SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
[ ] Confidential, For Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
FULL HOUSE RESORTS, INC.
(Name of Registrant as Specified in Its Charter)
FULL HOUSE RESORTS, INC.
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on the table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of 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 transaction:
(5) Total fee paid:
[ ] 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:
<PAGE>
FULL HOUSE RESORTS, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 1, 2000
To the Stockholders
of Full House Resorts, Inc.:
NOTICE IS HEREBY GIVEN that the 2000 Annual Meeting of Stockholders of
Full House Resorts, Inc., ("Full House"), will be held at 1:00 p.m., local time,
on June 1, 2000, at Del Mar Country Club, 6001 Clubhouse Drive, Rancho Santa Fe,
California, 92067, for the following purposes:
1. To elect five (5) directors to the Board of Directors of Full
House to hold office until the next Annual Meeting of
Stockholders of Full House following their election or until
their successors are duly elected and qualified;
2. To ratify the appointment of Deloitte & Touche LLP as the
Company's independent accountants for 2000; and
3. To transact such other business as may properly come before
the Annual Meeting and any adjournments or postponements
thereof.
The Board of Directors has fixed the close of business on April 28,
2000 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.
ALL STOCKHOLDERS ARE INVITED TO ATTEND THE MEETING IN PERSON. WHETHER
OR NOT YOU EXPECT TO BE PRESENT, ALL STOCKHOLDERS ARE URGED TO PROMPTLY EXECUTE
AND RETURN THE ENCLOSED PROXY CARD. STOCKHOLDERS WHO EXECUTE A PROXY CARD MAY
NEVERTHELESS ATTEND THE MEETING, REVOKE THEIR PROXY AND VOTE THEIR SHARES IN
PERSON. PLEASE MARK, SIGN AND DATE THE ENCLOSED PROXY AND RETURN IT IN THE
ENCLOSED POSTAGE PAID, PRE-ADDRESSED ENVELOPE.
By Order of the Board of Directors,
/s/ Megan G. McIntosh
Megan G. McIntosh
Las Vegas, Nevada Secretary
May 5, 2000
<PAGE>
2000 ANNUAL MEETING OF STOCKHOLDERS
OF
FULL HOUSE RESORTS, INC.
-----------------------
PROXY STATEMENT
-----------------------
This Proxy Statement is furnished in connection with the solicitation
by the Board of Directors of Full House Resorts, Inc. ("Full House" or "the
Company"), of proxies from the holders of the Common Stock of Full House, par
value $.0001 per share (the "Common Stock"), for use at the 2000 Annual Meeting
of Stockholders of Full House to be held on June 1, 2000, or at any
adjournment(s) or postponement(s) thereof (the "Annual Meeting"), pursuant to
the enclosed Notice of Annual Meeting.
The approximate date that this Proxy Statement and the enclosed proxy
are first being sent to stockholders is May 5, 2000. Stockholders should review
the information provided herein in conjunction with the 1999 Annual Report on
Form 10-KSB of Full House, a copy of which report accompanies this Proxy
Statement.
The Company's principal executive offices are located at 2300 W. Sahara
Ave., Las Vegas, Nevada 89102, and its telephone number is (702) 221-7800.
INFORMATION CONCERNING PROXY
The enclosed proxy is solicited on behalf of the Board of Directors of
Full House. The giving of a proxy does not preclude the right to vote in person
should any stockholder giving the proxy so desire. Stockholders have an
unconditional right to revoke their proxy at any time prior to the exercise
thereof, either in person at the Annual Meeting or by filing with the Secretary
of the Company a written revocation or duly executed proxy bearing a later date;
however, no such revocation will be effective until written notice of the
revocation is received by Full House at or prior to the Annual Meeting.
