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free online blackjack tournaments ubti sending a written notice of revocation to Pinnacle at 3980 Howard Hughes Parkway, Las Vegas, Nevada 89169, Attention: Corporate Secretary, which must be received before their shares are voted at the special meeting; ? proof of beneficial ownership as of the record date e.
? and ?The Merger Agreement?Conditions to Completion of the Merger.
? Proposal 3.
Record Date; Voting Rights.
The record date for the determination of stockholders entitled to notice of and to vote at the Pinnacle special meeting is the close of business on February 8, 2016.
Only Pinnacle stockholders who held shares of record at the close of business on February 8, 2016 are entitled to vote at the special meeting and any adjournment or postponement of the special meeting, so long as such shares remain outstanding on the date of the special meeting.
Each share of Pinnacle common stock entitles its holder of record to one vote at the Pinnacle special meeting.
In order for business to be conducted at the special meeting, a quorum must be present.
A quorum requires the presence, in person or by proxy, of holders of a majority of voting power of all the shares of stock entitled to vote at the meeting, present in person or by proxy.
For purposes of determining whether there is a quorum, all shares that are present and entitled to vote will count towards the quorum, which includes abstentions broker non-votes only when accompanied by broker votes with respect to at least one matter at the meeting.
Broker non-votes occur when a beneficial owner holding shares in ?street name? the occurrence of any event, change or other circumstances that could give rise to the termination of the merger agreement or the failure to satisfy the closing conditions; ? and wish to submit a proxy must provide instructions to the broker, bank, trustee or other nominee that holds their shares of record as to how to vote their shares with respect to Proposals 1, 2 and 3.
Pinnacle stockholders who hold their shares beneficially and wish to vote in person at the special meeting must obtain a legal proxy.
Pinnacle stockholders of record may submit a proxy in one of three ways or vote in person at the Pinnacle special meeting: ? the proposal to adjourn the special meeting of Pinnacle stockholders, if necessary or appropriate, to solicit additional proxies in favor of the merger agreement proposal if there are not sufficient votes at the time of such adjournment to adopt the merger agreement the ?Pinnacle adjournment proposal?.
Q: Will the GLPI common stock received at the time of completion of the merger be traded on an exchange?
It is a condition to the consummation of the merger that the shares of GLPI common stock to be issued to Pinnacle stockholders in connection with the merger be authorized for listing on NASDAQ, subject to official notice of issuance.
Q: Will the shares of OpCo common stock be traded on an exchange?
A: Immediately following the distribution, OpCo will be a new publicly traded company 100% owned by Pinnacle stockholders of record as of the date for the distribution.
Pinnacle will cause the OpCo common stock to be distributed in the distribution to be approved for listing on NASDAQ prior to the consummation of the distribution.
A: Upon completion of the merger, each GLPI shareholder will hold the same number of shares of GLPI common stock that such shareholder held immediately prior to completion of the merger.
As a result of the merger, GLPI shareholders will own shares in a larger company with more assets.
However, because in connection with the merger, GLPI will be issuing additional shares of GLPI common stock to Pinnacle stockholders in exchange for their shares of Pinnacle common stock, each outstanding share of GLPI common stock immediately prior to the merger will represent a smaller percentage of the aggregate number of shares of GLPI common stock outstanding after the merger.
Q: What are the U.
A: The obligation of the parties to consummate the merger is subject to the receipt by GLPI and Pinnacle of the opinions of their respective counsel to the effect that, on the basis of the facts, representations, assumptions and exclusions set forth in such opinions which are consistent with the state of facts existing as of the closing date, the merger will qualify for U.
If the merger so qualifies, then a Pinnacle stockholder generally will not recognize any gain or loss as a result of the merger other than gain or loss with respect to cash received in lieu of a fractional share, if any.
The particular consequences of the merger to each Pinnacle stockholder depend on such holder?s particular facts and circumstances.
Pinnacle stockholders are urged to consult their tax advisors to understand fully the consequences to them of the merger in their specific circumstances.
A more detailed discussion of the U.
Federal Income Tax Considerations Relating to the Merger.
? Q: Should I send in my Pinnacle stock certificates now?
After the merger is completed, if you held certificates representing shares of Pinnacle common stock prior to the merger, GLPI?s exchange agent will send you a letter of transmittal and instructions for exchanging your shares of Pinnacle common stock for the merger consideration.
Upon surrender of the certificates for cancellation along with the executed letter of transmittal and other required documents described in the instructions, a Pinnacle stockholder will receive the merger consideration.
The shares of GLPI common stock you receive in the merger will be issued in book-entry form.
You will automatically receive your pro rata share of OpCo stock.
Q: What happens if I sell or otherwise transfer my shares of Pinnacle common stock before the special meeting?
A: The record date for shareholders entitled to vote at the Pinnacle special meeting is February 8, 2016, which is earlier than the date of the special meeting.
If you sell or otherwise transfer your shares after the record date but before the special meeting, unless special arrangements such as provision of a proxy are made between you and the person to whom you transfer your shares and each of you notifies us in writing of such 7 special arrangements, you will retain your right to vote such shares at the special meeting but will otherwise transfer ownership of your shares of Pinnacle common stock.
Q: What happens if I sell or otherwise transfer my shares of Pinnacle common stock before the completion of the merger?
A: Only holders of shares of Pinnacle common stock at the effective time of the merger will become entitled to receive the merger consideration.
If you sell your shares of Pinnacle common stock prior to the completion of the merger, you will not become entitled to receive the merger consideration by virtue of the merger.
Additionally, prior to the completion of the merger, Pinnacle will set a record date and a distribution date for the distribution of OpCo stock in connection with the spin-off.
Pinnacle expects such distribution date to be the same date as the date that the merger is completed.
Only holders of shares of Pinnacle common stock as of such record date will become entitled to receive shares of OpCo in the spin-off.
If you sell your shares of Pinnacle common stock prior to the record date to the distribution for the spin-off, you will also be selling your entitlement to receive shares of OpCo stock.
Q: Do any of the officers or directors of Pinnacle have interests in the merger that may differ from or be in addition to my interests as a Pinnacle stockholder?
A: In considering the recommendation of the Pinnacle board that Pinnacle stockholders vote to adopt the merger agreement proposal, to approve the compensation proposal and to approve the Pinnacle adjournment proposal, Pinnacle stockholders should be aware that some of Pinnacle?s directors and executive officers have interests in the merger that may be different from, or in addition to, the interests of Pinnacle stockholders generally.
The Pinnacle board was aware of and considered these potential interests, among other matters, in evaluating and negotiating the merger agreement and the transactions contemplated therein, in approving the merger and in recommending the adoption of the merger and the approval of the adjournment proposal and the compensation proposal.
For more information and quantification of these interests, please see ?The Merger?Interests of Certain Pinnacle Persons in the Merger.
? ?will,? ? within the meaning of Section 368 a of the Code, Pinnacle stockholders may be required to pay substantial U.
Although GLPI and Pinnacle intend that the merger qualify as a ?reorganization? changes in stock market analyst recommendations or earnings estimates regarding GLPI?s common stock or other comparable REITs; ? Q: How can I find more information about GLPI and Pinnacle?
A: You can find more information about GLPI and Pinnacle from various sources described in the section titled ?Where You Can Find More Information.
? provisions that, subject to certain exceptions, would have prohibited GLPI from pursuing any form of public or unsolicited proposal with respect to Pinnacle.
On February 23, 2015, Messrs.
Sanfilippo and Carlino had a telephone call to discuss the draft NDA sent by Goldman Sachs.
Sanfilippo communicated Pinnacle?s willingness to provide due diligence information if an appropriate NDA, including a standstill provision, could be agreed to between the parties.
During this call, it was suggested that the parties? The principal executive offices of GLPI are located at 845 Berkshire Blvd.
See ?Where You Can Find More Information.
Merger Sub was formed by GLPI solely in contemplation of the transactions, has not conducted any business and has no assets, liabilities or other obligations of any nature other than as set forth in the merger agreement.
Pinnacle is an owner, operator and developer of casinos, a racetrack and related hospitality and entertainment facilities.
Pinnacle owns and operates 15 gaming facilities in Colorado, Indiana, Iowa, Louisiana, Missouri, Mississippi, Nevada and Ohio, of which fourteen will be subject to the master lease.
Pinnacle also holds a majority interest in the racing license owner, and Pinnacle is a party to a management contract, for Retama Park Racetrack located outside of San Antonio, Texas.
In addition to these properties, Pinnacle owns and operates a live and televised poker tournament series under the trade name Heartland Poker Tour.
Pinnacle?s mission is to increase stockholder value.
Pinnacle seeks to increase revenues through enhancing the guest experience by providing its guests with their favorite games, restaurants, hotel accommodations, entertainment and other amenities in attractive surroundings with high-quality guest service and guest rewards programs.
Pinnacle seeks to improve profit by focusing on operational excellence and efficiency while meeting its guests? the share issuance proposal and ?FOR? each U.
For additional information, see the section titled ?The Merger?U.
Federal Income Tax Considerations Relating to the Merger.
? , have entered into an Agreement and Plan of Merger, dated as of July 20, 2015 as it may be amended from time to time, the ?merger agreement? attending the GLPI special meeting and voting in person.
Attendance at the special meeting will not, however, in and of itself, constitute a vote or revocation of a prior proxy.
Beneficial owners of GLPI common stock may change their voting instruction only by submitting new voting instructions to the brokers, banks or other nominees that hold their shares of record.
Additional information can be found under the section titled ?GLPI Special Meeting.
? there has been a breach of the merger agreement by the other party or there has been a failure to perform any of its representations, warranties, covenants or agreements contained in the merger agreement, which breach or failure to perform i if it occurred or was continuing to occur on the 24 closing date, would result in a failure of a condition to close by such breaching party and ii is incapable of being cured during the time period set forth in the merger agreement or, if curable, is not cured during the applicable cure period subject to certain conditions.
GLPI may also terminate the merger agreement if, prior to the adoption of the merger agreement by Pinnacle?s stockholders, the Pinnacle board makes an adverse recommendation change.
Expenses and Termination Fees Relating to the Termination of the Merger Agreement see page 151 If the merger agreement is validly terminated, the agreement will become void and have no effect, without any liability or obligation on the part of any party except for i liabilities in connection with the confidentiality agreement between Pinnacle and GLPI, ii termination fees and expense reimbursements as described below, iii indemnification and confidentiality provisions arising out of Pinnacle?s cooperation with GLPI in connection with GLPI?s financing and iv liabilities arising out of or the result of fraud or any willful and material breach of any covenant, agreement, representation or warranty in the merger agreement prior to termination, in which case the aggrieved party is not limited to expense reimbursement or the termination fees described below and will be entitled to all rights and remedies available at law or equity.
