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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Securities Exchange Act of 1934
Filed by the Registrant þ
|
Filed by a Party other than the Registrant o |
Check the appropriate box:
| o | Preliminary Proxy Statement | |
| o | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) | |
| þ | Definitive Proxy Statement | |
| o | Definitive Additional Materials | |
| o | Soliciting Material Pursuant to §240.14a-12 |
FULL HOUSE RESORTS, INC.
(Name of Registrant as Specified In Its Charter)
Payment of Filing Fee (Check the appropriate box):
| þ | No fee required. | |
| o | Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. |
| (1) | Title of each class of securities to which the transaction applies: | |||
| (2) | Aggregate number of securities to which the transaction applies: | |||
| (3) | Per unit price or other underlying value of the transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): | |||
| (4) | Proposed maximum aggregate value of the transaction: | |||
| (5) | Total fee paid: | |||
| o | Fee paid previously with preliminary materials. | |
| o | Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. |
| (1) | Amount Previously Paid: | ||
| (2) | Form, Schedule or Registration Statement No.: | ||
| (3) | Filing Party: | ||
| (4) | Date Filed: | ||
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FULL
HOUSE RESORTS, INC.
4670 Fort Apache Road, Suite 190
Las Vegas, Nevada 89147
4670 Fort Apache Road, Suite 190
Las Vegas, Nevada 89147
To be held on 19th day of May,
2010
Dear Stockholder:
You are invited to attend our Annual Meeting of Stockholders,
which will be held at 10:00 a.m., local time, on the
19th day of May, 2010, at the Suncoast Hotel &
Casino, 9090 Alta Drive, Las Vegas, NV 89145, for the following
purposes:
(1) to elect six members to our board of directors to serve
until our next annual meeting of stockholders or until their
successors are duly elected and qualified;
(2) to ratify the appointment of Piercy Bowler
Taylor & Kern, Certified Public Accountants
(“Piercy Bowler Taylor & Kern”), as our
independent auditors for 2010;
(3) to transact such other business as may properly come
before the annual meeting, including any adjournments or
postponements thereof.
Our board of directors has fixed the close of business on
April 1, 2010 as the record date for determining those
stockholders entitled to notice of, and to vote at, the annual
meeting and any adjournments or postponements thereof.
Whether or not you expect to be present, please sign, date and
return the enclosed proxy card in the enclosed pre-addressed
envelope as promptly as possible. No postage is required if
mailed in the United States.
By Order of the Board of Directors
Barth F. Aaron
Secretary
Las Vegas, Nevada
April 19, 2010
YOU ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON.
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE
COMPLETE, DATE AND SIGN THE ENCLOSED PROXY CARD AS PROMPTLY AS
POSSIBLE IN ORDER TO ENSURE YOUR REPRESENTATION AT THE MEETING.
EVEN IF YOU EXECUTE A PROXY CARD, YOU MAY NEVERTHELESS ATTEND
THE MEETING, REVOKE YOUR PROXY AND VOTE YOUR SHARES IN PERSON.
PLEASE NOTE, HOWEVER, THAT IF YOUR SHARES ARE HELD OF RECORD BY
A BROKER, BANK OR OTHER NOMINEE, AND YOU WISH TO VOTE AT THE
MEETING, YOU MUST OBTAIN FROM THE RECORD HOLDER A PROXY ISSUED
IN YOUR NAME.
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2010
ANNUAL MEETING OF STOCKHOLDERS
OF
FULL HOUSE RESORTS, INC.
OF
FULL HOUSE RESORTS, INC.
This proxy statement contains information relating to our 2010
Annual Meeting of Stockholders to be held at 10:00 a.m.,
local time, on May 19, 2010, at the Suncoast
Hotel & Casino, 9090 Alta Drive, Las Vegas, NV 89145
and to any adjournments or postponements. This proxy statement
and the enclosed form of proxy are first being mailed to
stockholders on or about April 21, 2010.
IMPORTANT
NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE
STOCKHOLDER MEETING TO BE HELD ON MAY 19, 2010
STOCKHOLDER MEETING TO BE HELD ON MAY 19, 2010
This proxy statement and form of proxy are also available on
our website at www.fullhouseresorts.com.
ABOUT THE
MEETING
What Is
The Purpose Of The Annual Meeting?
At the annual meeting, stockholders will act upon the matters
outlined in the accompanying notice of meeting, including
| • | the election of six directors, | |
| • | the ratification of Piercy Bowler Taylor & Kern as our independent auditors, |
The stockholders also will transact any other business that
properly comes before the meeting.
Who Is
Entitled To Vote?
Only stockholders of record at the close of business on the
record date, April 1, 2010, are entitled to receive notice
of the annual meeting and to vote the shares of our common stock
that they held on that date at the meeting, or any postponement
or adjournment of the meeting. Each outstanding share of common
stock entitles its holder to cast one vote on each matter to be
voted upon.
Who Can
Attend The Meeting?
All stockholders as of the record date, or their duly appointed
proxies, may attend. Please note that if you hold shares in
“street name,” that is, through a broker or other
nominee, you will need to bring a copy of a brokerage statement
reflecting your stock ownership as of the record date. You will
also need a photo ID to gain admission.
What
Constitutes A Quorum?
The presence at the meeting, in person or by proxy, of the
holders of 40% of the total number of shares of our common stock
and preferred stock outstanding on the record date will
constitute a quorum, permitting the meeting to conduct its
business. As of the record date, 18,001,681 shares of our
common stock were outstanding and held by approximately 140
stockholders of record. As of the record date, no shares of our
preferred stock was outstanding. Proxies received but marked as
abstentions and broker non-votes will be included in the
calculation of the number of shares considered to be present at
the meeting for purposes of determining a quorum but will not be
counted as votes cast “for” or “against” any
given matter.
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If less than 40% of outstanding shares entitled to vote are
represented at the meeting, a majority of the shares present at
the meeting may adjourn the meeting to another date, time or
place, and notice need not be given of the new date, time or
place if the new date, time or place is announced at the meeting
before an adjournment is taken.
How Do I
Vote?
If you complete and properly sign the accompanying proxy card
and return it to us, it will be voted as you direct. If you are
a registered stockholder and you attend the meeting, you may
deliver your completed proxy card in person. “Street
name” stockholders who wish to vote at the meeting will
need to obtain a proxy from the institution that holds their
shares.
Prior to the annual meeting, we will select one or more
inspectors of election. These inspectors will determine the
number of shares of common stock represented at the meeting, the
existence of a quorum, the validity of proxies and will count
the ballots and votes and will determine and report the results
to us.
May I
Change My Vote After I Return My Proxy Card?
Yes. Even after you have submitted your proxy, you may change
your vote at any time before the proxy is exercised by filing
with our Secretary either a notice of revocation or a duly
executed proxy bearing a later date. The powers of the proxy
holders will be suspended if you attend the meeting in person
and so request, although attendance at the meeting will not by
itself revoke a previously granted proxy.
What Are
The Board’s Recommendations?
The enclosed proxy is solicited on behalf of our board of
directors. Unless you give other instructions on your proxy
card, the persons named as proxy holders on the proxy card will
vote in accordance with the recommendations of our board of
directors. The recommendation of the board of directors is set
forth with the description of each item in this proxy statement.