Unless contrary instructions are indicated on the enclosed proxy, all
shares represented by valid proxies received pursuant to this solicitation (and
which have not been revoked in accordance with the procedures set forth above)
will be voted in favor of the election of the five nominees for director named
below; in favor of the ratification of the appointment of Deloitte & Touche LLP;
and with discretion on any other matters as may properly come before the Annual
Meeting. In the event a stockholder specifies a different choice by means of the
enclosed proxy, his shares will be voted in accordance with the specification so
made.
<PAGE>
The cost of preparing, assembling and mailing this Proxy Statement, the
Notice of Annual Meeting of Stockholders and the enclosed Proxy is to be borne
by the Company. In addition to soliciting proxies by mail, directors and
employees of the Company, without additional compensation, may solicit proxies
personally and / or by other appropriate means. It is anticipated that banks,
brokers and other custodians, nominees and fiduciaries will forward proxy
soliciting material to their principals and that the Company will reimburse such
persons for their expenses in so doing
OUTSTANDING VOTING SECURITIES AND VOTING RIGHTSVOTING SECURITIES
AND VOTING RIGHTSSECURITIES AND VOTING RIGHTS
The Board of Directors has set the close of business on April 28, 2000
as the record date (the "Record Date") for determining stockholders entitled to
notice of and to vote at the Annual Meeting. As of the Record Date, there were
10,340,380 shares of Common Stock issued and outstanding, each of which is
entitled to be voted at the Annual Meeting. Each share of Common Stock is
entitled to one vote on each matter submitted to stockholders for approval at
the Annual Meeting. In addition, there were 700,000 shares of the Series 1992-1
Preferred Stock outstanding (the "Preferred Stock"), each of which is entitled
to vote together as a group with the Common Stock, on all matters coming before
the Annual Meeting.
The attendance, in person or by proxy, of the holders of 40% of the
aggregate of the outstanding shares of Common Stock and Preferred Stock entitled
to vote at the Annual Meeting is necessary to constitute a quorum. Directors are
elected by a plurality vote of the aggregate of the shares of Common Stock and
Preferred Stock represented in person or by proxy at the Annual Meeting. The
affirmative vote of the majority of the aggregate of the shares of Common Stock
and Preferred Stock represented in person or by proxy at the Annual Meeting will
be required for the approval of any other matters that may be submitted to a
vote of the stockholders, unless the matter is one for which a greater vote is
required by law or by the Certificate of Incorporation or Bylaws of the Company.
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. For each other item to be acted upon at
the meeting, a properly executed proxy marked "ABSTAIN" will not be voted on
such matters, although it will be counted for purposes of determining whether
there is a quorum. Accordingly, an abstention will have the effect of a vote
AGAINST the matter in question, whereas shares not voted due to the failure of a
broker to exercise his discretionary authority are not tabulated for purposes of
determining whether a proposal has been approved.
2
<PAGE>
SECURITY OWNERSHIP
The following table sets forth, as of April 14, 2000, information with
respect to the beneficial ownership of the Common Stock by (i) each person known
by Full House to beneficially own more than 5% of the outstanding shares of
Common Stock, (ii) each director of Full House, (iii) the executive officers of
Full House named in the Summary Compensation Table, and (iv) all directors and
executive officers of Full House as a group.
NAME AND ADDRESS SHARES OF COMMON PERCENTAGE OF
OF BENEFICIAL OWNER STOCK OWNED(1) COMMON STOCK
- --------------------------- ---------------------- OUTSTANDING(2)
--------------
William P. McComas (3) 1,396,537 (4)(5) 13.2%
James C. Gilstrap (3) 20,500 (5) *
Lee A. Iacocca (3) 1,381,471 (4)(5)(7) 13.0%
LKL Family Limited Partnership 1,056,471 10.2%
10900 Wilshire Boulevard., Suite 520
Los Angeles, California 90024
Ronald K. Richey (3) 322,200 (5) 3.0%
Gregg R. Giuffria (3) 256,666 (6) 2.4%
Michael P. Shaunnessy (3) 88,000 (6) *
Allen E. Paulson 2,842,800 (4)(8) 27.5%
6001 Clubhouse Drive
P. O. Box 9660
Rancho Santa Fe, California 92067
All Officers and Directors 3,475,374 (9) 30.2%
as a Group (7 Persons)
* Less than 1%
(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.
