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Annual Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934
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For the fiscal year ended: December 31, 2017
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o
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Transition Report Under Section 13 or 15(d) of the Securities Exchange
Act of 1934
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Delaware
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13-3391527
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(State or Other Jurisdiction
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(I.R.S. Employer
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of Incorporation or Organization)
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Identification No.)
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Common Stock, $0.0001 per Share
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The NASDAQ Stock Market LLC
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(Title of Each Class)
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(Name of Each Exchange on Which Registered)
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Large Accelerated Filer
o
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Accelerated Filer
o
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Non Accelerated Filer
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(Do not check if a smaller reporting company)
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Smaller reporting company
þ
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Emerging growth company
o
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•
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repayment of our substantial indebtedness;
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•
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substantial dilution related to our outstanding stock warrants and options;
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•
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implementation of our growth strategies, including the Bronco Billy’s expansion, exercise of options to acquire or lease property, capital investments and potential acquisitions;
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•
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the successful integration of acquisitions;
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•
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the development and success of our expansion projects and the financial performance of completed projects;
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•
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our ability to continue to comply with covenants and the terms of our debt instruments;
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•
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development and construction activities risks;
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•
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some of our casinos being on leased property;
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•
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changes to anticipated trends in the gaming industries;
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•
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changes in patron demographics;
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•
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general market and economic conditions, including, but not limited to, the effects of housing and energy conditions on the economy in general and on the gaming and lodging industries in particular;
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•
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access to capital and credit upon reasonable terms, including our ability to finance future business requirements and to repay or refinance debt as it matures;
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•
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dependence on key personnel;
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•
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our ability and the cost to hire, motivate and retain employees, given low unemployment rates and, in some jurisdictions, increases in minimum wages;
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•
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availability of adequate levels of insurance;
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•
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the complexity of the 2017 Tax Act and our ability to accurately interpret and predict its impact on our federal income taxes and refunds;
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•
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changes to federal, state, and local taxation and tax rates, and gaming and environmental laws, regulations and legislation;
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•
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any violations of the anti-money laundering laws;
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•
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cyber-security risks, including misappropriation of customer information or other breaches of information security;
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•
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obtaining and maintaining gaming and other licenses, and obtaining entitlements and other regulatory approvals for projects;
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•
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severe weather;
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•
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lack of alternative routes to certain of our properties;
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•
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the competitive environment, including increased competition in our target market areas;
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•
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litigation matters;
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•
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certain accounting and tax matters, including the effect on our company of adopting certain accounting pronouncements; and
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•
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other factors described from time to time in this and our other Securities and Exchange Commission ("SEC") filings and reports.
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Property
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Acquisition
Date
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Location
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Slot
Machines
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Table
Games
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Hotel
Rooms
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Silver Slipper Casino and Hotel
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2012
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Hancock County, MS
(near New Orleans)
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931
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28
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129
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Bronco Billy's Casino and Hotel
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2016
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Cripple Creek, CO
(near Colorado Springs)
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798
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11
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24
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Rising Star Casino Resort
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2011
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Rising Sun, IN
(near Cincinnati)
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917
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25
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294
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Stockman’s Casino
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2007
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Fallon, NV
(one hour east of Reno)
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223
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4
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—
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Grand Lodge Casino (leased and part of the Hyatt Regency Lake Tahoe Resort, Spa and Casino)
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2011
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Incline Village, NV
(North Shore of Lake Tahoe)
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264
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15
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*
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*
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We have agreements with Hyatt for exclusive usage of certain hotel rooms and suites, and access to additional rooms, other amenities and services to cater to our customers and support our operations. The Hyatt Regency Lake Tahoe Resort, Spa and Casino has approximately 422 guest rooms.
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•
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Periodic license fees and taxes must be paid to state and local gaming authorities;
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•
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Certain officers, directors, key employees, and gaming employees are required to be licensed or otherwise approved by the gaming authorities;
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•
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Individuals who must be approved by a gaming authority must submit comprehensive personal disclosure forms and undergo an exhaustive background investigation, the costs for which must be borne by the applicant;
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•
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Changes in any licensed or approved individuals must be reported to and/or approved by the relevant gaming authority;
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•
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Failure to timely file the required application forms by any individual required to be approved by the relevant gaming authority may result in that individual’s denial and the gaming licensee may be required by the gaming authority to disassociate with that individual; and
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•
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If any individual is found unsuitable by a gaming authority, the gaming licensee is required to disassociate with that individual.
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Full-time
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Part-time
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||
Silver Slipper Casino and Hotel
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473
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92
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Bronco Billy's Casino and Hotel
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271
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64
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Rising Star Casino Resort
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419
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132
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Grand Lodge Casino
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95
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35
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Stockman’s Casino
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78
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7
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•
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making it more difficult for us to satisfy our obligations with respect to our existing indebtedness;
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•
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limiting our ability to obtain additional financing without restructuring the covenants in our existing indebtedness to permit the incurrence of such financing;
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•
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requiring a substantial portion of our cash flow to be used for payments on debt and related interest, thereby reducing our ability to use cash flow to fund other working capital, capital expenditures and general corporate requirements;
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•
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limiting our ability to respond to changing business, industry and economic conditions and to withstand competitive pressures, which may affect our financial condition;
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•
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causing us to incur higher interest expense, either in the event of increases in interest rates on our borrowings that have variable interest rates, or in the event of refinancing existing debt at higher interest rates;
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•
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limiting our ability to make investments, dispose of assets, pay cash dividends or repurchase stock;
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•
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increasing our vulnerability to downturns in our business, our industry or the general economy and restricting us from making improvements or acquisitions or exploring business opportunities;
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•
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placing us at a competitive disadvantage to competitors with less debt or greater resources; and
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subjecting us to financial and other restrictive covenants in our indebtedness, the non-compliance with which could result in an event of default.
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incur additional debt;
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•
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make payments on subordinated obligations;
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make dividends or distributions and repurchase stock;
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•
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make investments;
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grant liens on our property to secure debt;
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sell assets or enter into mergers or consolidations;
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sell equity interest in our subsidiaries;
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make capital expenditures;
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amend or modify our subordinate indebtedness without obtaining consent from the holders of our senior indebtedness.
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•
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reduce funds available to us for purposes such as working capital, capital expenditures, strategic acquisitions and other general corporate purposes;
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•
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restrict our ability to capitalize on business opportunities;
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•
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increase our vulnerability to economic downturns and competitive pressures in the markets in which we operate; and
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•
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place us at a competitive disadvantage.
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•
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regional economic conditions;
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•
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regional competitive conditions, including legalization or expansion of gaming in Mississippi, Colorado, Indiana, Nevada, or in neighboring states;
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•
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allowance of new types of gaming, such as the introduction of live table games at Indiana racinos;
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•
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reduced land and air travel due to increasing fuel costs or transportation disruptions; and,
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•
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increase in our vulnerability to economic downturns and competitive pressures in the markets in which we operate.
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•
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shortage of materials;
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•
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shortage of skilled labor or work stoppages;
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•
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unforeseen construction scheduling, engineering, excavation, environmental or geological problems;
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•
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natural disasters, hurricanes, weather interference, changes in river levels, floods, fires, earthquakes or other casualty losses or delays;
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•
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unanticipated cost increase or delays in completing the project;
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•
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delays in obtaining or inability to obtain or maintain necessary license or permits;
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•
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changes to plans or specifications;
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•
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performance by contractors and subcontractors;
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•
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disputes with contractors;
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•
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disruption of our operations caused by diversion of management’s attention to new development projects and construction at our existing properties;
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•
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remediation of environmental contamination at some of our proposed construction sites, which may prove more difficult or expensive than anticipated in our construction budgets;
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•
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failure to obtain and maintain necessary gaming regulatory approvals and licenses, or failure to obtain such approvals and licenses on a timely basis;
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•
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requirements or government-established “goals” concerning union labor or requiring that a portion of the project expenditures be through companies controlled by specific ethnic or gender groups, goals that may not be obtainable, or may only be obtainable at additional project cost; and
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•
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increases in the cost of raw materials for construction, driven by demand, higher labor and construction costs and other factors, may cause price increases beyond those anticipated in the budgets for our development projects.
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•
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changes in federal, state or local tax or regulations, including state gaming regulations or gaming taxes, could impose additional restrictions or increase our operating costs;
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•
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aggressive marketing and promotional campaigns by our competitors for an extended period of time could force us to increase our expenditures for marketing and promotional campaigns in order to maintain our existing customer base or attract new customers;
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•
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as our properties age, we may need to increase our expenditures for repairs, maintenance, and to replace equipment necessary to operate our business in amounts greater than what we have spent historically;
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•
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our reliance on slot play revenues and any additional costs imposed on us from vendors;
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•
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availability and cost of the many products and services we provide our customers, including food, beverages, retail items, entertainment, hotel rooms, spa and golf;
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•
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availability and costs associated with insurance;
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•
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increases in costs of labor;
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•
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our properties use significant amounts of electricity, natural gas and other forms of energy, and energy price increases may adversely affect our cost structure;
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•
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our properties use significant amounts of water, and a water shortage may adversely affect our operations; and
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•
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at Grand Lodge Casino, we rely on Hyatt Lake Tahoe to provide certain items at reasonable costs, including food, beverages, parking and rooms. Any change in their pricing or the availability of such items may affect our ability to compete.
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•
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change in market valuations of companies in our industry;
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•
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change in expectations of future financial performance;
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•
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regulatory changes;
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•
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announcements by us or our competitors of acquisitions, investments, dispositions, joint ventures or other significant business decisions.
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High
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Low
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||||
Year Ended December 31, 2016
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First Quarter
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$
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1.78
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$
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1.31
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Second Quarter
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2.08
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1.38
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Third Quarter
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2.08
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1.71
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Fourth Quarter
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2.49
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1.56
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Year Ended December 31, 2017
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||||
First Quarter
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$
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2.60
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$
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2.10
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Second Quarter
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2.59
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2.10
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Third Quarter
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2.99
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2.37
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Fourth Quarter
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4.10
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2.69
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Property
|
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Acquisition
Date
|
|
Location
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Silver Slipper Casino and Hotel
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2012
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Hancock County, MS
(near New Orleans)
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Bronco Billy's Casino and Hotel
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2016
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Cripple Creek, CO
(near Colorado Springs)
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Rising Star Casino Resort
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2011
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Rising Sun, IN
(near Cincinnati)
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Stockman’s Casino
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2007
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Fallon, NV
(one hour east of Reno)
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Grand Lodge Casino (leased and part of the Hyatt Regency Lake Tahoe Resort, Spa and Casino)
|
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2011
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Incline Village, NV
(North Shore of Lake Tahoe)
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(In thousands)
|
For the Years Ended December 31,
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|||||||
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2017
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|
2016
|
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Percent Change
|
|||||
Net revenues
|
$
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161,267
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$
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145,992
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10.5
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%
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Operating expenses
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154,210
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139,803
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10.3
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%
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||
Operating income
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7,057
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6,189
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14.0
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%
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Interest and other non-operating expenses, net
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12,235
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10,653
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14.9
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%
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Income tax (benefit) provision
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(150
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)
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630
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(123.8
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)%
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||
Net loss
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$
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(5,028
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)
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$
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(5,094
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)
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(1.3
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)%
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(In thousands)
|
For the Years Ended December 31,
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|||||||
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2017
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|
2016
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Percent Change
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|||||
Casino revenues
|
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|||||
Slots
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$
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125,329
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$
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113,171
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10.7
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%
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Table games
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18,716
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18,039
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3.8
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%
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||
Other
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450
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374
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20.3
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%
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||
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144,495
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131,584
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9.8
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%
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||
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|||||
Non-casino revenues, net
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|
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|||||
Food and beverage
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11,869
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9,925
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19.6
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%
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||
Hotel
|
1,686
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1,547
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9.0
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%
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||
Other
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3,217
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2,936
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9.6
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%
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||
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16,772
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14,408
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16.4
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%
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||
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|||||
Total net revenues
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$
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161,267
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$
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145,992
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|
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10.5
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%
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(In thousands)
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For the Year Ended December 31,
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||||||
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2017
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2016
|
||||
Interest cost (excluding debt issuance cost amortization)
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$
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10,104
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$
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8,422
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Amortization of debt issuance costs
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882
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1,064
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Capitalized interest
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(130
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)
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—
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||
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$
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10,856
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$
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9,486
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(In Thousands)
|
For the Years Ended December 31,
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|||||||
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2017
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|
2016
|
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Percent Change
|
|||||
Net Revenues
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|
|
|
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|
|||||
Silver Slipper Casino and Hotel
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$
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64,046
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$
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59,093
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8.4
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%
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Bronco Billy's Casino and Hotel
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26,222
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16,220
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|
|
n/a
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Rising Star Casino Resort
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49,751
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49,472
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|
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0.6
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%
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Northern Nevada Casinos
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21,248
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|
|
21,207
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0.2
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%
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||
|
$
|
161,267
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|
|
$
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145,992
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10.5
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%
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Adjusted Property EBITDA and Adjusted EBITDA
|
|
|
|
|
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||||
Silver Slipper Casino and Hotel
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$
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10,733
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|
|
$
|
9,994
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|
|
7.4
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%
|
Bronco Billy's Casino and Hotel
|
4,758
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|
|
3,423
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|
|
n/a
|
|
||
Rising Star Casino Resort
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2,678
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|
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2,931
|
|
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(8.6
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)%
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||
Northern Nevada Casinos
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2,789
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|
|
3,941
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(29.2
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)%
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||
Adjusted Property EBITDA
|
20,958
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|
20,289
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3.3
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%
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||
Corporate and other
|
(4,491
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)
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(4,105
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)
|
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(9.4
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)%
|
||
Adjusted EBITDA
|
$
|
16,467
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|
|
$
|
16,184
|
|
|
1.7
|
%
|
(In thousands)
|
For the Years Ended December 31,
|
||||||
|
2017
|
|
2016
|
||||
Net loss
|
$
|
(5,028
|
)
|
|
$
|
(5,094
|
)
|
Income tax (benefit) provision
|
(150
|
)
|
|
630
|
|
||
Loss before income taxes
|
(5,178
|
)
|
|
(4,464
|
)
|
||
|
|
|
|
||||
Non-operating expense, net
|
|
|
|
||||
Interest expense, net of amounts capitalized
|
10,856
|
|
|
9,486
|
|
||
Debt modification costs
|
—
|
|
|
624
|
|
||
Adjustment to fair value of warrants
|
1,379
|
|
|
543
|
|
||
|
12,235
|
|
|
10,653
|
|
||
Operating income
|
7,057
|
|
|
6,189
|
|
||
Depreciation and amortization
|
8,602
|
|
|
7,928
|
|
||
(Gain) loss on asset disposals
|
(1
|
)
|
|
344
|
|
||
Project development and acquisition costs
|
284
|
|
|
1,314
|
|
||
Share-based compensation
|
525
|
|
|
409
|
|
||
Adjusted EBITDA
|
$
|
16,467
|
|
|
$
|
16,184
|
|
|
For the Year Ended December 31, 2017 (In thousands)
|
||||||||||||||||||||||
|
Operating
income (loss)
|
|
Depreciation
and
amortization
|
|
(Gain) loss on asset disposals
|
|
Project
development
and acquisition
costs
|
|
Stock
compensation
|
|
Adjusted
EBITDA
|
||||||||||||
Casino properties
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Silver Slipper Casino and Hotel
|
$
|
7,355
|
|
|
$
|
3,370
|
|
|
$
|
8
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
10,733
|
|
Bronco Billy's Casino and Hotel
|
2,889
|
|
|
1,875
|
|
|
(6
|
)
|
|
—
|
|
|
—
|
|
|
4,758
|
|
||||||
Rising Star Casino Resort
|
181
|
|
|
2,497
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,678
|
|
||||||
Northern Nevada Casinos
|
2,029
|
|
|
766
|
|
|
(6
|
)
|
|
—
|
|
|
—
|
|
|
2,789
|
|
||||||
|
12,454
|
|
|
8,508
|
|
|
(4
|
)
|
|
—
|
|
|
—
|
|
|
20,958
|
|
||||||
Other operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Corporate
|
(5,397
|
)
|
|
94
|
|
|
3
|
|
|
284
|
|
|
525
|
|
|
(4,491
|
)
|
||||||
|
(5,397
|
)
|
|
94
|
|
|
3
|
|
|
284
|
|
|
525
|
|
|
(4,491
|
)
|
||||||
|
$
|
7,057
|
|
|
$
|
8,602
|
|
|
$
|
(1
|
)
|
|
$
|
284
|
|
|
$
|
525
|
|
|
$
|
16,467
|
|
|
For the Year Ended December 31, 2016 (In thousands)
|
||||||||||||||||||||||
|
Operating
income (loss)
|
|
Depreciation
and
amortization
|
|
Loss on asset disposals, net
|
|
Project
development
and acquisition
costs
|
|
Stock
compensation
|
|
Adjusted
EBITDA
|
||||||||||||
Casino properties
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Silver Slipper Casino and Hotel
|
$
|
6,654
|
|
|
$
|
3,308
|
|
|
$
|
32
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
9,994
|
|
Bronco Billy's Casino and Hotel
|
2,200
|
|
|
1,215
|
|
|
8
|
|
|
—
|
|
|
—
|
|
|
3,423
|
|
||||||
Rising Star Casino Resort
|
277
|
|
|
2,645
|
|
|
9
|
|
|
—
|
|
|
—
|
|
|
2,931
|
|
||||||
Northern Nevada Casinos
|
2,900
|
|
|
746
|
|
|
295
|
|
|
—
|
|
|
—
|
|
|
3,941
|
|
||||||
|
12,031
|
|
|
7,914
|
|
|
344
|
|
|
—
|
|
|
—
|
|
|
20,289
|
|
||||||
Other operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Corporate
|
(5,842
|
)
|
|
14
|
|
|
—
|
|
|
1,314
|
|
|
409
|
|
|
(4,105
|
)
|
||||||
|
(5,842
|
)
|
|
14
|
|
|
—
|
|
|
1,314
|
|
|
409
|
|
|
(4,105
|
)
|
||||||
|
$
|
6,189
|
|
|
$
|
7,928
|
|
|
$
|
344
|
|
|
$
|
1,314
|
|
|
$
|
409
|
|
|
$
|
16,184
|
|
•
|
Implementation of a 10-vehicle ferry boat service to Kentucky, which will significantly shorten the distance for customers traveling from Kentucky to Rising Star. We have received a conditional use permit from the Boone County Board of Adjustment for a ferry landing on land that we own in Burlington, Kentucky. Commencement of ferry boat operations remains subject to additional approvals, including but not limited to, the Army Corps of Engineers and the U.S. Coast Guard;
|
•
|
Improvements to the entry pavilion, as well as the hotel's lobby and hallways, beginning in early 2018; and
|
•
|
Refurbishment of a portion of the casino to include a VIP room and sense-of-arrival improvements.
