sec document
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
PROXY STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the registrant /X/
Filed by a party other than the registrant /_/
Check the appropriate box:
/_/ Preliminary Proxy Statement
/_/ Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/_/ Definitive Additional Materials
/_/ Soliciting Material Pursuant to ss.240.14a-12
Empire Resorts, Inc.
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(Name of Registrant as Specified in Its Charter)
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(1) Title of each class of securities to which transaction applies:
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pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee
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EMPIRE RESORTS, INC.
701 N. Green Valley Parkway, Suite 200
Henderson, NV 89074
NOTICE OF MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 17, 2006
To the Stockholders of Empire Resorts, Inc.:
You are cordially invited to attend the annual meeting (the "Meeting")
of the stockholders of Empire Resorts, Inc. (the "Company"), to be held at
Monticello Raceway, on May 17, 2006, at 10:00 a.m. local time for the following
purposes:
(1) to elect two (2) Class III directors to serve on the Company's
Board of Directors until the stockholders' annual meeting in
2009; and
(2) to transact any such other business as may properly come
before the Meeting or any postponement or adjournment thereof.
The Board of Directors of the Company has fixed March 29, 2006 as the
record date (the "Record Date") for the determination of stockholders entitled
to notice of, and to vote at, the Meeting or any postponement or adjournment
thereof. Accordingly, only stockholders of record at the close of business on
the Record Date are entitled to notice of, and shall be entitled to vote at, the
Meeting or any postponement or adjournment thereof.
You are requested to fill in, date and sign the enclosed proxy card(s),
which are being solicited by the Company's Board of Directors. Submitting a
proxy will not prevent you from voting in person, should you so desire, but will
help to secure a quorum and will avoid added solicitation costs. You may revoke
your proxy at any time before it is voted at the Meeting.
ALL STOCKHOLDERS ARE CORDIALLY INVITED TO ATTEND THE MEETING. YOUR VOTE
IS IMPORTANT. TO ENSURE YOUR REPRESENTATION AT THE MEETING, PLEASE COMPLETE,
SIGN AND PROMPTLY MAIL YOUR PROXY IN THE RETURN ENVELOPE PROVIDED.
By Order of the Board of Directors,
/s/ John Sharpe /s/ Robert H. Friedman
------------------ ----------------------
John Sharpe Robert H. Friedman
Chairman of the Board Secretary
April 7, 2006
EMPIRE RESORTS, INC.
701 N. Green Valley Parkway, Suite 200
Henderson, NV 89074
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PROXY STATEMENT
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ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD AT 10:00 A.M. AT MONTICELLO RACEWAY, ROUTE 17B
MONTICELLO, NEW YORK 12701 ON MAY 17, 2006
This Proxy Statement is furnished in connection with the solicitation
of proxies by the Board of Directors of Empire Resorts, Inc. (the "Company") for
use at the Annual Meeting of Stockholders of the Company and at all adjournments
and postponements thereof (the "Meeting"). The Meeting is to be held at 10:00
a.m. local time on May 17, 2006 at Monticello Raceway, Route 17B, Monticello,
New York 12701. This Proxy Statement, with the accompanying Notice of Meeting
and form of proxy, are first being sent to stockholders on or about April 7,
2006.
A proxy card is enclosed. Even if you plan to attend the Meeting in
person, you should date, sign and return the enclosed proxy card as soon as
possible to be sure that your shares will be voted at the Meeting. A postage
prepaid envelope has been provided for your convenience. Please note that even
after submitting your proxy card, you can revoke it and/or change your vote
prior to the Meeting as described below.
The cost of preparing, assembling, printing and mailing this Proxy
Statement and the accompanying form of proxy, and the cost of soliciting proxies
relating to the Meeting, will be borne by the Company. Some banks and brokers
have customers who beneficially own Common Stock listed of record in the names
of nominees. The Company intends to request banks and brokers to solicit such
customers and will reimburse them for their reasonable out-of-pocket expenses
for such solicitations. If any additional solicitation of the holders of the
Company's outstanding shares of Common Stock, Series B Preferred Stock and
Series E Preferred Stock is deemed necessary, the Company (through its directors
and officers) anticipates making such solicitation directly. The solicitation of
proxies by mail may be supplemented by telephone, telegram and personal
solicitation by officers, directors and other employees of the Company, but no
additional compensation will be paid to such individuals.
PURPOSE OF THE MEETING
At the Meeting, the Company's stockholders will be asked to consider
and vote upon the following matters: (i) a proposal to elect two (2) Class III
directors to serve until the stockholders' annual meeting in 2009 and (ii) such
other business as may properly come before the Meeting.
VOTING AND SOLICITATION OF PROXIES
All shares of Common Stock, Series B Preferred Stock and Series E
Preferred Stock represented at the Meeting by properly executed proxies, unless
received after the vote at the Meeting or previously revoked as described below,
will be voted in accordance with the instructions thereon, or where a properly
signed proxy is returned and no instructions are given, FOR (1) the election of
all Class III director nominees. If any other matter should come before the
Meeting, or any nominee is not available for election, the person(s) named as a
proxy will have authority to vote all proxies not marked to the contrary in
their discretion as they deem advisable. At this time, the Company does not know
of any matters that may properly come before the Meeting other than the
proposals described in this Proxy.
Any proxy may be revoked by the person giving it at any time before it
is voted. A proxy may be revoked by filing with the Secretary of the Company
(Monticello Raceway, Route 17B, Monticello, New York) either (i) a written
notice of revocation bearing a date later than the date of such proxy or (ii) a
subsequent proxy relating to the same shares, or by attending the Meeting and
voting in person (although attendance at the Meeting will not, in and of itself,
constitute revocation of a proxy).
SHARES ENTITLED TO VOTE
The close of business on March 29, 2006 has been fixed as the record
date (the "Record Date") for determining the stockholders entitled to notice of
and to vote at the Meeting. As of the Record Date, there were 26,259,981 shares
of Common Stock, 44,258 shares of Series B Preferred Stock, 1,730,697 shares of
the Company's Series E Preferred Stock issued and outstanding and entitled to
vote.
Each share of Common Stock entitles the holder thereof to one vote,
each share of Series B Preferred Stock entitles the holder thereof to
eight-tenths (.8) of a vote and each share of Series E Preferred Stock entitles
the holder thereof to twenty five hundredths (.25) of a vote. Accordingly, a
total of 26,728,062 votes may be cast at the Meeting. The holders of shares of
Common Stock, Series B Preferred Stock and Series E Preferred Stock entitled to
cast a majority of all votes that could be cast by the holders of all of the
outstanding shares of Common Stock, Series B Preferred Stock and Series E
Preferred Stock, present in person or represented by proxy at the Meeting,
constitute a quorum.
A broker who holds shares in "street name" will not be entitled to vote
without instructions from the beneficial owner of such shares. This inability to
vote is referred to as a broker non-vote. Stockholder abstentions and broker
non-votes will be counted for purposes of determining the existence of a quorum
at the Meeting.