In summary, the board of directors recommends a vote:
| • | FOR the election of the nominated slate of directors (see pages 5-15). | |
| • | FOR the ratification of Piercy Bowler Taylor & Kern as our independent auditors (see pages 15-16). |
The board of directors does not know of any other matters that
may be brought before the meeting nor does it foresee or have
reason to believe that the proxy holders will have to vote for
substitute or alternate board nominees. In the event that any
other matter should properly come before the meeting or any
nominee is not available for election, the proxy holders will
vote as recommended by the board of directors or, if no
recommendation is given, in accordance with their best judgment.
What Vote
Is Required To Approve Each Item?
Election Of Directors. A plurality of the
votes cast at the meeting is required for the election of
directors. A properly executed proxy marked “WITHHOLD
AUTHORITY” with respect to the election of one or more
directors will not be voted with respect to the director or
directors indicated, although it will be counted for purposes of
determining whether there is a quorum. Stockholders do not have
the right to cumulate their votes for directors.
Ratification of Piercy Bowler Taylor &
Kern. An affirmative vote of a majority of the
votes cast at the meeting is required for the ratification of
the independent auditor. A properly executed proxy marked
“ABSTAIN” with respect to ratification will not be
voted with respect to ratification, although it will be counted
for purposes of determining whether there is a quorum.
Other Items. For any other item which may
properly come before the meeting, the affirmative vote of a
majority of the votes cast at the meeting, either in person or
by proxy, voting will be required for approval, unless otherwise
required by law. A properly executed proxy marked
“ABSTAIN” with respect to any of those matters will
not be voted, although it will be counted for purposes of
determining whether there is a quorum.
If you hold your shares in “street name” through a
broker or other nominee, your broker or nominee may not be
permitted to exercise voting discretion with respect to some
items that may be acted upon. Thus, if you do not give
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your broker or nominee specific instructions, your shares may
not be voted on those matters and will not be counted in
determining the number of shares necessary for approval. Shares
represented by these “broker non-votes” will, however,
be counted in determining whether there is a quorum.
Who Pays
For The Preparation Of The Proxy Statement?
We will pay the cost of preparing, assembling and mailing the
proxy statement, notice of meeting and enclosed proxy card. In
addition to the use of mail, our employees or authorized agents
may solicit proxies personally and by telephone. Our employees
will receive no compensation for soliciting proxies other than
their regular salaries. We may request banks, brokers and other
custodians, nominees and fiduciaries to forward copies of the
proxy material to their principals and to request authority for
the execution of proxies and we may reimburse those persons for
their expenses incurred in connection with these activities. We
will compensate only independent third party agents that are not
affiliated with us but solicit proxies. At this time, we do not
anticipate that we will be retaining a third party solicitation
firm, but should we determine in the future that it is in our
best interests to do so, we will retain a solicitation firm and
pay for all costs and expresses associated with retaining this
solicitation firm.
You should review the information provided in this proxy
statement in conjunction with our 2009 Annual Report to
Stockholders, which accompanies this proxy statement. Our
principal executive offices are located 4670 South
Fort Apache Road, Suite 190, Las Vegas, Nevada 89147
and our telephone number is
(702) 221-7800.
A list of stockholders entitled to vote at the annual meeting
will be available at our offices for a period of ten days prior
to the meeting and at the meeting itself for examination by any
stockholder.
Do I have
dissenter’s or appraisal rights?
You have no dissenter’s or appraisal rights in connection
with any of the proposals described herein.
SECURITY
OWNERSHIP
The following table sets forth information as of the record date
concerning the beneficial ownership of our common stock by:
| • | each person known by us to be the beneficial owner of more than 5% of our outstanding common stock, | |
| • | each director, | |
| • | each of the named executive officers (as defined below), and | |
| • | all executive officers and directors as a group. |
Unless otherwise listed above, the address for each of our
officers and directors is
c/o Full
House Resorts, 4670 South Fort Apache Road, Suite 190,
Las Vegas, Nevada 89147.
|
Number of Shares |
Percentage of Class |
|||||||
|
Name and Address of Beneficial Owner
|
Owned(1) | Outstanding(1) | ||||||
|
Common Stock:
|
||||||||
|
Lee A. Iacocca
|
1,360,471 | (2) | 7.6 | % | ||||
|
LKL Family Limited Partnership
|
300,000 | 1.7 | % | |||||
|
10900 Wilshire Boulevard, Suite 310
Los Angeles, California 90024 |
||||||||
|
J. Michael Paulson
|
110,000 | 0.6 | % | |||||
|
Andre Hilliou
|
297,500 | (3) | 1.7 | % | ||||
|
Carl G. Braunlich
|
10,000 | 0.1 | % | |||||
|
Mark J. Miller
|
134,000 | (4) | 0.7 | % | ||||
|
Kathleen M. Caracciolo
|
8,000 | — | ||||||
|
Kenneth R. Adams
|
12,400 | 0.1 | % | |||||
|
T. Wesley Elam
|
56,800 | 0.3 | % | |||||
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|
Number of Shares |
Percentage of Class |
|||||||
|
Name and Address of Beneficial Owner
|
Owned(1) | Outstanding(1) | ||||||
|
Barth F. Aaron
|
38,000 | 0.2 | % | |||||
|
James D. Meier
|
20,000 | 0.1 | % | |||||
|
All Officers and Directors as a Group (10 Persons)
|
2,047,171 | 11.4 | % | |||||
|
Allen E. Paulson Living Trust
|
3,171,800 | (5) | 17.7 | % | ||||
|
514 Via De La Valle, Suite 210
Solana Beach, California 92075 |
||||||||
|
William P. McComas
|
1,799,026 | (6) | 10.0 | % | ||||
|
75-395
Morningstar Drive
Indian Wells, CA 92210 |
||||||||
|
Austin W. Marxe and David M. Greenhouse
|
1,802,140 | (7) | 10.0 | % | ||||
|
527 Madison Ave, Suite 2600
New York, NY 10022 |
||||||||
|
Addison Clark Management, L.L.C.
|
1,168,081 | (7) | 6.5 | % | ||||
|
10 Wright Street, Suite 100
Westport, Connecticut 06880 Delaware Limited Liability Company |
||||||||
|
PAR Investment Partners LP
|
942,700 | (7) | 5.2 | % | ||||
|
One International Place, Suite 2401
Boston, MA 02110 |
||||||||
| (1) | Shares are considered beneficially owned, for purposes of this table only, if held by the person indicated as beneficial owner, or if such person, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise, has or shares the power to vote, to direct the voting of and/or dispose of or to direct the disposition of, such security, or if the person has a right to acquire beneficial ownership within 60 days, unless otherwise indicated in these footnotes. Any securities outstanding which are subject to options or warrants exercisable within 60 days are deemed to be outstanding for the purpose of computing the percentage of outstanding securities of the class owned by such person, but are not deemed to be outstanding for the purpose of computing the percentage of the class owned by any other person. | |
| (2) | Includes 300,000 shares of restricted stock held by the LKL Family Limited partnership (of which Lee A. Iacocca is the general partner) which vest over three years beginning May, 2007. | |
| (3) | All shares are owned through the Hilliou Living Trust, of which Mr. Hilliou is co-trustee and co-beneficiary. | |
| (4) | Includes 36,667 shares of restricted stock all of which vested as of February 2010. Also includes 20,000 shares owned through the Miller Family Living Trust of which Mr. Miller is a trustee and beneficiary. | |
| (5) | James and Vicki Paulson are the trustees of the Allen E. Paulson Living Trust. They are respectively brother and sister-in-law of J. Michael Paulson, who currently maintains no direct or indirect control over the trust. | |
| (6) | Based on information disclosed in Form 4s as filed with the SEC through April 1, 2010 | |
| (7) | Based on information disclosed, in Schedules 13G, as filed with the SEC through April 1, 2010 |
Section 16(a)
Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934
requires our directors and executive officers and persons who
own more than ten percent of our outstanding common stock, to
file with the Securities and Exchange Commission initial reports
of ownership and reports of changes in ownership of common
stock. These persons are required by SEC regulation to furnish
us with copies of all such reports they file.