|
Board of Directors and Stockholders
Full House Resorts, Inc. and Subsidiaries
Las Vegas, Nevada
|
|
Opinion on the Consolidated Financial Statements.
We have audited the accompanying consolidated balance sheets of Full House Resorts, Inc. and Subsidiaries (the Company) as of December 31, 2017 and 2016, and the related consolidated statements of operations, shareholders’ equity and cash flows, for each of the two years in the period ended December 31, 2017, and the notes to the consolidated financial statements (collectively referred to as the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company as of December 31, 2017 and 2016, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2017, in conformity with accounting principles generally accepted in the United States (U.S.).
|
|
Basis for Opinion.
These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
|
|
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.
|
|
The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.
|
|
/s/ Piercy Bowler Taylor & Kern
Certified Public Accountants
We have served as the Company's auditor since 2004
Las Vegas, Nevada
March 8, 2018
|
|
Year Ended December 31,
|
||||||
|
2017
|
|
2016
|
||||
Revenues
|
|
|
|
||||
Casino
|
$
|
144,495
|
|
|
$
|
131,584
|
|
Food and beverage
|
32,471
|
|
|
28,797
|
|
||
Hotel
|
8,863
|
|
|
8,637
|
|
||
Other operations
|
4,444
|
|
|
4,394
|
|
||
Gross revenues
|
190,273
|
|
|
173,412
|
|
||
Less promotional allowances
|
(29,006
|
)
|
|
(27,420
|
)
|
||
Net revenues
|
161,267
|
|
|
145,992
|
|
||
Operating expenses
|
|
|
|
|
|
||
Casino
|
76,305
|
|
|
68,127
|
|
||
Food and beverage
|
12,528
|
|
|
9,804
|
|
||
Hotel
|
1,084
|
|
|
969
|
|
||
Other operations
|
1,923
|
|
|
1,561
|
|
||
Project development and acquisition costs
|
284
|
|
|
1,314
|
|
||
Selling, general and administrative
|
53,472
|
|
|
49,756
|
|
||
Depreciation and amortization
|
8,602
|
|
|
7,928
|
|
||
Loss on disposal of assets and other, net
|
12
|
|
|
344
|
|
||
|
154,210
|
|
|
139,803
|
|
||
Operating income
|
7,057
|
|
|
6,189
|
|
||
Other expense, net
|
|
|
|
|
|
||
Interest expense, net of amounts capitalized
|
(10,856
|
)
|
|
(9,486
|
)
|
||
Debt modification costs
|
—
|
|
|
(624
|
)
|
||
Adjustment to fair value of stock warrants
|
(1,379
|
)
|
|
(543
|
)
|
||
|
(12,235
|
)
|
|
(10,653
|
)
|
||
Loss before income taxes
|
(5,178
|
)
|
|
(4,464
|
)
|
||
Income tax (benefit) expense
|
(150
|
)
|
|
630
|
|
||
Net loss
|
$
|
(5,028
|
)
|
|
$
|
(5,094
|
)
|
|
|
|
|
|
|||
Basic and diluted loss per share
|
$
|
(0.22
|
)
|
|
$
|
(0.26
|
)
|
Basic and diluted weighted average number of common shares outstanding
|
22,882,960
|
|
|
19,601,842
|
|
||
|
|
|
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
ASSETS
|
|
|
|
||||
Current assets
|
|
|
|
||||
Cash and equivalents
|
$
|
19,910
|
|
|
$
|
27,038
|
|
Accounts receivable, net of allowance for doubtful collection of $103 and $53
|
1,760
|
|
|
1,909
|
|
||
Inventories
|
1,692
|
|
|
1,329
|
|
||
Prepaid expenses
|
2,849
|
|
|
2,809
|
|
||
|
26,211
|
|
|
33,085
|
|
||
|
|
|
|
||||
Property and equipment, net
|
114,058
|
|
|
111,465
|
|
||
Goodwill
|
21,286
|
|
|
21,286
|
|
||
Other intangible assets, net
|
10,936
|
|
|
10,966
|
|
||
Deposits
|
994
|
|
|
404
|
|
||
|
147,274
|
|
|
144,121
|
|
||
|
$
|
173,485
|
|
|
$
|
177,206
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
||
Current liabilities
|
|
|
|
|
|
||
Accounts payable
|
$
|
5,182
|
|
|
$
|
4,910
|
|
Accrued payroll and related
|
3,115
|
|
|
3,126
|
|
||
Other accrued expenses
|
8,846
|
|
|
7,996
|
|
||
Current portion of long-term debt
|
1,000
|
|
|
1,688
|
|
||
Current portion of capital lease obligation
|
421
|
|
|
419
|
|
||
|
18,564
|
|
|
18,139
|
|
||
|
|
|
|
||||
Common stock warrant liability and other long-term obligations
|
2,689
|
|
|
1,117
|
|
||
Long-term debt, net of current portion
|
93,566
|
|
|
94,246
|
|
||
Capital lease obligation, net of current portion
|
4,861
|
|
|
5,318
|
|
||
Deferred tax liability
|
1,757
|
|
|
1,907
|
|
||
|
121,437
|
|
|
120,727
|
|
||
Commitments and contingencies (Notes 8 and 10)
|
|
|
|
|
|
||
Stockholders’ equity
|
|
|
|
|
|
||
Common stock, $0.0001 par value, 100,000,000 shares authorized; 24,294,084 and 24,221,558 shares issued; 22,937,489 and 22,864,963 shares outstanding
|
2
|
|
|
2
|
|
||
Additional paid-in capital
|
51,868
|
|
|
51,271
|
|
||
Treasury stock, 1,356,595 common shares
|
(1,654
|
)
|
|
(1,654
|
)
|
||
Retained earnings
|
1,832
|
|
|
6,860
|
|
||
|
52,048
|
|
|
56,479
|
|
||
|
$
|
173,485
|
|
|
$
|
177,206
|
|
|
Common Stock
|
|
Additional
Paid-in
Capital
|
|
Treasury Stock
|
|
Retained
Earnings
|
|
Total
Stockholders’
Equity
|
||||||||||||||||
December 31, 2017
|
Shares
|
|
Dollars
|
|
|
Shares
|
|
Dollars
|
|
|
|||||||||||||||
Beginning balances
|
24,221
|
|
|
$
|
2
|
|
|
$
|
51,271
|
|
|
1,357
|
|
|
$
|
(1,654
|
)
|
|
$
|
6,860
|
|
|
$
|
56,479
|
|
Share-based compensation and option exercises
|
73
|
|
|
—
|
|
|
597
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
597
|
|
|||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,028
|
)
|
|
(5,028
|
)
|
|||||
Ending balances
|
24,294
|
|
|
$
|
2
|
|
|
$
|
51,868
|
|
|
1,357
|
|
|
$
|
(1,654
|
)
|
|
$
|
1,832
|
|
|
$
|
52,048
|
|
|
Common Stock
|
|
Additional
Paid-in
Capital
|
|
Treasury Stock
|
|
Retained
Earnings
|
|
Total
Stockholders’
Equity
|
||||||||||||||||
December 31, 2016
|
Shares
|
|
Dollars
|
|
|
Shares
|
|
Dollars
|
|
|
|||||||||||||||
Beginning balances
|
20,326
|
|
|
$
|
2
|
|
|
$
|
46,221
|
|
|
1,357
|
|
|
$
|
(1,654
|
)
|
|
$
|
11,954
|
|
|
$
|
56,523
|
|
Issuance of common stock, net of issuance costs
|
3,846
|
|
|
—
|
|
|
4,641
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,641
|
|
|||||
Share-based compensation
|
49
|
|
|
—
|
|
|
409
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
409
|
|
|||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,094
|
)
|
|
(5,094
|
)
|
|||||
Ending balances
|
24,221
|
|
|
$
|
2
|
|
|
$
|
51,271
|
|
|
1,357
|
|
|
$
|
(1,654
|
)
|
|
$
|
6,860
|
|
|
$
|
56,479
|
|
|
Year Ended December 31,
|
||||||
|
2017
|
|
2016
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net loss
|
$
|
(5,028
|
)
|
|
$
|
(5,094
|
)
|
Adjustments to reconcile net loss to net cash provided by operating activities:
|
|
|
|
|
|
||
Depreciation and amortization of property and equipment
|
8,602
|
|
|
7,928
|
|
||
Amortization of debt issuance costs and warrants
|
882
|
|
|
1,088
|
|
||
Change in fair value of stock warrants
|
1,379
|
|
|
543
|
|
||
(Gain) loss on disposals and other
|
(1
|
)
|
|
567
|
|
||
Share-based compensation
|
525
|
|
|
409
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Accounts receivable
|
149
|
|
|
(445
|
)
|
||
Inventories and prepaid expenses
|
(403
|
)
|
|
(5
|
)
|
||
Deferred taxes
|
(150
|
)
|
|
631
|
|
||
Accounts payable and accrued expenses
|
1,188
|
|
|
2,298
|
|
||
Net cash provided by operating activities
|
7,143
|
|
|
7,920
|
|
||
Cash flows from investing activities:
|
|
|
|
|
|
||
Acquisition of Bronco Billy's, net of cash acquired
|
—
|
|
|
(28,369
|
)
|
||
Purchase of property and equipment
|
(11,070
|
)
|
|
(3,496
|
)
|
||
Restricted cash
|
—
|
|
|
569
|
|
||
Proceeds from repayment of tribal advance
|
—
|
|
|
250
|
|
||
Refunded acquisition deposit and other, net
|
(141
|
)
|
|
2,536
|
|
||
Net cash used in investing activities
|
(11,211
|
)
|
|
(28,510
|
)
|
||
Cash flows from financing activities:
|
|
|
|
|
|
||
First Term Loan repayments
|
(2,249
|
)
|
|
(2,688
|
)
|
||
Revolving Loan repayments
|
—
|
|
|
(2,000
|
)
|
||
Second Term Loan borrowings
|
—
|
|
|
35,000
|
|
||
Repayment of long-term debt on capital lease obligation
|
(455
|
)
|
|
(433
|
)
|
||
Deferred financing costs
|
(429
|
)
|
|
(1,466
|
)
|
||
Proceeds from issuance of common stock, net of issuance costs
|
—
|
|
|
4,641
|
|
||
Proceeds from exercise of stock options
|
73
|
|
|
—
|
|
||
Net cash (used in) provided by financing activities
|
(3,060
|
)
|
|
33,054
|
|
||
Net (decrease) increase in cash and equivalents
|
(7,128
|
)
|
|
12,464
|
|
||
Cash and equivalents, beginning of year
|
27,038
|
|
|
14,574
|
|
||
Cash and equivalents, end of year
|
$
|
19,910
|
|
|
$
|
27,038
|
|
SUPPLEMENTAL CASH FLOW INFORMATION:
|
|
|
|
||||
Cash paid for interest, net of amounts capitalized
|
$
|
9,909
|
|
|
$
|
8,187
|
|
NON-CASH INVESTING AND FINANCING ACTIVITIES:
|
|
|
|
|
|
||
Accrued capital expenditures
|
$
|
1,435
|
|
|
$
|
1,367
|
|
Issuance of common stock warrants
|
$
|
—
|
|
|
$
|
574
|
|
Property
|
|
Acquisition
Date
|
|
Location
|
Silver Slipper Casino and Hotel
|
|
2012
|
|
Hancock County, MS (near New Orleans)
|
Bronco Billy's Casino and Hotel
|
|
2016
|
|
Cripple Creek, CO (near Colorado Springs)
|
Rising Star Casino Resort
|
|
2011
|
|
Rising Sun, IN (near Cincinnati)
|
Stockman’s Casino
|
|
2007
|
|
Fallon, NV (one hour east of Reno)
|
Grand Lodge Casino (leased and part of the Hyatt Regency Lake Tahoe Resort, Spa and Casino)
|
|
2011
|
|
Incline Village, NV (North Shore of Lake Tahoe)
|
Land improvements
|
15 to 18 years
|