VOTE REQUIRED
If a quorum is present at the Meeting, either in person or by proxy,
then a plurality of the votes cast will be sufficient to elect the two Class III
director nominees.
NO APPRAISAL RIGHTS
Under the General Corporation Law of the State of Delaware,
stockholders of the Company do not have appraisal rights in connection with any
of the proposals upon which a vote is scheduled to be taken at the Meeting.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
STOCKHOLDER MATTERS
The following table sets forth certain information known to us with
respect to the beneficial ownership of our common stock as of March 29, 2006, by
(1) all persons who are beneficial owners of 5% or more of our voting securities
stock, (2) each director, (3) the named officers in the Summary Compensation
Table above, and (4) all directors and executive officers as a group.
The information regarding beneficial ownership of our common stock has
been presented in accordance with the rules of the Securities and Exchange
Commission. Under these rules, a person may be deemed to beneficially own any
shares of capital stock as to which such person, directly or indirectly, has or
shares voting power or investment power, and to beneficially own any shares of
our capital stock as to which such person has the right to acquire voting or
investment power within 60 days through the exercise of any stock option or
other right. The percentage of beneficial ownership as to any person as of a
particular date is calculated by dividing (a) (i) the number of shares
beneficially owned by such person plus (ii) the number of shares as to which
such person has the right to acquire voting or investment power within 60 days
by (b) the total number of shares outstanding as of such date, plus any shares
that such person has the right to acquire from us within 60 days. Including
those shares in the tables does not, however, constitute an admission that the
named stockholder is a direct or indirect beneficial owner of those shares.
Unless otherwise indicated, each person or entity named in the table has sole
voting power and investment power (or shares that power with that person's
spouse) with respect to all shares of capital stock listed as owned by that
person or entity.
Series B Preferred
Name and Address of Common Stock Stock Beneficially Series E Preferred Stock
Beneficial Owner(1) Beneficially Owned Owned Beneficially Owned
------------------------------ -------------------------- ------------------------ --------------------------
Shares Percentage Shares Percentage Shares Percentage
------ ---------- ------ ---------- ------ ----------
Thomas W. Aro 127,700(2) * -- -- -- --
Paul A. deBary 208,508(3) * -- -- -- --
John Sharpe 97,000(4) * -- -- -- --
David P. Hanlon 933,876(5) 3.43% -- -- -- --
Joseph E. Bernstein 2,076,143(6) 7.89% -- -- -- --
Ralph J. Bernstein 2,266,243(7) 8.62% -- -- -- --
Robert H. Friedman 25,000(8) * -- -- -- --
Frank Catania 25,000(9) * -- -- -- --
Ronald J. Radcliffe 99,000(10) * -- -- -- --
Hilda Manuel 38,500(11) * -- -- -- --
Concord Associates, L.P. 5,188,913(12) 16.50% -- -- -- --
Directors and Officers as a 5,896,970 21.27% -- -- -- --
Group
Patricia Cohen -- -- 44,258 100% -- --
8306 Tibet Butler Drive
Windmere, FL 34786
Bryanston Group, Inc. -- -- -- -- 1,551,213 89.6%
2424 Route 52
Hopewell Junction, NY 12533
Stanley Tollman -- -- -- -- 152,817 8.8%
c/o Bryanston Group, Inc.
2424 Route 52
Hopewell Junction, NY 12533
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* less than 1%
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(1) Unless otherwise indicated, the address of each stockholder, director, and
executive officer listed above is Empire Resorts, Inc., c/o Monticello
Raceway, Route 17B, P.O. Box 5013, Monticello, New York, 12701.
(2) Includes 4,200 shares of common stock owned directly by Thomas W. Aro and
options that are currently exercisable into 123,500 shares of common stock.
(3) Includes 165,913 shares of common stock owned directly by Paul deBary,
12,595 shares of common stock held in an individual retirement account for
Mr. deBary's benefit and options that are currently exercisable into 30,000
shares of common stock.
(4) Includes 2,000 shares of common stock owned directly by John Sharpe and
options that are currently exercisable into 95,000 shares of common stock.
(5) Consists of 86,138 shares of restricted stock that are currently vested,
86,138 shares of restricted stock which vest on May 23, 2006, options that
are currently exercisable into 417,050 shares of common stock and options
that are exercisable into 344,550 shares of common stock which vest on May,
23, 2006. Does not include 88,747 shares of restricted stock which vest on
May 23, 2007, and options that will be exercisable into 354,992 shares of
common stock which become exercisable on May 23, 2007.
(6) Includes 2,031,143 shares of common stock owned directly by Joseph E.
Bernstein and options that are currently exercisable into 45,000 shares of
common stock.
(7) Includes 2,221,243 shares of common stock owned directly by Ralph J.
Bernstein and options that are currently exercisable into 45,000 shares of
common stock.
(8) Consists of options that are currently exercisable into 25,000 shares of
common stock.
(9) Consists of options that are currently exercisable into 25,000 shares of
common stock.
(10) Consists of options that are currently exercisable into 49,500 shares of
common stock and options that will be exercisable into 49,500 shares of
common stock on May 23, 2006. Does not include options that will be
exercisable into 51,000 shares of common stock on May 23, 2007.
(11) Consists of options that are currently exercisable into 38,500 shares of
common stock.
(12) Consists of options that are currently exercisable into 5,188,913 shares of
common stock.
4
PROPOSAL 1
ELECTION OF DIRECTORS
Pursuant to Proposal No. 1, the nominees listed below have been
nominated to serve as Class III directors until the 2009 Annual Meeting of
Stockholders (subject to their respective earlier removal, death or resignation)
and until their successors are elected and qualified. Unless such authority is
withheld, proxies will be voted for the election of the persons named below, who
are all now serving as directors and each of whom has been designated as a
nominee. If, for any reason not presently known, any person is not available to
serve as director, another person who may be nominated will be voted for in the
discretion of the proxies.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF EACH OF
THE NOMINEES
NOMINEE INFORMATION
JOSEPH E. BERNSTEIN. Joseph E. Bernstein, 57, started his career as a
corporate and international tax attorney at Cahill Gordon & Reindel and at
Rosenman & Colin. He opened his own law practice in the early 1980's and became
actively involved in developing three million square feet of commercial property
in Manhattan, including The Crown Building at Fifth Avenue and 57th Street, and
Americas Tower, a 50-story office building on Avenue of the Americas and 46th
Street. Mr. Bernstein is a resident of Florida and has retired from the practice
of law. He is now actively engaged in developing tourism projects endorsed by
the Ministry of Tourism of Israel and Israel Land Authority: a $150 million
5-star golf resort overlooking the Sea of Galilee, and a $350 million
Entertainment City in Eilat. Since December 1995, Mr. Bernstein served as a
director and development partner in predecessor entities acquired by the company
in January 2004, and as a director of the Company since August 2003. Mr.