The provisions of the merger agreement relating to the effects of termination, fees and expenses, termination payments, governing law, jurisdiction, waiver of jury trial, nonsurvival of representations and warranties, as well as the confidentiality agreement entered into between Pinnacle and GLPI, will continue in effect notwithstanding termination of the merger agreement.
Expected Timing of the Merger see page 130 The merger is expected to be completed in the first quarter of 2016.
However, neither GLPI nor Pinnacle can predict the actual date on which the merger will be completed, nor can the parties assure that the merger will be completed, because completion is subject to conditions beyond each party?s control.
Comparison of Rights of Common Shareholders of GLPI and Common Stockholders of Pinnacle see page 184 Pinnacle stockholders receiving shares of GLPI common stock in connection with the merger will have different rights once they become shareholders of GLPI due to differences between laws of the Commonwealth of Pennsylvania and the State of Delaware and the governing corporate documents of GLPI and Pinnacle.
These differences are described in more detail under ?Comparison of Rights of Common Shareholders of GLPI and Common Stockholders of Pinnacle.
? the merger agreement proposal.
Proposal 2?the compensation proposal.
The affirmative vote, in person or by proxy, of a majority of the votes cast on the compensation proposal by the holders of shares of Pinnacle common stock is required to approve the proposal.
The required vote on the compensation proposal is based on the number of shares present?not the number of outstanding shares.
Abstentions from voting by a Pinnacle stockholder will have no effect on the outcome on the compensation proposal.
The failure of any Pinnacle stockholder to submit a vote i.
Brokers, banks and other nominees do not have discretionary authority to vote on the compensation proposal and will not be able to vote on compensation proposal.
Broker non-votes will have no effect on the outcome of the compensation proposal.
While Pinnacle?s board of directors intends to consider the vote resulting from this proposal, the vote is advisory only and therefore not binding on Pinnacle or GLPI, and, if the proposed merger with GLPI is approved by Pinnacle stockholders and consummated, the compensation will be payable even if the compensation proposal is not approved.
Proposal 3?the Pinnacle adjournment proposal.
The affirmative vote, in person or by proxy, of a majority of the votes cast on the Pinnacle adjournment proposal by the holders of shares of Pinnacle common stock is required to approve the proposal.
The required vote on the Pinnacle adjournment proposal is based on the number of shares present?not the number of outstanding shares.
Abstentions from voting by a Pinnacle stockholder will have no effect on the outcome on the Pinnacle adjournment proposal.
The failure of any Pinnacle stockholder to submit a vote i.
Brokers, banks and other nominees do not have discretionary authority to vote on Proposal 3 and will not be able to vote Proposal 3 absent instructions from the beneficial owner.
Broker non-votes will have no effect on the outcome of the adjournment proposal.
How to Vote Pinnacle stockholders as of the close of business on the record date may have their shares voted by submitting a proxy or may vote in person at the Pinnacle special meeting by following the instructions provided on the enclosed proxy card.
Pinnacle recommends that Pinnacle stockholders entitled to vote submit a proxy even if they plan to attend the special meeting.
Pinnacle stockholders who hold their shares beneficially in ?street name? Proposal 2: to approve the adjournment of the GLPI special meeting, if necessary or appropriate, to solicit additional proxies if there are not sufficient votes to approve the share issuance proposal, referred to previously as the GLPI adjournment proposal.
Recommendation of GLPI?s Board of Directors The board of directors of GLPI recommends that the GLPI shareholders vote: ? ?continue,? , providing for the merger of Pinnacle with and into Merger Sub, with Merger Sub surviving the merger as a wholly owned subsidiary of GLPI the ?merger? the Pinnacle special meeting has concluded without adoption of the merger agreement proposal by Pinnacle?s stockholders or if the GLPI special meeting has concluded without approval of GLPI?s shareholders of the share issuance proposal; or ? together with the master lease, separation agreement, employee matters agreement and the merger agreement, the ?transaction documents?.
GLPI and Pinnacle encourage you to read the entire merger agreement, including the exhibits thereto, carefully, because it is the principal document governing the merger.
The separation agreement will provide that each holder of Pinnacle common stock will receive one share of OpCo common stock for each share of Pinnacle common stock held by such stockholder as of the record date of the distribution referred to previously as the distribution.
For additional information regarding the distribution, please see PNK Entertainment, Inc.
?s Form 10 filed with the SEC File No.
Following the distribution, Pinnacle?s stockholders will collectively hold 100% of OpCo.
The separation agreement will provide that the distribution is subject to the satisfaction of certain conditions: ? for a more complete discussion of the United States federal income tax considerations relevant to the merger.
The tax 20 consequences of the merger to you will depend on your particular tax situation.
You should consult your tax advisor to determine the particular tax consequences of the merger to you.
Accounting Treatment of the Merger see page 125 GLPI prepares its financial statements in accordance with Generally Accepted Accounting Principles ?GAAP?.
The merger will be accounted for by applying the acquisition method of accounting using the accounting guidance for asset acquisitions in ASC 805.
When a transaction is deemed an asset acquisition, ASC 805 requires an allocation of the purchase price, including the transaction costs associated with the acquisition of assets, to the fair value of the assets acquired.
Based on the guidance of ASC 805, GLPI will be the acquirer of Pinnacle for accounting purposes and will allocate the purchase price, including incurred transaction costs, to the fair value of the acquired Pinnacle real estate assets at the acquisition date.
Regulatory Approvals see page 126 Under the merger agreement, the parties have agreed to use their reasonable best efforts to obtain all of the regulatory approvals, including certain gaming approvals, and are required to agree to certain divestiture and other actions in order to obtain such approvals.
GLPI and Pinnacle have made or intend to make various filings and submissions with governmental entities.
The parties? properly submitting a later-dated, new proxy card, which must be received before their shares are voted at the special meeting in which case only the later-dated proxy is counted and the earlier proxy is revoked ; ? Forms of Agreements to be Entered into Prior to the Closing of the Merger see page 153 The merger agreement attaches forms of certain additional agreements to be entered into prior to the closing of the merger to effect the separation of Pinnacle?s real estate assets except the Belterra Park property and excess land at certain locations from its operations, including the master lease agreement the ?master lease? For additional information regarding the consideration to be received in the merger, see the section entitled ?The Merger?Effects of the Merger.
? the share issuance proposal and ?FOR? will be held on March 15, 2016, beginning at 10 a.
This special meeting will be held for the following purposes: 1.
?GLPI? While the obligation of GLPI to consummate the merger is not subject to any financing condition, the merger agreement provides that, without Pinnacle?s agreement, the closing of the merger will not occur earlier than a a date during the GLPI marketing period specified by GLPI on no less than three business days? 26 SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA OF GLPI The following selected historical consolidated financial and operating data of GLPI for the five-year period ended December 31, 2014 and the selected historical consolidated balance sheet data as of the five-year periods ended on December 31, 2014 have been derived from GLPI?s audited consolidated financial statements as of and for the fiscal year ended December 31, 2014 contained in its Annual Report on Form 10-K filed with the SEC on February 27, 2015, as amended by Amendment No.
In GLPI?s view, the unaudited financial statements include all adjustments consisting of normal recurring adjustments necessary for a fair presentation of the interim September 30, 2015 financial information.
Interim results for the nine months ended and as of September 30, 2015 are not necessarily indicative of, and are not projections for, the results to be expected for the fiscal year ending December 31, 2015.
The information set forth below is only a summary and is not necessarily indicative of the results of future operations of GLPI or GLPI following completion of the merger, and you should read the following information together with GLPI?s consolidated financial statements, the related notes and the sections entitled ?Management?s Discussion and Analysis of Financial Condition and Results of Operations? reflecting a fixed exchange ratio of 0.
On June 21, 2015, Wachtell Lipton sent Skadden revised drafts of the transaction documents reflecting the June 19 Proposal, as well as GLPI?s position on the remaining open points.
On June 23, 2015, Mr.
Carlino that Pinnacle was in the process of reviewing the June 19 proposal and expected to respond no later than June 29, 2015.
On June 23, 2015, representatives of Morgan Stanley and Goldman Sachs held a telephonic meeting to discuss the June 19 Proposal.{/INSERTKEYS} beginning on page 38 for an explanation of the risks associated with the merger and the other transactions contemplated by the merger agreement, including the share issuance proposal.
GLPI?s board of directors unanimously determined that it is in the best interests of GLPI and its shareholders, and declared it advisable, to enter into the merger agreement, and approved the execution, delivery and performance of the merger agreement and the consummation of the transactions contemplated by the merger agreement, including the share issuance proposal.
GLPI?s board of directors recommends that GLPI shareholders vote ?FOR? Q: Who will count the votes?
A: The votes at the GLPI special meeting and the Pinnacle special meeting will be counted by an independent inspector or judge of election appointed for each special meeting.
Q: May I vote in person?
If you are a shareholder of record of GLPI at the close of business on February 8, 2016 or a stockholder of record of Pinnacle at the close of business on February 8, 2016, you may attend your special meeting and vote your shares in person, in lieu of submitting your proxy by Internet, telephone or by completing, signing, dating and returning the enclosed proxy card.
Q: What must I bring to attend my special meeting?
A: Only GLPI?s shareholders of record, or Pinnacle?s stockholders of record, as of the applicable record date, beneficial owners of GLPI common stock or Pinnacle common stock as of the applicable record date, holders of valid proxies for the GLPI special meeting or Pinnacle special meeting, and invited guests of GLPI or Pinnacle may attend the applicable special meeting.
All attendees should be prepared to present government-issued photo identification such as a driver?s license or passport for admittance.
The additional items, if any, that attendees must bring depend on whether they are shareholders or stockholders of record, beneficial owners or proxy holders.
Additional information on attending the special meetings can be found under the section titled ?GLPI Special Meeting? it could limit GLPI?s ability to take advantage of strategic business opportunities; and ? sending a written notice of revocation to GLPI at 845 Berkshire Blvd.
GLPI beneficial owners may change their voting instruction only by submitting new voting instructions to the brokers, banks or other nominees that hold their shares of record.
Judge of Election The board of directors of GLPI has selected a representative of Ballard Spahr LLP to act as the judge of election at the GLPI special meeting.
In addition to sending and making available these materials, some of GLPI?s directors, officers and other employees may solicit proxies by contacting GLPI shareholders by telephone, by mail, by e-mail or in person.
None of GLPI?s directors, officers or employees will receive any extra compensation for their solicitation services.
GLPI has also retained MacKenzie Partners, Inc.
GLPI will also reimburse brokers, banks and other nominees for their expenses in sending proxy solicitation materials to the beneficial owners of GLPI common stock and obtaining their proxies.
Adjournments The GLPI special meeting may be adjourned in the absence of a quorum by the chairman of the meeting or the affirmative vote of holders of a majority of the GLPI shares present in person or represented by proxy at the special meeting and entitled to vote at the special meeting.