Buildings and improvements
|
3 to 44 years
|
Furniture, fixtures and equipment
|
2 to 10 years
|
|
|
|
||
Cash and equivalents
|
|
$
|
2,682
|
|
Other current assets
|
|
258
|
|
|
Property and equipment
|
|
16,694
|
|
|
Goodwill
|
4,806
|
|
||
Gaming licenses
|
|
7,000
|
|
|
Trade names
|
|
1,800
|
|
|
Total assets
|
|
33,240
|
|
|
|
|
|
||
Current liabilities
|
|
2,189
|
|
|
|
|
|
||
Net assets acquired
|
|
$
|
31,051
|
|
Pro Forma Consolidated Statement of Operations
|
||||
(In thousands except per share data, unaudited)
|
||||
|
|
|||
|
Year Ended
|
|||
|
|
December 31,
2016 |
||
Net revenues
|
|
$
|
154,734
|
|
Net loss
|
|
(5,818
|
)
|
|
Basic and diluted loss per share
|
|
(0.30
|
)
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Land and improvements
|
$
|
15,376
|
|
|
$
|
14,548
|
|
Buildings and improvements
|
106,728
|
|
|
102,410
|
|
||
Furniture and equipment
|
41,281
|
|
|
37,312
|
|
||
Construction in progress
|
2,723
|
|
|
868
|
|
||
|
166,108
|
|
|
155,138
|
|
||
Less accumulated depreciation and amortization
|
(52,050
|
)
|
|
(43,673
|
)
|
||
|
$
|
114,058
|
|
|
$
|
111,465
|
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Leased land and improvements
|
$
|
215
|
|
|
$
|
215
|
|
Leased buildings and improvements
|
5,787
|
|
|
5,787
|
|
||
Leased furniture and equipment
|
1,724
|
|
|
1,724
|
|
||
|
7,726
|
|
|
7,726
|
|
||
Less accumulated amortization
|
(2,087
|
)
|
|
(1,586
|
)
|
||
|
$
|
5,639
|
|
|
$
|
6,140
|
|
|
December 31, 2017
|
||||||||||||||
|
Gross Carrying Value
|
|
Additions
|
|
Accumulated Impairments
|
|
Balance at
End of the
Year
|
||||||||
Silver Slipper Casino and Hotel
|
$
|
14,671
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
14,671
|
|
Bronco Billy's Casino and Hotel
|
4,806
|
|
|
—
|
|
|
—
|
|
|
4,806
|
|
||||
Rising Star Casino Resort
|
1,647
|
|
|
—
|
|
|
(1,647
|
)
|
|
—
|
|
||||
Northern Nevada
|
5,809
|
|
|
—
|
|
|
(4,000
|
)
|
|
1,809
|
|
||||
Goodwill, net of accumulated impairment losses
|
$
|
26,933
|
|
|
$
|
—
|
|
|
$
|
(5,647
|
)
|
|
$
|
21,286
|
|
|
December 31, 2016
|
||||||||||||||
|
Gross Carrying Value
|
|
Additions
|
|
Accumulated Impairments
|
|
Balance at
End of the
Year
|
||||||||
Silver Slipper Casino and Hotel
|
$
|
14,671
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
14,671
|
|
Bronco Billy's Casino and Hotel
|
—
|
|
|
4,806
|
|
|
—
|
|
|
4,806
|
|
||||
Rising Star Casino Resort
|
1,647
|
|
|
—
|
|
|
(1,647
|
)
|
|
—
|
|
||||
Northern Nevada
|
5,809
|
|
|
—
|
|
|
(4,000
|
)
|
|
1,809
|
|
||||
Goodwill, net of accumulated impairment losses
|
$
|
22,127
|
|
|
$
|
4,806
|
|
|
$
|
(5,647
|
)
|
|
$
|
21,286
|
|
|
December 31, 2017
|
||||||||||||||||
|
Estimated
Life
(Years)
|
|
Gross
Carrying
Value
|
|
Accumulated
Amortization
|
|
Accumulated Impairments, Net
|
|
Intangible
Assets, Net
|
||||||||
|
|
|
|
|
|
|
|
|
|
||||||||
Customer Loyalty Programs
|
3
|
|
$
|
7,600
|
|
|
$
|
(7,600
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Land Lease and Water Rights
|
46
|
|
1,420
|
|
|
(163
|
)
|
|
—
|
|
|
1,257
|
|
||||
Gaming Licenses
|
Indefinite
|
|
17,981
|
|
|
—
|
|
|
(10,203
|
)
|
|
7,778
|
|
||||
Trade Names
|
Indefinite
|
|
1,800
|
|
|
—
|
|
|
—
|
|
|
1,800
|
|
||||
Trademarks
|
Indefinite
|
|
101
|
|
|
—
|
|
|
—
|
|
|
101
|
|
||||
|
|
|
$
|
28,902
|
|
|
$
|
(7,763
|
)
|
|
$
|
(10,203
|
)
|
|
$
|
10,936
|
|
|
December 31, 2016
|
||||||||||||||||
|
Estimated
Life
(Years)
|
|
Gross
Carrying
Value
|
|
Accumulated
Amortization
|
|
Accumulated Impairments, Net
|
|
Intangible
Assets, Net
|
||||||||
|
|
|
|
|
|
|
|
|
|
||||||||
Customer Loyalty Programs
|
3
|
|
$
|
7,600
|
|
|
$
|
(7,600
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Land Lease and Water Rights
|
46
|
|
1,420
|
|
|
(132
|
)
|
|
—
|
|
|
1,288
|
|
||||
Gaming Licenses
|
Indefinite
|
|
17,981
|
|
|
—
|
|
|
(10,203
|
)
|
|
7,778
|
|
||||
Trade Names
|
Indefinite
|
|
1,800
|
|
|
—
|
|
|
—
|
|
|
1,800
|
|
||||
Trademarks
|
Indefinite
|
|
100
|
|
|
—
|
|
|
—
|
|
|
100
|
|
||||
|
|
|
$
|
28,901
|
|
|
$
|
(7,732
|
)
|
|
$
|
(10,203
|
)
|
|
$
|
10,966
|
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Player club points and progressive jackpots
|
$
|
3,166
|
|
|
$
|
2,901
|
|
Real estate and personal property taxes
|
1,564
|
|
|
1,538
|
|
||
Gaming and other taxes
|
1,801
|
|
|
1,667
|
|
||
Gaming related accruals
|
442
|
|
|
622
|
|
||
Accrued rent
|
1,032
|
|
|
443
|
|
||
Other
|
841
|
|
|
825
|
|
||
|
$
|
8,846
|
|
|
$
|
7,996
|
|
(In thousands)
|
December 31, 2017
|
||||||||||||||
|
Outstanding Principal
|
|
Unamortized Discount
|
|
Unamortized Debt Issuance Costs
|
|
Long-term
Debt, Net
|
||||||||
First Term Loan
|
$
|
41,063
|
|
|
$
|
—
|
|
|
$
|
(313
|
)
|
|
$
|
40,750
|
|
Revolving Loan
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Second Term Loan
|
55,000
|
|
|
(305
|
)
|
|
(879
|
)
|
|
53,816
|
|
||||
|
96,063
|
|
|
(305
|
)
|
|
(1,192
|
)
|
|
94,566
|
|
||||
Less current portion
|
(1,000
|
)
|
|
—
|
|
|
—
|
|
|
(1,000
|
)
|
||||
|
$
|
95,063
|
|
|
$
|
(305
|
)
|
|
$
|
(1,192
|
)
|
|
$
|
93,566
|
|
(In thousands)
|
December 31, 2016
|
||||||||||||||
|
Outstanding Principal
|
|
Unamortized Discount
|
|
Unamortized Debt Issuance Costs
|
|
Long-term
Debt, Net
|
||||||||
First Term Loan
|
$
|
43,312
|
|
|
$
|
—
|
|
|
$
|
(561
|
)
|
|
$
|
42,751
|
|
Revolving Loan
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Second Term Loan
|
55,000
|
|
|
(469
|
)
|
|
(1,348
|
)
|
|
53,183
|
|
||||
|
98,312
|
|
|
(469
|
)
|
|
(1,909
|
)
|
|
95,934
|
|
||||
Less current portion
|
(1,688
|
)
|
|
—
|
|
|
—
|
|
|
(1,688
|
)
|
||||
|
$
|
96,624
|
|
|
$
|
(469
|
)
|
|
$
|
(1,909
|
)
|
|
$
|
94,246
|
|
|
Prior Facilities
|
|
Notes
|
||||
2018
|
$
|
2,250
|
|
|
$
|
1,000
|
|
2019
|
93,813
|
|
|
1,000
|
|
||
2020
|
—
|
|
|
1,000
|
|
||
2021
|
—
|
|
|
1,000
|
|
||
2022
|
—
|
|
|
1,000
|
|
||
Thereafter
|
—
|
|
|
95,000
|
|
||
|
$
|
96,063
|
|
|
$
|
100,000
|
|
2018
|
$
|
631
|
|
2019
|
744
|
|
|
2020
|
680
|
|
|
2021
|
652
|
|
|
2022
|
652
|
|
|
Thereafter
|
3,151
|
|
|
Total minimum lease payments
|
6,510
|
|
|
Less: amount representing interest
|
(1,228
|
)
|
|
Present value of minimum lease payments
|
$
|
5,282
|
|
|
|
Years Ended December 31,
|
||||||
|
|
2017
|
|
2016
|
||||
Current:
|
Federal
|
$
|
—
|
|
|
$
|
—
|
|
|
State
|
—
|
|
|
—
|
|
||
|
|
—
|
|
|
—
|
|
||
|
|
|
|
|
||||
Deferred:
|
Federal
|
1,278
|
|
|
(1,383
|
)
|
||
|
State
|
(686
|
)
|
|
(505
|
)
|
||
|
(Decrease) increase in valuation allowance
|
(742
|
)
|
|
2,518
|
|
||
|
|
(150
|
)
|
|
630
|
|
||
|
|
$
|
(150
|
)
|
|
$
|
630
|
|
|
Years Ended December 31,
|
||||||||||||
|
2017
|
|
2016
|
||||||||||
|
Percent
|
|
Amount
|
|
Percent
|
|
Amount
|
||||||
Federal income tax benefit at U.S. statutory rate
|
34.0
|
%
|
|
$
|
(1,760
|
)
|
|
34.0
|
%
|
|
$
|
(1,518
|
)
|
State taxes, net of federal benefit
|
8.7
|
%
|
|
(452
|
)
|
|
7.5
|
%
|
|
(333
|
)
|
||
Change in valuation allowance, exclusive of Tax Reform impact
|
(57.5
|
)%
|
|
2,979
|
|
|
(56.5
|
)%
|
|
2,518
|
|
||
Effect of Tax Reform on net deferred taxes
|
17.2
|
%
|
|
(890
|
)
|
|
—
|
%
|
|
—
|
|
||
Permanent differences
|
(1.7
|
)%
|
|
91
|
|
|
(2.1
|
)%
|
|
95
|
|
||
Credits
|
2.2
|
%
|
|
(116
|
)
|
|
2.9
|
%
|
|
(129
|
)
|
||
Other
|
—
|
%
|
|
(2
|
)
|
|
0.1
|
%
|
|
(3
|
)
|
||
|
2.9
|
%
|
|
$
|
(150
|
)
|
|
(14.1
|
)%
|
|
$
|
630
|
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Deferred tax assets:
|
|
|
|
||||
Deferred compensation
|
$
|
438
|
|
|
$
|
655
|
|
Depreciation of fixed assets
|
—
|
|
|
42
|
|
||
Intangible assets and amortization
|
4,415
|
|
|
6,830
|
|
||
Net operating loss carry-forwards
|
4,505
|
|
|
2,861
|
|
||
Accrued expenses
|
772
|
|
|
1,077
|
|
||
Allowance for doubtful accounts
|
24
|
|
|
19
|
|
||
Credits
|
336
|
|
|
220
|
|
||
Common stock warrant liability
|
541
|
|
|
263
|
|
||
Charitable contribution carry-forward
|
72
|
|
|
90
|
|
||
Valuation allowance
|
(9,011
|
)
|
|
(9,753
|
)
|
||
|
2,092
|
|
|
2,304
|
|
||
Deferred tax liabilities:
|
|
|
|
|
|
||
Depreciation of fixed assets
|
(910
|
)
|
|
(631
|
)
|
||
Amortization of indefinite-lived intangibles
|
(1,757
|
)
|
|
(1,907
|
)
|
||
Prepaid expenses
|
(651
|
)
|
|
(1,055
|
)
|
||
Effect of state taxes on future federal returns
|
(505
|
)
|
|
(585
|
)
|
||
Other
|
(26
|
)
|
|
(33
|
)
|
||
|
(3,849
|
)
|
|
(4,211
|
)
|
||
|
$
|
(1,757
|
)
|
|
$
|
(1,907
|
)
|
•
|
an option to purchase or lease land consisting of a closed casino, with an original expiration date of March 1, 2018 and
four
additional
one
-month extension options to July 1, 2018. Each
one
-month extension option costs
$22,500
. If purchased, the purchase option price is
$2.2 million
. If leased, the lease would include a minimum
three
-year term with annual lease payments of
$0.2 million
and a purchase option price within the lease that increases annually;
|
•
|
an option to purchase land improved with a hotel for
$1.7 million
, with an expiration date of February 1, 2019; and
|
•
|
an option to purchase land improved with a residence for
$0.3 million
, with an expiration date of February 1, 2019.
