Empire Resorts : DEF 14C

SCHEDULE 14C

INFORMATION STATEMENT PURSUANT TO SECTION 14(C) OF THE

SECURITIES EXCHANGE ACT OF 1934

(Amendment No. )

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• Preliminary Information Statement
• Confidential, for Use of the Commission Only (as permitted by Rule 14c-5(d)(2))
  ☒ Definitive Information Statement

EMPIRE RESORTS, INC.

(Name of Registrant as Specified in Its Charter)

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NOTICE OF ACTION BY WRITTEN CONSENT OF STOCKHOLDERS

EMPIRE RESORTS, INC.

C/O MONTICELLO CASINO AND RACEWAY

204 STATE ROUTE 17B, P.O. BOX 5013

MONTICELLO, NEW YORK 12701

DATE FIRST MAILED TO STOCKHOLDERS: ON OR ABOUT SEPTEMBER 9, 2019

WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED

NOT TO SEND US A PROXY

To the Stockholders of Empire Resorts, Inc.:

On November 6, 2018, Empire Resorts, Inc. ("Empire," and, together with its subsidiaries, the "Company," "us," "our" or "we") entered into a letter agreement (as amended and restated on November 9, 2018, the "KH 2018 Preferred Stock Commitment Letter") with Kien Huat Realty III Limited ("Kien Huat"), the Company's largest stockholder, pursuant to which Kien Huat committed to provide additional equity financing in support of the general corporate and working capital requirements of the Company and its subsidiaries.

Pursuant to the KH 2018 Preferred Stock Commitment Letter, Kien Huat had agreed to purchase up to $126 million (the "Commitment Amount") of Series F Convertible Preferred Stock, $0.01 par value per share (the "Series F Preferred Stock") of the Company between November 2018 and March 2020 on the terms set forth in the KH 2018 Preferred Stock Commitment Letter and in accordance with the terms of the Certificate of the Designations, Powers, Preferences and Rights of the Series F Convertible Preferred Stock ($0.01 Par Value Per Share), which the Company filed with the Secretary of State of the State of Delaware on November 5, 2018 and amended and restated on November 9, 2018 (as amended and restated, the "Series F Certificate of Designation").

On May 7, 2019, the Company and Kien Huat amended the KH 2018 Preferred Stock Commitment Letter to accelerate its commitment to purchase up to the full Commitment Amount from March 15, 2020 to November 15, 2019 (the "May 2019 KH Commitment Amendment"). Pursuant to the KH 2018 Preferred Stock Commitment Letter, as amended by the May 2019 KH Commitment Amendment, Kien Huat had committed to purchase the Series F Preferred Stock pursuant to the following schedule: (i) up to $12 million no earlier than November 9, 2018; (ii) up to $20 million no earlier than February 15, 2019; (iii) up to $27 million no earlier than May 15, 2019; (iv) up to $15 million no earlier than June 17, 2019; (v) up to $15 million no earlier than August 15, 2019; and (vi) up to $37 million no earlier than November 15, 2019. In accordance with this schedule, on each of November 13, 2018, February 20, 2019, May 21, 2019, June 17, 2019 and August 26, 2019, the Company and Kien Huat entered into subscription agreements (the "KH Subscription Agreements") to purchase an aggregate of 890 shares of Series F Preferred Stock for an aggregate purchase price of $89 million, resulting in net proceeds to the Company (after deducting a $890,000 funding fee due to Kien Huat) of $88.1 million.

On August 18, 2019, the Company entered into an Agreement and Plan of Merger (the "Merger Agreement") by and among Hercules Topco LLC, a Delaware limited liability company ("Parent"), Hercules Merger Subsidiary Inc., a Delaware corporation ("Merger Sub" and together with Parent, "Hercules"), and the Company. Parent and Merger Sub are affiliates of Kien Huat and Genting Malaysia Berhad ("Genting Malaysia"). The Merger Agreement provides for, upon the terms and subject to the conditions set forth in the Merger Agreement, the merger of Merger Sub with and into the Company, with the Company surviving as a subsidiary of Parent (the "Merger"). Pursuant to the Merger Agreement, at the effective time of the Merger (the "Effective Time"), each issued and outstanding share of the Company's common stock, par value $0.01 per share (the "Common Stock") (other than any Rollover Shares, Canceled Shares or Dissenting Shares, as defined below), will be converted into the right to receive $9.74 in cash, without interest (the "Common Merger Consideration"), and each issued and outstanding share of the Company's Series B Preferred Stock, par value $0.01 per share (other than Rollover Shares, Canceled Shares or Dissenting Shares), will be converted into the