Even if a quorum is present, the GLPI special meeting could be adjourned in order to provide more time to solicit additional proxies in favor of approval of the share issuance proposal if a majority of votes are cast in favor of the GLPI adjournment proposal.
If after the adjournment a new record date is set for the adjourned meeting, a notice of the adjourned meeting must be given to each shareholder of record entitled to vote at the special meeting.
No Dissenters? rights in connection with the merger.
Other Matters At this time, Pinnacle knows of no other matters to be submitted at the Pinnacle special meeting.
Each stockholder in the household will continue to receive a separate proxy card.
This process, known as ?householding,? The principal executive offices of Pinnacle are located at 3980 Howard Hughes Parkway, Las Vegas, Nevada 89169, and its telephone number is 702 541-7777.
See ?Where You Can Find More Information.
? as its financial advisor and Skadden as its legal advisor in connection with such review.
At a meeting of the Pinnacle board of directors held on August 18, 2014, members of Pinnacle?s management team, as well as representatives of Goldman Sachs and Skadden, reviewed with the Pinnacle board a preliminary assessment of the potential feasibility of such a separation transaction.
At this meeting, the Pinnacle board of directors directed management to continue to work with Pinnacle?s advisors to further assess the feasibility and desirability of pursuing a REIT separation transaction.
The Pinnacle board of directors met on October 7 and October 8, 2014 and received an update regarding the work being done by management and Pinnacle?s financial and legal advisors regarding the possibility of pursuing a REIT separation transaction and other alternatives potentially available to Pinnacle.
Representatives of Pinnacle?s management, Goldman Sachs and Skadden were in attendance at the meeting.
At this meeting, the Pinnacle board of directors received an update from management and Pinnacle?s advisors on the potential REIT separation transaction.
The Pinnacle board considered the assessment regarding the feasibility of implementing a REIT separation transaction and the additional analysis and work that would need to be performed to implement such a transaction and directed management to begin taking steps to effect the potential REIT separation transaction.
The Pinnacle board of directors met on October 27, 2014.
Representatives of Pinnacle?s management, Goldman Sachs and Skadden were in attendance at the meeting.
At this meeting, the Pinnacle board received an update from management and Pinnacle?s advisors on the potential REIT separation transaction and discussed the possible adoption of a stockholder rights plan to help maintain the ability to pursue a REIT separation transaction which rights plan was subsequently adopted.
On November 6, 2014, Pinnacle announced that the Pinnacle board had approved a plan to pursue a separation of Pinnacle?s operating assets and its real estate assets into two publicly traded companies the ?REIT Separation Plan? properly submitting a later-dated, new proxy card, which must be received before their shares are voted at the special meeting in which case only the later-dated proxy is counted and the earlier proxy is revoked ; ? GLPI is expected to incur substantial expenses related to the completion of the transactions.
The combined company is expected to incur substantial expenses in connection with the completion of the transactions.
While GLPI and Pinnacle have assumed that a certain level of expenses would be incurred, there are many factors beyond their control that could affect the total amount or the timing of the expenses.
Other Risk Factors of GLPI and Pinnacle GLPI?s and Pinnacle?s businesses are and will be subject to the risks described above.
In addition, GLPI and Pinnacle are, and will continue to be subject to the risks described in GLPI?s and Pinnacle?s Annual Reports on Form 10-K including, in the case of GLPI, Amendment No.
The risks described above and in those filings represent all known material risks with respect to GLPI?s and Pinnacle?s businesses.
In connection with the Penn spin-off, which was completed on November 1, 2013, Penn contributed to GLPI through a series of internal corporate restructurings substantially all of the assets and liabilities associated with Penn?s real property interests and real estate development business, as well as the assets and liabilities of the TRS properties in a tax-free distribution.
As a result of the Penn spin-off, GLPI acquired substantially all of Penn?s former real property assets and leased back most of those assets to Penn for use by its subsidiaries, pursuant to the Penn master lease.
Following the Penn spin-off, GLPI became a self-administered and self-managed Pennsylvania REIT.
GLPI?s primary business consists of acquiring, financing, and owning real estate property to be leased to gaming operators in triple-net lease arrangements.
As of September 30, 2015, GLPI?s portfolio consisted of 21 gaming and related facilities?including the TRS properties, which GLPI operates through an indirect wholly owned subsidiary and the real property associated with 18 gaming and related facilities operated by Penn under the Penn master lease?and the real property associated with the Casino Queen in East St.
These facilities are geographically diversified across 12 states and contain approximately 7.
Shares of GLPI Common Stock are Traded on NASDAQ under the Symbol ?GLPI? notice to GLPI or, if not so specified, on the last day of such Pinnacle marketing period subject to certain conditions and b the ?end date? Q: Why is the separation important and consummation of the spin-off a condition to the closing of the merger?
A: Under the terms of the merger agreement, Pinnacle will merge with and into Merger Sub, with Merger Sub surviving the merger as a wholly owned subsidiary of GLPI following which GLPI will own substantially all of Pinnacle?s real property assets, excluding Pinnacle?s Belterra Park property and excess land at certain locations.
In order to effect this acquisition, the real property assets of Pinnacle except the Belterra Park property and excess land at certain locations will be separated from its operations and transferred to OpCo so that, at the effective time of the merger, Pinnacle only owns the real estate assets that GLPI has agreed to acquire.
Accordingly, the separation of Pinnacle?s real property is an important step in the transactions agreed to by the parties and the consummation of the spin-off is a condition to the closing of the merger.
For additional information regarding the spin-off, please see PNK Entertainment, Inc.
?s Form 10 filed with the SEC File No.
Q: Where can I find voting results of the special meeting?
A: Pinnacle and GLPI intend to announce their respective preliminary voting results at each of the Pinnacle and GLPI special meetings and publish the final results in a Current Report on Form 8-K that will be filed with the SEC following the special meetings.
All reports that Pinnacle and GLPI file with the SEC are publicly available when filed.
See the section titled ?Where You Can Find More Information.
? the Form 10 filed with the SEC File No.
GLPI and Pinnacle encourage you to read the separation agreement carefully because it is the principal document governing the spin-off and forms a critical part of the transactions.
Master Lease see page 153 Immediately prior to the closing of the merger, Pinnacle MLS, LLC, one of Pinnacle?s wholly owned subsidiaries ?Tenant? submitting a proxy via Internet or by telephone at a later date in which case only the later-dated proxy is counted and the earlier proxy is revoked ; or ? Dividends In order to qualify to be taxed as a REIT, GLPI is required to annually distribute dividends, other than capital gain dividends, to its shareholders in an amount at least equal to: 1 the sum of a 90% of its REIT taxable income, computed without regard to its net capital gains and the deduction for dividends paid; and b 90% of its after tax net income, if any, from foreclosure property; minus 2 the excess of the sum of specified items of non-cash income over 5% of its REIT taxable income, computed without regard to its net capital gain and the deduction for dividends paid.
GLPI generally must make these distributions in the taxable year to which they relate.
At GLPI?s election, a dividend distribution is treated as paid in a taxable year if it is declared before GLPI timely files its tax return for that year and if paid with or before the first regular dividend payment after such declaration as long as the payment is made during the 12-month period following the close of that year.
These distributions will be treated as received by GLPI?s shareholders in the year in which paid.
Pinnacle does not declare or pay cash dividends on its common stock.
The indentures governing Pinnacle?s senior subordinated notes and credit facility limit the amount of dividends that Pinnacle is permitted to pay.
Words such as ?anticipate,? the merger agreement proposal and the compensation proposal are very important.
You are encouraged to submit a proxy as soon as possible.
Approval of the share issuance proposal requires the affirmative vote, in person or by proxy, of a majority of the votes cast by holders of shares of GLPI common stock entitled to vote.
Any abstention from voting by a GLPI shareholder will have the same effect as a vote against this proposal.
The failure of any GLPI shareholder to submit a vote and any broker non-vote will not be counted in determining the votes cast in connection with this proposal and therefore will have no impact on this proposal.
Adoption of the merger agreement proposal requires the affirmative vote, in person or by proxy, of holders of a majority of the outstanding shares of Pinnacle common stock entitled to vote.
Any abstention from 2 voting by a Pinnacle stockholder, the failure of any Pinnacle stockholder to submit a vote and any broker non-vote will have the same effect as voting against this proposal.
The compensation proposal will be approved if more votes are cast in favor of the proposal than against the proposal.
Since the compensation proposal is non-binding, if the merger agreement is approved by Pinnacle stockholders and the merger is completed, the compensation that is the subject of the compensation proposal, which includes amounts GLPI or Pinnacle are contractually obligated to pay, would still be paid regardless of the outcome of the non-binding advisory vote.
Failure to vote, or failure to instruct your broker, bank or nominee to vote, abstentions and broker nonvotes will not be counted as a vote ?for? new laws or regulations or new interpretations of existing laws or regulations applicable to GLPI?s business and operations or the gaming industry; ? In Person: GLPI shareholders may vote in person at the special meeting or by sending a representative with an acceptable proxy that has been signed and dated.
Attendance at the special meeting will not, however, in and of itself constitute a vote or a revocation of a prior proxy.
GLPI shareholders are encouraged to submit a proxy promptly.
Each valid proxy received in time will be voted at the special meeting according to the choice specified, if any.
Executed but uninstructed proxies i.
Proxies and Revocation GLPI shareholders of record may revoke their proxies at any time before their shares are voted at the GLPI special meeting in any of the following ways: ? who wishes to attend the special meeting in person should bring: ? with Merger Sub surviving the merger as a wholly owned subsidiary of GLPI and each outstanding share of Pinnacle common stock will be converted into the right to receive 0.
Please refer to the attached document, including the merger agreement and all other annexes and including any documents incorporated by reference, for further information with respect to the business to be transacted at the special meeting.
You are encouraged to read the entire document carefully before voting.
Pinnacle?s board of directors the ?Pinnacle board? , OpCo will assume responsibility for, and will pay and be liable for, all wages, salaries, welfare, incentive compensation and employment-related liabilities, and will assume all compensation and employment-related plans and agreements, with respect to each of the employees and directors.
Except with regard to certain of Pinnacle?s outstanding long-term incentive awards, which will be adjusted and settled in connection with the merger as described more fully below in ?The Merger?Treatment of Pinnacle Long-Term Incentive Compensation,? rent obligations and other obligations under the master leases, in each case, could materially and adversely affect GLPI?s business, financial position or results of operations, including GLPI?s ability to pay dividends to its shareholders as required to maintain its status as a REIT.
Due to GLPI?s dependence on rental payments from Pinnacle and Penn and their respective subsidiaries as GLPI?s primary source of revenue, GLPI may be limited in its ability to enforce its rights under the master leases or to terminate the master leases with respect to any particular property.