To our knowledge, based solely on a review of the copies of such
reports furnished to us and written representations that no
other reports were required, we believe that all
Section 16(a) reports were timely filed by our officers,
directors and greater than ten percent beneficial owners, except
that the change in trustees of the Allen E. Paulson Living Trust
occurred as of June 12, 2009 and was reported on
Form 3 on March 29, 2010.
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PROPOSAL ONE:
ELECTION
OF DIRECTORS
Our bylaws provide that the number of directors constituting our
board of directors shall be fixed from time to time by the
board. Our board of directors currently consists of seven
directors. J. Michael Paulson, who served as a Director of the
Company since 2004, is not seeking re-election in order to
devote more time and attention to his other interests. As a
result, following the annual meeting, the number of directors
shall be fixed at six directors. The nominees to be voted on by
stockholders at this meeting are Kenneth R. Adams, Carl G.
Braunlich, Kathleen M. Caracciolo, Andre M. Hilliou, Lee A.
Iacocca, and Mark Miller.
OUR BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” EACH OF
THE NOMINEES.
All nominees have consented to be named and have indicated their
intent to serve if elected. We have no reason to believe that
any of these nominees are unavailable for election. However, if
any of the nominees become unavailable for any reason, the
persons named as proxies may vote for the election of such
person or persons for such office as our board of directors may
recommend in the place of such nominee or nominees. It is
intended that proxies, unless marked to the contrary, will be
voted in favor of the election of Kenneth R. Adams, Carl G.
Braunlich, Kathleen Caracciolo, Andre M. Hilliou, Lee A.
Iacocca, and Mark J. Miller.
The names, ages and positions of all our nominees for director
and executive officers are listed below, followed by a brief
account of their business experience during at least the past
five years.
|
Name
|
Age
|
Position
|
||||
|
Kenneth R. Adams
|
67 | Director | ||||
|
Carl G. Braunlich
|
57 | Vice Chairman | ||||
|
Kathleen M. Caracciolo
|
54 | Director | ||||
|
Lee A. Iacocca
|
85 | Director | ||||
|
Andre M. Hilliou
|
62 | Chairman/ Chief Executive Officer | ||||
|
Mark J. Miller
|
53 | Director/ Treasurer/Chief Financial Officer/Chief Operating Officer | ||||
|
T. Wesley Elam
|
56 | Vice President of Operations and Project Management | ||||
|
Barth F. Aaron
|
61 | Secretary | ||||
|
James D. Meier
|
45 | Vice President - Finance | ||||
Kenneth R. Adams joined our Board in January
2007. Mr. Adams is a principal in the gaming
consulting firm, Ken Adams Ltd., which he founded in 1990. He is
also an editor of the Adams’ Report monthly newsletter, the
Adams’ Daily Report daily electronic newsletter and the
Adams Review, each of which focus on the gaming industry. Since
August 1997, Mr. Adams has been a partner in Johnny
Nolon’s Casino in Cripple Creek Colorado, a limited stakes
casino with a restaurant and bar. From 2001 until 2008, he
served on the Board of Directors of Vision Gaming &
Technology, Inc., a privately-held gaming machine company, and
he currently serves on the Board of Directors of the Downtown
Improvement Agency for Reno, Nevada. The Board believes
Mr. Adams is qualified to serve as a Director of the
Company due to his specific experience as a casino operator, his
knowledge of the casino industry and his continuing analysis and
review of the industry.
Kathleen M. Caracciolo joined our Board in January 2007.
Ms. Caracciolo has also been appointed the Chairperson of
our Audit Committee. Ms. Caracciolo is a certified public
accountant who since October 2008 has served as Director of
Business Development of Global Connect, LLC a web-based voice
messaging company. Prior to that, from July 2003 through August
2008 served as Vice President of Finance for Atlantic City
Coin & Slot Service Co. Inc., which designs,
manufactures and distributes electronic gaming devices. Between
January and June 2003, Ms. Caracciolo worked as a
consultant. From April 1999 to December 2002, she served as Vice
President of Finance for the Atlantic City Convention and
Visitors Authority, a government agency responsible for
enhancing the economy of the region with coordination of the
operations of the Atlantic City Convention Center. Prior to
that, Ms. Caracciolo held various finance positions with
several Atlantic City Casinos, including Atlantic City Showboat,
Inc. and Caesars Atlantic City, Inc. The Board believes that
Ms. Caracciolo is qualified to serve as a Director of the
Company due to her knowledge of and experience in the casino
industry and her background as a financial officer for casino
and casino related companies.
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Dr. Carl G. Braunlich has been one of our directors
since May 2005. Since August 2006, he has been an Associate
Professor at University of Nevada Las Vegas. Dr. Braunlich
holds a Doctor of Business Administration in International
Business from United States International University,
San Diego, CA. Prior to joining the faculty of University
of Nevada, Las Vegas, Dr. Braunlich was a Professor of
Hotel Management at Purdue University since 1990. Previously he
was on the faculty at United States International University. Dr
Braunlich has held executive positions at the Golden Nugget
Hotel and Casino in Atlantic City, NJ and at Paradise Island
Hotel and Casino, Nassau, Bahamas. He has been a consultant to
Wynn Las Vegas, Harrah’s Entertainment, Inc., Showboat
Hotel and Casino, Bellagio Resort and Casino, International Game
Technology, Inc., Atlantic Lottery Corporation, Nova Scotia
Gaming Corporation and the Nevada Council on Problem Gambling.
He was on the Board of Directors of the National Council on
Problem Gambling and has served on several Problem Gambling
Committees, including those of the Nevada Resort Association and
the American Gaming Association. The Board believes that
Dr. Braunlich is qualified to serve as a Director of the
Company due to his knowledge of and experience in the casino
industry and his position as an educator and consultant to the
casino industry.
Lee A. Iacocca has been one of our directors since April
1998. Mr. Iacocca currently serves as the President of
Iacocca & Associates, a consulting firm. In 1997, he
founded EV Global Motors, to design, market and distribute the
next generation of electric vehicles. Mr. Iacocca is former
Chief Executive Officer and Chairman of the Board of Directors
of Chrysler Corporation, retiring from those positions in 1992.
He retired as a Chrysler Director in September 1993 and
continued to serve as a consultant to Chrysler until 1994. He is
Chairman of the Iacocca Foundation, a philanthropic organization
dedicated to educational projects and the advancement of
diabetes research, and is Chairman of the Committee for
Corporate Support of Joslin Diabetes Foundation.
Mr. Iacocca is also Chairman Emeritus of the Statue of
Liberty — Ellis Island Foundation and serves on the
Advisory Board of Reading Is Fundamental, the nation’s
largest reading motivation program.