(2) Based on 10,340,380 shares of Common Stock outstanding. Any securities
outstanding which are subject to presently exercisable options or
warrants 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.
3
<PAGE>
(3) The address for Messrs., McComas, Gilstrap, Iacocca, Richey, Giuffria
and Shaunnessy is c/o Full House Resorts, 2300 W. Sahara, Suite 450,
Las Vegas, NV. 89102
(4) Pursuant to an Option Agreement dated December 29, 1995, Messrs.
McComas, Iacocca and Paulson have granted an option to GTECH
Corporation, which expires December 29, 2000, to purchase their shares
of Common Stock should they propose to transfer the same.
(5) Includes options to purchase 250,000, 20,000, 325,000 and 230,000
shares of Common Stock for Messrs. McComas, Gilstrap, Iacocca and
Richey, respectively.
(6) Includes options to purchase 256,666 and 88,000 shares of Common Stock
for Messrs. Giuffria and Shaunnessy, respectively.
(7) Includes 1,056,471 shares held by the LKL Family Limited Partnership of
which Lee A. Iacocca is the General Partner.
(8) Includes 2,000,636 shares held by the Allen E. Paulson Living Trust of
which Mr. Paulson is the trustee.
(9) Includes 1,179,666 shares of Common Stock which may be purchased upon
exercise of currently exercisable options.
4
<PAGE>
PROPOSAL 1
ELECTION OF DIRECTORS; NOMINEES
The Bylaws of Full House provide that the number of directors
constituting the Board of Directors shall be fixed from time to time by the
Board of Directors. The Board of Directors has fixed at five the number of
directors that will constitute the Board for the ensuing year.
Each Director elected at the Annual Meeting will serve for a term
expiring at the 2001 Annual Meeting of Stockholders of Full House or when his
successor has been duly elected and qualified. Each of the current members of
the Board of Directors, consisting of William P. McComas, James C. Gilstrap, Lee
A. Iacocca, Ronald K. Richey, and Gregg R. Giuffria has been nominated by the
Company to be re-elected as a Director at the Annual Meeting.
The Board of Directors has no reason to believe that any of the
nominees will refuse to act or be unable to accept election; however, in the
event that any of the nominees is unable to accept election or if any other
unforeseen contingencies should arise, each proxy that does not direct otherwise
will be voted for the remaining nominees, if any, and for such other person(s)
as may be designated by the Board of Directors.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION
OF ALL THE DIRECTOR NOMINEES LISTED IN PROPOSAL 1 ABOVE.
DIRECTORS AND EXECUTIVE OFFICERS
The names, ages and positions of all directors and executive officers
of Full House as of April 14, 2000 are listed below, followed by a brief account
of their business experience during the past five years.
<TABLE>
<CAPTION>
NAME AGE POSITIONS
------------ ----------------- -----------------------------------------------
<S> <C> <C>
William P. McComas 73 Chairman and Chief Executive Officer
James C. Gilstrap 64 Director
Lee A. Iacocca 75 Director
Ronald K. Richey 73 Director
Gregg R. Giuffria 48 Director, President and Chief Operating Officer
Michael P. Shaunnessy 46 Executive Vice President - Finance
Megan G. McIntosh 44 Secretary
</TABLE>
5
<PAGE>
WILLIAM P. MCCOMAS served as interim President of Full House Resorts
between October 7, 1997 and April 9, 1998 and became Chairman of the Board and
Chief Executive Officer on March 5, 1998. Mr. McComas has been a Director of the
Company since November 1992. He has been President of McComas Properties, Inc.,
a California real estate development company since January 1984. Mr. McComas and
companies controlled by him have owned or developed several hotels and resorts,
including Marina Bay Resort, Fort Lauderdale, Florida; Ocean Colony Hotel and
Resort, Half Moon Bay, California; Residence Inn by Marriott, Somers Point, New
Jersey; and five Holiday Inns located in Des Moines, Iowa; San Angelo, Texas;
Suffern, New York; Niagara Falls, New York; and Fort Myers, Florida.