Failure by Pinnacle or Penn to comply with the terms of their respective master leases or to comply with the gaming regulations to which the leased properties are subject could require GLPI to find another lessee for such leased property and there could be a decrease or cessation of rental payments by either Pinnacle or Penn, as the case may be.
In such event, GLPI may be unable to locate a suitable lessee at similar rental rates or at all, which would have the effect of reducing GLPI?s rental revenues.
Under the separation agreement, Pinnacle will have to indemnify GLPI for certain liabilities.
However, there can be no assurance that these indemnities will be sufficient to insure GLPI against the full amount of such liabilities, or that Pinnacle?s ability to satisfy its indemnification obligation will not be impaired in the future.
Under the separation agreement, Pinnacle will agree to indemnify GLPI for certain liabilities.
However, third parties could seek to hold GLPI responsible for any of the liabilities that Pinnacle will agree to retain, and there 44 can be no assurance that Pinnacle will be able to fully satisfy its indemnification obligations.
Even if GLPI ultimately succeeds in recovering from Pinnacle any amounts for which GLPI is held liable, GLPI may be temporarily required to bear these losses while seeking recovery from Pinnacle.
GLPI has a material amount of indebtedness that involves debt service obligations, exposes GLPI to interest rate fluctuations and exposes GLPI to the risk of default under its debt obligations and GLPI expects to incur more indebtedness in connection with the transactions contemplated by the merger agreement.
GLPI has a material amount of indebtedness and debt service requirements.
In addition, GLPI expects to incur more indebtedness in connection with the transactions.
GLPI?s material indebtedness could have important consequences to you, including the following: ? adverse conditions in the financial markets or general U.
If GLPI fails to remain qualified as a REIT, GLPI will be subject to U.
GLPI?s qualification as a REIT depends on GLPI?s satisfaction of certain asset, income, organizational, distribution, shareholder ownership and other requirements on a continuing basis.
GLPI?s ability to satisfy the asset tests depends upon its analysis of the characterization and fair market values of its assets, some of which are not susceptible to a precise determination.
GLPI?s compliance with the REIT income and quarterly asset requirements also depends upon its ability to successfully manage the composition of its income and assets on an ongoing basis.
Moreover, the proper classification of one or more of GLPI?s investments may be uncertain in some circumstances, which could affect the application of its REIT qualification.
Accordingly, there can be no assurance that the IRS will not contend that GLPI does not satisfy the requirements for qualification and taxation as a REIT following the merger.
If GLPI were to fail to qualify as a REIT in any taxable year, it would be subject to U.
Any such corporate tax liability could be substantial and would reduce the amount of cash available for distribution to GLPI?s shareholders, which in turn could have an adverse effect on the value of, and trading prices for, GLPI common stock.
In addition, unless GLPI is entitled to relief under certain provisions of the Code, it would also be disqualified from taxation as a REIT for the four taxable years following the year during which it initially ceased to qualify as a REIT.
The future results of GLPI will suffer if GLPI does not effectively manage its expanded portfolio of properties following the completion of the merger and the failure to effectively manage its portfolio could have a material and adverse effect on GLPI?s business and its ability to make distribution to shareholders, as required for GLPI to continue to qualify as a REIT.
Following the completion of the transactions, the size of GLPI?s business will materially increase beyond the current size of GLPI?s business.
GLPI?s future success depends, in part, upon its ability to manage this expanded business, which will pose challenges for management, including challenges related to acting as landlord to a larger portfolio of properties and associated increased costs and complexity.
There can be no assurances that GLPI will be successful.
In addition, GLPI depends on its tenants to operate the properties that GLPI owns in a manner that generates revenues sufficient to allow the tenants to meet their obligations to GLPI, including their obligations to pay rent, maintain certain insurance coverage, pay real estate taxes and maintain the properties in a manner so as not to jeopardize their operating licenses or regulatory status.
The ability of GLPI?s tenants to fulfill their obligations may depend, in part, upon the overall profitability of their operations.
GLPI?s financial position could be materially weakened if any of its tenants were unable to meet their obligations to GLPI or failed to renew or extend any lease as such lease expires, or if GLPI were unable to lease or re-lease GLPI?s properties on economically favorable terms.
GLPI?s tenants are primarily in the business of operating gaming facilities.
As a result, GLPI will be affected by the risks associated with the gaming industry.
Therefore, following the merger, GLPI?s success will continue to be dependent on the gaming industry, which could be adversely affected by economic conditions in general, changes in consumer trends and preferences and other factors over which GLPI and its tenants have no control.
As GLPI is subject to risks inherent in substantial investments in a single industry, a decrease in the gaming business would likely have a greater adverse effect on GLPI?s business than if it owned a more diversified real estate portfolio, particularly because a component of the rent paid to GLPI is based, over time, on the performance of the gaming facilities operated by GLPI?s tenants on its properties.
Moreover, the operations of the facilities on GLPI?s properties are subject to disruptions or reduced patronage as a result of severe weather conditions, natural disasters and other casualty events.
Because many of the facilities are located on or adjacent to bodies of water, they are subject to risks in addition to those associated with land-based facilities, including loss of service due to casualty, forces of nature, mechanical failure, extended or extraordinary maintenance, flood, hurricane or other severe weather conditions.
Because a component of the rent paid to GLPI is based, over time, on the performance of the gaming facilities operated by GLPI?s tenants a casualty that leads to the loss of use of a casino facility for an extended period may negatively affect GLPI?s revenues.
GLPI will be significantly dependent on two tenants and their respective subsidiaries until GLPI substantially diversifies its portfolio, and an event that has a material and adverse effect on either tenant?s respective business, financial position or results of operations could have a material and adverse effect on GLPI?s business, financial position or results of operations.
Following completion of the merger, substantially all of GLPI?s revenue will be based on the revenue derived under the master leases with Pinnacle and Penn.
Because these master leases are triple-net leases, GLPI will depend on Pinnacle and Penn to pay all insurance, taxes, utilities and maintenance and repair expenses in connection with these leased properties and to indemnify, defend and hold GLPI harmless from and against various claims, litigation and liabilities arising in connection with their businesses.
There can be no assurance that either Pinnacle or Penn will have sufficient assets, income or access to financing to enable them to satisfy their payment obligations under the master leases.
The inability or unwillingness of either Pinnacle or Penn to meet their subsidiaries? it may limit GLPI?s ability to obtain additional debt or equity financing for working capital, capital expenditures, acquisitions, debt service requirements and general corporate or other purposes; ? , among other matters, not to directly or indirectly solicit, initiate, knowingly facilitate or knowingly encourage any inquiries regarding, or the making of any proposal or offer that constitutes, or would reasonably be expected to lead to competing proposals relating to certain alternative transaction proposals or, except as described below, engage in, continue or otherwise participate in any substantive discussions or negotiations regarding, or furnish to any other person any nonpublic information in connection with or for the purpose of encouraging or facilitating, such a proposal.
If Pinnacle receives a certain written unsolicited bona fide transaction proposal, prior to adoption of the merger agreement by its stockholders, that the Pinnacle board of directors has determined in good faith after consultation with its outside legal counsel and financial advisors that such proposal constitutes or would reasonably be expected to lead to a company takeover proposal that constitutes a superior proposal which is defined as an alternative transaction that the Pinnacle board of directors determines is more favorable to the stockholders of Pinnacle from a financial point of view than the transaction contemplated by this merger agreement after taking certain factors into consideration and that failure to take certain actions with respect to such a superior proposal would be reasonably likely to be inconsistent with its fiduciary duties under appliance law, then, Pinnacle may, subject to certain conditions, furnish nonpublic information to the third party making the superior proposal for an alternative transaction and engage in discussions or negotiations with the third party with respect to the superior proposal for an alternative transaction.
Antitrust Division of the Department of Justice or the Federal Trade Commission the ?FTC? ?expect,? Background of the Merger GLPI is a self-administered and self-managed Pennsylvania REIT that was formed as part of the Penn spin-off.
GLPI?s primary business consists of acquiring, financing, and owning real estate property to be leased to gaming operators in triple-net lease arrangements, and GLPI?s management has been seeking out and evaluating strategic acquisition opportunities since GLPI?s inception.
As part of this ongoing evaluation process, GLPI?s management identified Pinnacle as a company with real estate assets that would fit into GLPI?s growth strategy.
As part of its ongoing evaluation of Pinnacle?s business, the Pinnacle board, together with senior management, regularly reviews opportunities to increase shareholder value.
Pinnacle?s long-term strategy has included disciplined capital expenditures to improve and maintain its existing properties, while growing the number and quality of its facilities by pursuing gaming entertainment opportunities it believes it can improve, develop, or acquire.
In recent years, Pinnacle has focused on increasing shareholder value through, among other things, acquiring Ameristar Casinos, Inc.
Louis, completing the sales of its Ameristar Casino Lake Charles development and its ownership interests in its subsidiaries that operate the Lumiere Place Casino, HoteLumiere, the Four Seasons Hotel St.
Louis, and related excess land parcels.
In addition, Pinnacle regularly engages with its stockholders to understand their perspectives on the most effective ways to increase shareholder value.
Following Penn?s announcement of the Penn spin-off on November 15, 2012, Pinnacle?s management and board have considered the possibility of pursuing a separation of Pinnacle?s real estate from its operating business.
From time to time since the announcement of the Penn spin-off, Pinnacle stockholders have recommended that Pinnacle explore such a separation transaction.
However, at that time, Pinnacle?s focus had primarily been the successful integration of the Ameristar acquisition.
?Goldman Sachs? the possibility that the consummation of the proposed merger is delayed or does not occur, including due to the failure to obtain the required approvals of the GLPI shareholders and Pinnacle stockholders, which may have adverse effects on the business and the stock price of GLPI and Pinnacle; ? Shares of Pinnacle Common Stock are Traded on NASDAQ under the symbol ?PNK? rights in connection with the share issuance proposal.
No Solicitation of Alternative Proposals see page 137 Pursuant to the merger agreement, Pinnacle has agreed that it will, and will cause each of its and its affiliates respective officers, directors and employees, agents, financial advisors, investment bankers, attorneys, accountants or other representatives collectively, ?representatives? will be held on March 15, 2016, beginning at 10 a.
Q: Who can vote at the special meetings?
A: All GLPI shareholders of record at the close of business on February 8, 2016, the record date for the GLPI special meeting, are entitled to receive notice of and to vote at the special meeting.
All Pinnacle stockholders of record at the close of business on February 8, 2016, the record date for the Pinnacle special meeting, are entitled to receive notice of and to vote at the special meeting.
Q: What do I need to do now?
Additional information on voting procedures can be found under the section titled ?GLPI Special Meeting? A shareholder who holds shares in ?street name? will be held on March 15, 2016 at the offices of Kozloff Stoudt, 2640 Westview Drive, Wyomissing, Pennsylvania 19610, at 10 a.
This special meeting will be held for the following purposes: 1.