Andre M. Hilliou became President and Chief Executive
Officer of Full House in March 2004 and has been one of our
directors since May 2005. From 2001 until joining us, he served
as Chairman and Chief Executive Officer of Vision Gaming and
Technology. Mr. Hilliou held executive positions with
various companies including Chief Executive Officer of American
Bingo and Gaming, Inc. and Chief Executive Officer of
Aristocrat, Inc. He also spent approximately 11 years with
the Showboat Corporation, reaching the level of Senior Vice
President of Operations for its Atlantic City, New Jersey
property, and Chief Executive Officer of Showboat’s Sydney
Harbour Casino. The Board believes that Mr. Hilliou is
qualified to serve as a Director of the Company due to his
extensive experience as a casino developer and operator for
publicly traded companies.
Mark J. Miller became Chief Financial Officer on
February 19, 2007. He was named Chief Operating Officer on
May 28, 2009. He was one of our directors from May 2005
until the announcement of his employment with us in January
2007. He rejoined the board of directors on May 31, 2007.
From September 2003 until December 2006, Mr. Miller served
as Executive Vice President and Chief Financial Officer of Aero
Products International, a leading maker of premium, air-filled
bedding products. From December 1998 until May 2003,
Mr. Miller was Executive Vice President and Chief Financial
Officer and then, Chief Operating Officer of American Skiing
Company, owner and operator of nine well-known ski resorts. From
1994 until 1998, he was an Executive Vice President of Showboat,
Inc. with operational support responsibility for new casino
development. Previously, Mr. Miller served in various
positions within the Showboat organization, including President
and Chief Executive Officer of Atlantic City Showboat, Inc.
Mr. Miller holds a Master Degree in Accountancy from
Brigham Young University and is a Certified Public Accountant.
The Board believes that Mr. Miller is qualified to serve as
a Director of the Company due to his extensive experience as a
casino developer, operator and as a financial officer for
publicly traded companies.
T. Wesley Elam became our Vice President of
Operations and Project Management in April 2005. Prior to
joining us, he served as general manager of the Argosy Casino in
Baton Rouge, Louisiana beginning in December 1998. From
September 1994 until August 1998 he served as chief operating
officer for the Star City Casino in Sydney, Australia,
responsible for the openings and operations of both the
temporary and permanent casino/hotel. Prior to that, he served
as controller for Casino Windsor, Ontario, Canada, overseeing
the construction and opening of the temporary casino, which was
a six-month fast track project. Previously, he served in various
executive positions with responsibilities for opening and
operations of the Trump Taj Mahal Casino, Showboat Casino, Trump
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Castle Casino and Tropicana Casino. Mr. Elam holds a
Bachelor of Science degree in Business Administration from the
Thomas Edison State College.
Barth F. Aaron was appointed as our Secretary in March
2004. He has served as our General Counsel since March 2004.
From April 2002 until May 2005, Mr. Aaron was General
Counsel of Vision Gaming and Technology, Inc. From January 2001
until April 2002, Mr. Aaron served as Corporate Director of
Regulatory Compliance and Risk Management for Penn National
Gaming, Inc. From August 1996 until May 2000, Mr. Aaron was
Corporate General Counsel for Aristocrat, Inc., the
U.S. subsidiary of Australia’s largest slot machine
manufacturer, where he was a legal consultant from May 2000
until January 2001. Mr. Aaron has been a Deputy Attorney
General with the New Jersey Division of Gaming Enforcement and
is admitted to practice law in the states of Nevada, New Jersey
and New York.
James D. Meier was named Vice President of Finance in
February 2007. Previously, Mr. Meier served as our Chief
Financial Officer since January 2005 and as our controller from
July 2004 until January 2005. Prior to joining us, he served as
Chief Financial Officer of Capital One, LLC, a gaming
development and finance company. From 2001 to 2003, he served as
the Controller/Chief Financial Officer of Phoenix Leisure
Corporation and prior to that he was financial reporting manager
for Ameristar Casinos, Inc. beginning in 2000. He served as
controller for Nevada Palace Hotel and Casino and until 1999 was
an auditor with Piercy Bowler Taylor & Kern.
Mr. Meier is a Certified Public Accountant and Certified
Management Accountant with a Master’s Degree in Hotel
Administration from University of Nevada, Las Vegas. He received
his Bachelor of Science degree in Business Administration from
Minnesota State University.
The term of office of each director ends at the next annual
meeting of stockholders or when his successor is elected and
qualified. Our officers serve at the discretion of the board of
directors.
Director
Compensation
For service as a director, each non-executive director receives
cash compensation of $20,000 per year plus $1,000 for each
meeting attended in excess of four meetings. The chairperson of
each committee of the board, other than the nominating
committee, receives cash compensation of $10,000 per year for
such service and each committee member receives $1,000 for each
committee meeting attended. In addition, non-executive directors
also receive 2,000 shares of fully vested common stock per
annum.
The table below summarizes the compensation paid by us to our
non-employee directors for services rendered for 2009. Directors
who are employed by us do not receive additional compensation
for serving as directors.
Director
Compensation
|
Fees Earned or Paid |
||||||||||||
|
Name
|
in Cash | Stock Awards(1) | Total | |||||||||
|
J. Michael Paulson
|
$ | 23,000 | $ | 5,100 | $ | 28,100 | ||||||
|
Carl G. Braunlich
|
$ | 41,000 | $ | 5,100 | $ | 46,100 | ||||||
|
Kenneth R Adams
|
$ | 39,000 | $ | 5,100 | $ | 44,100 | ||||||
|
Kathleen M Caracciolo
|
$ | 42,000 | $ | 5,100 | $ | 47,100 | ||||||
| (1) | The amounts shown in this column represent the dollar amount recognized for financial statement reporting purposes for the fiscal year ended December 31, 2009 in accordance with SFAS No. 123(R) related to restricted stock awards granted in and prior to 2009 pursuant to our various share-based payment plans, and include amounts from awards. Assumptions used in the calculation of these amounts are included in Note 12 to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2009. |
Independent
Directors
Under the corporate governance standards of the NYSE Amex at
least 50% of our board of directors and all of the members of
our audit committee, compensation committee and the nominating
committee must meet the test of
7
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independence as defined by the listing requirements of NYSE
Amex. Our board of directors, in the exercise of its reasonable
business judgment, has determined that Mr. Paulson,
Mr. Adams, Dr. Braunlich, and Ms. Caracciolo
qualify as independent directors pursuant to the NYSE Amex and
SEC rules and regulations. Our board of directors had determined
that Mr. Miller was an independent director prior to his
agreement to serve as our chief financial officer and that
Mr. Iacocca was an independent director prior to entering
into a consulting agreement with us. In making the determination
of independence, our board considered whether an independent
director has a material relationship with Full House, either
directly or as a partner or shareholder of an organization that
has a relationship with Full House or any other relationships
that, in our board’s judgment, would interfere with the
director’s independence. In the late 1980’s and early
1990’s, Mr. Hilliou, Mr. Miller and
Ms. Caracciolo were employed by Showboat, Inc. or a
subsidiary thereof and were professionally associated through
such employment.