Bernstein currently serves as Co-Trustee of the Catskill Litigation Trust.
FRANK CATANIA. Frank Catania, 64, has been a principal at Catania
Consulting Group and a lawyer at Catania & Associates since January 1999. Prior
to this, he was the assistant attorney general and director of New Jersey's
Division of Gaming Enforcement, a position he took in 1994. Mr. Catania was a
managing partner at the law offices of Catania & Harrington up until that time
and was engaged in all aspects of civil and criminal litigation, real estate
transactions, and corporate representation. He was also elected and served as
the assemblyman for New Jersey's 35th Legislative District from 1990 through
1994. Mr. Catania is currently a member of the International Masters of Gaming
Law association and was chairman of the International Association of Gaming
Regulators from 1998 to 1999. He has a J.D. from Seton Hall University School of
Law and a B.A. from Rutgers College. Mr. Catania became a director in November
2005.
CLASS I DIRECTORS
JOHN SHARPE. John Sharpe, 63, is our Chairman of the Board of Directors.
Most recently, Mr. Sharpe served as President and Chief Operating Officer of
Four Seasons Hotels & Resorts, from which he retired in 1999 after 23 years of
service. During his tenure at Four Seasons, the world's largest operator of
luxury hotels, Mr. Sharpe directed worldwide hotel operations, marketing and
human resources, and helped create Four Seasons' renowned reputation for the
highest level of service in the worldwide hospitality industry. In 1999, Mr.
Sharpe was bestowed with the "Corporate Hotelier of the World" award by Hotels
Magazine, Inc. Mr. Sharpe also received the "Silver Plate" award from the
International Food Manufacturers Association, and the "Gold Award" from the
Ontario Hostelry Institute. Mr. Sharpe graduated with a B.S. in hotel
administration from Cornell University and is currently a trustee of the
Culinary Institute of America, and a member and former chair of the Industry
Advisory Council at the Cornell Hotel School. Mr. Sharpe also serves on the
board of Fairmont Hotels & Resorts, Toronto, Canada. Mr. Sharpe previously
served as executive-in-residence, School of Hotel Administration, Cornell
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University; chair, board of governors, Ryerson Polytechnic University, Toronto,
Canada, and co-chair, American Hotel Foundation, Washington, D.C. Mr. Sharpe has
served as a director since August 2003 and became Chairman of the Board in May
2005.
RALPH J. BERNSTEIN. Ralph J. Bernstein, 47, is a co-founder and general
partner of Americas Partners, a real estate development and investment firm,
and, since 1981 has been responsible for the acquisition, renovation,
development and financing of several million square feet of commercial space.
Mr. Bernstein also serves as a director for Air Methods Corporation, a publicly
traded company that provides air medical emergency transport services and
systems throughout the United States of America. Mr. Bernstein received a B.A.
in economics from the University of California at Davis. Mr. Bernstein has
served as a director since August 2003.
PAUL A. DEBARY. Paul A. deBary, 59, is a managing director at Marquette
deBary Co., Inc., a New York based broker-dealer, where he serves as a financial
advisor for state and local government agencies, public and private corporations
and non-profit organizations. Prior to assuming his current position, Mr. deBary
was a managing director in the Public Finance Department of Prudential
Securities from 1994 to 1997. Mr. deBary was also a partner in the law firm of
Hawkins, Delafield & Wood in New York from 1975 to 1994. Mr. deBary received an
AB in 1968, and an M.B.A. and J.D. in 1971 from Columbia University. Mr. deBary
is a member of the American Bar Association, the New York State Bar Association,
the Association of the Bar of the City of New York and the National Association
of Bond Lawyers. Mr. deBary is also a member of the Board of Managers of
Teleoptic Digital Imaging, LLC, and serves as a director of several non-profit
organizations, including New Neighborhoods, Inc., AA Alumni Foundation and the
Society of Columbia Graduates. Mr. deBary has served as a director since March
2002.
CLASS II DIRECTORS
DAVID P. HANLON. David P. Hanlon, 61, is currently our Company's Chief
Executive Officer and President and a member of the Board of Directors. He
previously served as Vice Chairman of the Board and has been a director since
2003. Prior to starting his own gaming consulting business in 2000, in which he
advised a number of Indian and international gaming ventures, Mr. Hanlon was
President and Chief Operating Officer of Rio Suites Hotel & Casino from
1996-1999, a period in which the Rio Suites Hotel & Casino underwent a major
expansion. From 1994-1995, Mr. Hanlon served as President and Chief Executive
Officer of International Game Technology, the world's leading manufacturer of
microprocessor gaming machines. From 1988-1993, Mr. Hanlon served as President
and Chief Executive Officer of Merv Griffin's Resorts International, and prior
to that, Mr. Hanlon served as President of Harrah's Atlantic City (Harrah's
Marina and Trump Plaza). Mr. Hanlon's education includes a B.S. in Hotel
Administration from Cornell University, an M.S. in Accounting, an M.B.A. in
Finance from the Wharton School, University of Pennsylvania, and he completed
the Advanced Management Program at the Harvard Business School.
ROBERT H. FRIEDMAN. Robert H. Friedman, 52, has served as our Secretary
since May 2004. Mr. Friedman has been a partner with Olshan Grundman Frome
Rosenzweig & Wolosky LLP, a New York City law firm, since August 1992. Prior to
that time and since September 1983 he was associated with Cahill Gordon &
Reindel, also a New York City law firm. Mr. Friedman specializes in corporate
and securities law matters. Mr. Friedman received his B.A. and J.D. degrees from
Rutgers University, and has been on the faculty of the Practicing Law Institute
since August 2000. Mr. Friedman became a director in July 2005.
Ralph J. Bernstein and Joseph E. Bernstein are brothers.
6
COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS
The Board of Directors met on eighteen occasions during the fiscal year
ended December 31, 2005. During the time that he served as a director during
2005, each of the directors attended at least 75% of the meetings held by the
Board of Directors. The Board of Directors also acted by unanimous written
consent on one occasion. There are three committees of the Board of Directors:
the audit committee, the compensation committee and the corporate governance and
nominations committee.
AUDIT COMMITTEE
The Company has a separately-designated standing audit committee as
defined in Section 3(a)(58)(A) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"). In addition, the Company's Board of Directors
adopted a written charter for the audit committee, which is available, free of
charge, from the Company by writing to Investor Relations at Empire Resorts,
Inc., 701 N. Green Valley Parkway, Suite 200, Henderson, NV 89074 or calling
(702) 990-3355.