JAMES C. GILSTRAP has been a Director of the Company since March 10,
1998. He has been Co-chairman of the Board of Directors of CardioDynamics
International Corporation since June 1996 and served as Chairman of the Board
from February 1995 to June 1996. Mr. Gilstrap has for more than the past five
years managed a portfolio of personal investments. He is a retired Partner of
Jefferies & Company, where he served as Senior Executive Vice President, and a
Member of the Executive Committee. He is a past President of the Dallas
Securities Dealers and served as a member of the Board of Governors of the
National Association of Securities Dealers. Mr. Gilstrap founded the 1,700
member PGA West Members Association, of which he is President. Mr. Gilstrap is
also an accomplished horseman, competing in major polo tournaments throughout
the world and representing the United States on winning teams in open
competition against the best players in the world.
LEE A. IACOCCA has been a Director of the Company since April 8, 1998.
In March 1998, he assumed the role of Acting Chairman of Koo Koo Roo, Inc.,
which operates 52 restaurants, including Hamburger Hamlet restaurants and the
Arrosto Coffee Company. 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.
RONALD K. RICHEY has been a Director of the Company since April 9,
1996. He was Chairman of Torchmark Corporation, an insurance holding company
from August 1986 until his retirement from Torchmark in March 1998. Mr. Richey
was Chief Executive Officer of that company from December 1984 until his
retirement. From December 1984 through August 1986, he was President of
Torchmark Corporation. Mr. Richey is an attorney and a member of the Oklahoma
Bar Association.
GREGG R. GIUFFRIA has been a Director of the Company since September
24, 1998. He has been serving Full House as President since April 10, 1998 and
was Vice President of Corporate
6
<PAGE>
Development since December 1997. Mr. Giuffria owned American Laser Cutting,
Inc., a state-of-the-art industrial laser facility in Las Vegas which
specializes in gaming manufacturing uses, and was an independent gaming
consultant from 1996 to 1997. He headed Corporate Development for Casino Data
Systems, Inc. from 1995 to 1996, with responsibilities for design and
development of innovative technology in new casino games. Mr. Giuffria was
President of American Leisure Technologies from 1992 to 1995, after 20 years in
the music, film and publishing business. In January 1999, the Company was
advised by the U.S. Securities and Exchange Commission ("SEC") that it is
conducting an inquiry into trading of the Company's stock by Mr. Giuffria for a
period beginning prior to his association with the Company and continuing for
several weeks after he began providing consulting services to the Company. The
SEC has admonished that this inquiry is not to be construed as an indication
that any violations of federal securities laws have occurred. The Company and
Mr. Giuffria voluntarily provided all information requested, and are cooperating
fully with the SEC.
MICHAEL P. SHAUNNESSY joined the Company on July 1, 1998 as Executive
Vice President -Finance and Chief Financial Officer. Mr. Shaunnessy has over 15
years experience in the gaming industry. From 1995 to 1998 he was Vice President
- - Finance and Chief Accounting Officer of Primadonna Resorts, Inc. He was with
Aztar Corporation from 1983 to 1995, serving in senior financial positions at
properties in New Jersey and Nevada. Mr. Shaunnessy received his Masters in
Accountancy from Northern Illinois University in DeKalb, Illinois.
MEGAN G. MCINTOSH has been employed by Full House since December 1,
1994 and has been the Secretary of Full House since November 20, 1995. From
April 1991 until she joined Full House, Ms. McIntosh was an administrative
assistant for a civil engineering firm located in California.
The officers of Full House are elected annually and serve at the
discretion of the Board of Directors.
COMPENSATION OF DIRECTORS
Directors who are not employees of the Company may receive a fee for
attendance at meetings of the Board of Directors, and are entitled to
reimbursement for reasonable expenses of such attendance. No fees for attendance
at meetings have been paid to date.