Meetings
and Committees of the Board of Directors
Meetings. During fiscal year 2009, the board
of directors held three regular meetings and two special
meetings. Each of our directors attended at least 80% of the
aggregate of the number of meetings of the board of directors
which were held during the period such person served on the
board of directors and the number of meetings of committees of
the board of directors held during the period that such person
served on such committee. We have no specific requirements
regarding the attendance at the annual meeting of stockholders
by our directors. In 2009, all of our directors except
Mr. Iacocca attended the annual meeting in person.
We have four standing committees: the audit committee, the
nominating committee, the compensation committee and the
regulatory compliance committee.
Audit
Committee
Our audit committee is comprised of three members,
Ms. Caracciolo, Dr. Braunlich and Mr. Adams.
Ms. Caracciolo serves as Chair and financial expert on the
Committee. Our board had determined that Ms. Caracciolo is
an audit committee financial expert as defined by the rules and
regulations of the Securities and Exchange Commission. Our board
of directors, in its reasonable judgment, has determined that
each member of the audit committee is independent as defined
under the applicable NYSE Amex listing standards and federal
law. Our audit committee held four meetings in 2009.
The audit committee’s functions include overseeing and
monitoring the activities of our financial reporting process,
our systems of internal controls over financial reporting and
the integrity of our financial statements, the independent
auditors’ qualifications, independence and performance, and
to assist our board of directors in ensuring our compliance with
legal and regulatory requirements in our financial reporting
process. Our board of directors has adopted a written charter
for the audit committee setting out the functions that it is to
perform. The text of the charter is available on our website at
www.fullhouseresorts.com.
Please refer to the audit committee report, which is set forth
on pages
15-16, for a
further description of our audit committee’s
responsibilities and its recommendations with respect to our
audited consolidated financial statements for the year ended
December 31, 2009.
Compensation
Committee
The compensation committee is comprised of two members,
Ms. Caracciolo, and Dr. Braunlich. Dr. Braunlich
acts as chair of the compensation committee. Our board of
directors, in its reasonable judgment, has determined that each
member of the compensation committee is independent as defined
under the applicable NYSE Amex listing standards. Our
compensation committee held two meetings in 2009.
The compensation committee’s functions include reviewing
and making recommendations to the board of directors regarding
all forms of compensation to be provided to our executive
officers and directors. Our board of directors has adopted a
written charter for the compensation committee setting out the
functions that it is to perform and has recently amended the
charter. The text of the charter is available on our website at
www.fullhouseresorts.com.
8
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Management provides recommendations to the committee on the
amount and type of executive compensation as well as individual
performance objectives for bonuses and incentive compensation,
and the committee reviews these recommendations along with
information previously provided by an executive employment
consultant to formulate the committee’s recommendations to
the board of directors. The compensation committee determines
the fulfillment of the individual performance objectives and
recommends individual bonus and incentive compensation amounts
to the board of directors.
Independent director compensation was based on recommendations
provided by management in 2005. The recommendations were
determined by management to be at the low end of comparably
sized companies in the gaming industry but recommended as a
needed retention incentive.
Nominating
Committee
In 2009, the Board acted as the Nominating Committee. The Board
met twice during the first quarter of 2010 to approve the slate
of nominees standing for election by the shareholders.
Our board of directors has adopted a written charter for the
nominating committee setting out the functions that it is to
perform. The text of the charter is available on our website at
www.fullhouseresorts.com.
Our nominating committee’s functions include assisting our
board of directors with respect to nominating new directors. To
fulfill its responsibilities and duties, the committee, among
other things;
| • | determines periodically, as appropriate, desired board qualifications, expertise and characteristics, including such factors as business experience and skills and knowledge with respect to gaming, finance, marketing, financial reporting, regulatory and any other areas as may be expected to contribute to an effective board; | |
| • | determines periodically, as appropriate, whether there are any specific, minimum qualifications that the nominating committee believes must be met by a nominee approved by the nominating committee for a position on the board and whether there are any specific qualities or skills that the nominating committee believes are necessary for one or more directors to possess; | |
| • | conducts searches for potential board members with corresponding attributes as needed; | |
| • | evaluates, proposes and approves nominees for election or appointment to the board; and | |
| • | considers, evaluates and, as applicable, proposes and approves, stockholder nominees for election to the board. |
The nominating committee considers all qualified candidates
regardless of age, race, gender, national origin or religion.
The nominating committee will consider stockholder
recommendations for director candidates and will do so in the
same manner that it considers all director candidates. There are
no specific, minimum qualifications that must be met by a
director nominee recommended by a stockholder except as provided
for by applicable law. A stockholder wishing to recommend a
prospective director nominee for consideration should send
notice to Full House Resorts, Inc., Attention: Nominating
Committee
c/o Secretary,
4670 Fort Apache Road, Suite 190, Las Vegas, Nevada
89147. To be included in our proxy for our next annual meeting,
the notice of recommendation must be made in writing and
received by our Secretary by December 22, 2010. Although
the committee’s charter permits the committee to engage a
search firm to identify director candidates, we did not pay any
third parties a fee to assist in the process of identifying or
evaluating director candidates in 2009.
Regulatory
Compliance Committee
The regulatory compliance committee is comprised of three
members, Mr. Adams, Ms. Caracciolo, and
Dr. Braunlich. Mr. Adams acts as chair of the
regulatory compliance committee. The regulatory compliance
committee’s functions include reviewing and making
recommendations to the board of directors regarding compliance
with gaming laws and regulations. The regulatory compliance
committee held four meetings in 2009.
9
Table of Contents
The regulatory compliance committee meets quarterly to review
the items determined by the Nevada Gaming Control Board to be of
sufficient material interest to warrant review by a committee of
the board. During 2009, the committee met quarterly, reviewed
reports from the Company’s Compliance Officer,
Mr. Aaron, who also serves as General Counsel. The
committee found no material violations of or deviations from
appropriate regulatory controls and events of regulatory
interest were appropriately addressed with no gaming regulatory
agency action.
Board of
Directors Leadership Structure
The Company is led by Mr. Andre M. Hilliou, who has served
as Chief Executive Officer since 2004 and as Chairman of the
Board since 2009. In 2009, we named Dr. Carl Braunlich as
Vice Chairman of the Board. Dr. Braunlich serves as our
lead independent director. All of our board committees are
compromised only of independent directors. Each committee is
chaired by a different independent director. Our independent
directors meet regularly at each committee meeting. In May 2009,
we appointed Mr. Mark J. Miller to be Chief Operating
Officer in addition to his roles as Treasurer and Chief
Financial Officer of the Company. This will ensure an orderly
succession of executive management should one be needed.
Our audit committee is responsible for reviewing and assessing
financial risk to the Company. The audit committee is comprised
of three independent directors and meets at least quarterly. In
addition, we maintain a regulatory compliance committee,
comprised of three independent directors which is responsible
for the oversight and review of all matters of gaming regulatory
import. We believe that these two independent committees provide
proper risk oversight for the Company.
Our board leadership structure is commonly utilized by other
public companies in the United States of comparable size and
scope. We believe that this leadership structure has been
effective for the Company. We believe that an independent Vice
Chairman and only independent directors serving on our board
committees provides a balance with a combined Chairman and Chief
Executive Officer. With experienced and participating
independent directors, we believe we have the proper leadership
structure.
Code of
Conduct and Ethics
Our board of directors has adopted a code of conduct and ethics
applicable to each of our directors, officers and employees. In
addition, our board of directors has adopted a separate code of
ethics applicable to the Chief Executive Officer and senior
financial officers. The full text of the code of conduct and
ethics and the code of ethics are available at our website at
www.fullhouseresorts.com.