|
2018
|
$
|
3,561
|
|
2019
|
3,589
|
|
|
2020
|
3,250
|
|
|
2021
|
3,114
|
|
|
2022
|
3,119
|
|
|
Thereafter
|
34,600
|
|
|
|
$
|
51,233
|
|
|
Number
of Stock
Options
|
|
Weighted
Average
Exercise Price
|
|
Weighted Average Remaining Contractual Term
(in years)
|
|
Aggregate Intrinsic Value
|
|||||
Options outstanding at January 1, 2017
|
2,057,950
|
|
|
$
|
1.42
|
|
|
|
|
|
||
Granted
|
479,990
|
|
|
2.32
|
|
|
|
|
|
|||
Exercised
|
(46,666
|
)
|
|
1.56
|
|
|
|
|
|
|||
Canceled/Forfeited
|
—
|
|
|
—
|
|
|
|
|
|
|||
Options outstanding at December 31, 2017
|
2,491,274
|
|
|
$
|
1.59
|
|
|
7.76
|
|
$
|
5,736,488
|
|
Options exercisable at December 31, 2017
|
1,327,068
|
|
|
$
|
1.37
|
|
|
7.24
|
|
$
|
3,340,061
|
|
|
For the year ended December 31,
|
||
|
2017
|
|
2016
|
Expected volatility
|
43.67%
|
|
43.87%
|
Expected dividend yield
|
—%
|
|
—%
|
Expected term (in years)
|
5.87
|
|
5.70
|
Weighted average risk free rate
|
2.00%
|
|
1.41%
|
|
|
December 31, 2017
|
||||||||||||||
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Common stock warrant liability
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,496
|
|
|
$
|
2,496
|
|
|
|
December 31, 2016
|
||||||||||||||
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Common stock warrant liability
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,117
|
|
|
$
|
1,117
|
|
(In thousands)
|
|
|
|
||||
|
December 31,
2017 |
|
December 31,
2016 |
||||
|
|
|
|
||||
Total Assets
|
|
|
|
||||
Silver Slipper Casino and Hotel
|
$
|
80,780
|
|
|
$
|
79,975
|
|
Bronco Billy's Hotel and Casino
|
35,567
|
|
|
36,732
|
|
||
Rising Star Casino Resort
|
36,327
|
|
|
36,444
|
|
||
Northern Nevada Casinos
|
12,235
|
|
|
12,722
|
|
||
Corporate and Other
|
8,576
|
|
|
11,333
|
|
||
|
$
|
173,485
|
|
|
$
|
177,206
|
|
(In thousands)
|
|
|
|
||||
|
December 31,
2017 |
|
December 31,
2016 |
||||
|
|
|
|
||||
Property and Equipment, net
|
|
|
|
||||
Silver Slipper Casino and Hotel
|
$
|
58,059
|
|
|
$
|
58,856
|
|
Bronco Billy's Hotel and Casino
|
15,276
|
|
|
16,020
|
|
||
Rising Star Casino Resort
|
30,534
|
|
|
29,819
|
|
||
Northern Nevada Casinos
|
7,868
|
|
|
6,202
|
|
||
Corporate and Other
|
2,321
|
|
|
568
|
|
||
|
$
|
114,058
|
|
|
$
|
111,465
|
|
•
|
Report of Independent Registered Public Accounting Firm;
|
•
|
Consolidated Statements of Operations for the years ended December 31, 2017 and 2016;
|
•
|
Consolidated Balance Sheets as of December 31, 2017 and 2016;
|
•
|
Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2017 and 2016;
|
•
|
Consolidated Statements of Cash Flows for the years ended December 31, 2017 and 2016;
|
•
|
Notes to Consolidated Financial Statements.
|
Exhibit Number
|
|
Description
|
|
2.1
|
|
||
2.2
|
|
||
2.3
|
|
||
2.4
|
|
||
2.5
|
|
||
3.1
|
|
||
3.2
|
|
||
4.1
|
|
||
4.2
|
|
||
4.3
|
|
||
4.4
|
|
||
4.5
|
|
||
10.1
|
|
10.2
|
|
||
10.3
|
|
||
10.4
|
|
||
10.5
|
|
||
10.6
|
|
||
10.7
|
|
||
10.8
|
|
||
10.9
|
|
||
10.10
|
|
||
10.11
|
|
||
10.12
|
|
||
10.13
|
|
||
10.14
|
|
||
10.15
|
|
||
10.16
|
|
||
10.17
|
|
10.18
|
|
||
10.19
|
|
||
10.20
|
|
||
10.21
|
|
||
10.22
|
|
||
10.23
|
|
||
10.24
|
|
||
10.25
|
|
||
10.26
|
|
||
10.27
|
|
||
10.28
|
|
||
10.29
|
|
||
10.30
|
|
||
10.31
|
|
10.32
|
|
||
10.33
|
|
||
10.34
|
|
||
10.35
|
|
||
10.36
|
|
||
10.37
|
|
||
10.38
|
|
||
10.39+
|
|
||
10.40+
|
|
||
10.41+*
|
|
||
10.42+
|
|
||
10.43+
|
|
||
10.44+
|
|
||
10.45+
|
|
||
10.46+
|
|
||
10.47+
|
|
||
10.48+
|
|
||
10.49+
|
|
||
10.50
|
|
||
10.51
|
|
21.1*
|
|
||
23.1*
|
|
||
31.1*
|
|
||
31.2*
|
|
||
32.1*
|
|
||
32.2*
|
|
||
99.1*
|
|
||
101.INS*
|
|
XBRL Instance
|
|
101.SCH*
|
|
XBRL Taxonomy Extension Schema
|
|
101.CAL*
|
|
XBRL Taxonomy Extension Calculation
|
|
101.DEF*
|
|
XBRL Taxonomy Extension Definition
|
|
101.LAB*
|
|
XBRL Taxonomy Extension Labels
|
|
101.PRE*
|
|
XBRL Taxonomy Extension Presentation
|
|
FULL HOUSE RESORTS, INC.
|
|
|
|
|||
March 8, 2018
|
By:
|
/s/ DANIEL R. LEE
|
|
|
|
Daniel R. Lee, Chief Executive Officer
|
|
Name and Capacity
|
|
Date
|
|
|
|
/s/ DANIEL R. LEE
|
|
March 8, 2018
|
Daniel R. Lee, Chief Executive Officer and Director
|
|
|
(Principal Executive Officer)
|
|
|
|
|
|
/s/ LEWIS A. FANGER
|
|
March 8, 2018
|
Lewis A. Fanger, Chief Financial Officer
|
|
|
(Principal Financial Officer and Principal Accounting Officer)
|
|
|
|
|
|
/s/ KENNETH R. ADAMS
|
|
March 8, 2018
|
Kenneth R. Adams, Director
|
|
|
|
|
|
/s/ CARL G. BRAUNLICH
|
|
March 8, 2018
|
Carl G. Braunlich, Director
|
|
|
|
|
|
/s/ W. H. BAIRD GARRETT
|
|
March 8, 2018
|
W. H. Baird Garrett, Director
|
|
|
|
|
|
/s/ ELLIS LANDAU
|
|
March 8, 2018
|
Ellis Landau, Director
|
|
|
|
|
|
/s/ KATHLEEN MARSHALL
|
|
March 8, 2018
|
Kathleen Marshall, Director
|
|
|
|
|
|
/s/ CRAIG W. THOMAS
|
|
March 8, 2018
|
Craig W. Thomas, Director
|
|
|
|
|
|
/s/ BRADLEY M. TIRPAK
|
|
March 8, 2018
|
Bradley M. Tirpak, Director
|
|
|
To:
|
[Recipient Name]
|
From:
|
The Compensation Committee of the Board of Directors
|
CC:
|
Daniel Lee, President & Chief Executive Officer; Lewis Fanger, Sr. Vice President, Chief Financial Officer and Treasurer; Elaine Guidroz, Vice President, Secretary & General Counsel
|
Date:
|
[Insert Date]
|
Re:
|
Award Agreement
|
|
Type of Award:
|
Non-Qualified Stock Option
|
|
Number of Shares, if applicable:
|
[ ]
|
|
Applicable Attachment:
|
Attachment 1-B
|
1.
|
Compliance with the 2015 Plan.
The Award is governed by the 2015 Plan and this Agreement. If this Agreement and the 2015 Plan are inconsistent as to any aspect of the Award, this Agreement will control. If this Agreement is silent as to any aspect of the Award, the 2015 Plan will control.
|
2.
|
Administration; Interpretation
. The Committee shall have full power and authority to take all actions and make all determinations required or provided for under this Agreement, and shall have full power and authority to take all such other actions and make all such other determinations not inconsistent with the terms of this Agreement that the Committee deems necessary or appropriate in the administration of this Agreement and the 2015 Plan. All actions taken by the Committee in good faith shall be final and binding upon the Grantee. No member of the Committee or the Board shall be personally liable for any action, determination or interpretation made in good faith with respect to this Agreement or the Award. The Grantee accepts the Award subject to all of the terms, provisions and restrictions of this Agreement and the 2015 Plan. The undersigned Grantee hereby accepts as binding, conclusive and final all decisions or interpretations of the Board or the Committee upon any questions arising under this Agreement or the 2015 Plan.
|
3.
|
Transferability
. Except as may be set forth in the applicable Attachment, the Award may not be sold, pledged, assigned, hypothecated, transferred or disposed of in any manner other than in accordance with Section 6(
l
) of the 2015 Plan.
|
4.
|
Tax Consultation.
|
a.
|
The Grantee understands that the Grantee may suffer adverse tax consequences as a result of the grant, vesting, exercise, purchase or further disposition of the Award or any Option or Shares granted thereunder. Grantee represents
|
b.
|
Notwithstanding any other provision of this Agreement, to the extent that any Award granted under the 2015 Plan constitutes deferred compensation, this Agreement shall be interpreted in accordance with the requirements of Section 409(A) of the Internal Revenue Code of 1986, as amended (together with any Department of Treasury regulations and any interpretive guidance issued thereunder, including without limitation any such regulations or other guidance that may be issued after the date hereof, "Section 409A"). The Committee may, in its discretion adopt such amendment to this Agreement or adopt other policies and procedures, including amendments, policies and procedures with a retroactive effect;
provided
, that such amendments, policies and procedures shall not have a materially adverse effect on any portion of this Award that has vested at the time of such amendment or the adoption of such policies and procedures. The Committee may take any other actions, as the Committee determines are necessary or appropriate to comply with the requirements of Section 409A. Grantee represents that Grantee has consulted with any tax consultants Grantee deems advisable in connection with Section 409A.
|
5.
|
Adjustments; Fractional Shares
. In accordance with Sections 8, 10 and 11 of the 2015 Plan, the Grantee acknowledges that the Award is subject to modification, acceleration or termination upon certain events, including but not limited to, the termination of Grantee’s Continuous Service, a Change in Control of the Company or a change in the capitalization of the Company. Notwithstanding such adjustment, no Award may be exercised that will result in the issuance of a fraction of a Share.
|
6.
|
No Right to Continued Employment or Service
. Nothing contained in this Agreement shall confer, or be construed to confer, upon Grantee any right with respect to the Grantee’s Continuous Service, nor shall it interfere in any with Grantee’s right or the right of the Company to terminate the Grantee’s Continuous Service at any time. The Company’s ability to terminate the employment of a Grantee who is employed at will is in no way affected by a determination that Grantee’s Continuous Service has been terminated for Cause for purposes of the 2015 Plan.
|
7.
|
No Effect on Compensation, Retirement or Other Benefit Plans
. Nothing contained in this Agreement shall preclude the Company from adopting or continuing in effect other or additional compensation plans, agreements or arrangements, and any such plans, agreements and arrangements may be either generally applicable or applicable only in specific cases or to specific persons. Except as specifically provided in a retirement or other benefit plan of the Company, Awards shall not be deemed compensation for purposes of computing benefits or contributions under any retirement plan of the Company, and shall not affect any benefits under any other benefit plan of any kind or any benefit plan subsequently instituted under which the availability or amount of benefits is related to the level of compensation. The 2015 Plan is not a "Pension Plan" or "Welfare Plan" under the Employee Retirement Income Security Act of 1974, as amended (as amended, the "ERISA").
|
8.
|
Unfunded Obligation
. For purposes of the Award, Grantee shall have the status of a general unsecured creditor of the Company, and any amount payable to Grantee shall be an unfunded and unsecured obligation for all purposes, including Title I of the ERISA. To the extent that the Grantee or any other person acquires a right to receive payments from the Company pursuant to this Agreement, such right shall be no greater that the right of any unsecured general creditor of the Company.
|
9.
|
Compliance with Securities Laws.
|
a.
|
Grantee acknowledges that, to the extent applicable, this Agreement is intended to conform with (i) all provisions of the Securities Act of 1933, as amended, and the Securities and Exchange Act of 1934, (as amended, the "Exchange Act"), and all regulations and rules promulgated thereunder by the Securities and Exchange Commission, (ii) all applicable state securities laws and regulations, and (iii) the rules and regulations of the Nasdaq Stock Market (collectively, the "Securities Laws"). Notwithstanding anything to the contrary herein, this Agreement and the Award granted hereunder, shall be administered (and exercised where applicable) only in such a manner as to conform to the Securities Laws.
|
b.
|
Notwithstanding any other provision of this Agreement, if Grantee is subject to Section 16 of the Exchange Act, the Award shall be subject to any additional limitations set forth in any applicable exemptive rule under Section 16 of the Exchange Act. To the extent permitted by law, this Agreement shall be deemed amended to the extent necessary to conform to any amendment of such exemptive rule.
|
c.
|
If Shares issued pursuant to an Award or purchased through the exercise of an Option or a SAR have not been registered under the Securities Act or any applicable state laws on an effective registration statement at the time of
|
10.
|
Consent to Collection, Processing and Transfer of Personal Data
. By accepting the Award, the Grantee voluntarily acknowledges and consents to the collection, use, processing and transfer of personal data as described in this Section 10. The Grantee is not obliged to consent to such collection, use, processing and transfer of personal data. However, failure to provide the consent may affect the Grantee’s ability to participate in the 2015 Plan. The Company holds certain personal information about the Grantee, including the Grantee’s name, home address and telephone number, date of birth, social security number or other employee identification number, salary, nationality, job title, any shares of stock or directorships held in the Company, details of all options or any other entitlement to any Shares that may be awarded, canceled, purchased, vested, unvested or outstanding in the Grantee’s favor, for the purpose of managing and administering the 2015 Plan ("Data"). The Company will transfer Data within the Company as necessary for the purpose of implementation, administration and management of the Grantee’s participation in the 2015 Plan, and the Company may further transfer Data to any third parties assisting the Company in the implementation, administration and management of the 2015 Plan. These recipients may be located in the United States, or elsewhere throughout the world. The Grantee hereby authorizes them to receive, possess, use, retain and transfer the Data, in electronic or other form, for the purposes of implementing, administering and managing the Grantee’s participation in the 2015 Plan, including any requisite transfer of such Data as may be required for the administration of the 2015 Plan and/or the subsequent holding of Shares on the Grantee’s behalf to a broker or other third party with whom the Grantee may elect to deposit any Shares acquired pursuant to the 2015 Plan.
|
11.
|
Clawback Policy
. By accepting the Award, the Grantee voluntarily acknowledges and consents to the Clawback Policy set forth in Section 6(n) of the 2015 Plan. Under the Clawback Policy, the Company may (i) cause the cancellation of any Award, (ii) require reimbursement of any award by the Grantee, and (iii) effect any other right of recoupment of equity and other compensation provided under the 2015 Plan or otherwise in accordance with any Company policies that currently exist or that may from time to time be adopted or modified in the future by the Company and/or applicable law. In addition, the Grantee may be required to repay to the Company certain previously paid compensation, whether provided under this Plan, this Award Agreement, or otherwise in accordance with any Clawback Policy.
|
12.
|
Miscellaneous.
|
a.
|
Severability
. If any provision in this Agreement is or becomes or is deemed to be invalid, illegal or unenforceable in any jurisdiction or under any applicable law, rule or regulation, then such provision shall be construed or deemed amended to conform to applicable law, and if such provision cannot be so construed or deemed amended without materially altering the purpose or intent of this Agreement and the Award hereunder, such provision shall be stricken as to such jurisdiction and the remainder of this Agreement and the Award hereunder shall remain in full force and effect.
|
b.
|
Notices
. Any notice under this Agreement shall be in writing and shall be deemed to have been duly given: (i) to the Company when deposited in the United States certified mail, or with a reputable overnight carrier, postage prepaid, and addressed to the Secretary of the Company, at 1980 Festival Plaza Drive, Suite 680, Las Vegas, Nevada 89135; and (ii) to the Grantee when deposited in the United States certified mail, or with a reputable overnight carrier, postage prepaid, and addressed to the Grantee at the address given below Grantee’s signature to this Agreement, in each case subject to the right of each party to designate a different address by notice given in accordance with this Section 12(b).
|
c.
|
Non-waiver of Breach.