?Pinnacle? an injunction is entered permanently restraining, enjoining or otherwise prohibiting the consummation of the merger and such injunction shall have become final and nonappealable provided that the right to terminate will not be available to a party if the injunction was due to the failure of the party to perform any of its obligations under the merger agreement ; ? You can find more information regarding the spin-off by reading PNK Entertainment, Inc.
?s Form 10 filed with the SEC File No.
Q: Who can answer any questions I may have about the special meeting or the merger?
To understand the merger and the matters being voted on by Pinnacle stockholders and GLPI shareholders at their respective special meetings more fully, and to obtain a more complete description of the legal terms of the merger agreement and the agreements related thereto, you should carefully read this entire document, including the annexes, and the documents to which GLPI and Pinnacle refer you.
Each item in this summary includes a page reference directing you to a more complete description of that topic.
See ?Where You Can Find More Information.
? from JPMorgan Chase Bank, N.
The borrower under the Pinnacle Bridge Facility will be OpCo and the obligations of OpCo under the Pinnacle Bridge Facility will be guaranteed by each existing and subsequently acquired or formed direct and indirect domestic wholly-owned subsidiary of OpCo, subject to customary exceptions; and 2 a commitment letter dated November 17, 2015 the ?Pinnacle Takeout Commitment Letter? ?should,? ?could,? rights in connection with the merger.
Under the laws of the Commonwealth of Pennsylvania, GLPI shareholders do not have appraisal or dissenters? prior to the separation, Pinnacle will transfer all of the assets, if any, and liabilities relating to the compensation and benefit plans and agreements to OpCo.
GLPI and Pinnacle encourage you to read the Employees Matters Agreement carefully.
Tax Matters Agreement see page 161 The tax matters agreement, a copy of which is attached to the merger agreement as Exhibit D thereto, will govern OpCo?s and GLPI?s respective rights, responsibilities and obligations with respect to taxes including taxes arising in the ordinary course of business and taxes incurred as a result of the spin-off , tax attributes, tax returns, tax contests and certain other tax matters.
Under the tax matters agreement, OpCo will generally be liable for taxes of Pinnacle relating to time periods before the effective time of the merger.
GLPI, however, will be liable for taxes of Pinnacle arising as a result of the merger, the spin-off and certain related transactions.
GLPI?s liability in this regard will be limited by certain assumptions relating to Pinnacle?s tax attributes and projected taxable income, with OpCo bearing liability to the extent additional taxes may result from an inaccuracy in such assumptions.
OpCo and GLPI have also agreed to share liability for certain taxes relating to the assets to be acquired by GLPI.
GLPI will bear liability for any transfer taxes incurred on the merger, the spin-off and certain related transactions.
The tax matters agreement provides that OpCo will generally prepare and file any tax returns for tax periods of Pinnacle ending on or prior to the effective time of the merger and will control any tax contests related to such tax returns, subject to certain review, participation and consent rights of GLPI.
GLPI and Pinnacle encourage you to read the tax matters agreement carefully.
Recommendation of GLPI?s Board of Directors and Reasons for the Merger see page 74 GLPI?s board of directors recommends that GLPI shareholders vote ?FOR? properly submitting a new, later-dated proxy card, which must be received before their shares are voted at the special meeting in which case only the later-dated proxy is counted and the earlier proxy is revoked ; ? may assert that the merger fails to qualify as such.
If the IRS were to be successful in any such contention, or if for any other reason the merger were to fail to qualify as a ?reorganization,? The Parties see pages 47 and 48 Gaming and Leisure Properties, Inc.
On November 15, 2012, Penn National Gaming, Inc.
?Penn? Telephone: Pinnacle stockholders may submit their proxy by calling the toll-free telephone number shown on their proxy card.
Telephone voting is available 24 hours a day and will be accessible until 11:59 p.
Eastern Time, on March 14, 2016.
Pinnacle stockholders who submit a proxy this way should NOT send in their proxy card.
Pinnacle stockholders who vote this way should mail the proxy card early enough so that it is received before the date of the special meeting.
? This amount will be funded through either but not both of i the Pinnacle Bridge Facility defined below or ii the Pinnacle Takeout Facilities defined below , together with the proceeds from any Pinnacle Notes defined below.
Remaining amounts under the Bridge Revolving Credit Facility defined below or the Takeout Revolving Credit Facility defined below , as applicable, will be used for general corporate purposes of OpCo, including, without limitation, permitted acquisitions or dividends.
To provide the debt financing required by Pinnacle to consummate the merger, Pinnacle has entered into: 1 an amended and restated commitment letter, dated November 17, 2015 the ?Pinnacle Bridge Commitment Letter? in a tax-free distribution.
As a result of the Penn spin-off, GLPI acquired substantially all of Penn?s former real property assets and leased back most of those assets to Penn for use by its subsidiaries, pursuant to a triple-net master lease the ?Penn master lease?.
Following the Penn spin-off, GLPI became a self-administered and self-managed Pennsylvania REIT.
GLPI?s primary business consists of acquiring, financing, and owning real estate property to be leased to gaming operators in triple-net lease arrangements.
These facilities are geographically diversified across 12 states and contain approximately 7.
The principal executive offices of GLPI are located at 845 Berkshire Blvd.
Gold Merger Sub, LLC Merger Sub is a direct, wholly owned subsidiary of GLPI.
Merger Sub was formed by GLPI solely in contemplation of the merger, has not conducted any business and has no assets, liabilities or other obligations of any nature other than as set forth in the merger agreement.
Pinnacle is an owner, operator and developer of casinos, a racetrack and related hospitality and entertainment facilities.
Pinnacle owns and operates 15 gaming properties in Colorado, Indiana, Iowa, Louisiana, Missouri, 10 Mississippi, Nevada and Ohio, fourteen of which will be subject to the master lease as defined below.
Pinnacle also holds a majority interest in the racing license owner, and is a party to a management contract, for Retama Park Racetrack located outside of San Antonio, Texas.
In addition to these properties, Pinnacle owns and operates a live and televised poker tournament series under the trade name Heartland Poker Tour.
Pinnacle?s mission is to increase stockholder value.
Pinnacle seeks to increase revenues through enhancing the guest experience by providing its guests with their favorite games, restaurants, hotel accommodations, entertainment and other amenities in attractive surroundings with high-quality guest service and guest rewards programs.
Pinnacle seeks to improve profit by focusing on operational excellence and efficiency while meeting its guests? expectations of value and reducing its leverage.
Pinnacle?s long-term strategy includes disciplined capital expenditures to improve and maintain its existing properties, while growing the number and quality of its facilities by pursuing gaming entertainment opportunities it can improve, develop, or acquire.
In making decisions, Pinnacle considers its stockholders, guests, team members and other constituents in the communities in which it operates.
The principal executive offices of Pinnacle are located at 3980 Howard Hughes Parkway, Las Vegas, Nevada 89169, and its telephone number is 702 541-7777.
Immediately following the closing of the merger, OpCo will be renamed ?Pinnacle Entertainment, Inc.
? the GLPI adjournment proposal.
In the course of reaching its decision to approve the merger agreement and the transactions contemplated by the merger agreement and the other transaction documents, including the share issuance proposal, GLPI?s board of directors considered a number of factors in its deliberations.
For a more complete discussion of these factors, see ?The Merger?Recommendation of GLPI?s Board of Directors and Reasons for the Merger.
? pursuant to which such due diligence information could be provided.
Later that day Morgan Stanley sent Goldman Sachs the list of high-priority due diligence requests and Goldman Sachs sent Morgan Stanley a proposed NDA in order to facilitate discussions between Pinnacle and GLPI regarding a potential transaction.
The draft NDA included ?standstill? reduces the volume of duplicate information received at your household and helps to reduce our expenses.
Questions and Additional Information GLPI shareholders may contact GLPI?s proxy solicitor, MacKenzie Partners, Inc.
Shareholders may call MacKenzie Partners Inc.
Date, Time and Place of the Pinnacle Special Meeting The Pinnacle special meeting will be held on March 15, 2016, beginning at 10:00 a.
Purposes of the Pinnacle Special Meeting The Pinnacle special meeting is being held to consider and vote upon the following proposals: ? GLPI and Pinnacle will be required to pay their respective costs relating to the transactions, such as legal, accounting, financial advisory and printing fees, whether or not the transactions are completed; ? , by and among GLPI, Gold Merger Sub, LLC, a wholly owned subsidiary of GLPI, and Pinnacle the ?share issuance proposal? strategic actions taken by GLPI or its competitors, such as acquisitions; ? Q: How will my proxy be voted?
A: If you submit your proxy via the Internet, by telephone or by completing, signing, dating and returning the enclosed proxy card, your proxy will be voted in accordance with your instructions.
Additional information on voting procedures can be found under the section titled ?GLPI Special Meeting? The completion of the transactions may trigger change in control or other provisions in certain agreements to which Pinnacle is a party.
If GLPI and Pinnacle are unable to negotiate waivers of those provisions, the counterparties may exercise their rights and remedies under the agreements, potentially terminating the agreements or seeking monetary damages.
Even if GLPI and Pinnacle are able to negotiate waivers, the counterparties may require a fee for such waivers or seek to renegotiate the agreements on terms less favorable to Pinnacle.
As discussed in the risk factor above, completion of the merger is conditioned upon the receipt of certain governmental approvals.
For more information, see the section titled ?The Merger Agreement?Expenses and Termination Fees Relating to the Termination of the Merger Agreement.
? Effects of the Merger On the closing date, before the effective time of the merger, Pinnacle will distribute to Pinnacle stockholders all of the issued and outstanding shares of common stock of OpCo, a newly formed wholly owned subsidiary of Pinnacle, containing Pinnacle?s operating assets and certain other specified assets.
Then, upon satisfaction or waiver of the conditions to closing, on the closing date, Pinnacle will merge with and into Merger Sub, a wholly owned subsidiary of GLPI formed for the purpose of effecting the merger.
Merger Sub will be the surviving company in the merger.
At the effective time of the merger, each share of Pinnacle common stock issued and outstanding immediately prior to the effective time of the merger will be converted into 0.
In addition, Pinnacle will take all actions as may be necessary so that at the effective time of the merger, each Pinnacle stock option, restricted stock unit including phantom stock unit awards, restricted stock unit awards, other stock unit awards, performance share grants, director other stock unit awards, deferred shares and any other similar instruments and cash performance unit will be treated as described in ??Interests of Certain Pinnacle Persons in the Merger.
? respective financial advisors meet to discuss the January 16 Proposal and additional information provided on February 5, 2015.
Later that day, Morgan Stanley and Goldman Sachs had a telephone call to discuss next steps and agreed that Morgan Stanley would provide Goldman Sachs with a list of high-priority due diligence requests and Goldman Sachs would provide Morgan Stanley with a form of nondisclosure agreement an ?NDA? the merger agreement proposal, ?FOR? advisory services and opinion were provided for the information and assistance of the board of directors of Pinnacle in connection with its consideration of the proposed transaction and the opinion does not constitute a recommendation as to how any holder of Pinnacle common stock should vote with respect to the proposed transaction or any other matter.