Compensation
Committee Interlocks and Insider Participation
No executive of Full House Resorts is also a member of a
compensation committee for a company whose executive officers
are on the board of Full House Resorts.
Communications
with the Board of Directors
Our board of directors believes it important that interested
parties have the opportunity to communicate their concerns
directly to our board of directors. Stockholders may contact or
communicate with an individual director or our board of
directors as a group, including the non-employee directors as a
group, by addressing that letter to Full House Resorts, Inc.,
Attention: Board of Directors
c/o Company
Secretary, 4670 Fort Apache Road, Suite 190, Las
Vegas, Nevada 89147. Each communication should specify the
applicable addressee or addressees to be contacted.
10
Table of Contents
EXECUTIVE
COMPENSATION
In accordance with the SEC’s proxy disclosure rules,
“total compensation” in 2009 is defined as the sum of
the following:
| • | Salary: Base salary paid during 2009. | |
| • | Bonus: Non-performance based awards (i.e., guarantees, sign on, retention bonuses). | |
| • | Stock Awards: Restricted stock (including dividends earned on outstanding restricted shares that are not part of FAS 123(R) value) dollar amounts reflect the grant date accounting fair value calculated pursuant to the guidance set forth under FAS 123(R), as presented in our Annual Report on Form 10-K. | |
| • | Non-Equity Incentive Awards: Short and long-term performance based awards, reflecting only annual incentives for 2009. | |
| • | All Other Compensation: All other compensation not captured elsewhere in the Summary Executive Compensation Table. We have reported these amounts, even if the value of an individual item is less than $10,000. |
Summary
Executive Compensation Table
The following table summarizes the “total
compensation” of our Chief Executive Officer, and our two
highest paid executives other than our Chief Executive Officer,
or, collectively, the named executive officers, for the fiscal
year ended December 31, 2009.
SUMMARY
COMPENSATION TABLE
|
Non-Equity |
All Other |
|||||||||||||||||||||||||||
|
Name and |
Stock |
Incentive Plan |
Compensation |
|||||||||||||||||||||||||
|
Principal Position
|
Year | Salary | Bonus | Awards(1) | Compensation(2) | (3) | Total | |||||||||||||||||||||
|
Andre M. Hilliou
|
2009 | $ | 288,750 | $ | — | $ | 82,500 | $ | 210,603 | $ | 4,800 | $ | 586,653 | |||||||||||||||
|
Chief Executive Officer
|
2008 | $ | 266,963 | $ | — | $ | 171,875 | $ | 215,000 | $ | 4,800 | $ | 658,638 | |||||||||||||||
|
Mark J. Miller
|
2009 | $ | 288,750 | $ | — | $ | 38,500 | $ | 210,603 | $ | — | $ | 537,853 | |||||||||||||||
|
Executive Vice
|
2008 | $ | 267,340 | $ | — | $ | 69,665 | $ | 215,000 | $ | — | $ | 552,005 | |||||||||||||||
|
President /Chief Financial Officer/Chief Operating Officer
|
||||||||||||||||||||||||||||
|
T. Wesley Elam
|
2009 | $ | 216,295 | $ | — | $ | 14,000 | $ | 110,250 | $ | — | $ | 340,545 | |||||||||||||||
|
Vice President of
|
2008 | $ | 207,551 | $ | — | $ | 29,165 | $ | 143,000 | $ | — | $ | 379,716 | |||||||||||||||
|
Operations and Project Management
|
||||||||||||||||||||||||||||
| (1) | The amounts shown in this column represent the dollar amount recognized for payroll reporting purposes for the year ended related to restricted stock awards granted in and prior to 2009 pursuant to our various share-based payment plans, and include amounts from awards. Assumptions used in the calculation of these amounts are included in Note 14 to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2009. | |
| (2) | The amount shown in this column for each named executive officer is the attributable performance-based bonus granted under the 2006 Incentive Compensation Plan. These amounts correspond to the year in which they were earned. | |
| (3) | The amounts shown in this column represent incidental expenses relating to maintaining an office for Mr. Hilliou separate from the company’s headquarters. |
During 2009, the Compensation Committee approved and the
executive officers were paid the salaries, incentive
compensation, and restricted stock awards reported in the above
table, which were determined to be at the low end of executive
compensation for equivalent positions for companies of similar
size and status.
11
Table of Contents
Employment
Agreements
In April 20, 2007, we entered into an employment agreement
with each of Mr.. Hilliou, Mr. Miller and Mr. Elam and
on July 17, 2007, the Company and Mr. Hilliou and
Mr. Miller amended their agreements. The term of each of
these agreements is one year, with automatic successive renewals
unless either we or the relevant executive provides notice of
termination at least 90 days prior to the end of the then
current term. The agreements set an initial annual base salary
of $250,000 for Mr. Hilliou, $250,000 for Mr. Miller
and $200,000 for Mr. Elam, in each case subject to increase
by our board of directors at the beginning of each calendar
year. In addition, Mr. Miller and Mr. Elam each are
eligible to receive an annual incentive bonus equal to up to
100% (200% for Mr. Hilliou) of his base salary subject to
the achievement of annual objectives established by our
compensation committee. In addition to the shares of restricted
stock previously granted to each executive, each executive may
receive additional grants as determined by our compensation
committee. The agreement further provides that we will maintain
a policy of term life insurance on each executive for the
benefit of beneficiaries designated by the executive. The amount
of such policy shall be determined by us, but shall not be less
than two years of the executive’s base compensation. In the
event of termination of any of these employment agreements upon
the death of the executive or by us because of illness or
incapacity of the executive that continues for 90 days, in
addition to all amounts owed through the date of termination, we
shall pay to the executive an amount equal to his prior
year’s annual bonus pro-rated through the date of
termination. In the event the agreement is terminated by us for
“cause”, or by the executive without “good
reason”, we shall only be obligated to pay the executive
all base salary and benefits accrued through the date of
termination and the executive shall forfeit any unvested shares
of restricted stock. In the event the agreement is terminated by
us without “cause” or by the executive for “good
reason”, in addition to amounts owed through the date of
termination, we shall:
| • | Continue to pay the executive’s base salary for a period of six months plus an additional one month of base salary for each year of employment (up to a maximum of 12 months base salary), | |
| • | Pay an annual bonus for the year of termination equal to the average annual bonus for the executive for the previous two years, pro-rated through the date of termination (subject to a minimum of 50%), and | |
| • | Continue, at our expense, all of the executive’s health, dental and other insurance benefits until the earlier of the end of the term or the date the executive becomes subsequently employed. |
For purposes of the employment agreements, “cause”
means (1) the executive’s material fraud, dishonesty,
willful misconduct, or willful and continuing failure in the
performance of his duties under the employment agreement;
(2) the executive’s breach of any material provision
of the employment agreement which has not been cured within
30 days following the notice thereof, or (3) the
commission by the executive of any felony criminal act or the
commission of any crime involving fraud, dishonesty or moral
corruptness, including denial or removal of the executive’s
licensing from any governmental gaming agency or licensing
authority. For purposes of the employment agreements “good
reason” means (1) our failure to comply with any
material provision of the employment agreement which has not
been cured within 30 days following the notice thereof, or
(2) our direction to the executive to do, perform, or omit
to perform any act, or the executive’s knowledge of such
acts or omissions performed by our other employees without
appropriate redress, which acts or omissions are known to be
fraudulent, illegal or could otherwise materially impact
negatively upon the executive’s personal and professional
reputation.