The waiver of (or failure to pursue) the other party’s prompt and complete performance, or breach or violation, of any term or provision of this Agreement shall be effected solely in a writing signed by the waiving party, and shall not operate nor be construed as a waiver of any subsequent breach or violation, and shall not operate nor be construed as a bar to the exercise of such right or remedy.
|
d.
|
Governing Law
. This Agreement shall be governed by and construed under the internal laws of the State of Delaware, without reference to the conflict of laws rules or principles thereof.
|
e.
|
Successors and Assigns
. The Company may assign any of its rights under this Agreement to single or multiple assignees, and this Agreement shall inure to the benefit of such successors and assigns of the Company. This Agreement shall be binding on Grantee, and subject to the transfer restrictions contained in Section 6(
l
) of the 2015 Plan, this Agreement shall be binding on Grantee’s heirs, executors, administrators, successors and assigns.
|
f.
|
Amendments, Suspension and Termination
. This Agreement may be wholly or partially amended or otherwise modified, suspended, or terminated at any time or from time to time by the Committee, in order to comply with Securities Laws, or for any other reason pursuant to Committee’s sole discretion; provided, that no such amendment, modification, suspension or termination shall have a materially adverse effect on any Award without the prior written consent of the Grantee.
|
g.
|
Headings
. Section, paragraph and other headings and captions are provided solely as a convenience to facilitate reference. Such headings and captions shall not be deemed in any way material or relevant to the construction, meaning or interpretation of this Agreement or any term or provision hereof.
|
h.
|
Entire Agreement.
This Agreement is binding upon the Grantee and the Company and upon their respective heirs, executors, administrators, successors and assigns. This Agreement, the 2015 Plan and related documents shall be governed by, interpreted and enforced in accordance with the laws of the State of Delaware, except to the extent preempted by Federal law. This Agreement contains the entire agreement and understanding between the Grantee and the Company respecting the Award.
|
i.
|
Counterparts.
This Agreement may be executed in two or more separate counterparts, each of which shall be an original, and all of which together shall constitute one and the same agreement.
|
13.
|
Prospectus and Plan:
Grantee acknowledges that Grantee has received a copy of the 2015 Plan and a Prospectus prior to the execution of this Agreement. As a condition to entering into this Agreement, and as a condition to the issuance of any Award, the Grantee agrees to be bound by all of the terms and conditions herein and in the 2015 Plan.
|
1.
|
Grant
.
The Company hereby grants to Grantee the option (the "Option") to purchase any part or all of the aggregate number of Shares set forth in the Award Agreement (the "Option Shares") pursuant to the 2015 Plan. This Option is granted as of ____________ (the "Award Date"). This Option is intended to qualify as an "incentive stock option" defined in Section 422(b) of the Internal Revenue Code of 1986, as amended (the
"Code"
), to the extent that the aggregate Fair Market Value (determined as of the Award Date) of Option Shares that are exercisable for the first time by the Option Holder during any calendar year does not exceed $100,000. The remaining Option Shares covered by this Option, if any, shall be deemed to be non-qualified options. The Option Shares shall upon issue rank equally in all respects with all other Shares.
|
2.
|
Exercise Price.
The exercise price for the Option Shares shall be, except as herein provided, $_____ per Option Share, hereinafter sometimes referred to as the "Option Price," payable immediately in full upon the exercise of the Option. In no event shall the Option Price be less than 100% of the Fair Market Value of the Option Shares subject to this Option the Award Date (or 110% where the Option Holder owns more than 10% of the combined voting power of all classes of stock of the Company the Award Date).
|
3.
|
Commencement of Exercisability
.
|
(a)
|
Except as otherwise provided in Sections 3(b), 3(c), and 3(d) hereof, the Option Shares shall become vested in the following amounts, at the following times and upon the following conditions, provided that the Continuous Service of the Grantee continues through and on the applicable Vesting Date:
|
Option Shares
|
|
|
(Number or Percentage)
|
|
Vesting Date
|
|
|
|
|
|
|
|
|
|
(b)
|
In the event that a Change in Control of the Company occurs during the Grantee’s Continuous Service, the following terms shall apply.
|
i.
|
All outstanding Options under the 2015 Plan shall terminate. However, all such Options shall not terminate to the extent they are Assumed in connection with the Change in Control.
|
ii.
|
In the event of a Change in Control and:
|
(A)
|
For the portion of each Option that is Assumed or Replaced, then such Option (if Assumed), the replacement Option (if Replaced), or the cash incentive program (if Replaced) automatically shall become fully vested, exercisable and payable and be released from any repurchase or forfeiture rights (other than repurchase rights exercisable at Fair Market Value) for all of the Option Shares (or other consideration) at the time represented by such Assumed or Replaced portion of the Option, immediately upon termination of the Grantee’s Continuous Service if such Continuous Service is terminated by the successor company or the Company without Cause or voluntarily by the Grantee with Good Reason within twelve (12) months after the Change in Control;
|
(B)
|
For the portion of each Option that is neither Assumed nor Replaced, such portion of the Option shall automatically become fully vested and exercisable and be released from any repurchase or forfeiture rights (other than repurchase rights exercisable at Fair Market Value) for all of the Option Shares (or other consideration) at the time represented by such portion of the Option, immediately prior to the specified effective date of such Change in Control, provided that the Grantee’s Continuous Service has not terminated prior to such date. The portion of the Option that is not Assumed shall terminate under subsection (A) of this Section to the extent not exercised prior to the consummation of such Change in Control; and
|
(C)
|
If the Option is accelerated in connection with a Change in Control, it shall remain exercisable as an Incentive Stock Option under the Code only to the extent the $100,000 dollar limitation of Section 422(d) of the Code is not exceeded.
|
(c)
|
To the extent not exercised within the time permitted by law for the exercise of Incentive Stock Options following the termination of a Grantee’s Continuous Service, the Option shall convert automatically to a Non-Qualified Stock Option and thereafter shall be exercisable as such to the extent exercisable by its terms for the period specified herein.
|
(d)
|
Notwithstanding any other term or provision of this Agreement, the Board or the Committee shall be authorized, in its sole discretion, based upon its review and evaluation of the performance of the Grantee and of the Company, to accelerate the vesting of any Option Shares under this Agreement, at such times and upon such terms and conditions as the Board or the Committee shall deem advisable.
|
(e)
|
For purposes of this Agreement, the following terms shall have the meanings indicated:
|
i.
|
"Non-Vested Shares"
means any portion of the Option subject to this Agreement that has not become vested pursuant to this Section 2.
|
ii.
|
"Vested Shares"
means any portion of the Option subject to this Agreement that is and has become vested pursuant to this Section 2.
|
4.
|
Expiration of the Option.
The Option may not be exercised to any extent by anyone after __________ __, 20__, (the "Expiration Date"). Unless otherwise provided in an employment agreement the terms of which have been approved by the Administrator, in the event the Grantee’s Continuous Service terminates, the Grantee may exercise the Option to the extent that the Grantee was so entitled as of the date of termination, but only within such period of time ending on the date ninety (90) days following the termination of the Grantee’s Continuous Service;
provided that
, if the termination of Continuous Service is by the Company for Cause, the Option shall immediately terminate and cease to be exercisable.
|
5.
|
Exercise of the Option.
|
(a)
|
Except as provided herein or in the 2015 Plan, during the lifetime of the Grantee, only the Grantee may exercise the Option or any portion thereof. After the death or Disability of the Grantee, any exercisable portion of the Option may be exercised pursuant to the terms of the 2015 Plan by any person empowered to do so. Any portion of the Option not exercisable at the time of the death or Disability of the Grantee shall terminate and cease to be exercisable.
|
(b)
|
Any exercisable portion of the Option, or the entire Option if then wholly exercisable, may be exercised in whole or in part at any time prior to the time when the Option or portion thereof becomes unexercisable under Section 4 hereof.
|
(c)
|
The Option may be exercised solely by delivery to the Secretary of the Company (or other person or entity designated by the Company) of all of the following, prior to the Expiration Date.
|
i.
|
A written or electronic notice, signed by the Grantee or other person then entitled to exercise the Option and complying with the applicable rules established by the Committee stating that the Option, or a portion thereof, is exercised;
|
ii.
|
Full payment of the exercise price and applicable withholding taxes in a manner permitted by Section 8(c) hereof;
|
iii.
|
Any other written representations or documents as may be required in the Committee’s sole discretion to effect compliance with Securities Laws; and
|
iv.
|
If exercised under Section 5 hereof, the appropriate proof of the right of such person or persons to exercise the Option.
|
(d)
|
Consideration for the exercise of the Option may consist of any one of the following, or a combination thereof:
|
i.
|
Cash;
|
ii.
|
Check;
|
iii.
|
Surrender of Shares or delivery of a properly executed form of attestation of ownership of Shares as the Committee may require which have a Fair Market Value on the date of surrender or attestation equal to the aggregate exercise price of the Option Shares as to which the Option shall be exercised;
|
iv.
|
Payment through a broker-dealer sale and remittance procedure pursuant to which the Grantee (A) shall provide written instructions to a Company designated brokerage firm to effect the immediate sale of some or all of the purchased Shares and remit to the Company sufficient funds to cover the aggregate exercise price payable for the purchased Shares and (B) shall provide written directives to the Company to deliver the certificates for the purchased Shares directly to such brokerage firm in order to complete the sale transaction;
|
v.
|
Payment through a "net exercise" such that, without the payment of any funds, the Grantee may exercise the Option and receive the net number of Shares equal to (i) the number of Option Shares as to which the Option is being exercised, multiplied by (ii) a fraction, the numerator of which is the Fair Market Value per Share (on such date as is determined by the Committee) less the exercise price per Option Share, and the denominator of which is such Fair Market Value per Share (the number of net Shares to be received shall be rounded down to the nearest whole number of Shares); or
|
vi.
|
With the consent of the Committee, such other form of legal consideration as may be acceptable to the Committee.
|
6.
|
Conditions to the Issuance of Stock Certificates
.
The Shares deliverable upon the exercise of the Option, or any portion thereof, shall be fully paid and nonassessable. The Company shall not be required to issue or deliver any certificates or make any book entries evidencing the Shares purchased upon exercise of the of the Option or portion thereof prior to fulfillment of the conditions set forth herein and in the 2015 Plan.
|
7.
|
Rights with Respect to the Option
.
|
(a)
|
Prior to the exercise of the Option, Grantee shall not be, nor have any of the rights or privileges of, a stockholder of the Company in respect of any Option Shares purchasable upon exercise of any part of the Option unless and until such Option has been exercised and Shares have been issued by the Company to the Grantee (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company).
|
(b)
|
Except as otherwise provided in this Agreement, the Grantee shall have, with respect to all of the Shares issued by the Company to the Grantee upon exercise of the Option, all of the rights of a holder of shares of common stock of the Company, including without limitation (i) the right to vote such Shares, (ii) the right to receive dividends, if any, as may be declared on the Shares from time to time, and (iii) the rights available to all holders of shares of common stock of the Company upon any merger, consolidation, reorganization, liquidation or dissolution, stock split-up, stock dividend or recapitalization undertaken by the Company; provided, however, that all of such rights shall be subject to the terms, provisions, conditions and restrictions set forth in this Agreement (including without limitation conditions under which all such rights shall be forfeited). Any Shares issued to the Grantee as a dividend with respect to the Shares shall have the same status set forth in this Section 7 unless otherwise determined by the Committee.
|
(c)
|
If at any time while this Agreement is in effect (or Options granted hereunder shall be or remain unvested while Grantee’s Continuous Service continues and has not yet terminated or ceased for any reason), there shall be any increase or decrease in the number of issued and outstanding Shares of the Company resulting from a stock split, reverse stock split, stock dividend, recapitalization, combination or reclassification of the Shares, or similar transaction affecting the Option, then and in that event, the Board or the Committee shall make any adjustments it deems fair and appropriate, in view of such change, in the number of Options then subject to this Agreement.
|
(d)
|
Notwithstanding any term or provision of this Agreement to the contrary, the existence of this Agreement, or of any outstanding Option awarded hereunder, shall not affect in any manner the right, power or authority of the Company to make, authorize or consummate: (i) any or all adjustments, recapitalizations, reorganizations or other changes in the Company’s capital structure or its business; (ii) any merger, consolidation or similar transaction by or of the Company; (iii) any offer, issue or sale by the Company of any capital stock of the Company, including any equity or debt securities, or preferred or preference stock that would rank prior to or on parity with the Shares that would be issued upon exercise of the Option and/or that would include, have or possess other rights, benefits and/or preferences superior to those that would be applicable to Shares that would be issued upon exercise of the Option, or any warrants, options or rights with respect to any of the foregoing; (iv) the dissolution or liquidation of the Company; (v) any sale, transfer or assignment of all or any part of the stock, assets or business of the Company; or (vi) any other corporate transaction, act or proceeding (whether of a similar character or otherwise).
|
8.
|
Tax Matters
.
|
(a)
|
The Grantee understands that the Grantee may suffer adverse tax consequences as a result of the Award, vesting and/or exercise of the Option, and/or with the purchase or disposition of the Shares subject to the Option.
|
(b)
|
Upon exercise of the Option, Grantee shall pay to the Company, or make arrangements satisfactory to the Committee for payment of, any federal, state or local taxes of any kind required by law to be withheld with respect to the exercise of the Option. If the Grantee shall fail to make such tax payments, or fail to make satisfactory arrangements for the payment thereof, the Company shall, to the extent permitted by law, have the right to deduct from any payment of any kind (including without limitation, the withholding of any Shares that otherwise would be issued to the Grantee under this Agreement) otherwise due to the Grantee any federal, state or local taxes of any kind required by law to be withheld with respect to the exercise of the Option.
|
(c)
|
The Grantee may satisfy the withholding requirements with respect to the exercise of the Option pursuant to any one or combination of the following methods:
|
i.
|
Payment in cash; or
|
ii.
|
By surrender of the whole number of Option Shares sufficient to satisfy the minimum applicable tax withholding obligations incident to the exercise or vesting of the Option (reduced to the lowest whole number of Option Shares if such number of Option Shares withheld would result in withholding a fractional Share with any remaining tax withholding settled in cash).
|
(d)
|
Tax consequences on the Grantee (including without limitation federal, state, local and foreign income tax consequences) with respect to the Option or the exercise thereof (including without limitation the grant, vesting and/or forfeiture thereof) are the sole responsibility of the Grantee. The Grantee shall consult with his or her own personal accountant(s) and/or tax advisor(s) regarding these matters and the Grantee’s filing, withholding and payment (or tax liability) obligations.
|
9.
|
Qualification as an Incentive Stock Option
. Grantee understands that the Option is intended to qualify as an "incentive stock option" within the meaning of section 422(b) of the Code. Grantee understands, further, that the Option Price for the Option Shares has been set by the Committee at a price that the Committee has determined to be not less than 100% (or, if Option Holder owned at the time of grant more than 10% of the voting securities of the Company, 110%) of the Fair Market Value of the Option Shares on the Award Date. The Company believes that the methodology by which the Committee valued the Option Shares at such time represented a good faith attempt, as defined in the Code, at reaching an accurate appraisal of the Fair Market Value of the Option Shares. Grantee understands and acknowledges, however, that the Company shall not be responsible for any additional tax liability incurred by Grantee in the event that the Internal Revenue Service is to determine that this Option does not qualify as
|
1.
|
Grant
.