? rights in connection with the share issuance proposal.
? who wishes to attend the special meeting in person should bring: ? submitting a proxy via Internet or by telephone at a later date in which case only the later-dated proxy is counted and the earlier proxy is revoked ; or ? Risks Relating to GLPI After Completion of the Merger Following the merger, the market price of GLPI common stock may be volatile, and holders of GLPI?s common stock could lose a significant portion of their investment due to drops in the market price of GLPI?s common stock following completion of the transactions.
The market price of GLPI?s common stock may be volatile, and following completion of the merger, shareholders may not be able to resell their shares of GLPI common stock at or above the price at which they acquired the common stock pursuant to the merger agreement or otherwise due to fluctuations in its market price, including changes in price caused by factors unrelated to GLPI?s performance or prospects.
Specific factors that may have a significant effect on the market price for GLPI?s common stock include, among others, the following: ? ?estimate,? rendered to the board of directors its oral opinion, subsequently confirmed in writing, to the effect that, as of July 20, 2015, based upon and subject to the factors and assumptions set forth in Goldman Sachs? the GLPI adjournment proposal.
See ?The Merger?Recommendation of GLPI?s Board of Directors and Reasons for the Merger.
GLPI shareholders are encouraged to read the entire document carefully, including the annexes to and documents incorporated by reference into this document, for more detailed information regarding the merger agreement and the transactions contemplated by the merger agreement, including the share issuance proposal.
Attendance at the GLPI Special Meeting Only GLPI shareholders of record as of the close of business on the record date, beneficial owners as of the close of business on the record date, holders of valid proxies for the special meeting and invited guests of GLPI may attend the special meeting.
The additional items, if any, that attendees must bring depend on whether they are shareholders of record, beneficial owners or proxy holders.
? Q: What happens if the merger is not completed?
A: If the merger agreement is not adopted by Pinnacle?s stockholders, the share issuance is not approved by GLPI?s shareholders or if the merger is not completed for any other reason, Pinnacle?s stockholders will not receive any payment for their shares of common stock and OpCo will not be spun off into an independently traded public company.
Instead, Pinnacle will remain an independent public company, Pinnacle common stock will continue to be listed and traded on NASDAQ and registered under the Exchange Act and Pinnacle will continue to file periodic reports with the SEC on account of Pinnacle?s common stock.
? approval.
On June 19, 2015, Mr.
Carlino sent a letter to the Pinnacle board of directors presenting a revised proposal for Pinnacle?s real estate assets the ?June 19 Proposal? and under the section titled ?Pinnacle Special Meeting.
? A beneficial owner of Pinnacle common stock who wishes to attend the Pinnacle special meeting in person should bring: ? beginning on page 60 for a description of the transactions contemplated by the merger agreement, including the share issuance proposal, and the section titled ?Risk Factors? wherein an unfavorable judgment, decree, injunction, order or ruling would prevent the performance of the transaction documents or any of the transactions contemplated hereby or thereby, declare unlawful the transactions contemplated by the transaction documents or cause such transactions to be rescinded or reasonably be expected to cause a regulatory material adverse effect the ?regulatory approval condition?.
Neither GLPI nor Pinnacle can be certain when, or if, the conditions to the merger will be satisfied or waived, or that the merger will be completed.
Termination of the Merger Agreement see page 151 Pinnacle and GLPI may mutually agree to terminate the merger agreement before completing the merger, even after approval of the merger agreement by the Pinnacle stockholders and approval of the share issuance by GLPI shareholders.
In addition, either GLPI or Pinnacle may decide to terminate the merger agreement if: ? and Pinnacle trading symbol ?PNK?.
The obligations of GLPI and Pinnacle to complete the merger are subject to the satisfaction or waiver of a number of conditions set forth in the merger agreement, a copy of which is included as part of Annex A.
It also contains or references information about GLPI and Pinnacle and certain related agreements and matters.
You also can obtain information about GLPI and Pinnacle from documents that each has filed with the Securities and Exchange Commission.
Sanfilippo Chairman and Chief Executive Officer Chief Executive Officer Gaming and Leisure Properties, Inc.
Any representation to the contrary is a criminal offense.
This document is dated February 16, 2016 and is first being mailed to shareholders of record of GLPI and stockholders of record of Pinnacle on or about February 16, 2016.
GAMING AND LEISURE PROPERTIES, INC.
?GLPI? a material portion of GLPI?s cash flows will be dedicated to the payment of principal and interest on GLPI?s indebtedness, including indebtedness it may incur in the future, and will not be available for other purposes, including to pay dividends and make acquisitions; ? ?forecast,? , which, immediately after the consummation of the merger, will be renamed 1 Pinnacle Entertainment, Inc.
Immediately following the separation but prior to the merger, Pinnacle will effect a pro rata distribution to Pinnacle?s stockholders of common stock representing a 100% interest in OpCo the ?distribution? ?believe,? Pinnacle stockholders should note that the compensation proposal is merely an advisory vote which will not be binding on Pinnacle, GLPI or their respective board of directors.
Further, the underlying plans and arrangements are contractual in nature and not, by their terms, subject to stockholder approval.
Accordingly, regardless of the outcome of the advisory vote, if the merger is consummated, the eligibility of the Pinnacle named executive officers for such payments and benefits will not be affected by the outcome of the advisory vote.
Pinnacle stockholders are encouraged to read the entire document carefully, including the annexes to and documents incorporated by reference into this document, for more detailed information regarding the merger agreement and the merger and other transactions contemplated by the merger agreement, including the spin-off and the merger.
Attendance at the Pinnacle Special Meeting Only Pinnacle stockholders of record as of the record date, beneficial owners as of the record date, holders of valid proxies for the special meeting and invited guests of Pinnacle may attend the Pinnacle special meeting.
All attendees should be prepared to present government-issued photo identification such as a driver?s license or passport for admittance.
The additional items, if any, that attendees must bring depend on whether they are stockholders of record, beneficial owners or proxy holders.
? the adoption of that proposal.
Additional information on voting procedures can be found under the section titled ?GLPI Special Meeting? ; ? the Pinnacle adjournment proposal.
Pinnacle?s board of directors unanimously determined that it is advisable and in the best interests of Pinnacle?s stockholders to enter into the merger agreement, and unanimously approved the merger agreement and the transactions contemplated by the merger agreement, including the merger, and resolved to recommend adoption of the merger agreement by Pinnacle?s stockholders and that the adoption of the merger agreement be submitted to a vote at a meeting of Pinnacle?s stockholders.
In considering the recommendations of Pinnacle?s board of directors, Pinnacle stockholders should be aware that some of Pinnacle?s directors and executive officers may have interests that are different from, or in addition to, the interests of Pinnacle stockholders more generally.
For more information see the section titled ?The Merger?Interests of Certain Pinnacle Persons in the Merger.
? , GLPI is required to obtain shareholder approval of the share issuance.
Accordingly, GLPI will hold a special meeting of shareholders to vote on the share issuance the ?share issuance proposal? does not instruct the broker, bank or other nominee that is the record owner of such stockholder?s shares on how to vote those shares on a particular proposal.
Vote Required The votes required for each proposal are as follows: Proposal 1?the merger agreement proposal.
The affirmative vote, in person or by proxy, of holders of a majority of the outstanding shares of Pinnacle common stock is required to adopt the merger agreement proposal.
The required vote on Proposal 1 is based on the number of outstanding shares?not the number of shares actually voted.
The failure of any Pinnacle stockholder to submit a vote i.
Because the merger agreement proposal 1 is non-routine, brokers, banks and other nominees do not have discretionary authority to vote on the merger agreement proposal, and will not be able to vote on the merger agreement proposal absent instructions from the beneficial owner.
As a result, a broker non-vote will have the same effect as a vote ?against? sending a written notice of revocation to Pinnacle at 3980 Howard Hughes Parkway, Las Vegas, Nevada 89169, Attention: John A.
Godfrey, General Counsel, which must be received before their shares are voted at the special meeting; ? , pursuant to which each of the Carlino Group and the Fortress Group has agreed, among other matters and upon the terms and subject to the conditions set forth in their 21 respective voting agreements, to vote all of their shares of GLPI common stock in favor of the share issuance proposal and the other actions contemplated by the merger agreement and against any proposal that would reasonably be expected to materially impair the ability of GLPI or Merger Sub to consummate the merger.
Listing of GLPI Common Stock; Delisting of Pinnacle Common Stock see page 129 It is a condition to the consummation of the merger that the shares of GLPI common stock to be issued to Pinnacle stockholders in the merger be authorized for listing on NASDAQ, subject to official notice of issuance.
As a result of the merger, shares of Pinnacle common stock currently listed on NASDAQ will cease to be listed on NASDAQ.
Under the Pennsylvania Business Corporation Law the ?PBCL? Proposal 2 : ?FOR? and Gold Merger Sub, LLC ?Merger Sub? A proxy holder who wishes to attend the Pinnacle special meeting in person should bring: ? and ii Fortress Investment Fund V GLPI SisterCo B LP, Fortress Investment Fund V GLPI SisterCo C LP, Fortress Investment Fund V GLPI SisterCo F LP, Fortress Investment Fund V Coinvestment GLPI Sister Co B LP, Fortress Investment Fund V Coinvestment GLPI SisterCo C LP, Fortress Investment Fund V Coinvestment GLPI SisterCo F LP, Fortress Investment Fund V GLPI SisterCo A LP, Fortress Investment Fund V GLPI SisterCo D LP, Fortress Investment Fund V GLPI SisterCo E LP, Fortress Investment Fund V Coinvestment GLPI SisterCo A LP and Fortress Investment Fund V Coinvestment GLPI SisterCo D LP the ?Fortress Group? and ?The Merger Agreement?Financing Efforts?GLPI?s Financing.
? the compensation proposal and ?FOR? compensation, labor relations, and related matters.
The Employee Matters Agreement, in conjunction with the merger agreement, will provide that all Pinnacle employees will be transferred to OpCo prior to the separation and distribution.
Except with regard to Pinnacle?s outstanding long-term incentive awards as described more fully below in ?The Merger?Treatment of 15 Pinnacle Long-Term Incentive Compensation? will be held on March 15, 2016, beginning at 10 a.
A: The special meeting of Pinnacle the ?Pinnacle special meeting? and the employee matters agreement the ?employee matters agreement?.
A tax matters agreement has been entered into as of the date of the execution of the merger agreement and is also attached as an exhibit to the merger agreement the ?tax matters agreement,? Q: What do I do if I am a GLPI shareholder and I want to revoke my proxy?