The members of the audit committee are Paul A. deBary (chairman of the
committee), John Sharpe, Ralph J. Bernstein and Frank Catania. Each of Messrs.
deBary, Sharpe, Bernstein and Catania is independent from the Company, as
independence is defined in Rule 4200(a)(15) of the listing standards of the
National Association of Securities Dealers (the "NASD"). David P. Hanlon
previously served as a member of the audit committee but resigned following his
appointment as Chief Executive Officer and President of the Company and was
replaced by Ralph J. Bernstein. Frank Catania was appointed ot the audit
committee when he joined the Board of Directors in November 2005. The primary
purpose of the audit committee is to assist the Board of Directors in fulfilling
its responsibility to oversee the Company's financial reporting activities. The
audit committee is responsible for reviewing with both the Company's independent
certified public accountants and management, the Company's accounting and
reporting principles, policies and practices, as well as the Company's
accounting, financial and operating controls and staff. The audit committee has
reviewed and discussed the audited financial statements of the Company with
management, has discussed with the independent auditors the matters required to
be discussed by SAS 61, as may be modified or supplemented. Additionally, the
audit committee has received the written disclosures and the letter from the
independent accountants required by Independence Standards Board Standard No. 1
(Independence Standards Board Standard No. 1, Independence Discussions with
audit committees), as may be modified or supplemented, and has discussed with
the independent accountant the independent accountant's independence. Based upon
such review and discussion, the audit committee recommended to the Board of
Directors that the audited financial statements be included in the Company's
Annual Report on Form 10-K for the last fiscal year for filing with the
Securities and Exchange Commission (the "SEC").
The audit committee met on fourteen occasions during the fiscal year
ended December 31, 2005. Each of the members of the audit committee attended
each of the meetings held by the audit committee during the time he served as a
member of the committee.
Paul A. deBary, Chairman
John Sharpe
Ralph J. Bernstein
Frank Catania
COMPENSATION COMMITTEE
The compensation committee, which is comprised of Joseph E. Bernstein
(chairman of the committee), Paul A. deBary and Ralph J. Bernstein, is
responsible for establishing and reviewing the appropriate compensation of
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directors and officers of the Company, for reviewing employee compensation plans
and for considering and making grants and awards under, and administering, the
Company's equity incentive plans.
CORPORATE GOVERNANCE AND NOMINATIONS COMMITTEE
The corporate governance and nominations committee recommends
appropriate governance practices, recommends criteria for service as a director
and reviews candidates to serve as directors. The corporate governance and
nominations committee has adopted a written charter, a copy of which was
included as an appendix to the proxy materials for the Company's 2004 annual
meeting of stockholders. The members of the corporate governance and nominations
committee are John Sharpe, Ralph J. Bernstein, Robert H. Friedman and Frank
Catania. Each of Messrs. Sharpe, Bernstein, Friedman and Catania is independent
from the Company, as independence is defined in Rule 4200(a)(15) of the NASD
listing standards. David P. Hanlon previously served as a member of the
corporate governance and nominations committee but resigned following his
appointment as Chief Executive Officer and President of the Company. Robert H.
Friedman and Frank Catania were appointed to the corporate governance and
nominations committee in November 2005.
The corporate governance and nominations committee develops, recommends
and oversees implementation of corporate governance principles for the Company.
In addition, it considers recommendations for director nominees from a wide
variety of sources, including members of the Company's board, business contacts,
community leaders, third-party advisory services and members of management. The
corporate governance and nominations also considers stockholder recommendations
for director nominees that are properly received in accordance with applicable
rules and regulations of the SEC.
The board believes that all of its directors should have the highest
personal integrity and have a record of exceptional ability and judgment. The
board also believes that its directors should ideally reflect a mix of
experience and other qualifications. There is no firm requirement of minimum
qualifications or skills that candidates must possess. The corporate governance
and nominations committee evaluates director candidates based on a number of
qualifications, including their independence, judgment, leadership ability,
expertise in the industry, experience developing and analyzing business
strategies, financial literacy, risk management skills, and, for incumbent
directors, his or her past performance. In making its recommendations, the
corporate governance and nominations committee seeks out outstanding talent
among minority groups and women.
Stockholders wishing to nominate a candidate for director at the annual
stockholders meeting must give written notice to Empire Resorts, Inc., 701 N.
Green Valley Parkway, Suite 200, Henderson, NV 89074, Attention: Investor
Relations either by personal delivery or by United States mail, postage prepaid.
The stockholder's notice must be received by the Company not later than the
close of business on the 120th calendar day prior to the date on which notice of
the prior year's annual meeting was first mailed to stockholders. The
stockholder's written notice shall set forth (a) as to each person whom the
stockholder proposes to nominate for election or reelection as a director all
information relating to such person that is required to be disclosed in
solicitations of proxies for election of directors, or is otherwise required, in
each case pursuant to Regulation 14A under the Exchange Act, including such
person's written consent to being named in the proxy statement as a nominee and
to serving as a director if elected; and (b) as to the stockholder giving the
notice and the beneficial owner, if any, on whose behalf the nomination is made
(i) the name and address of such stockholder, as they appear on the Company's
books, and of such beneficial owner, (ii) the class and number of shares of the
Company which are owned beneficially and of record by such stockholder and such
beneficial owner and (iii) a representation that the stockholder is a holder of
8
record of shares of the Company and intends to appear in person or by proxy at
the meeting to propose such business.
The corporate governance and nominations committee initially evaluates
a prospective nominee on the basis of his or her resume and other background
information that has been made available to the committee. A member of the
corporate governance and nominations committee will contact for further review
those candidates who the committee believes are qualified, who may fulfill a
specific board need and who would otherwise best make a contribution to the
board. If, after further discussions with the candidate, and other further
review and consideration as necessary, the corporate governance and nominations
committee believes that it has identified a qualified candidate, it will make a
recommendation to the board.
The corporate governance and nominations committee met on one occasion
during the fiscal year ended December 31, 2005. Each of the members of the
corporate governance and nominations committee attended each of the meetings
held by the corporate governance and nominations committee during the time each
director served as a member of the committee.
CODE OF ETHICS
The Company adopted a code of ethics that is available on its internet
website (www.empireresorts.com) and will be provided in print without charge to
any stockholder who submits a request in writing to Empire Resorts, Inc., 701 N.
Green Valley Parkway, Suite 200, Henderson, NV 89074, Attention: Investor
Relations. The code of ethics applies to each director and officer, including
the Chief Financial Officer and Chief Executive Officer, and all of other
employees of the Company and its subsidiaries. The code of ethics provides that
any waiver of the code of ethics may be made only by the Company's Board of
Directors.
PROCEDURES FOR CONTACTING DIRECTORS
The Board of Directors has established a process for stockholders to
send communications to the Board of Directors. Stockholders may communicate with
the board generally or a specific director at any time by writing to: Empire
Resorts, Inc., 701 N. Green Valley Parkway, Suite 200, Henderson, NV 89074,
Attention: Investor Relations. The Company reviews all messages received, and
forwards any message that reasonably appears to be a communication from a
stockholder about a matter of stockholder interest that is intended for
communication to the Board of Directors. Communications are sent as soon as
practicable to the director to whom they are addressed, or if addressed to the
Board of Directors generally, to the chairman of the corporate governance and
nominations committee. Because other appropriate avenues of communication exist
for matters that are not of stockholder interest, such as general business
complaints or employee grievances, communications that do not relate to matters
of stockholder interest are not forwarded to the Board of Directors.