The Company hereby grants to Grantee the option (the "Option") to purchase any part or all of the aggregate number of Shares set forth in the Award Agreement (the "Option Shares") pursuant to the 2015 Plan. This Option is granted as of [INSERT DATE] (the "Award Date"). The Option Shares shall upon issue rank equally in all respects with all other Shares. The Option is not intended to qualify as an "incentive stock option" defined in Section 422(b) of the Internal Revenue Code of 1986, as amended (the
"Code"
).
|
2.
|
Exercise Price.
The exercise price for the Option Shares shall be, except as herein provided, [INSERT EXERCISE PRICE] per Option Share, hereinafter sometimes referred to as the "Option Price," payable immediately in full upon the exercise of the Option. In no event shall the Option Price be less than 100% of the Fair Market Value of the Option Shares subject to this Option the Award Date (or 110% where the Option Holder owns more than 10% of the combined voting power of all classes of stock of the Company the Award Date).
|
3.
|
Commencement of Exercisability
.
|
a.
|
Except as otherwise provided in Sections 3(b), and 3(c) hereof, the Option Shares shall become vested in the following amounts, at the following times and upon the following conditions, provided that the Continuous Service of the Grantee continues through and on the applicable Vesting Date:
|
Option Shares
|
|
|
(Number or Percentage)
|
|
Vesting Date
|
|
|
|
|
|
|
|
|
|
b.
|
In the event that a Change in Control of the Company occurs during the Grantee’s Continuous Service, the following terms shall apply.
|
i.
|
All outstanding Options under the 2015 Plan shall terminate. However, all such Options shall not terminate to the extent they are Assumed in connection with the Change in Control.
|
ii.
|
In the event of a Change in Control and:
|
1.
|
For the portion of each Option that is Assumed or Replaced, then such Option (if Assumed), the replacement Option (if Replaced), or the cash incentive program (if Replaced) automatically shall become fully vested, exercisable and payable and be released from any repurchase or forfeiture rights (other than repurchase rights exercisable at Fair Market Value) for all of the Option Shares (or other consideration) at the time represented by such Assumed or Replaced portion of the Option, immediately upon termination of the Grantee’s Continuous Service if such Continuous Service is terminated by the successor company or the Company without Cause or voluntarily by the Grantee with Good Reason within twelve (12) months after the Change in Control; and
|
2.
|
For the portion of each Option that is neither Assumed nor Replaced, such portion of the Option shall automatically become fully vested and exercisable and be released from any repurchase or forfeiture rights (other than repurchase rights exercisable at Fair Market Value) for all of the Option Shares (or other consideration) at the time represented by such portion of the Option, immediately
|
c.
|
Notwithstanding any other term or provision of this Agreement, the Board or the Committee shall be authorized, in its sole discretion, based upon its review and evaluation of the performance of the Grantee and of the Company, to accelerate the vesting of any Option Shares under this Agreement, at such times and upon such terms and conditions as the Board or the Committee shall deem advisable.
|
d.
|
For purposes of this Agreement, the following terms shall have the meanings indicated:
|
i.
|
"Non-Vested Shares"
means any portion of the Option subject to this Agreement that has not become vested pursuant to this Section 2.
|
ii.
|
"Vested Shares"
means any portion of the Option subject to this Agreement that is and has become vested pursuant to this Section 2.
|
4.
|
Expiration of the Option.
The Option may not be exercised to any extent by anyone after [INSERT EXPIRATION DATE], (the "Expiration Date"). Unless otherwise provided in an employment agreement the terms of which have been approved by the Administrator, in the event the Grantee’s Continuous Service terminates, the Grantee may exercise the Option to the extent that the Grantee was so entitled as of the date of termination, but only within such period of time ending on the date ninety (90) days following the termination of the Grantee’s Continuous Service;
provided that
, if the termination of Continuous Service is by the Company for Cause, the Option shall immediately terminate and cease to be exercisable. If, after termination, the Grantee does not exercise his or her Option within the time specified herein, the Option shall terminate without any payment to the Grantee.
|
5.
|
Exercise of the Option.
|
a.
|
Except as provided herein or in the 2015 Plan, during the lifetime of the Grantee, only the Grantee may exercise the Option or any portion thereof. After the death or Disability of the Grantee, any exercisable portion of the Option may be exercised pursuant to the terms of the 2015 Plan by any person empowered to do so. Any portion of the Option not exercisable at the time of the death or Disability of the Grantee shall terminate and cease to be exercisable.
|
b.
|
Any exercisable portion of the Option, or the entire Option if then wholly exercisable, may be exercised in whole or in part at any time prior to the time when the Option or portion thereof becomes unexercisable under Section 4 hereof.
|
c.
|
The Option may be exercised solely by delivery to the Secretary of the Company (or other person or entity designated by the Company) of all of the following, prior to the Expiration Date.
|
i.
|
A written or electronic notice, signed by the Grantee or other person then entitled to exercise the Option and complying with the applicable rules established by the Committee stating that the Option, or a portion thereof, is exercised;
|
ii.
|
Full payment of the exercise price and applicable withholding taxes in a manner permitted by Section 8(c) hereof;
|
iii.
|
Any other written representations or documents as may be required in the Committee’s sole discretion to effect compliance with Securities Laws; and
|
iv.
|
If exercised under Section 5 hereof, the appropriate proof of the right of such person or persons to exercise the Option.
|
d.
|
Consideration for the exercise of the Option may consist of any one of the following, or a combination thereof:
|
i.
|
Cash;
|
ii.
|
Check;
|
iii.
|
Surrender of Shares or delivery of a properly executed form of attestation of ownership of Shares as the Committee may require which have a Fair Market Value on the date of surrender or attestation equal to the aggregate exercise price of the Option Shares as to which the Option shall be exercised;
|
iv.
|
Payment through a broker-dealer sale and remittance procedure pursuant to which the Grantee (A) shall provide written instructions to a Company designated brokerage firm to effect the immediate sale of some or all of the purchased Shares and remit to the Company sufficient funds to cover the aggregate exercise price payable for the purchased Shares and (B) shall provide written directives to the Company to deliver the certificates for the purchased Shares directly to such brokerage firm in order to complete the sale transaction;
|
v.
|
Payment through a "net exercise" such that, without the payment of any funds, the Grantee may exercise the Option and receive the net number of Shares equal to (i) the number of Option Shares as to which the Option is being exercised, multiplied by (ii) a fraction, the numerator of which is the Fair Market Value per Share (on such date as is determined by the Committee) less the exercise price per Option Share, and the denominator of which is such Fair Market Value per Share (the number of net Shares to be received shall be rounded down to the nearest whole number of Shares); or
|
vi.
|
With the consent of the Committee, such other form of legal consideration as may be acceptable to the Committee.
|
6.
|
Conditions to the Issuance of Stock Certificates
.
The Shares deliverable upon the exercise of the Option, or any portion thereof, shall be fully paid and nonassessable. The Company shall not be required to issue or deliver any certificates or make any book entries evidencing the Shares purchased upon exercise of the of the Option or portion thereof prior to fulfillment of the conditions set forth herein and in the 2015 Plan.
|
7.
|
Rights with Respect to the Option
.
|
a.
|
Prior to the exercise of the Option, Grantee shall not be, nor have any of the rights or privileges of, a stockholder of the Company in respect of any Option Shares purchasable upon exercise of any part of the Option unless and until such Option has been exercised and Shares have been issued by the Company to the Grantee (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company).
|
b.
|
Except as otherwise provided in this Agreement, the Grantee shall have, with respect to all of the Shares issued by the Company to the Grantee upon exercise of the Option, all of the rights of a holder of shares of common stock of the Company, including without limitation (i) the right to vote such Shares, (ii) the right to receive dividends, if any, as may be declared on the Shares from time to time, and (iii) the rights available to all holders of shares of common stock of the Company upon any merger, consolidation, reorganization, liquidation or dissolution, stock split-up, stock dividend or recapitalization undertaken by the Company; provided, however, that all of such rights shall be subject to the terms, provisions, conditions and restrictions set forth in this Agreement (including without limitation conditions under which all such rights shall be forfeited). Any Shares issued to the Grantee as a dividend with respect to the Shares shall have the same status set forth in this Section 7 unless otherwise determined by the Committee.
|
c.
|
If at any time while this Agreement is in effect (or Options granted hereunder shall be or remain unvested while Grantee’s Continuous Service continues and has not yet terminated or ceased for any reason), there shall be any increase or decrease in the number of issued and outstanding Shares of the Company resulting from a stock split, reverse stock split, stock dividend, recapitalization, combination or reclassification of the Shares, or similar transaction affecting the Option, then and in that event, the Board or the Committee shall make any adjustments it deems fair and appropriate, in view of such change, in the number of Options then subject to this Agreement.
|
d.
|
Notwithstanding any term or provision of this Agreement to the contrary, the existence of this Agreement, or of any outstanding Option awarded hereunder, shall not affect in any manner the right, power or authority of the Company to make, authorize or consummate: (i) any or all adjustments, recapitalizations, reorganizations or other changes in the Company’s capital structure or its business; (ii) any merger, consolidation or similar transaction by or of the Company; (iii) any offer, issue or sale by the Company of any capital stock of the Company, including any equity
|
8.
|
Tax Matters
.
|
a.
|
The Grantee understands that the Grantee may suffer adverse tax consequences as a result of the Award, vesting and/or exercise of the Option, and/or with the purchase or disposition of the Shares subject to the Option.
|
b.
|
Upon exercise of the Option, Grantee shall pay to the Company, or make arrangements satisfactory to the Committee for payment of, any federal, state or local taxes of any kind required by law to be withheld with respect to the exercise of the Option. If the Grantee shall fail to make such tax payments, or fail to make satisfactory arrangements for the payment thereof, the Company shall, to the extent permitted by law, have the right to deduct from any payment of any kind (including without limitation, the withholding of any Shares that otherwise would be issued to the Grantee under this Agreement) otherwise due to the Grantee any federal, state or local taxes of any kind required by law to be withheld with respect to the exercise of the Option.
|
c.
|
The Grantee may satisfy the withholding requirements with respect to the exercise of the Option pursuant to any one or combination of the following methods:
|
i.
|
Payment in cash; or
|
ii.
|
By surrender of the whole number of Option Shares sufficient to satisfy the minimum applicable tax withholding obligations incident to the exercise or vesting of the Option (reduced to the lowest whole number of Option Shares if such number of Option Shares withheld would result in withholding a fractional Share with any remaining tax withholding settled in cash).
|
d.
|
Tax consequences on the Grantee (including without limitation federal, state, local and foreign income tax consequences) with respect to the Option or the exercise thereof (including without limitation the grant, vesting and/or forfeiture thereof) are the sole responsibility of the Grantee. The Grantee shall consult with his or her own personal accountant(s) and/or tax advisor(s) regarding these matters and the Grantee’s filing, withholding and payment (or tax liability) obligations.
|
1.
|
Award of Stock Appreciation Rights.
The Company hereby grants to the Grantee, an Award of SARs covering _______ Shares of the common stock of the Company (each a "SAR Share"), pursuant to which the Grantee shall be eligible for the payment set forth in Section 4(d) hereof. The SAR exercise price for SARs granted pursuant to this Agreement is __________ ($_____) per SAR Share (the "Base Appreciation Amount");
provided
that the Base Appreciation Amount shall not be less than one hundred percent (100%) of the Fair Market Value per Share of the common stock of the Company on the date of the grant. Upon exercise, as further discussed in Section 4(d) below, Grantee will receive the whole number of Shares of the common stock of the Company whose value is an amount equal to the difference between the Fair Market Value of a Share of the common stock of the Company on the exercise date and the Base Appreciation Amount, multiplied by the number of SAR Shares (defined below) being exercised.
|
2.
|
Commencement of Exercisability
.
|
a.
|
Except as otherwise provided in Sections 2(b) and 2(c) hereof, the SAR shall become vested in the following amounts, at the following times and upon the following conditions, provided that the Continuous Service of the Grantee continues through and on the applicable Vesting Date:
|
SAR Shares
|
|
|
(Number or Percentage)
|
|
Vesting Date
|
|
|
|
|
|
|
|
|
|
b.
|
In the event that a Change in Control of the Company occurs during the Grantee’s Continuous Service, the following terms shall apply.
|
i.
|
All outstanding SARs under the 2015 Plan shall terminate. However, all such SARs shall not terminate to the extent they are Assumed in connection with the Change in Control.
|
ii.
|
In the event of a Change in Control and:
|
A.
|
For the portion of each SAR that is Assumed or Replaced, then such SAR (if Assumed), the replacement SAR (if Replaced), or the cash incentive program (if Replaced) automatically shall become fully vested, exercisable and payable and be released from any repurchase or forfeiture rights (other than repurchase rights exercisable at Fair Market Value) for all of the SAR Shares (or other consideration) at the time represented by such Assumed or Replaced portion of the SAR, immediately upon termination of the Grantee’s Continuous Service if such Continuous Service is terminated by the successor company or the Company without Cause or voluntarily by the Grantee with Good Reason within twelve (12) months after the Change in Control; and
|
B.
|
For the portion of each SAR that is neither Assumed nor Replaced, such portion of the SAR shall automatically become fully vested and exercisable and be released from any repurchase or forfeiture rights (other than repurchase rights exercisable at Fair Market Value) for all of
|
c.
|
Notwithstanding any other term or provision of this Agreement, the Board or the Committee shall be authorized, in its sole discretion, based upon its review and evaluation of the performance of the Grantee and of the Company, to accelerate the vesting of any SAR Shares under this Agreement, at such times and upon such terms and conditions as the Board or the Committee shall deem advisable.
|
d.
|
For purposes of this Agreement, the following terms shall have the meanings indicated:
|
i.