All non-employee directors are eligible to participate in the Company's
1992 Non-employee Director Stock Plan. However, no non-employee director is
eligible to receive options if at the time such option would otherwise be
granted, such non-employee director is directly or indirectly the beneficial
owner of more than ten percent of any class of equity security of the Company
which is registered pursuant to the Securities and Exchange Act of 1934, as
amended. Options to purchase10,000 shares of Common Stock are granted pursuant
to the Plan immediately following each annual meeting of the Company's
stockholders at an exercise price equal to the Market Price at the date of
grant. The Market Price is the average of the "Fair Market Value " (as such
term is
7
<PAGE>
defined in the Plan) of the Common Stock for all trading days during the thirty
calendar days preceding the date on which the option is granted. Each option is
exercisable for a five-year period commencing six months after the date of
grant, and each such option expires five years and six months after the date of
grant.
THE BOARD AND ITS COMMITTEES
The Board has an Audit Committee and an Incentive Plan Committee. The
full Board administers the compensation program for executive officers.
The Audit Committee is comprised of Messrs. Richey, McComas and
Gilstrap, who serves as its chairman. This committee is responsible for
reviewing the audit scope, timing, and fee arrangements with the independent
public accountants; reviewing the audit findings and other information submitted
by such accountants; and presenting such information to the full Board.
The Incentive Plan Committee is comprised of Messrs. Iacocca and
Richey, who serves as its chairman. This committee is responsible recommending
awards under the 1992 Employee Incentive Plan.
During 1999, the Board of Directors held four meetings. The Audit
Committee held one meeting, and there were no meetings of the Incentive Plan
Committee. No Director attended less than 75% of the meetings of the Board and
the committees of which he was a member.
COMPLIANCE WITH SECTION 16(A) OF
THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the
directors and executive officers of Full House, and persons who own more than
ten percent of the outstanding Common Stock, to file with the Securities and
Exchange Commission (the "SEC") initial reports of ownership and reports of
changes in ownership of Common Stock. Such persons are required by SEC
regulation to furnish Full House with copies of all such reports they file.
To the knowledge of Full House, based solely on a review of the copies
of such reports furnished to Full House and written representations that no
other reports were required, we believe that all required Section 16(a) reports
were timely filed in 1999 except for the following: William McComas filed a
report in July with respect to June 1999 transactions which report was 11 days
late and further filed a report in January 2000 which was one day late and
included two transactions from November 1999; Allen E. Paulson filed a report in
August 1999 which was 10 days late and included transactions from June and
further filed a report in October 1999 which was three days late and included
transactions from August 1999.
8
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth the annual compensation paid or accrued
by the Company for services rendered during each year presented, for the Chief
Executive, Operating, and Financial Officers of the Company (collectively,
"Named Executive Officers"), for services in all capacities to the Company and
its subsidiaries. No other executive officer received over $100,000 in annual
salary and bonus in 1999.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
LONG-TERM
COMPENSATION
------------
ANNUAL COMPENSATION NUMBER OF
OTHER SECURITIES
NAME ANNUAL UNDERLYING
PRINCIPAL POSITION YEAR SALARY COMPENSATION OPTIONS
------------------ ---- ------ ------------ -------
<S> <C> <C> <C> <C>
William P. McComas, Chairman 1999 $250,000 -0- -0-
and Chief Executive Officer 1998 181,193 -0- 250,000(1)
1997 -0- -0- 250,000(1)
Gregg R. Giuffria, President 1999 $250,000 -0- -0-
and Chief Operating Officer 1998 153,458 -0- 800,000
1997 -0- -0- -0-
Michael P. Shaunnessy, Executive 1999 $200,000 -0- -0-
V.P. Chief Financial Officer 1998 100,000 -0- 176,000
1997 -0- -0- -0-
<FN>
(1) Represents a re-pricing in June 1998, of a grant originally issued in March 1997
</FN>
</TABLE>
EMPLOYMENT ARRANGEMENTS
The Company and Gregg R. Giuffria have an employment arrangement
providing for Mr. Giuffria's employment as President and Chief Operating
Officer, at a base salary of $250,000 per year. Mr. Giuffria was also granted,
in connection with his service to the Company, options to purchase a total of
800,000 shares of the Company's Common Stock, 163,333 of which had vested as of
December 31, 1999.