right to receive an amount in cash equal to the product of the Common Merger Consideration, multiplied by the number of shares of Common Stock into which such share of Series B Preferred Stock is convertible. In addition, pursuant to the Merger Agreement, at the Effective Time, (i) shares of the Company's Common Stock or Series F Preferred Stock owned by Kien Huat, Genting Malaysia or their respective affiliates (the "Rollover Shares") will remain outstanding, (ii) shares of Common Stock or any series of the Company's preferred stock owned by the Company or any of its wholly-owned subsidiaries will be canceled (the "Canceled Shares") and (iii) shares owned by any stockholder who properly exercises appraisal rights under Delaware law (the "Dissenting Shares") will entitle the holder thereof only to such appraisal rights.

Stockholders of the Company will be asked to vote on the adoption of the Merger Agreement at a special meeting that will be held on a date to be announced. Consummation of the Merger is also subject to a number of other customary conditions, including without limitation that certain requisite gaming authority approvals have been obtained and remain in full force and effect, the absence of any law or order enjoining or prohibiting the Merger.

In connection with the execution of the Merger Agreement, on August 18, 2019 the Company and Kien Huat further amended the KH 2018 Preferred Stock Commitment Letter (such amendment, the "August 2019 KH Commitment Amendment") to, among other things, increase the Commitment Amount from $126 million to $151 million and modify the schedule on which Kien Huat will purchase additional shares of Series F Preferred Stock to adjust for the increased Commitment Amount. Accordingly, as a result of the August 2019 KH Commitment Amendment, Kien Huat has committed to purchase the Series F Preferred Stock pursuant to the following schedule: (i) up to $12 million no earlier than November 9, 2018; (ii) up to $20 million no earlier than February 15, 2019; (iii) up to $27 million no earlier than May 15, 2019; (iv) up to $15 million no earlier than June 17, 2019; (v) up to $15 million no earlier than August 15, 2019; (vi) up to $7.5 million no earlier than September 15, 2019; (vii) up to $7.5 million no earlier than October 15, 2019; (viii) up to $37 million no earlier than November 15, 2019; and (ix) up to $10 million no earlier than February 15, 2020.

Additionally, the August 2019 KH Commitment Amendment obligates Kien Huat to execute a written consent to: (i) approve the issuance of an incremental $25 million of shares of Series F Preferred Stock (the "Additional Series F Shares") and shares of Company common stock underlying such Additional Series F Shares and the terms of any specific financing consummated in connection with the August 2019 KH Commitment Amendment and (ii) approve an amendment to the Series F Certificate of Designation to (a) increase the number of shares designated as Series F Preferred Stock from 1,500 to 1,600 and (b) to change the definition of "Change of Control Transaction" to exempt from such definition (1) the proposed acquisition of shares of capital stock of the Company by Kien Huat, Genting (USA) Limited ("Gen USA") or any of their respective affiliates or any person that is a "group" of which Kien Huat, Gen USA or their respective affiliates is a member (including the "Purchase" and the "Contributions", each pursuant to, and as defined in, that certain Term Sheet dated August 5, 2019) and (2) the consummation of the Merger (the proposed amendments to the Series F Certificate of Designation in (ii) are collectively referred to herein as the "Series F COD Amendment"). The August 2019 KH Commitment Amendment, and Kien Huat's commitment to provide incremental financing contemplated thereby, terminates if the Merger Agreement is terminated by the Company to accept a Superior Proposal (as such term is defined in the Merger Agreement), or by Parent due to the Company's willful and material breach, however any such termination will not relieve Kien Huat of its obligations and remaining commitments under the KH 2018 Preferred Stock Commitment Letter, as amended by the May 2019 KH Commitment Amendment.

On November 14, 2018, an affiliate of bet365 Group Limited ("bet365") entered into a common stock purchase agreement (the "bet365 Common Stock Purchase Agreement") to purchase up to $50 million in shares of common stock of the Company in connection with the Company's collaboration with another bet365 affiliate to develop a physical and online sportsbook and digital gaming services at Resorts Word Catskills. $33.715 million (the "bet365 proceeds") of the $50 million was purchased on November 14, 2018, with the balance to acquire at a future date, subject to certain conditions. In accordance with the KH 2018 Preferred Stock Commitment Letter, as amended by the May 2019 KH Commitment Amendment and the August 2019 KH Commitment Amendment, the Commitment Amount is reduced by the amount of bet365 proceeds exceeding

$29 million, from $151 million to $146.28 million. Any future sales to bet365 pursuant to the bet365 Common Stock Purchase Agreement would further reduce the Commitment Amount by such additional amount.