A: Shareholders of record may revoke their proxies at any time before their shares are voted at the GLPI special meeting in any of the following ways: ? the GLPI adjournment proposal.
Under the laws of the State of Delaware, the approval of Pinnacle?s stockholders must be obtained before the merger can be completed.
Adoption of the merger agreement requires the affirmative vote of the holders of a majority of the outstanding shares of Pinnacle common stock.
Pinnacle?s board of directors unanimously recommends that Pinnacle stockholders vote ?FOR? Proposal 1.
To adopt the merger agreement pursuant to which each outstanding share of Pinnacle common stock will be converted into the right to receive 0.
? entered into an Agreement and Plan of Merger the ?merger agreement? ?pursue,? , rendered its oral opinion to the GLPI board of directors, subsequently confirmed by delivery of a written opinion dated July 20, 2015 that, as of that date, and based upon and subject to the various assumptions made, procedures followed, matters considered and qualifications and limitations on the scope of review undertaken as set forth in the written opinion, the exchange ratio pursuant to the merger agreement was fair from a financial point of view to GLPI.
You should read Morgan Stanley?s opinion, this section and the summary of Morgan Stanley?s opinion carefully and in their entirety for a discussion of the assumptions made, procedures followed, matters considered and qualifications and limitations upon the review undertaken by Morgan Stanley in rendering its opinion.
Morgan Stanley?s opinion was directed to the GLPI board of directors, in its capacity as such, and addressed only the fairness from a financial point of view to GLPI of the exchange ratio pursuant to the merger agreement as of the date of such opinion and does not address any other aspect of the transactions contemplated by the transaction documents.
Morgan Stanley?s opinion did not address any other aspects or implications of the transactions.
It was not intended to, and does not, constitute advice or a recommendation to any holder of shares of GLPI common stock as to how to vote at the GLPI special meeting or whether to take any other action with respect to the transactions.
?Goldman Sachs? and under the section titled ?Pinnacle Special Meeting.
? it could make it more difficult for GLPI to satisfy its obligations with respect to its indebtedness, including under the notes, and any failure to comply with the obligations of any of GLPI?s debt instruments, including any financial and other restrictive covenants, could result in an event of default under the indenture governing the notes or under the agreements governing GLPI?s other indebtedness which, if not cured or waived, could result in the acceleration of GLPI?s indebtedness under the senior credit facility and under the notes.
GLPI cannot assure you that its business will generate sufficient cash flow from operations, or that future borrowings will be available to GLPI under its senior unsecured credit facility or from other debt financing, in an amount sufficient to enable GLPI to pay its indebtedness, including the notes, or to fund its other liquidity needs.
If GLPI does not generate sufficient cash flow from operations to satisfy its debt service obligations, including payments on the notes, GLPI may have to undertake alternative financing plans, such as refinancing or restructuring its indebtedness, selling assets or seeking to raise additional capital, including by issuing equity securities or securities convertible into equity securities.
GLPI?s ability to restructure or refinance its indebtedness will depend on the capital markets and its financial condition at such time.
Any refinancing of GLPI?s indebtedness could be at higher interest rates and may require GLPI to comply with more onerous covenants, which could further restrict its business operations.
GLPI?s inability to generate sufficient cash flow to satisfy its debt service requirements, including the inability to service the notes, or to refinance its obligations 45 on commercially reasonable terms, would have an adverse effect, which could be material, on its business, financial position and results of operations, as well as on GLPI?s ability to satisfy its obligations in respect of the notes.
To the extent that GLPI will incur additional indebtedness or such other obligations, the risks associated with GLPI?s leverage, including its possible inability to service its debt, would increase.
Adverse changes in GLPI?s credit rating may affect GLPI?s borrowing capacity and borrowing terms.
GLPI?s outstanding debt is periodically rated by nationally recognized credit rating agencies.
The credit ratings are based upon GLPI?s operating performance, liquidity and leverage ratios, overall financial position, and other factors viewed by the credit rating agencies as relevant to both GLPI?s industry and the economic outlook.
GLPI?s credit rating may affect the amount of capital GLPI can access, as well as the terms of any financing GLPI obtains.
Because GLPI relies in part on debt financing to fund growth, adverse changes in GLPI?s credit rating may have a negative effect on GLPI?s future growth.
If GLPI cannot obtain additional capital, GLPI?s growth may be limited.
In order to qualify and maintain GLPI?s qualification as a REIT each year, GLPI is required to distribute at least 90% of GLPI?s REIT taxable income, excluding net capital gains, to GLPI?s shareholders.
As a result, GLPI?s retained earnings available to fund acquisitions, development, or other capital expenditures are nominal, and GLPI relies upon the availability of additional debt or equity capital to fund these activities.
GLPI?s long-term ability to grow through acquisitions or development, which is an important component of GLPI?s strategy, will be limited if GLPI cannot obtain additional debt financing or raise equity capital.
Market conditions may make it difficult to obtain debt financing or raise equity capital, and GLPI cannot assure you that GLPI will be able to obtain additional debt or equity financing or that GLPI will be able to obtain such capital on favorable terms.
After the merger is completed, Pinnacle stockholders will become shareholders of a Pennsylvania corporation and have their rights as shareholders governed by GLPI?s organizational documents and Pennsylvania law.
Upon consummation of the merger, Pinnacle stockholders will receive GLPI common stock that will be governed by GLPI?s organizational documents and the PBCL.
For a detailed discussion of the differences between rights as a stockholders of Pinnacle and rights as a shareholder of GLPI, see ?Comparison of Rights of Common Shareholders of GLPI and Common Stockholders of Pinnacle.
? announced that it intended to pursue a plan to separate the majority of its operating assets and real property assets into two publicly traded companies including an operating entity, and, through a tax-free spin-off of its real estate assets to holders of its common and preferred stock, a newly formed publicly traded real estate investment trust a ?REIT? and GLP Financing II, Inc.
In connection with the transactions, GLPI has entered into an amended and restated commitment letter dated July 31, 2015 the ?GLPI Commitment Letter? and ?The Merger Agreement?Expenses and Termination Fees Relating to the Termination of the Merger Agreement.
Pinnacle?s executive officers and directors have interests in the transactions that may be different from, or in addition to, the interests of Pinnacle stockholders generally.
When considering the recommendation of the Pinnacle board with respect to the merger, you should be aware that Pinnacle?s executive officers and directors may have interests in the merger that are different from, or in addition to, those of Pinnacle?s stockholders more generally.
Pinnacle?s board of directors was aware of these interests during its deliberations on the merits of the merger and in deciding to recommend that Pinnacle stockholders vote for the adoption of the merger agreement at the Pinnacle special meeting.
At the time of the distribution, equity incentive awards and certain cash performance unit awards granted on or prior to July 16, 2015 will be adjusted into OpCo awards and Pinnacle awards in proportion to the relative value of Pinnacle after giving effect to the spin-off and OpCo.
Outstanding equity incentive awards and cash performance unit awards granted after July 16, 2015 will be adjusted into OpCo awards.
Following the spin-off, all OpCo awards will continue to vest in accordance with their terms based on OpCo service.
Upon completion of the merger, each outstanding Pinnacle equity award will be cancelled in exchange for a number of shares of GLPI common stock determined based on the exchange ratio.
In addition, certain cash performance unit awards will be cancelled in the merger in exchange for GLPI common stock based on the value of GLPI common stock at the time of the merger.
Pinnacle and GLPI will be subject to business uncertainties while the merger is pending, which could adversely affect their business.
In connection with the pendency of the transactions, it is possible that certain persons with whom Pinnacle and GLPI have a business relationship may delay or defer certain business decisions or might decide to seek to terminate, change or renegotiate their relationships with Pinnacle or GLPI, as the case may be, as a result of the transactions, which could negatively affect Pinnacle?s or GLPI?s revenues, earnings and cash flows, as well as the market price of Pinnacle?s or GLPI?s respective common stock, regardless of whether the merger is completed.
Under the terms of the merger agreement, Pinnacle and GLPI are subject to certain restrictions on the conduct of its business prior to the effective time of the merger, which may adversely affect its ability to execute certain of its business strategies, including, the ability in certain cases to enter into contracts, acquire or dispose of assets, incur indebtedness or incur capital expenditures.
Such limitations could negatively affect Pinnacle?s businesses and operations prior to the completion of the transactions.
Completion of the merger is conditioned upon the receipt of certain governmental approvals, including, without limitation, gaming regulatory approvals.
Although each party has agreed to use their respective reasonable best efforts to obtain the requisite governmental approvals, there can be no assurance that these approvals will be obtained and that the other conditions to completing the merger will be satisfied.
In addition, the governmental authorities from which the regulatory approvals are required may impose conditions on the completion of the merger or require changes to the terms of the merger or other agreements to be entered into in connection with the merger agreement.
Such conditions or changes and the process of obtaining regulatory approvals could have the effect of delaying or impeding consummation of the transaction or of imposing additional costs or limitations on GLPI or Pinnacle following completion of the merger, any of which might have an adverse effect on GLPI or Pinnacle following completion of the merger.
For additional information about the regulatory approvals process, see ?The Merger?Regulatory Approvals.
? as defined in the merger agreement , subject to certain conditions.
The Pinnacle marketing period is the first period of twenty consecutive-days throughout and at the end of which nothing shall have occurred and no condition exists that would cause any of the conditions to closing to fail to be satisfied, assuming the closing to the merger were to be scheduled for any time during such twenty consecutive day period other than conditions to closing that i relate to the stockholder approval, which must be satisfied five business days prior to the end of the Pinnacle marketing period and ii conditions to closing that by their nature will not be satisfied until the closing of the merger.
Moreover, in no event will the closing of the merger occur prior to November 20, 2015, See ?The Merger Agreement?Marketing Periods.
This amount is expected to be funded through one or more of the following sources: available cash on hand, the issuance and sale by GLP Capital, L.
?GLP Capital? government-issued photo identification; and ? , will enter into a triple-net master lease with Pinnacle ?Landlord? it could make GLPI more vulnerable to downturns in general economic or industry conditions or in GLPI?s business, or prevent GLPI from carrying out activities that are important to its growth; ? Proposal 2 : ?FOR? or ?against? the ability to successfully integrate the real property portfolios of GLPI and Pinnacle, unexpected costs or unexpected liabilities that may arise from the merger, whether or not consummated; ? the merger agreement proposal; ?FOR? the share issuance proposal and Pinnacle?s stockholders ?FOR? changes in tax or accounting standards, policies, guidance, interpretations or principles; 42 ? and Pinnacle stockholders must approve the proposal to adopt the merger agreement the ?merger agreement proposal? ?may,? and ?The Merger Agreement?Financing Efforts?Pinnacle?s Financing.
? submitting a proxy via Internet or by telephone at a later date in which case only the later-dated proxy is counted and the earlier proxy is revoked ; or ? The principal executive offices of OpCo will be located at 3980 Howard Hughes Parkway, Las Vegas, Nevada 89169, and its telephone number is 702 541-7777.