EXECUTIVE OFFICERS
The executive officers of the Company are:
David P. Hanlon Chief Executive Officer and President
Ronald J. Radcliffe Chief Financial Officer and Treasurer
Thomas W. Aro Chief Operating Officer
9
Hilda A. Manuel Senior Vice President for Native American
Affairs and Chief Compliance Officer
Information with respect to Mr. Hanlon is set forth above under "Class
II Directors" beginning on page 6.
RONALD J. RADCLIFFE. Ronald J. Radcliffe, 62, joined us as our Chief
Financial Officer in May 2005. Mr. Radcliffe was previously Chief Financial
Officer, Treasurer and Vice President of the Rio Suites Hotel & Casino in Las
Vegas from 1996-2000, where he negotiated the sale of the company to Harrah's
Entertainment, Inc. He was also the lead company representative in the company's
$125 million secondary public offering, negotiating a $300 million revolving
line of credit, and a public offering of $125 million in subordinated debt. In
2001, Mr. Radcliffe started a gaming consultancy business, and in 2002 became
Chief Financial Officer, Treasurer, Vice President and Principal of Siren
Gaming, LLC, a management company for an Indian casino. From 1993 to 1995, Mr.
Radcliffe was Chief Financial Officer, Treasurer and Vice President of Mikohn
Gaming Corporation, Las Vegas, NV. Prior to this, he was Vice Chairman,
President, Chief Operating Officer and Chief Financial Officer for Sahara
Resorts, Las Vegas, NV. Mr. Radcliffe is a licensed C.P.A. and received a B.S.
in business administration in 1968 from the University of Nevada.
THOMAS W. ARO. Thomas W. Aro, 62, is our Chief Operating Officer and
was a member of our Board of Directors from 1994 through July 2003. Mr. Aro was
also our Executive Vice President since our formation in 1993 through November
11, 2003 and served as our Secretary from 1998 until May 2004. Mr. Aro also
serves as our Chief Operating Officer of our gaming subsidiaries and has over 30
years experience in the hospitality and gaming industries. Mr. Aro received a
B.S. from the University of Arizona and is a licensed C.P.A.
HILDA A. MANUEL. Hilda A. Manuel, 54, joined us in March 2005 as our
Senior Vice President for Native American Affairs and Chief Compliance Officer.
From February 2003 through December 2004, Ms. Manuel served as deputy general
counsel for the Gila River Indian Community, where she supervised general
employees and attorneys with respect to civil and criminal matters. From May
2000 through March 2002, Ms. Manuel served as special counsel to the law firm of
Steptoe & Johnson, LLP, where she oversaw business development with Indian
tribes and Indian organizations, along with supervising the management of cases
for Indian clients. From October 1994 through April 2000, Ms. Manuel served as
the Deputy Commissioner of the BIA for the U.S. Department of the Interior. As
Deputy Commissioner, Ms. Manuel was responsible for the overall management of
the BIA, including the maintenance of government-to-government relationships
with Indian tribes, protecting trust resources and the trust assets of Indian
tribes, the fiscal administration and expenditure of $2.8 billion in
appropriated funds and the supervision of 12 regional offices, 83 tribe-agencies
and over 13,000 employees. From February 1992 through May 1994, Ms. Manuel
served as Staff Director for the Indian Gaming Management Office of the BIA,
where she was responsible for implementing the responsibilities of the Secretary
of the Interior under the Indian Gaming Regulatory Act of 1988, along with
supervising acts related to the approval of Class III gaming tribal-state
compacts, fee to trust land acquisitions for gaming purposes, revenue allocation
plans, including per capita distributions of gaming revenues, and the
development of policy guidelines and directives on gaming related issues within
the authority of the Secretary of the Interior. Finally, from May 1991 through
February 1992, Ms. Manuel served as Division Chief for Tribal Government Affairs
for the BIA and from February 1990 through July 1991, Ms. Manuel was a Judicial
Services Specialist for the BIA.
10
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth all information concerning the
compensation received, for each of the last three years, for services rendered
to us by David P. Hanlon, our chief executive officer, Robert A. Berman, our
former chief executive officer, and each of our four other most highly
compensated executive officers during the year ended December 31, 2005 whose
total compensation in 2005 exceeded $100,000.
Securities
Name and Other Annual Underlying All Other
Principal Position Year Salary Bonus Compensation Options Compensation
----------------------------- -------- ---------- --------- ---------------- -------------- ----------------
David P. Hanlon 2005(2) $ 298,077 -- (1) 1,054,092 $ 343,691
Chief Executive Officer and
President
Robert A. Berman 2005(3) $ 97,846 -- (1) -- --
Former Chief Executive 2004 282,000 -- (1) -- --
Officer
2003 300,000 -- (1) 298,189 --
Ronald J. Radcliffe 2005(4) $ 163,942 $ 25,000 (1) 150,000 --
Chief Financial Officer --
--
Thomas W. Aro 2005 $ 183,550 $ 12,500 (1) 30,000 --
Chief Operating Officer 2004 229,000 -- (1) 50,000 --
2003 210,000 -- (1) 50,000 --
Hilda Manuel 2005(5) $ 115,385 $ 7,500 (1) 38,500 --
Sr. VP for Native American
Affairs and Chief
Compliance Officer
-------------
(1) We concluded that the aggregate amount of perquisites and other personal
benefits, if any, paid did not exceed the lesser of 10% of the officer's
total annual salary and bonus for this fiscal year or $50,000; so that
amount is not included in the table.
(2) Mr. Hanlon was hired as our Chief Executive Officer and President on May
23, 2005 at an annual base salary of $500,000.
(3) Mr. Berman resigned as our Chief Executive Officer on May 23, 2005.
(4) Mr. Radcliffe was hired as our Chief Financial Officer on May 23, 2005 at
an annual base salary of $275,000.
11
(5) Ms. Manuel was hired as our Senior Vice President for Native American
Affairs and Chief Compliance Officer on March 21, 2005 at an annual base
salary of $150,000.
OPTION GRANTS TABLE FOR FISCAL 2005
The following table contains information concerning the grant of stock
options to our executive officers during the fiscal year. No stock appreciation
rights were granted during the year.
