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