|
"Non-Vested SAR Shares"
means any portion of the SAR subject to this Agreement that has not become vested pursuant to this Section 2.
|
ii.
|
"Vested SAR Shares"
means any portion of the SAR subject to this Agreement that is and has become vested pursuant to this Section 2.
|
3.
|
Expiration of the SAR
. The SARs issued under this Agreement may not be exercised to any extent by anyone after ____________ __, 20__ (the "Expiration Date"). Unless otherwise provided in an employment agreement the terms of which have been approved by the Committee, in the event that the Grantee’s Continuous Service terminates, the Grantee may exercise the SAR to the extent that Grantee was so entitled as of the date of termination, but only within such period of time ending on the date that is ninety (90) days following the termination of the Grantee’s Continuous Service;
provided that
, if the termination of the Continuous Service is by the Company for Cause, the SAR shall immediately terminate and cease to be exercisable. If, after termination, the Grantee does not exercise his or her SAR within the time specified herein, the SAR shall terminate without any payment to the Grantee.
|
4.
|
Exercise of the SAR
.
|
a.
|
Except as provided herein or in the 2015 Plan, during the lifetime of the Grantee, only the Grantee may exercise the SAR or any portion thereof. After the death or Disability of the Grantee, any exercisable portion of the SAR may be exercised pursuant to the terms of the 2015 Plan by any person empowered to do so. Any portion of the SAR not exercisable at the time of the death or Disability of the Grantee shall terminate and cease to be exercisable.
|
b.
|
Any exercisable portion of the SAR, or the entire SAR if then wholly exercisable, may be exercised in whole or in part at any time prior to the time when the SAR or portion thereof becomes unexercisable under Section 3 hereof.
|
c.
|
The SAR may be exercised prior to the Expiration Date solely by delivery to the Secretary of the Company (or other person or entity designated by the Company) of all of the following.
|
i.
|
A written or electronic notice, signed by the Grantee or other person then entitled to exercise the SAR and complying with the applicable rules established by the Committee stating that the SAR, or a portion thereof, is exercised;
|
ii.
|
Full payment of the applicable withholding taxes in a manner permitted by Section 7(c) hereof;
|
iii.
|
Any other written representations or documents as may be required in the Committee’s sole discretion to effect compliance with Securities Laws; and
|
iv.
|
If exercised under Section 4 hereof, the appropriate proof of the right of such person or persons to exercise the SAR.
|
d.
|
After receiving the notice of exercise pursuant to Section 4(c) hereof, the Company shall cause to be issued, the whole number of Shares of the common stock of the Company whose value is an amount equal to the difference
|
5.
|
Conditions to the Issuance of Stock Certificates
. The Shares of common stock of the Company deliverable upon the exercise of the SAR, or any portion thereof, shall be fully paid and nonassessable. The Company shall not be required to issue or deliver any certificates or make any book entries evidencing such Shares upon exercise of the of the SAR or portion thereof prior to fulfillment of the conditions set forth herein and in the 2015 Plan.
|
6.
|
Rights with Respect to the SAR
.
|
a.
|
Prior to the exercise of the SAR, Grantee shall not be, nor have any of the rights or privileges of, a stockholder of the Company in respect of any Shares of the common stock of the Company issued upon exercise of any part of the SAR unless and until such SAR has been exercised and Shares have been issued by the Company to the Grantee (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company).
|
b.
|
Except as otherwise provided in this Agreement, the Grantee shall have, with respect to all of the Shares issued by the Company to the Grantee upon exercise of the SAR, all of the rights of a holder of shares of common stock of the Company, including without limitation (i) the right to vote such Shares, (ii) the right to receive dividends, if any, as may be declared on the Shares from time to time, and (iii) the rights available to all holders of shares of common stock of the Company upon any merger, consolidation, reorganization, liquidation or dissolution, stock split-up, stock dividend or recapitalization undertaken by the Company;
provided, however
, that all of such rights shall be subject to the terms, provisions, conditions and restrictions set forth in this Agreement (including without limitation conditions under which all such rights shall be forfeited). Any Shares issued to the Grantee as a dividend with respect to the Shares shall have the same status set forth in this Section 6 unless otherwise determined by the Committee.
|
c.
|
If at any time while this Agreement is in effect (or SARs granted hereunder shall be or remain unvested while Grantee’s Continuous Service continues and has not yet terminated or ceased for any reason), there shall be any increase or decrease in the number of issued and outstanding Shares of the Company resulting from a stock split, reverse stock split, stock dividend, recapitalization, combination or reclassification of the Shares of common stock of the Company, or similar transaction affecting the SAR Shares, then and in that event, the Board or the Committee shall make any adjustments it deems fair and appropriate, in view of such change, in the number of SAR Shares then subject to this Agreement.
|
d.
|
Notwithstanding any term or provision of this Agreement to the contrary, the existence of this Agreement, or of any outstanding SAR awarded hereunder, shall not affect in any manner the right, power or authority of the Company to make, authorize or consummate: (i) any or all adjustments, recapitalizations, reorganizations or other changes in the Company’s capital structure or its business; (ii) any merger, consolidation or similar transaction by or of the Company; (iii) any offer, issue or sale by the Company of any capital stock of the Company, including any equity or debt securities, or preferred or preference stock that would rank prior to or on parity with the Shares that would be issued upon exercise of the SAR and/or that would include, have or possess other rights, benefits and/or preferences superior to those that would be applicable to Shares that would be issued upon exercise of the SAR, or any warrants, options or rights with respect to any of the foregoing; (iv) the dissolution or liquidation of the Company; (v) any sale, transfer or assignment of all or any part of the stock, assets or business of the Company; or (vi) any other corporate transaction, act or proceeding (whether of a similar character or otherwise).
|
7.
|
Tax Matters
.
|
a.
|
The Grantee understands that the Grantee may suffer adverse tax consequences as a result of the Award, vesting and/or exercise of the SAR, and/or with the purchase or disposition of the SAR Shares.
|
b.
|
Upon exercise of the SAR, Grantee shall pay to the Company, or make arrangements satisfactory to the Committee for payment of, any federal, state or local taxes of any kind required by law to be withheld with respect to the exercise of the SAR. If the Grantee shall fail to make such tax payments, or fail to make satisfactory arrangements for the payment thereof, the Company shall, to the extent permitted by law, have the right to deduct from any payment of any kind (including without limitation, the withholding of any Shares that otherwise would be issued
|
c.
|
The Grantee may satisfy the withholding requirements with respect to the exercise of the SAR pursuant to any one or combination of the following methods:
|
i.
|
Payment in cash; or
|
ii.
|
By surrender of the whole number of SAR Shares sufficient to satisfy the minimum applicable tax withholding obligations incident to the exercise or vesting of the SAR (reduced to the lowest whole number of SAR Shares if such number of SAR Shares withheld would result in withholding a fractional Share of the common stock of the Company with any remaining tax withholding settled in cash).
|
d.
|
Tax consequences on the Grantee (including without limitation federal, state, local and foreign income tax consequences) with respect to the SAR or the exercise thereof (including without limitation the grant, vesting and/or forfeiture thereof) are the sole responsibility of the Grantee. The Grantee shall consult with his or her own personal accountant(s) and/or tax advisor(s) regarding these matters and the Grantee’s filing, withholding and payment (or tax liability) obligations.
|
1.
|
Award of Restricted Stock.
The Committee hereby grants, as of the Award Date (the "
Award Date"
), to (the "
Grantee"
), restricted shares of Full House Resorts, Inc., a Delaware corporation (the "Company"), common stock, par value $.0001 per share (collectively the "
Restricted Stock"
). The Restricted Stock shall be subject to the terms, provisions and restrictions set forth in this Agreement and the 2015 Plan, which is incorporated herein for all purposes.
|
2.
|
Purchase Price.
The purchase price of your Restricted Stock, if any, is [_________________ ($______)] per Share.
|
3.
|
Vesting of Restricted Stock.
|
a.
|
Except as otherwise provided in Sections 3(b) and 3(c) hereof, the shares of Restricted Stock shall become vested in the following amounts, at the following times and upon the following conditions, provided that the Continuous Service of the Grantee continues through and on the applicable Vesting Date:
|
Shares of Restricted Stock
|
|
|
(Number or Percentage)
|
|
Vesting Date
|
|
|
|
|
|
|
|
|
|
b.
|
In the event that a Change in Control of the Company occurs during the Grantee’s Continuous Service, the following terms shall apply.
|
i.
|
All outstanding Awards under the 2015 Plan shall terminate. However, all such Awards shall not terminate to the extent they are Assumed in connection with the Change in Control.
|
ii.
|
In the event of a Change in Control and:
|
A.
|
For the portion of this Award of Restricted Stock that is Assumed or Replaced, then this Award (if Assumed), the replacement Award (if Replaced), or the cash incentive program (if Replaced) automatically shall become fully vested, exercisable and payable and be released from any repurchase or forfeiture rights (other than repurchase rights exercisable at Fair Market Value) for all of the Shares (or other consideration) at the time represented by such Assumed or Replaced portion of this Award, immediately upon termination of the Grantee’s Continuous Service if such Continuous Service is terminated by the successor company or the Company without Cause or voluntarily by the Grantee with Good Reason within twelve (12) months after the Change in Control; and
|
B.
|
For the portion of this Award of Restricted Stock that is neither Assumed nor Replaced, such portion of this Award shall automatically become fully vested and exercisable and be released from any repurchase or forfeiture rights (other than repurchase rights exercisable at Fair Market Value) for all of the Shares (or other consideration) at the time represented by such portion of this Award, immediately prior to the specified effective date of such Change in Control,
|
c.
|
Notwithstanding any other term or provision of this Agreement, the Board or the Committee shall be authorized, in its sole discretion, based upon its review and evaluation of the performance of the Grantee and of the Company, to accelerate the vesting of any shares of Restricted Stock under this Agreement, at such times and upon such terms and conditions as the Board or the Committee shall deem advisable.
|
d.
|
Definitions
. For purposes of this Agreement, the following terms shall have the meanings indicated:
|
a.
|
"Non-Vested Shares"
means any portion of the Restricted Stock subject to this Agreement that has not become vested pursuant to this Section 2.
|
b.
|
"Vested Shares"
means any portion of the Restricted Stock subject to this Agreement that is and has become vested pursuant to this Section 2.
|
4.
|
Exercise and Delivery of Restricted Stock.
|
a.
|
Except as provided herein or in the 2015 Plan, the Grantee may purchase the Restricted Stock on or after the date (the "
Applicable Date"
) on which the shares (or a portion thereof) subject to this Restricted Stock award become Vested Shares pursuant to Section 2 hereof;
provided
, that all such purchases shall be made prior to ___________ __, 20__ (the "Expiration Date").
|
b.
|
Unless otherwise provided in an employment agreement the terms of which have been approved by the Committee, in the event the Grantee’s Continuous Service terminates, the Grantee may purchase the Restricted Stock (to the extent that the Grantee was entitled to purchase such Restricted Stock as of the date of termination) but only within such period of time ending on the earlier of (x) the date ninety (90) days following the termination of the Grantee’s Continuous Service or (y) the Expiration Date;
provided that
, if the termination of Continuous Service is by the Company for Cause, all portions of this Award that remain outstanding (whether or not vested) shall immediately terminate and cease to be exercisable. If, after termination, the Grantee does not purchase the Restricted Stock within the time specified herein, this Award shall terminate, and the Shares shall revert back to the Company without any payment to the Grantee.
|
c.
|
Except as provided herein or in the 2015 Plan, during the lifetime of the Grantee, only the Grantee may purchase the Restricted Stock or any portion thereof. After the death or Disability of the Grantee, any Vested Shares may be purchased pursuant to the terms of the 2015 Plan by any person empowered to do so. At the time of the death or Disability of the Grantee the right to purchase any Non-Vested Shares shall terminate and cease to be exercisable.
|
d.
|
One or more stock certificates evidencing the Restricted Stock shall be issued in the name of the Grantee but shall be held and retained by the Records Administrator of the Company until Applicable Date. All such stock certificates shall bear the following legends, along with such other legends that the Board or the Committee shall deem necessary and appropriate or which are otherwise required or indicated pursuant to any applicable stockholders agreement:
|
e.
|
The Grantee shall deposit with the Company stock powers or other instruments of transfer or assignment, duly endorsed in blank with signature(s) guaranteed, corresponding to each certificate representing shares of Restricted Stock until such shares become Vested Shares. If the Grantee shall fail to provide the Company with any such stock power or other instrument of transfer or assignment, the Grantee hereby irrevocably appoints the Secretary of the Company as his attorney-in-fact, with full power of appointment and substitution, to execute
|
f.
|
On or after each Applicable Date, upon written request to the Company by the Grantee, the Company shall promptly cause a new certificate or certificates to be issued for and with respect to all shares that become Vested Shares on that Applicable Date, which certificate(s) shall be delivered to the Grantee as soon as administratively practicable after the date of receipt by the Company of the Grantee’s written request. The new certificate or certificates shall continue to bear those legends and endorsements that the Company shall deem necessary or appropriate (including those relating to restrictions on transferability and/or obligations and restrictions under the Securities Laws).
|
g.
|
Consideration for the purchase of Restricted Stock may consist of any one of the following, or a combination thereof:
|
i.
|
Cash;
|
ii.
|
Check;
|
iii.
|
Surrender of Shares or delivery of a properly executed form of attestation of ownership of Shares as the Committee may require which have a Fair Market Value on the date of surrender or attestation equal to the aggregate purchase price of the Restricted Stock; or
|
iv.
|
With the consent of the Committee, such other form of legal consideration as may be acceptable to the Committee.
|
5.
|
Conditions to the Issuance of Stock Certificates
. The Restricted Stock deliverable hereunder shall by fully paid and nonassessable. The Company shall not be required to issue or deliver any certificates or make any book entries evidencing the Restricted Stock prior to the fulfillment of the conditions set forth herein and in the 2015 Plan.
|
6.
|
Rights with Respect to Restricted Stock.
|
a.
|
Except as otherwise provided in this Agreement, the Grantee shall have, with respect to all of the shares of Restricted Stock, all of the rights of a holder of shares of common stock of the Company, including without limitation (i) the right to vote such Restricted Stock, (ii) the right to receive dividends, if any, as may be declared on the Restricted Stock from time to time, and (iii) the rights available to all holders of shares of common stock of the Company upon any merger, consolidation, reorganization, liquidation or dissolution, stock split-up, stock dividend or recapitalization undertaken by the Company; provided, however, that all of such rights shall be subject to the terms, provisions, conditions and restrictions set forth in this Agreement (including without limitation conditions under which all such rights shall be forfeited). Any Shares issued to the Grantee as a dividend with respect to shares of Restricted Stock shall have the same status and bear the same legend as the shares of Restricted Stock and shall be held by the Company, if the shares of Restricted Stock that such dividend is attributed to is being so held, unless otherwise determined by the Committee.
|
b.