Number of
Securities Percent of Total
Underlying Options/SARs Granted Exercise Or
Options/SARs to Employees in Fiscal Base Price
Name Granted (#) Year ($/Sh) Expiration Date
-------------------- ----------------- ------------------------ ------------- ----------------------
David P. Hanlon 10,000/-- 0.6 % $8.51 January 6, 2010
David P. Hanlon 1,044,092/-- 64 % $3.99 May 22, 2015
Ronald J. Radcliffe 150,000/-- 9 % $3.99 May 22, 2015
Thomas W. Aro 30,000/-- 1.8 % $6.75 December 15, 2015
Hilda Manuel 30,000/-- 1.8 % $8.26 March 17, 2015
Hilda Manuel 8,500/-- 0.5 % $6.75 December 15, 2015
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES
The following table sets forth information regarding the exercise of
stock options during the last fiscal year by the named officers in the Summary
Compensation Table above and the fiscal year-end value of unexercised options.
Shares Number of Securities Value Of Unexercised
Acquired Underlying Unexercised In-The-Money Options/SARs
on Value Options/SARs At FY-End At FY-End ($) (1)
Exercise Realized (#) Exercisable/ Exercisable/Unexercisable
Name (#) ($) Unexercisable (in thousands)
------------------------ ------------ ------------ ------------------------- ----------------------------
David P. Hanlon -- -- 420,530/696,062 $1,187 / $2,374
Robert A. Berman -- -- 281,689/-- $1,487 / --------
Ronald J. Radcliffe -- -- 50,000/100,000 $171 / $341
Hilda Manuel -- -- 28,500/10,000 ------- /--------
Thomas W. Aro -- -- 123,500/-- $237 / --------
-------------
(1) Assumes a fair market value for our common stock of $7.40, the closing
market price per share of our common stock as reported by the Nasdaq Small
Cap Market on December 30, 2005.
EMPLOYMENT AGREEMENTS
On May 23, 2005, we entered into an employment agreement with David P.
Hanlon which sets forth terms and provisions governing Mr. Hanlon's employment
as our Chief Executive Officer and President. This agreement provides for an
initial term of three years at an annual base salary of $500,000. In addition,
Mr. Hanlon is entitled to participate in any annual bonus plan or equity based
12
incentive programs maintained by us for our senior executives. In connection
with his employment, Mr. Hanlon received an option grant of a 10-year
non-qualified stock option to purchase 1,044,092 shares of our common stock
pursuant to the 2005 Equity Incentive Plan, subject to stockholder approval, at
an exercise price per share of $3.99, vesting 33% 90 days following the grant
date, 33% on the first anniversary of the grant and 34% on the second
anniversary of the grant, which approval was received on August 17, 2005. We
also granted Mr. Hanlon 261,023 restricted shares, pursuant to our 2005 Equity
Incentive Plan, vesting 33% on the grant date, 33% on the first anniversary of
grant, and 34% on the second anniversary of the grant. We agreed to provide
certain benefits to Mr. Hanlon, including maintaining a term life insurance
policy on the life of Mr. Hanlon in the amount of $2,000,000 and reimbursement
for relocation expenses and expenses for temporary housing. In the event that we
terminate Mr. Hanlon's employment with Cause (as defined in Mr. Hanlon's
employment agreement) or Mr. Hanlon resigns without Good Reason (as defined in
Mr. Hanlon's employment agreement), our obligations are limited generally to
paying Mr. Hanlon his base salary through the termination date. In the event
that we terminate Mr. Hanlon's employment without Cause or Mr. Hanlon resigns
with Good Reason, we are generally obligated to continue to pay Mr. Hanlon's
compensation for the remainder of the term of Mr. Hanlon's employment agreement
and accelerate the vesting of the options and restricted shares granted at the
commencement of this agreement. If Mr. Hanlon terminates his employment within
one year following a Change of Control (as such term is defined in Mr. Hanlon's
employment agreement), we shall pay such cash compensation in a lump sum.
On May 23, 2005, we entered into an employment agreement with Ronald J.
Radcliffe which sets forth terms and provisions governing Mr. Radcliffe's
employment as our Chief Financial Officer. This agreement provides for an
initial term of three years at an annual base salary of $275,000. In addition,
Mr. Radcliffe is entitled to participate in any annual bonus plan or equity
based incentive programs maintained by us for our senior executives. In
connection with his employment, Mr. Radcliffe received an option grant of a
10-year non-qualified stock option to purchase 150,000 shares of our common
stock pursuant to our 2005 Equity Incentive Plan, subject to stockholder
approval, at an exercise price per share of $3.99, vesting 33% 90 days following
the grant date, 33% on the first anniversary of the grant and 34% on the second
anniversary of the grant, which approval was obtained on August 17, 2005. In the
event that we terminate Mr. Radcliffe's employment with Cause (as defined in the
Mr. Radcliffe's employment agreement) or Mr. Radcliffe resigns without Good
Reason (as defined in the Mr. Radcliffe's employment agreement), our obligations
are limited generally to paying Mr. Radcliffe his base salary through the
termination date. In the event that we terminate Mr. Radcliffe's employment
without Cause or Mr. Radcliffe resigns with Good Reason, we are generally
obligated to continue to pay Mr. Radcliffe's compensation for a period of six
months following such termination.
REPORT BY THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
GENERAL
The compensation committee determines the cash and other incentive
compensation, if any, to be paid to the Company's executive officers and key
employees. The compensation committee consists of Joseph E. Bernstein (chairman
of the committee), Paul A. deBary and Ralph J. Bernstein. David A. Matheson
previously served as chairman of the compensation committee until his
resignation from the Board of Directors in October 2005. Ralph J. Bernstein was
appointed to the compensation committee in November 2005. During fiscal 2005,
there were five meetings of the compensation committee. Each of the members of
the compensation committee attended each of the meetings held by the
compensation committee during the time such director served as a member of the
committee.
13
COMPENSATION PHILOSOPHY
The compensation committee's executive compensation philosophy is to
base management's pay, in part, on the achievement of the Company's performance
goals, to provide competitive levels of compensation, to recognize and reward
individual initiative, achievement and length of service to the Company, to
assist the Company to retain and attract the best qualified management, and to
enhance long term stockholder value. In retaining and attracting the best
qualified management personnel, the Company targets offering compensation and
benefits that place it near the top quartile of its industry.
The compensation committee strongly believes that the caliber of the
management personnel makes a significant difference in the Company's long term
success and it is the philosophy of the compensation committee to provide
officers with the opportunity to realize potentially significant financial gains
through the grants of stock options and issuance of restricted stock. The
compensation committee also believes that the potential for equity ownership by
management is beneficial in aligning management and stockholders' interest in
the enhancement of stockholder value.
Section 162(m) of the Internal Revenue Code of 1986, as amended (the
"Code"), prohibits a publicly held corporation, such as the Company, from
claiming a deduction on its federal income tax return for compensation in excess
of $1 million paid for a given fiscal year to the chief executive officer (or
person acting in that capacity) at the close of the corporation's fiscal year
and the four most highly compensated officers of the corporation, other than the
chief executive officer, at the end of the corporation's fiscal year. The $1
million compensation deduction limitation does not apply to "performance-based
compensation". The Company believes that, with certain exceptions, any
compensation received by executive officers in connection with the exercise of
options granted under the 1993, 1998 or 2004 stock option plans qualifies as
"performance-based compensation." The policy of the compensation committee is to
the extent reasonable to qualify the Company's executive officers' compensation
for deductibility under Section 162(m) and other applicable tax laws. However,
the compensation committee believes that providing an appropriate level of cash
compensation and maintaining flexibility in determining compensation are also
important issues which must be balanced with preserving a tax deduction for
amounts in excess of $1,000,000.