9
<PAGE>
STOCK OPTIONS
OPTION GRANTS IN LAST FISCAL YEAR
The Company did not grant any options to purchase Common Stock to the
Named Executive Officers during 1999.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUES
The following table sets forth certain information concerning the
fiscal year-end value of the unexercised stock options held by the Named
Executive Officers. No options were exercised by such officers in 1999.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
SHARES ACQUIRED VALUE OPTIONS AT 1999 FISCAL IN-THE-MONEY OPTIONS AT
NAME ON EXERCISE REALIZED YEAR END 1999 FISCAL YEAR-END(1)
- --------------------- ------------------- -------- ---------------------------------------- ---------------------------
EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
William P. McComas -0- -0- 200,000 50,000 $ -0- $ -0-
Gregg R. Giuffria -0- -0- 163,334 636,666 -0- -0-
Michael P. Shaunnessy -0- -0- 88,000 88,000 -0- -0-
<FN>
(1) Based upon the market value of the underlying securities at December 31, 1999 of $1.25, minus the exercise
price of "in-the-money" options.
</FN>
</TABLE>
REPORT ON EXECUTIVE COMPENSATION
During 1999, the Board of Directors of Full House administered the
compensation program for executive officers.
It is the philosophy of the Board of Directors that compensation of
executive officers should be closely aligned with the financial performance of
Full House. Therefore, benefits are provided to management through stock option
incentives and bonuses which are generally consistent with the goal of closely
coordinating the rewards to management with the maximization of stockholder
return. The compensation of William P. McComas, Chief Executive Officer, Gregg
R. Giuffria, President and Chief Operating Officer, and Michael P. Shaunnessy,
Executive Vice President - Finance, reflects this policy. During 1999, there
were no bonuses awarded, options granted, or raises given to any of the Named
Executive Officers.
In reviewing the performance of Full House, consideration is given to
revenues and earnings and an evaluation is made of strategic planning and the
Company's progress in that regard. Also
10
<PAGE>
taken into consideration are external economic factors that affect results of
operations. An attempt is also made to maintain compensation within the market
range. Although review of individual performance is primarily tied to the
performance of the Company, it is also, to a lesser extent, subjective.
Section 162(m) of the Internal Revenue Code, enacted in 1993, generally
disallows a tax deduction to publicly held companies for compensation exceeding
$1 million paid to certain of the corporation's executive officers. The
compensation paid to the Company's executive officers in 1999 did not exceed the
$1 million limit per officer, nor is it expected that the compensation to be
paid to the Company's executive officers in 2000 will exceed that limit.
Although it is possible that the $1 million limit could be exceeded as a result
of awards under the Company's 1992 Incentive Plan, the Board intends to monitor
such grants in an attempt to ensure that this does not occur. Because it is very
unlikely that the cash compensation payable to any of the Company's executive
officers in the foreseeable future will approach the $1 million limit, the Board
has decided at this time not to take any other action to limit or restructure
the elements of cash compensation payable to the Company's executive officers.
The Compensation Committee will reconsider this decision should the individual
compensation of any executive officer ever approach the $1 million level.
COMPENSATION OF THE CHIEF EXECUTIVE OFFICER
Mr. McComas became the Chief Executive Officer on March 5, 1998 after
serving as interim President of the Company since October 7, 1997. The Board
considered the necessary level of involvement in the day to day management of
the strategic affairs of the Company that it expected, and reviewed comparable
compensation levels in the gaming industry. Mr. McComas receives a base
compensation of $250,000 per year. In furtherance of its overall compensation
philosophy, the Board decided to adjust the exercise price for options held by
Mr. McComas. In March 1997, in his capacity as a director of the Company, Mr.