Kien Huat is entitled to a funding fee in the amount of 1% of the portion of the Commitment Amount funded by Kien Huat.

Unless earlier terminated by mutual agreement, the KH 2018 Preferred Stock Commitment Letter (as amended by the May 2019 KH Commitment Amendment) will terminate upon the earlier of (a) the Company's receipt of third-party financing in the Commitment Amount or (b) April 15, 2020.

Pursuant to the Series F Certificate of Designation, the Series F Preferred Stock is convertible into shares of the Company's Common Stock (the shares of Common Stock into which the Series F Preferred Stock is convertible, the "Conversion Shares") at any time and from time to time (and in certain cases, automatically) prior to December 31, 2038 (the "Maturity Date"), and is automatically convertible on the Maturity Date. Subject to certain voting limitations prior to effectiveness of stockholder approval described below, the Series F Preferred Stock is entitled to vote on all matters submitted to the vote of the holders of Common Stock, with each share of Series F Preferred Stock having a number of votes equal to the number of shares of Common Stock into which such share is convertible at any given time.

The transactions contemplated by the KH 2018 Preferred Stock Commitment Letter, including the issuance of the Series F Preferred Stock pursuant thereto and the Conversion Shares in respect of such Series F Preferred Stock, were approved by the Company's Board of Directors and Audit Committee, and the total number of Conversion Shares issuable along with the total number of votes represented by the Series F Preferred Stock on an as-converted basis were approved by a majority of the voting power of the Company's issued and outstanding voting stock on February 1, 2019, which action took effect pursuant to Rule 14c-2 under the Securities and Exchange Act of 1934, as amended (the "Exchange Act") on March 5, 2019.

On August 18, 2019, the Company's Audit Committee, the Special Committee and the Board of Directors approved the August 2019 KH Commitment Amendment and the transactions contemplated therein, including the filing of the Series F COD Amendment with the Secretary of State of Delaware.

The Company's entry into the August 2019 KH Commitment Amendment did not require the approval of our stockholders. However, pursuant to the Series F Certificate of Designation, any amendment to the Series F Certificate of Designation requires the written consent of the holders representing at least a majority of the outstanding Series F Preferred Stock and, pursuant to Section 242 of the General Corporation Law of the State of Delaware (the "DGCL"), the Series F COD Amendment requires the written consent of the holders representing a majority of voting power of the Company's issued and outstanding Voting Stock (as defined below). Additionally, in accordance with the applicable listing rules (the "Nasdaq Rules") of The Nasdaq Stock Market LLC, the issuance of the Additional Series F Shares may constitute a "20% Issuance" requiring approval of a majority of the Company's issued and outstanding Voting Stock. Pursuant to Rule 5635(d) of the Nasdaq Rules, a "20% Issuance" means a transaction, other than a public offering, involving the sale, issuance or potential issuance by the issuer of common stock (or securities convertible into or exercisable for common stock), which alone or together with sales by officers, directors or substantial shareholders of the issuer, equals 20% or more of the common stock or 20% or more of the voting power outstanding before the issuance.

This Notice and the accompanying Information Statement are being furnished to the stockholders of the Company to advise our stockholders that the holders of a majority of voting power of the issued and outstanding shares of the Company's Common Stock, Series B Preferred Stock, par value $0.01 per share (the "Series B Preferred Stock"), and Series F Preferred Stock (the Series F Preferred Stock, together with the Series B Preferred Stock and the Common Stock, the "Voting Stock"), as well as the holders representing at least a majority of the Series F Preferred Stock, voting as a separate class, have acted by written consent to approve the Series F COD Amendment and the issuance of the Additional Series F Shares on August 18, 2019.

Please review the Information Statement included with this Notice for a more complete description of these matters.

Pursuant to Section 228(e) of the General Corporation Law of the State of Delaware, the close of business on August 18, 2019, the date that the holders of a majority of the voting power of the Voting Stock delivered to the Company a written consent approving the Series F COD Amendment and the issuance of the Additional Series F Shares, is the record date for the determination of stockholders entitled to notice of the action by written consent. Pursuant to Rule 14c-2 under the Exchange Act, the actions taken by the holders of a majority of the voting power of the Voting Stock will not become effective until 20 calendar days after the mailing of the Information Statement to the Company's stockholders, or September 29, 2019. This Notice and accompanying Information Statement are first being mailed to stockholders on or about September 9, 2019.

IMPORTANT NOTICE: THIS NOTICE AND THE COMPANY'S INFORMATION STATEMENT CAN BE ACCESSED DIRECTLY AT THE FOLLOWING INTERNET ADDRESS:

http://www.cstproxy.com/empireresorts/info2019.

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