Change of
Control Provisions
Each of the employment agreements provides that upon a change of
control, the executive may terminate his employment agreement
only if the change of control materially affects his position
and compensation under the agreement. To the extent any
executive so terminates his agreement, or in the event the
executive is not retained under contract following a change of
control:
| • | We will pay to the executive a cash payment equal to the greater of (a) one year’s base salary or in the case of Mr. Hilliou two year’s base salary and (b) the remaining base salary due under the agreement; |
12
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| • | We will pay to the executive a cash payment equal to his average annual bonuses paid under his employment agreement for the three prior years (or the average of the annual bonuses paid to date, if the term of employment is less than three years); and | |
| • | All unvested shares or other stock-based grants awarded pursuant to our 2006 Incentive Compensation Plan or other benefit plan will accelerate and vest upon the date of the change of control. |
For purposes of the employment agreements, a “change of
control” means (1) a person, entity or group acquires
beneficial ownership of 50% or more of our then outstanding
voting securities, (2) individuals who constitute our board
as of April 17, 2007 and directors whose nominations are
approved by a majority of such incumbent board members cease to
constitute a majority of our board of directors, or
(3) approval by our stockholders of (A) a business
combination in which our shareholders prior to the transaction
do not own at least 50% of the combined voting power of the
voting securities of combined business and at least a majority
of our incumbent board comprises a majority of the board of the
combined business, (B) a liquidation or dissolution of our
company, or (C) a sale of all or substantially all of our
assets.
The following describes the amounts payable upon termination of
employment of the named executive officers as if such employment
terminated on December 31, 2009.
|
Accelerated |
||||||||||||||||
|
Continued |
Vesting of |
|||||||||||||||
|
Medical |
Restricted |
|||||||||||||||
|
Benefits |
Stock |
Total |
||||||||||||||
|
Employee
|
Payment | (1) | (2) | Payments | ||||||||||||
|
Andre M. Hilliou
|
||||||||||||||||
|
Death or Disability
|
$ | 720,302 | — | — | $ | 720,302 | ||||||||||
|
Without Cause or with Good Reason
|
$ | 469,052 | $ | 9,171 | — | $ | 478,223 | |||||||||
|
Change of control
|
$ | 758,201 | — | — | $ | 758,201 | ||||||||||
|
Mark J. Miller
|
||||||||||||||||
|
Death or Disability
|
$ | 431,552 | — | $ | 126,134 | $ | 557,686 | |||||||||
|
Without Cause or with Good Reason
|
$ | 455,618 | $ | 13,362 | $ | 126,134 | $ | 595,114 | ||||||||
|
Change of control
|
$ | 455,618 | — | $ | 126,134 | $ | 581,752 | |||||||||
|
T. Wesley Elam
|
||||||||||||||||
|
Death or Disability
|
$ | 99,625 | — | — | $ | 99,625 | ||||||||||
|
Without Cause or with Good Reason
|
$ | 306,625 | $ | 5,292 | — | $ | 311,917 | |||||||||
|
Change of control
|
$ | 343,150 | — | — | $ | 343,150 | ||||||||||
| (1) | Following a termination by us without cause or by the executive with good reason, we have agreed to provide him, his spouse and his dependents medical, dental and life insurance benefits for the term or until the executive is otherwise employed. The amounts in this column represent the estimated cost to us of those payments over a twelve month period. | |
| (2) | Represents the value of the unvested shares owned by the executive as of December 31, 2009, calculated by multiplying the number of shares by the closing price of our stock on that date of $3.44. These shares vested in February 2010. |
13
Table of Contents
Restricted
Stock
Upon stockholder approval of our 2006 Incentive Compensation
Plan in May 2006, we granted 275,000 shares of restricted
stock to Andre Hilliou which vests in four equal annual amounts
beginning on the grant date of May 31, 2006 and then in
January of the succeeding three years. We also granted 35,000
restricted shares to T. Wesley Elam, vesting in three equal
annual installments beginning in January 2007. In addition, in
March of 2007, we granted 110,000 shares of restricted
stock to Mark Miller which vests in three annual amounts
beginning on February 19, 2009. The following table sets
forth Outstanding Equity Awards at Fiscal Year-End, or
December 31, 2009, for our named executive officers.
OUTSTANDING
EQUITY AWARDS AT FISCAL YEAR-END FOR 2009
| Stock Awards | ||||||||
|
Market |
||||||||
|
Number of |
Value of |
|||||||
|
Shares or |
Shares or |
|||||||
|
Units of |
Units of |
|||||||
|
Stock that |
Stock that |
|||||||
|
have not |
have not |
|||||||
|
Name
|
Vested | Vested(1) | ||||||
|
Mark Miller
|
36,667 | (2) | $ | 126,134 | ||||
| (1) | Value based on closing price of our common stock on December 31, 2009 of $3.44. | |
| (2) | Restricted stock that vests February 19, 2010. |
2006
Incentive Compensation Plan
On May 29, 2006, our stockholders approved our 2006
Incentive Compensation Plan. The 2006 Incentive Compensation
Plan is administered by our compensation committee. In
consideration of their services, officers, directors, employees
and consultants of us or a related entity are eligible to
receive a variety of awards under the plan, including, incentive
stock options, nonqualified stock options, stock appreciation
rights, restricted stock, deferred stock, dividend equivalents,
bonus stock and performance awards. The total number of shares
issuable under the plan is 1,200,000. As of December 31,
2009, we had issued 1,114,000 shares of stock and
restricted stock under the plan to our executive officers and
directors.
Prior
Stock Option Plans
The Company’s ability to issue options under its earlier
plans expired on June 30, 2002, and all options granted
were fully vested prior to 2006. A summary of the status of Full
House’s stock option plan as of December 31, 2009 and
2008, and changes during the years then ended are presented
below:
| 2009 | 2008 | |||||||||||||||
|
Weighted-Average |
Weighted-Average |
|||||||||||||||
| Exercise | Exercise | |||||||||||||||
| Options | Price | Options | Price | |||||||||||||
|
Outstanding at beginning of year
|
— | — | 75,000 | $ | 2.25 | |||||||||||
|
Granted
|
— | — | — | — | ||||||||||||
|
Exercised
|
— | — | — | — | ||||||||||||
|
Forfeited
|
— | — | 75,000 | 2.25 | ||||||||||||
|
Outstanding at end of year
|
— | — | — | — | ||||||||||||
|
Exercisable at year-end
|
— | — | — | — | ||||||||||||
Certain
Relationships and Related Transactions
In September 2006, we entered into a consulting agreement with
Mr. Iacocca, one of our directors, under the terms of which
Mr. Iacocca would provide consulting services to us related
to marketing and advertising for a period
14
Table of Contents
of three years. In consideration of these services, we granted
to Mr. Iacocca 300,000 restricted shares of our common
stock valued at $1,119,000 based on the closing price on the
grant date with no discount, which vested in equal amounts over
the three year term of the agreement. The grant to
Mr. Iacocca was initially recorded as deferred
compensation, reported as a reduction of stockholder’s
equity and was subsequently amortized into compensation expense
on a straight-line basis as services are provided over the three
year vesting period.