McComas was granted 250,000 options at the then current market price of $3.69
per share. In June 1998, the Board determined to adjust the exercise price to
the then current market price of $2.25 per share.
11
<PAGE>
PERFORMANCE GRAPH
The following line-graph presentation compares cumulative stockholder
returns on Full House's Common Stock since December 31, 1994, with the NASDAQ
Stock Market index (U.S. companies) and a peer index consisting of companies
included in the NASDAQ system engaged in the gaming industry (sic 7010-7019).
The following company was deleted from last year's peer index due to its
acquisition by another company: Lady Luck Gaming. The 1999 self-determined peer
index companies are:
Butler National Corp. Florida Gaming Corp.
Dover Downs Entertainment Hollywood Casino Corp
Europa Cruise Lines Presidents Casinos
[GRAPH OMITTED]
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Legend
SYMBOL CRSP Total Returns Index for: 12/1994 12/1995 12/1996 12/1997 12/1998 12/1999
- ------ ----------------------------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
FULL HOUSE RESORTS, INC. 100.0 52.4 60.7 40.5 42.9 23.8
Nasdaq Stock Market (US Companies) 100.0 141.3 173.9 213.1 300.4 566.0
Self-Determined Peer Group 100.0 48.6 36.3 27.3 19.4 39.2
<FN>
Companies in the Self-Determined Peer Group
BUTLER NATIONAL CORP DOVER DOWNS ENTERTAINMENT INC
EUROPA CRUISES CORP FLORIDA GAMING CORP
HOLLYWOOD CASINO CORP PRESIDENT CASINOS INC.
NOTES:
A. The lines represent monthly index levels derived from compounded daily returns that include all dividends.
B. The indexes are reweighted daily, using the market capitalization on the previous trading day.
C. If the monthly interval, based on the fiscal year-end, is not a trading day, the preceding trading days is used.
D. The index level for all series was set to $100.0 on 12/30/1994.
</FN>
</TABLE>
12
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On September 10, 1998, the Company and Allen E. Paulson formed a
limited liability company for the purpose of developing and owning a Hard Rock
Hotel & Casino in Biloxi, Mississippi. The Company contributed its rights to
various agreements with Hard Rock Cafe International ("Hard Rock"), and Mr.
Paulson contributed a gaming vessel and its related equipment (the former
Treasure Bay barge in Tunica, Mississippi). Each member received a 50% interest
for its contribution.
The agreements with Hard Rock provide for the exclusive right to
develop a Hard Rock themed gaming facility in the defined territory in exchange
for payment of a territory fee, and continuing fees based on the gaming and
hotel revenues generated by the project. The contributed gaming vessel will
provide the basis for the development of the complex.
The Hard Rock - Biloxi, as currently envisioned, is expected to cost
between $250 and $300 million, and the Company is exploring various financing
alternatives. Substantial additional financing will be required for the Company
to effect its business strategy, and there can be no assurance that the Company
will be able to obtain such financing on acceptable terms, or at all.
The Company believes that the terms of the transaction with Mr. Paulson
were as favorable to Full House as would have bee available from unrelated
parties.
13
<PAGE>
PROPOSAL 2
RATIFICATION OF APPOINTMENT
OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors of Full House recommends that the stockholders
ratify the appointment of Deloitte & Touche LLP, as the independent accountants
for the Company for 2000.
Representatives of Deloitte & Touche LLP are expected to appear at the
Annual Meeting to be available to answer appropriate questions from
stockholders. If the proposal is not approved, the Board of Directors will
reconsider the appointment.
THE BOARD RECOMMENDS A VOTE "FOR" APPROVAL OF PROPOSAL 2.