COMPENSATION OF CHIEF EXECUTIVE OFFICER
David H. Hanlon's salary was $298,077 in 2005. Mr. Hanlon's
compensation as contemplated under his employment agreement was determined by
the compensation committee based on the factors described in the "Salaries" and
"Annual Bonuses" paragraphs below.
SALARIES
Base salaries for the Company's executive officers are determined
initially by evaluating the responsibilities of the position held and the
experience of the individual, and by reference to the competitive marketplace
for management talent, including a comparison of base salaries for comparable
positions at other companies (base salaries are targeted to be competitive with
the top quartile of the industry). The Company believes that it is necessary to
position executive officers' base salaries at or above these levels in order to
attract, retain and motivate its executive officers. In addition, the
compensation committee considers the recommendations of the Company's Chief
Executive Officer and Chief Financial Officer. Annual salary adjustments are
determined by (i) considering various factors, tangible and intangible, achieved
by the Company; (ii) the overall performance of the executive; (iii) the length
of the executive's service to the Company; and (iv) any increased
responsibilities assumed by the executive. There are no restrictions on salary
adjustments of the Company. The Company has employment agreements with certain
of its executive officers, which sets the base salaries and other terms and
14
conditions of employment for such individuals. The base salaries of certain of
the Company's senior management increased from 2004 to 2005 due to increased
responsibilities for those individuals.
ANNUAL BONUSES
The compensation committee evaluates the performance of the Company's
executives on an annual basis. Bonuses may be based upon the level of personal
achievement by individual participants and the Company's performance, including,
but not limited to, (i) the Company's actual stock price performance and stock
price performance relative to its competitors and (ii) the Company's actual
performance as compared to the Company's projected performance goals. In 2005,
Ronald J. Radcliffe Thomas W. Aro and Hilda Manuel received bonuses of $25,000,
$12,500 and $7,500, respectively.
COMPENSATION COMMITTEE
This report by the compensation committee on executive compensation is
submitted by the members of the compensation committee:
Joseph E. Bernstein, Chairman
Paul A. deBary
Ralph J. Bernstein
COMPENSATION COMMITTEE INTERLOCKS
There were no transactions between any member of the compensation
committee and the Company during the fiscal year ended December 31, 2005. No
member of the compensation committee was an officer or employee of the Company
or any subsidiary of the Company during fiscal 2005.
COMPENSATION OF DIRECTORS
CASH COMPENSATION
During 2005, each non-employee member of the Company's Board of
Directors receives $20,000 per year and $1,000 per meeting. Directors that also
serve on committees of the Board of Directors, other than the audit committee,
receive an additional $1,000 per committee meeting, other than employee members,
with the chairperson receiving $2,500 per meeting. With respect to the audit
committee, its chairperson receives an additional annual payment of $10,000, and
each audit committee member (including the chairperson) receives $2,500 per
audit committee meeting.
STOCK COMPENSATION
Each non-employee member of the Company's Board of Directors receives
an annual grant of 10,000 stock options at the common stock's then current fair
market value, and since August 2003 each newly elected or appointed non-employee
director received a one time grant of 15,000 stock options at the common stock's
then current fair market value. All stock options granted to the members of the
Company's Board of Directors vest immediately. In addition, in recognition of
special and extraordinary services provided by David P. Hanlon and John Sharpe
to the Company, on November 11, 2004, the compensation committee granted to each
of Messrs. Sharpe and Hanlon options to purchase 50,000 shares of common stock,
having a term of three (3) years and an exercise price of $8.11. Messrs. Hanlon
and Sharpe abstained from all votes of the Board of Directors related to the
granting of these stock options.
15
CHAIRMAN COMPENSATION
On May 23, 2005, the Company's Board of Directors ratified the
compensation committee's approval of compensation of $50,000 per year for the
position of non-executive Chairman of the Board and a grant of 50,000 options to
purchase shares of the Company's common stock vesting immediately with a term of
10 years at the initiation of service for any new non-executive Chairman of the
Board. John Sharpe, who became the Company's Chairman of the Board on such date,
abstained from all votes of the Board of Directors related to the establishment
of this compensation.
RECENT DEVELOPMENTS
On March 8, 2006, the Board of Directors approved compensation of
$25,000 per year and an annual grant of 5,000 options to purchase shares of the
Company's common stock for the chairman of the audit committee. Paul A. deBary,
the chairman of the audit committee, abstained from all votes of the Board of
Directors related to the establishment of this compensation. On March 8, 2006,
the Board of Directors also approved compensation of $1,000 per meeting attended
in person and $500 per meeting attended telephonically by the members of each of
the audit committee, compensation committee and corporate governance and
nominations committee as full compensation for service on such committees (other
than with respect to the chairman of the audit committee).
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires our executive officers and directors, and persons who beneficially own
more than ten percent of our common stock, to file initial reports of ownership
and reports of changes in ownership with the Securities and Exchange Commission.
Executive officers, directors and greater than ten percent beneficial owners are
required by Securities and Exchange Commission regulations to furnish us with
copies of all Section 16(a) forms they file. Based upon a review of the copies
of such forms furnished to us and written representations from our executive
officers and directors, we believe that during the year ended December 31, 2005
there were no delinquent filers except as follows: David J. Matheson filed a
late Form 4 for a transaction that occurred on January 7, 2005 (one
transaction); David P. Hanlon filed a late Form 4 for one transaction that
occurred on January 7, 2005 (one transaction); Ralph J. Bernstein filed a late
Form 4 for a transaction that occurred on January 7, 2005 (one transaction);
Joseph E. Bernstein filed a late Form 4 for a transaction that occurred on
January 7, 2005 (one transaction); Robert A. Berman filed a late Form 4 for a
transaction that occurred on March 7, 2005 (two transactions); Hilda Manuel
filed a Form 5 on February 9, 2006 on which she reported an option grant to her
on December 16, 2005 that was not timely reported on a Form 4 (one transaction);
and Thomas W. Aro filed a Form 5 on February 13, 2006 in which he reported an
option grant to him on December 16, 2005 that was not timely reported on a Form
4 (one transaction). Paul A. deBary and John Sharpe each failed to file a Form 5
transactions that occurred on January 7, 2005 (one transaction each).
