30, 2003).
10.75 Third Amendment to Acquisition and Participation Agreement
dated as of February 28, 2003, by and among MRD Gaming, LLC,
Lakes Cloverdale, LLC and Lakes Corning, LLC (Incorporated
herein by reference to Exhibit 10.63 to Lakes' Report on
Form 10-Q for the fiscal quarter ended March 30, 2003).
10.76 Assignment dated as of February 28, 2003 by and between
Lakes Corning, LLC and Lakes Cloverdale, LLC (Incorporated
herein by reference to Exhibit 10.63 to Lakes' Report on
Form 10-Q for the fiscal quarter ended March 30, 2003.
10.77 Assignment dated as of February 28, 2003 by and among
Pacific Coast Gaming -- Corning, LLC, MRD Gaming, LLC and
Lakes Corning, LLC (Incorporated herein by reference to
Exhibit 10.63 to Lakes' Report on Form 10-Q for the fiscal
quarter ended March 30, 2003).
</Table>
20
<Table>
<Caption>
EXHIBITS DESCRIPTION
- -------- -----------
10.78 Purchase Agreement dated as of June 26, 2003 by and between
Grand Casinos Nevada I, Inc. and Diamond Resorts, LLC
(Incorporated herein by reference to Exhibit 10.63 to Lakes'
Report on Form 10-Q for the fiscal quarter ended June 29,
2003).
10.79 Amendment dated July 25, 2003 to Acquisition Master
Agreement dated January 22, 2003 by and between The Travel
Channel, LLC and World Poker Tour, LLC (portions of this
exhibit have been omitted pursuant to a request for
confidential treatment and have been filed separately with
the Commission pursuant to Rule 24b-2 of the Securities
Exchange Act of 1934) (Incorporated herein by reference to
Exhibit 10.63 to Lakes' Report on Form 10-Q for the fiscal
quarter ended September 28, 2003).
21 Subsidiaries of the Company (Incorporated herein by
reference to Exhibit 21 to Lakes' Report on Form 10-K for
the fiscal year ended December 28, 2003).
23 Consent of Independent Public Accountants Dated March 26,
2004 (Incorporated by reference to Exhibit 23 to Lakes'
Report on Form 10-K for the fiscal year ended December 28,
2003).
31.1 Certification of Chief Executive Officer under Section 302
of the Sarbanes-Oxley Act
31.2 Certification of Chief Financial Officer under Section 302
of the Sarbanes-Oxley Act
32.1 Certification of Chief Executive Officer and Chief Financial
Officer under Section 906 of the Sarbanes-Oxley Act
</Table>
- ---------------
* Management Compensatory Plan or Arrangement
21