OTHER BUSINESS
The Board knows of no other business to be brought before the Annual
Meeting. If, however, any other business should properly come before the Annual
Meeting, the persons named in the accompanying proxy will, consistent with
applicable laws, vote proxies as in their discretion they may deem appropriate,
unless they are directed by a proxy to do otherwise.
INFORMATION CONCERNING STOCKHOLDER PROPOSALS
Pursuant to Rule 14a-8 promulgated by the Securities and Exchange
Commission, a stockholder intending to present a proposal to be included in the
proxy statement of Full House for the 2001 Annual Meeting of Stockholders must
deliver a proposal in writing to the principal executive offices of Full House
no later than January 8, 2001. Pursuant to Rule 14A-4(c)(1) of the federal proxy
rules, the holders of proxies shall have discretionary authority to vote with
respect to any matter that a stockholder desires to bring before the annual
meeting that is not the subject of a proposal timely submitted for inclusion in
the Proxy Statement, unless written notice of said business is received no later
than March 16, 2001.
14
<PAGE>
FULL HOUSE RESORTS, INC.
2300 W. SAHARA AVE.
SUITE 450, BOX 23
LAS VEGAS, NV 89102
THIS PROXY IS SOLICITED ON BEHALF OF THE
COMPANY'S BOARD OF DIRECTORS
The undersigned holder of Common Stock of Full House Resorts, Inc., a
Delaware corporation ("Full House"), hereby appoints William P. McComas and
Ronald K. Richey, and each of them, as proxies for the undersigned, each with
full power of substitution, for and in the name of the undersigned to act for
the undersigned and to vote, as designated on the reverse, all of the shares of
stock of Full House that the undersigned is entitled to vote at the 2000 Annual
Meeting of Stockholders of Full House to be held on June 1, 2000 at Del Mar
Country Club, 6001 Clubhouse Drive, Rancho Santa Fe, California 92067, at 1:00
p.m., local time, and at any adjournment(s) or postponement(s) thereof.
(SEE REVERSE SIDE)
<PAGE>
PLEASE DETACH AND MAIL IN THE ENVELOPE PROVIDED
A [X] PLEASE MARK YOUR
VOTES AS IN THIS
EXAMPLE
VOTE FOR all nominees
listed below, except vote VOTE WITHHELD
withheld from the following FROM
nominees (if any): ALL NOMINEES
(1) To elect five (5) [ ] [ ]
directors to the
Board of Directors
of Full House to
hold office until the next annual meeting of Stockholders of Full House
following their election or until their successors are duly elected and
qualified.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE ELECTION OF ALL THE
NOMINEES FOR DIRECTOR LISTED BELOW.
NOMINEES: WILLIAM P. MCCOMAS, GREGG R. GIUFFRIA,
JAMES C. GILLSTRAP, LEE A. IACOCCA AND RONALD K. RICHEY
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL
NOMINEE, WRITE THE NOMINEE'S NAME IN THE SPACE PROVIDED BELOW.
- --------------------------------------------------------------
FOR AGAINST ABSTAIN
(2) Ratification of the appointment of Deloitte & [ ] [ ] [ ]
Touche LLP to serve as Full House's independent
accountants for the current year.
(3) In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the Annual Meeting and any adjournments
or postponements thereof.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED "FOR" THE ELECTION OF ALL DIRECTOR NOMINEES LISTED ABOVE, AND THE
RATIFICATION OF THE APPOINTMENT OF DELOITTE & TOUCHE.
PLEASE MARK, SIGN AND DATE THIS PROXY CARD AND PROMPTLY RETURN IT IN THE
ENVELOPE PROVIDED. NO POSTAGE NECESSARY IF MAILED IN THE UNITED STATES.
Signature _______________ Signature if held jointly __________________
Dated: _____________ , 2000
IMPORTANT: Please sign exactly as your name appears hereon and mail it promptly
even though you now plan to attend the meeting. When shares held by
joint tenants, both should sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as such.
If a corporation, please sign in full corporate name by president or
other authorized officer. If a partnership please sign in partnership
name by authorized person.