PROPOSAL TWO:
RATIFICATION
OF INDEPENDENT AUDITORS
Piercy Bowler Taylor & Kern was retained as our
independent auditors for the year ending December 31, 2009.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE
RATIFICATION OF PIERCY BOWLER TAYLOR & KERN AS OUR
INDEPENDENT AUDITORS FOR THE YEAR ENDING DECEMBER 31, 2010.
INDEPENDENT
AUDITOR MATTERS
Independent
Auditors
Piercy Bowler Taylor & Kern audited Full House’s
annual consolidated financial statements for the years ended
December 31, 2009 and 2008. Representatives of Piercy
Bowler Taylor & Kern are not expected to attend the
meeting.
During fiscal years 2009 and 2008, Full House retained Piercy
Bowler Taylor & Kern to provide services in the
following categories and amounts:
Audit
Fees
Fees in connection with the audit of our financial statements
and the reviews of the financial statements included in each of
our Quarterly Reports on
Form 10-Q
was $165,553 and $181,000 for 2009 and 2008, respectively.
Audit
Related Fees
Audit related fees were $12,296 and $21,108 for 2009 and 2008,
respectively. Fees in 2009 and 2008 relate primarily to Nevada
Gaming Commission regulatory reporting and fees in 2008 include
internal control reviews required by Sarbanes-Oxley.
Tax
Fees
We did not engage Piercy Bowler Taylor & Kern for any
tax related professional services for the fiscal year ended
December 31, 2009 or 2008.
All Other
Fees
Other services fees were $0 for the fiscal year ended
December 31, 2009 and $15,600 for December 31, 2008.
Pre-Approval
Policies and Procedures
The audit committee’s policy is to review and pre-approve
any engagement of our independent auditor to provide any audit
or permissible non-audit service to us. All of the services
provided by our independent auditors were approved by our audit
committee and the audit committee believes that the provision of
these services is consistent with maintaining the
accountants’ independence.
15
Table of Contents
Audit
Committee Report
The following report of the Audit Committee does not
constitute soliciting material and should not be deemed filed or
incorporated by reference into any of Full House’s filings
under the Securities Act of 1933, as amended, or the Securities
Exchange Act of 1934, as amended, except to the extent that we
specifically incorporate such report by reference.
The Audit Committee oversees Full House’s financial
reporting process. Management has the primary responsibility for
the financial statements and the financial reporting process
including the system of internal controls.
In fulfilling our oversight responsibilities, we reviewed and
discussed the financial statements with management. In addition,
we discussed with the independent auditors matters deemed
significant by the independent auditors, including those matters
required to be discussed pursuant to Statement on Auditing
Standards No. 61 (Communication with Audit Committees), as
amended. The audit committee met at the end of each quarter with
management and the independent auditors where we reviewed and
approved the quarterly and annual filings.
The independent auditors also provided us with the written
disclosures and the letter required by Independence Standards
Board Standard No. 1 (Independence Discussions with Audit
Committees). We discussed with the independent auditors matters
relating to their independence and considered whether their
provision of non-audit services is compatible with maintaining
their independence.
Based on our review with management and the independent auditors
of Full House’s audited consolidated financial statements
and the independent auditors’ report on such financial
statements, and based on the discussions and written disclosures
described above and our business judgment, we recommended that
the audited consolidated financial statements be included in
Full House’s Annual Report on
Form 10-K
for the year ended December 31, 2009 for filing with the
SEC.
Kathleen M. Caracciolo
Kenneth R. Adams
Carl G. Braunlich
16
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GENERAL
INFORMATION
Other Matters. Our Board of Directors does not
intend to present any matter for action at the annual meeting
other than the matters described in this proxy statement. If any
other matters properly come before the annual meeting, it is
intended that the holders of the proxies hereby solicited will
act in respect to such matters in accordance with their best
judgment.
Information Concerning Shareholder Proposals and Director
Nominations. Any stockholder satisfying the
Securities and Exchange Commission requirements and wishing to
submit a proposal to be included in the proxy statement for the
2011 Annual Meeting of Stockholders should submit the proposal
in writing to the Corporate Secretary, Full House Resorts, Inc.,
4670 South Fort Apache Road, Suite 190, Las Vegas
Nevada 89147. We must receive a proposal by December 22,
2010 in order to consider it for inclusion in the proxy
statement for the 2011 Annual Meeting of Stockholders.
Stockholders who wish to present director nominations or any
other business at the 2011 Annual Meeting of Stockholders are
required to notify the Corporate Secretary of their intent no
later than December 22, 2010. We retain discretion to vote
proxies we receive with respect to proposals received after
March 7, 2011.
By Order of the Board of Directors,
Barth F. Aaron
Secretary
Las Vegas, Nevada
April 19, 2010
17
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PROXY
FULL HOUSE RESORTS, INC.
FULL HOUSE RESORTS, INC.
This Proxy is Solicited on behalf of the Board of Directors
KNOWN ALL MEN BY THESE PRESENTS, that the undersigned, a stockholder in Full House Resorts,
Inc., a Delaware corporation (“Full House”), hereby appoints Andre M. Hilliou and Carl G.
Braunlich, and each of them acting jointly, if more than one be present, to be the true and lawful
attorneys and proxies for the undersigned, to vote all shares of Full House as the undersigned is
entitled to vote, with all powers the undersigned would possess if personally present, at the
annual meeting of stockholders of Full House to be held on May 19, 2010 or any adjournment thereof,
on the following matters and, in their discretion, on such other matters as may properly come
before the meeting. This proxy will be voted in the manner directed herein by the undersigned
stockholder. If no direction is made, this proxy will be voted FOR the following Proposals.
ANNUAL MEETING OF STOCKHOLDERS OF
FULL HOUSE RESORTS, INC.
FULL HOUSE RESORTS, INC.
MAY 19, 2010
PROPOSAL ONE: Election of Directors.
o FOR all nominees listed below
|
o WITHHOLD AUTHORITY to vote for all nominees listed below |
A VOTE FOR ALL NOMINEES IS RECOMMENDED BY THE BOARD OF DIRECTORS.
NOMINEES ARE:
NOMINEES ARE:
| Kenneth R. Adams | Carl G. Braunlich | |||
| Kathleen M. Caracciolo | Lee A. Iacocca | |||
| Andre M. Hilliou | Mark J. Miller |
| * | To withhold authority to vote for any individual nominee, print that nominee’s name on the line provided below: |
Exceptions:
PROPOSAL TWO: Ratification of Piercy Bowler Taylor & Kern as independent auditors of Full House for 2010.
A VOTE FOR RATIFICATION IS RECOMMENDED BY THE BOARD OF DIRECTORS.
o FOR ratification
|
o AGAINST ratification |
OTHER MATTERS: Granting the proxies discretionary authority to vote upon any other unforeseen
matters which are properly brought before the meeting as management may recommend.
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The undersigned hereby revokes any and all other proxies heretofore given by the undersigned
and hereby ratifies all that the above-named proxies may do at such meeting or any adjournments
thereof, by virtue hereof.
| , 2010 | ||||
| Dated | ||||
| Signature(s) | ||||
Note: When shares are held by joint tenants, both should sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as such and also state the name of the
stockholder of record for whom you act. If a corporation, please sign in full corporate name by
President or other authorized officer.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY USING THE ENCLOSED ENVELOPE.