|
If at any time while this Agreement is in effect (or shares granted hereunder shall be or remain unvested while Grantee’s Continuous Service continues and has not yet terminated or ceased for any reason), there shall be any increase or decrease in the number of issued and outstanding Shares of the Company resulting from a stock split, reverse stock split, stock dividend, recapitalization, combination or reclassification of the Shares, or similar transaction affecting the Shares, then and in that event, the Board or the Committee shall make any adjustments it deems fair and appropriate, in view of such change, in the number of shares of Restricted Stock then subject to this Agreement. If any such adjustment shall result in a fractional share, such fraction shall be disregarded.
|
c.
|
Notwithstanding any term or provision of this Agreement to the contrary, the existence of this Agreement, or of any outstanding Restricted Stock awarded hereunder, shall not affect in any manner the right, power or authority of the Company to make, authorize or consummate: (i) any or all adjustments, recapitalizations, reorganizations or other changes in the Company’s capital structure or its business; (ii) any merger, consolidation or similar transaction by or of the Company; (iii) any offer, issue or sale by the Company of any capital stock of the Company, including any equity or debt securities, or preferred or preference stock that would rank prior to or on parity with the Restricted Stock and/or that would include, have or possess other rights, benefits and/or preferences superior to those that the Restricted Stock includes, has or possesses, or any warrants, options or
|
7.
|
Tax Matters; Section 83(b) Election.
|
a.
|
Grantee shall properly elect, within thirty (30) days of the Award Date, and prior to the delivery of any Shares, to include in gross income for federal income tax purposes an amount equal to the fair market value (as of the Award Date) of the Restricted Stock pursuant to Section 83(b) of the Internal Revenue Code of 1986, as amended (the "
Code"
), and shall make arrangements satisfactory to the Company to pay to the Company any federal, state or local income taxes required to be withheld with respect to the Restricted Stock. If the Grantee shall fail to make such tax payments as are required, the Company shall, to the extent permitted by law, have the right to deduct from any payment of any kind (including without limitation, the withholding of any Shares that otherwise would be issued to the Grantee under this Agreement) otherwise due to the Grantee any federal, state or local taxes of any kind required by law to be withheld with respect to the Restricted Stock.
|
b.
|
If the Grantee does not properly make the election described in paragraph 5(a) above, the Grantee shall, no later than the date or dates as of which the restrictions referred to in this Agreement hereof shall lapse, pay to the Company, or make arrangements satisfactory to the Committee for payment of, any federal, state or local taxes of any kind required by law to be withheld with respect to the Restricted Stock (including without limitation the vesting thereof), and the Company shall, to the extent permitted by law, have the right to deduct from any payment of any kind (including without limitation, the withholding of any Shares that otherwise would be distributed to the Grantee under this Agreement) otherwise due to Grantee any federal, state, or local taxes of any kind required by law to be withheld with respect to the Restricted Stock.
|
c.
|
The Grantee may satisfy the withholding requirements with respect to the Restricted Stock pursuant to any one or combination of the following methods:
|
i.
|
Payment in cash; or
|
ii.
|
By surrender of the whole number of Shares covered by this Award sufficient to satisfy the minimum applicable tax withholding obligations incident to the exercise or vesting of this Award (reduced to the lowest whole number of Shares if such number of Shares withheld would result in withholding a fractional Share with any remaining tax withholding settled in cash).
|
d.
|
Tax consequences on the Grantee (including without limitation federal, state, local and foreign income tax consequences) with respect to the Restricted Stock (including without limitation the grant, vesting and/or forfeiture thereof) are the sole responsibility of the Grantee. The Grantee shall consult with his or her own personal accountant(s) and/or tax advisor(s) regarding these matters, the making of a Section 83(b) election, and the Grantee’s filing, withholding and payment (or tax liability) obligations.
|
|
|
|
NAME OF SUBSIDIARY
|
|
JURISDICTION OF INCORPORATION
|
Full House Subsidiary, Inc.
|
|
Delaware
|
Full House Subsidiary II, Inc.
|
|
Nevada
|
Stockman’s Casino
|
|
Nevada
|
Gaming Entertainment (Indiana) LLC
|
|
Nevada
|
Gaming Entertainment (Nevada) LLC
|
|
Nevada
|
Silver Slipper Casino Venture LLC
|
|
Delaware
|
Gaming Entertainment (Kentucky) LLC
|
|
Nevada
|
Richard and Louise Johnson, LLC
|
|
Kentucky
|
FHR-Colorado LLC
|
|
Nevada
|
1.
|
I have reviewed this Annual Report on Form 10-K of Full House Resorts, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date: March 8, 2018
|
By:
|
/s/ DANIEL R. LEE
|
|
|
Daniel R. Lee
|
|
|
Chief Executive Officer
|
1.
|
I have reviewed this Annual Report on Form 10-K of Full House Resorts, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date: March 8, 2018
|
By:
|
/s/ LEWIS A. FANGER
|
|
|
Lewis A. Fanger
|
|
|
Chief Financial Officer
|
(1)
|
The Annual Report on Form 10-K for the year ended December 31, 2017 (the "Report") of the Company fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date: March 8, 2018
|
By:
|
/s/ DANIEL R. LEE
|
|
Daniel R. Lee
|
|
|
Chief Executive Officer
|
(1)
|
The Annual Report on Form 10-K for the year ended December 31, 2017 (the "Report") of the Company fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date: March 8, 2018
|
By:
|
/s/ LEWIS A. FANGER
|
|
Lewis A. Fanger
|
|
|
Chief Financial Officer
|
•
|
the character of persons having any direct or indirect involvement with gaming to prevent unsavory or unsuitable persons from having a direct or indirect involvement with gaming at any time or in any capacity;
|
•
|
establishment and application of responsible accounting practices and procedures;
|
•
|
maintenance of effective control over the financial practices and financial stability of licensees, including procedures for internal controls and the safeguarding of assets and revenues;
|
•
|
recordkeeping and reporting to the Nevada gaming authorities;
|
•
|
fair operation of games; and
|
•
|
the raising of revenues through taxation and licensing fees.
|
•
|
pay to the unsuitable person any dividends, interest or any distribution whatsoever;
|
•
|
recognize any voting right by such unsuitable person in connection with such securities;
|
•
|
pay the unsuitable person remuneration in any form; or
|
•
|
make any payment to the unsuitable person by way of principal, redemption, conversion exchange, liquidation or similar transaction.
|
•
|
assure the financial stability of corporate gaming licensees and their affiliates;
|
•
|
preserve the beneficial aspects of conducting business in the corporate form; and
|
•
|
promote a neutral environment for the orderly governance of corporate affairs.
|
•
|
a percentage of the gross revenues received;
|
•
|
the number of gaming devices operated; or
|
•
|
the number of table games operated.
|
•
|
knowingly violates any laws of the foreign jurisdiction pertaining to the foreign gaming operation;
|
•
|
fails to conduct the foreign gaming operation in accordance with the standards of honesty and integrity required of Nevada gaming operations;
|
•
|
engages in any activity or enters into any association that is unsuitable because it poses an unreasonable threat to the control of gaming in Nevada, reflects or tends to reflect, discredit or disrepute upon the State of Nevada or gaming in Nevada, or is contrary to the gaming policies of Nevada;
|
•
|
engages in activities or enters into associations that are harmful to the State of Nevada or its ability to collect gaming taxes and fees; or
|
•
|
employs, contracts with or associates with a person in the foreign operation who has been denied a license or a finding of suitability in Nevada on the ground of unsuitability.
|
•
|
the character of persons having any direct or indirect involvement with gaming to prevent unsavory or unsuitable persons from having a direct or indirect involvement with gaming at any time or in any capacity;
|
•
|
establishment and application of responsible accounting practices and procedures;
|
•
|
maintenance of effective control over the financial practices and financial stability of licensees, including procedures for internal controls and the safeguarding of assets and revenues;
|
•
|
recordkeeping and reporting to the Mississippi gaming authorities;
|
•
|
the prevention of cheating and fraudulent practices;
|
•
|
providing a source of state and local revenues through taxation and licensing fees; and
|
•
|
ensuring that gaming licensees, to the extent practicable, employ Mississippi residents.
|
•
|
pay that person any dividend or interest upon our voting securities;
|
•
|
recognize the exercise, directly or indirectly of any voting right conferred through securities held by that person;
|
•
|
pay the unsuitable person any remuneration in any form for services rendered or otherwise, except in certain limited and specific circumstances; or
|
•
|
fail to pursue all lawful efforts to require the unsuitable person to divest himself of the securities including, if necessary, the immediate purchase of the securities for cash at fair market value.
|
•
|
assure the financial stability of corporate gaming licensees and their affiliates;
|
•
|
preserve the beneficial aspects of conducting business in the corporate form; and
|
•
|
promote a neutral environment for the orderly governance of corporate affairs.
|
•
|
the success of limited stakes gaming is dependent upon public confidence and trust that licensed limited stakes gaming is conducted honestly and competitively, the rights of the creditors of licensees are protected and gaming is free from criminal and corruptive elements;
|
•
|
public confidence and trust can be maintained only by strict regulation of all persons, locations, practices, associations and activities related to the operation of licensed gaming establishments and the manufacture or distribution of gaming devices and equipment;
|
•
|
all establishments where limited gaming is conducted and where gambling devices are operated, and all manufacturers, sellers and distributors of certain gambling devices and equipment, must therefore be licensed, controlled and assisted to protect the public health, safety, good order and the general welfare of the inhabitants of the state to foster the stability and success of limited stakes gaming and to preserve the economy, policies and free competition in Colorado; and
|
•
|
no applicant for a license or other affirmative Colorado Commission approval has any right to a license or to the granting of the approval sought; any license issued or other Colorado Commission approval granted pursuant to the Colorado Act is a revocable privilege, and no holder acquires any vested rights therein.
|
•
|
A person has less than a 5% ownership interest in an institutional investor that has an ownership interest in a publicly traded licensee or publicly traded company affiliated with a licensee;
|
•
|
A person has a 5% or more ownership interest in an institutional investor, but the institutional investor has less than a 5% ownership interest in a publicly traded licensee or publicly traded company affiliated with a licensee;
|
•
|
An institutional investor has less than a 5% ownership interest in a publicly traded licensee or publicly traded company affiliated with a licensee;
|
•
|
An institutional investor possesses voting securities in a fiduciary capacity for another person and does not exercise voting control over 5% or more of the outstanding voting securities of a publicly traded licensee or of a publicly traded company affiliated with a licensee;
|
•
|
A registered broker or dealer retains possession of voting securities of a publicly traded licensee or of a publicly traded company affiliated with a licensee for its customers and not for its own account, and exercises voting rights for less than 5% of the outstanding voting securities of a publicly traded licensee or publicly traded company affiliated with a licensee;
|
•
|
A registered broker or dealer acts as a market maker for the stock of a publicly traded licensee or of a publicly traded company affiliated with a licensee and exercises voting rights in less than 5% of the outstanding voting securities of the publicly traded licensee or publicly traded company affiliated with a licensee;
|
•
|
An underwriter is holding securities of a publicly traded licensee or publicly traded company affiliated with a licensee as part of an underwriting for no more than 90 days after the beginning of such underwriting if it exercises voting rights of less than 5% of the outstanding voting securities of a publicly traded licensee or publicly traded company affiliated with a licensee;
|
•
|
A book entry transfer facility holds voting securities for third parties, if it exercises voting rights with respect to less than 5% of the outstanding voting securities of a publicly traded licensee or publicly traded company affiliated with a licensee; or
|
•
|
A person's sole ownership interest is less than 5% of the outstanding voting securities of the publicly traded licensee or publicly traded company affiliated with a licensee.
|
•
|
0.25% up to and including $2 million of AGP;
|
•
|
2.0% on amounts from $2 million to $5 million;
|
•
|
9.0% on amounts from $5 million to $8 million;
|
•
|
11.0% on amounts from $8 million to $10 million;
|
•
|
16.0% on amounts from $10 million to $13 million; and
|
•
|
20.0% on amounts over $13 million.
|
•
|
First fifty (50) gaming devices - $50 for the first quarter, $100 for the second quarter, $225 for the third quarter, and $225 for the fourth quarter.
|
•
|
Each device in excess of fifty (50) - $300 per quarter.
|
•
|
Gaming licensees, affiliated companies and controlling persons commencing a public offering of voting securities must notify the Colorado Commission no later than 10 business days after the initial filing of a registration statement with the Securities and Exchange Commission;
|
•
|
Licensed publicly traded corporations are required to send proxy statements to the Division of Gaming within five days after their distribution.
|
•
|
Licensees must include provisions in their charter documents which (i) restrict the rights of the licensees to issue voting interests or securities except in accordance with the Colorado Act and the Colorado Regulations, (ii) limit the rights of persons to transfer voting interests or securities of licensees except in accordance with the Colorado Act and the Colorado Regulations, and (iii) provide that holders of voting interests or securities of licensees found unsuitable by the Colorado Commission may, within 60 days of such finding of unsuitability, be required to sell their interests or securities back to the issuer at the lesser of the cash equivalent of the holders' investment or the market price as of the date of the finding of unsuitability, or (iv) alternatively, the holders may, within 60 days after the finding of unsuitability, transfer the voting interests or securities to a suitable person, as determined by the Colorado Commission. Until the voting interests or securities are held by suitable persons, the issuer may not pay dividends or interest, the securities may not be voted and may not be included in the voting or securities of the issuer, and the issuer may not pay any remuneration in any form to the holders of the securities.
|
•
|
Persons who acquire direct or indirect beneficial ownership of (i) 5% or more of any class of voting securities of a publicly traded corporation, or (ii) 5% or more of the beneficial interest in a gaming licensee directly or indirectly through any class of voting securities of any holding company or intermediary company of a licensee (“qualifying persons”) must (i) notify the Division of Gaming within 10 days of such acquisition, (ii) submit all requested information to the Division of Gaming and/or Colorado Commission, and (iii) are subject to a finding of suitability as required by the Division of Gaming or the Colorado Commission, and (iv) unless the “qualifying person” is an institutional investor who owns at least 10% of the company, they must apply to the Colorado Commission for a finding of suitability within 45 days after acquiring such securities.
|
•
|
Licensees must notify any “qualifying persons” of the above requirements, and regardless of whether they have been notified, qualifying persons are responsible for complying with these requirements.
|
•
|
Institutional investors, who individually, or in association with others, directly or indirectly acquires the beneficial ownership of 15% or more of any class of voting securities must apply to the Colorado Commission for a finding of suitability within 45 days after acquiring such interests.
|
•
|
Any persons found unsuitable by the Colorado Commission must be removed from any position as an officer, director or employee of a licensee, or from a holding or intermediary company, and are prohibited from holding any beneficial ownership of the voting securities of any such entities. Should a licensee or its affiliates (i) pay dividends or distributions to, (ii) recognize the voting rights of, or (iii) pay a salary or any remuneration to, a person deemed unsuitable by the Colorado Commission, they will be subject to discipline and/or sanctions.
|
•
|
The Colorado Commission may determine that anyone with a material relationship to, or material involvement with, a licensee or an affiliated company must apply for a finding of suitability or must apply for a key employee license. The Colorado Regulations also provide for exemption from the requirements for a finding of suitability when the Colorado Commission finds such action to be consistent with the purposes of the Colorado Act.
|