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
We, Catskill Development, L.L.C., the Cayuga Nation of New York, the
Cayuga Catskill Gaming Authority, Robert A. Berman, our former chief executive
officer, a former member of our board of directors and our former chairman, and
Morad Tahbaz, Catskill Development, L.L.C.'s president and our former president
and a member of Catskill Development L.L.C.'s board of directors and a former
member of our board of directors, are parties to a letter agreement, dated as of
April 3, 2003, as amended, pursuant to which we agreed to fund the Cayuga
Catskill Gaming Authority's purchase of those 29 acres of land subject to the
Land Purchase Agreement between Monticello Raceway Management, Inc. and the
Cayuga Nation of New York and the development costs of building a Class III
16
gaming enterprise on such land. Under the letter agreement, we awarded the
Cayuga Nation of New York 300,000 shares of restricted common stock, 100,000 of
which vested on April 11, 2003, 100,000 of which vested on October 11, 2003, and
100,000 of which vested on April 11, 2004. This letter agreement was terminated
pursuant to a letter agreement entered into by and among, us, the Cayuga Nation
of New York, the Cayuga Catskill Gaming Authority and Monticello Raceway
Management, Inc. dated December 19, 2005.
Robert H. Friedman, one of our directors, is a partner in the law firm
of Olshan Grundman Frome Rosenzweig & Wolosky LLP. Olshan Grundman Frome
Rosenzweig & Wolosky LLP provided legal services to the Company and its
subsidiaries in 2005. In 2005, the Company paid Olshan Grundman Frome Rosenzweig
& Wolosky LLP fees for legal services that represented less than 5% of Olshan
Grundman Frome Rosenzweig & Wolosky LLP's gross revenues for 2005. The Company
expects that Olshan Grundman Frome Rosenzweig & Wolosky LLP will continue to
provide legal services to the Company and its subsidiaries in 2006.
STOCK PERFORMANCE GRAPH
[OBJECT OMITTED]
17
COMPANY/INDEX 12/29/00 12/31/01 12/31/02 12/31/03 12/31/04 12/30/05
----------------------------------------- -------- -------- -------- -------- -------- --------
Empire Resorts, Inc...................... 100 154.29 25.94 103.03 127.43 84.57
Resorts and Casinos...................... 100 106.09 111.51 146.38 248.30 242.57
NASDAQ Market Index...................... 100 79.71 55.60 83.60 90.63 92.62
---------------------------------------------------------------------------------------------------------------------
Assumes $100 invested on December 29, 2000 in the Company's common
stock, the NASDAQ Market Index and the Peer Group.
The calculations in the table were made on a dividends reinvested
basis.
There can be no assurance that the Company's common stock performance
will continue with the same or similar trends depicted in the above graph.
INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has selected Friedman LLP ("Friedman") as the
Company's independent auditors for the fiscal year ending December 31, 2006.
The audit committee reviews and approves the audit and non-audit
services to be provided by the Company's independent auditors during the year,
considers the effect that performing those services might have on audit
independence and approves management's engagement of the Company's independent
auditors to perform those services. The audit committee reserves the right to
appoint a different independent auditors at any time during the year if the
Board of Directors and the audit committee believe that a change is in the best
interest of the Company and its stockholders.
Friedman was originally engaged as the Company's independent auditors
in February 2002. Friedman has audited the Company's financial statements for
the fiscal years ended December 31, 2001 through December 31, 2005. A
representative of Friedman will be present at the Annual Meeting, will have an
opportunity to make a statement if he or she desires to do so, and will be
available to respond to questions.
FEES BILLED TO COMPANY BY FRIEDMAN DURING FISCAL 2004 AND 2005
AUDIT FEES
The aggregate fees billed by Friedman for professional fees rendered in
connection with the audit of the Company's annual financial statements and its
review of the Company's financial statements included in the Company's quarterly
reports on Forms 10-Q and 10-QSB, including services related thereto, were
approximately $418,194 for the fiscal year ended December 31, 2005 and
approximately $248,100 for the fiscal year ended December 31, 2004.
AUDIT-RELATED FEES
The aggregate fees billed by Friedman for assurance and related
services that are reasonably related to the performance of the audit or review
of the Company's financial statements and are not reported as "Audit Fees,"
including services rendered in connection with capital raising efforts,
preparation of registration statements and consultations regarding financial
accounting and reporting matters not classified as audit, were approximately
$83,486 for the fiscal year ended December 31, 2005 and approximately $159,051
for the fiscal year ended December 31, 2004.
18
TAX FEES
The aggregate fees billed by Friedman for professional services
rendered for tax compliance, tax advice and tax planning were approximately
$77,068 for the fiscal year ended December 31, 2005 and approximately $43,013
for the fiscal year ended December 31, 2004. The services comprising the fees
reported as "Tax Fees" include tax return preparation in various jurisdictions,
consultation regarding various tax issues, and support provided to management in
connection with income and other tax audits.
ALL OTHER FEES
Other than the fees described above, there were no other fees billed by
Friedman for products and services rendered to the Company for the fiscal year
ended December 31, 2005 and approximately $20,153 for the fiscal year ended
December 31, 2004.
PRE-APPROVAL POLICIES AND PROCEDURES
All audit and non-audit services to be performed by the Company's
independent accountant must be approved in advance by the audit committee.
Consistent with applicable law, limited amounts of services, other than audit,
review or attest services, may be approved by one or more members of the audit
committee pursuant to authority delegated by the audit committee, provided each
such approved service is reported to the full audit committee at its next
meeting.
All of the engagements and fees for the Company's fiscal year ended
December 31, 2005 were approved by the audit committee. In connection with the
audit of the Company's financial statements for the fiscal years ended December
31, 2005 and December 31, 2004, Friedman only used full-time, permanent
employees.
The audit committee of the Board of Directors considered whether the
provision of non-audit services by Friedman was compatible with its ability to
maintain independence from an audit standpoint and concluded that Friedman's
independence was not compromised.
19
STOCKHOLDER PROPOSALS
We expect that the Company's 2007 annual meeting of stockholders will
be held on or about May 16, 2007. The SEC has adopted regulations that govern
the inclusion of stockholder proposals in the Company's annual proxy materials.
For a stockholder proposal to be included in the proxy statement for the
Company's 2006 annual meeting of stockholders, as applicable, including a
proposal for the election of a director, the proposal must have been received by
the company at its principal offices no later than December 6, 2007. If the
Company is not notified of a stockholder proposal by February 19, 2007, then its
Board of Directors will have discretionary authority to vote on the stockholder
proposal, even though the stockholder proposal is not discussed in the proxy
statement. In order to curtail any controversy as to the date on which a
stockholder proposal was received by the company, it is suggested that
stockholder proposals be submitted by certified mail, return receipt requested,
and be addressed to Empire Resorts, Inc., 701 N. Green Valley Parkway, Suite
200, Henderson, NV 89074, Attention: Investor Relations.
OTHER MATTERS
As of the date of this proxy statement/prospectus, the Company's Board
of Directors does not know of any matter that will be presented for
consideration at the meeting other than as described in this proxy
statement/prospectus.
Robert H. Friedman
Secretary
April 7, 2006
20