GLPI Special Meeting see page 49 Date, Time and Place.
The GLPI special meeting will be held on March 15, 2016, at the offices of Kozloff Stoudt, 2640 Westview Drive, Wyomissing, Pennsylvania 19610, at 10 a.
The special meeting of GLPI shareholders is being held to consider and vote on the following proposals: ? , may have regarding the merger, the issuance of shares of GLPI common stock to Pinnacle stockholders in connection with the merger and other matters being considered at the special meetings of GLPI?s shareholders and Pinnacle?s stockholders and the answers to those questions.
Q: Why am I receiving this document?
A: GLPI, Pinnacle and Gold Merger Sub, LLC, a direct, wholly owned subsidiary of GLPI ?Merger Sub? ?intend,? Proposal 1 : ?FOR? it could increase GLPI?s interest expense if interest rates in general increase because GLPI?s indebtedness under the senior unsecured credit facility bears interest at floating rates; ? the possibility that the stock price of GLPI falls prior to or following the consummation of the proposed merger; ? it could limit GLPI?s flexibility in planning for, or reacting to, changes in its business and the industry in which it operates and place GLPI at a competitive disadvantage compared to its competitors that have less debt or are less leveraged; ? rights?
Under the laws of the State of Delaware, Pinnacle stockholders do not have appraisal or dissenters? the market price of GLPI common stock or Pinnacle common stock could decline to the extent that the current market price reflects a market assumption that the transactions will be completed; and ? Risks Relating to the Merger Because the exchange ratio is fixed and the market prices of GLPI?s and Pinnacle?s common stock may fluctuate, Pinnacle stockholders cannot be sure of the value of the GLPI common stock they will receive on the closing date.
At the effective time of the merger, each share of Pinnacle common stock will be converted into the right to receive 0.
If applicable, the exchange ratio will be adjusted appropriately to fully reflect the effect of any stock dividend, subdivision, stock split, reclassification, reorganization or other similar change with respect to the shares of either GLPI common stock or Pinnacle common stock prior to the completion of the merger.
The exchange ratio will not, however, be adjusted for cash dividends or changes in the market price of either GLPI common stock or Pinnacle common stock between the date of signing the merger agreement and the effective time.
Accordingly, at the time of the GLPI special meeting and at the time of the Pinnacle special meeting, neither GLPI shareholders nor Pinnacle stockholders will know, or be able to determine, the value of GLPI common stock to be issued in connection with the merger.
For that reason, the market price of GLPI common stock on the date of the GLPI special meeting and the Pinnacle special meeting may not be indicative of the value of GLPI common stock that Pinnacle stockholders will receive upon completion of the merger.
The market prices of GLPI common stock and Pinnacle common stock are subject to general price fluctuations in the market for publicly traded equity securities and have experienced volatility in the past.
Neither GLPI nor Pinnacle is permitted to terminate the merger agreement or re-solicit the vote of GLPI shareholders or Pinnacle stockholders, as applicable, solely because of changes in the market prices of either company?s common stock.
Stock price changes may result from a variety of factors, including general market and economic conditions and changes in the respective businesses, operations and prospects, regulatory considerations of GLPI and Pinnacle and investor behavior following the merger.
Market assessments of the benefits of the proposed merger and the likelihood that the transactions will be completed, as well as general and industry-specific market and economic conditions, may also affect market prices of GLPI common stock and Pinnacle common stock.
Many of these factors are beyond GLPI?s and Pinnacle?s control.
Pinnacle stockholders should obtain current market quotations for shares of GLPI common stock and for shares of Pinnacle common stock.
Failure to complete the transactions contemplated by the merger agreement, including the merger, could have material and adverse effects on GLPI and Pinnacle.
Completion of the merger is subject to a number of conditions, including the approval by GLPI shareholders of the share issuance proposal, approval by Pinnacle stockholders of the merger agreement proposal and consummation of the spin-off, which make the completion and timing of the completion of the transactions uncertain.
See the section titled ?The Merger Agreement?Conditions to Completion of the Merger? Proposal 1.
The affirmative vote of at least a majority of the outstanding shares of Pinnacle common stock.
The affirmative vote, in person or by proxy, of a majority of the votes cast on the compensation proposal by the holders of shares of Pinnacle common stock is required to approve the proposal.
The affirmative vote, in person or by proxy, of a majority of the votes cast on the Pinnacle adjournment proposal by the holders of shares of Pinnacle common stock is required to approve the proposal.
As of the record date, there were 61,074,913 shares of Pinnacle common stock outstanding, held by 1,796 holders of record.
In addition, as of the record date, Pinnacle directors and executive officers, as a group, owned and were entitled to vote 1,277,449 shares of Pinnacle common stock, or approximately 2.
Pinnacle currently expects that these directors and executive officers will vote their shares in favor of the proposal to adopt the merger agreement, although none of them has entered into any agreement obligating them to do so.
The Merger see page 60 Pinnacle, GLPI and Merger Sub have entered into a merger agreement, pursuant to which GLPI will acquire substantially all of Pinnacle?s real property assets.
Prior to the merger, Pinnacle will cause certain assets relating to its operating business to be transferred to, and liabilities relating thereto to be assumed by OpCo.
Immediately following the separation, Pinnacle will distribute to Pinnacle?s stockholders all of the issued and outstanding shares of common stock of OpCo, a newly formed wholly owned subsidiary of Pinnacle, owning Pinnacle?s operating assets and certain other specified assets.
Then, upon satisfaction or waiver of the conditions to closing in the merger agreement on the closing date, Pinnacle will merge with and into Merger Sub, a wholly owned subsidiary of GLPI formed for the purpose of effecting the merger.
Merger Sub will be the surviving company in the merger and will then own substantially all of Pinnacle?s real estate assets that were retained or transferred to Pinnacle in the separation.
At the effective time of the merger, each share of Pinnacle common stock issued and outstanding immediately prior to the effective time of the merger will be converted into 0.
In addition, Pinnacle will take all actions as may be necessary so that at the effective time of the merger, each Pinnacle stock option, restricted stock unit including phantom stock unit awards, restricted stock unit awards, other stock unit awards, performance share grants, director other stock unit awards, deferred shares and any other similar instruments and cash performance unit will be treated as described in ?The Merger?Interests of Certain Pinnacle Persons in the Merger.
? , providing for the merger of Pinnacle with and into Merger Sub, with Merger Sub surviving the merger as a wholly owned subsidiary of GLPI the ?merger? the GLPI adjournment proposal.
The GLPI board of directors has fixed the close of business on February 8, 2016 as the record date for determination of GLPI shareholders entitled to receive notice of, and to vote at, the GLPI special meeting or any adjournments or postponements thereof.
Only holders of record of GLPI common stock at the close of business on the record date are entitled to receive notice of, and to vote at, the GLPI special meeting.
YOUR VOTE IS VERY IMPORTANT REGARDLESS OF THE NUMBER OF SHARES THAT YOU OWN.
The merger between GLPI and Pinnacle cannot be completed without the approval of the share issuance proposal by the affirmative vote, in person or by proxy, of a majority of the votes cast on the proposal by the holders of shares of record of GLPI common stock entitled to vote at the special meeting.
Whether or not you expect to attend the GLPI special meeting in person, we urge you to submit a proxy to have your shares voted as promptly as possible by either: 1 logging onto the website shown on your proxy card and following the instructions to vote online; 2 dialing the toll-free number shown on your proxy card and following the instructions to vote by phone; or 3 signing and returning the enclosed proxy card in the postage-paid envelope provided, so that your shares may be represented and voted at the GLPI special meeting.
Even if you plan to attend the special meeting in person, we request that you complete, sign, date and return the enclosed proxy card and thus ensure that your shares of GLPI common stock will be represented at the special meeting if you are unable to attend.
If your shares are held the name of a broker, bank, trustee or other nominee, please follow the instructions on the voting instruction card furnished by such broker, bank, trustee or other nominee, as appropriate.
?Pinnacle? through the creation of a newly formed, publicly traded REIT that would be distributed to Pinnacle stockholders in a tax-free spin-off, with Pinnacle remaining an operating entity following the transaction.
In its announcement, Pinnacle noted that while it had conducted substantial analysis of the feasibility of implementing the REIT Separation Plan, a significant amount of work remained to be completed, with a number of hurdles to be cleared to complete the transaction, including: receipt of a favorable private letter ruling from the Internal Revenue Service; identification and appointment of senior executive leadership of the newly formed REIT; negotiation and execution of a master lease agreement between the newly formed REIT and the operating company, as well as other separation arrangements; gaming regulatory approvals; SEC filings related to the REIT Separation Plan; and debt financing transactions.
In the months that followed, Pinnacle progressed the REIT Separation Plan, including by submitting a private letter ruling request to the Internal Revenue Service on December 19, 2014, developing plans with respect to the proposed financing in connection with such transaction and formulating a plan to separate Pinnacle?s operating assets from its real estate assets.
The GLPI board of directors met on November 18, 2014, with representatives of GLPI?s management in attendance.
At this meeting, members of GLPI management discussed with the GLPI board of directors management?s analysis of Pinnacle?s REIT Separation Plan based on public information.
The GLPI board of directors and management also discussed the potential opportunity for GLPI to create value for GLPI while also providing enhanced value and certainty to Pinnacle?s stockholders relative to the REIT Separation Plan by pursuing a strategic transaction between GLPI and Pinnacle involving the acquisition of Pinnacle?s real estate assets by GLPI.
The GLPI board of directors instructed management to continue evaluating a potential transaction with Pinnacle, including reaching out to Pinnacle?s senior management to gauge Pinnacle?s interest in exploring a potential transaction.
While no specific potential strategic transaction between the parties was discussed, during the course of the meeting Mr.
Carlino inquired whether Pinnacle had considered a taxable transaction involving the separation of its real estate assets from its operating assets, and Mr.
Ruisanchez noted potentially significant transaction costs in any such transaction structure.
In the fall of 2014 and in early 2015, Steven Snyder, GLPI?s Senior Vice President of Corporate Development, spoke with an investment banker at Goldman Sachs on several occasions indicating potential interest in a strategic transaction involving Pinnacle?s real estate assets.
In early January 2015, certain third parties contacted members of Pinnacle?s management to indicate potential interest in providing financing in connection with the REIT Separation Plan or other possible transactions involving Pinnacle?s real estate but not involving a merger or acquisition of Pinnacle.
On January 16, 2015, Mr.
Sanfilippo had a telephone call during the course of which Mr.
Carlino advised that he would be sending a letter indicating GLPI?s interest in a transaction between GLPI and Pinnacle.
Following that call, Mr.
Carlino sent a letter, a draft of which GLPI management had previously distributed to the GLPI board of directors and received its authorization to distribute to Pinnacle, to Mr.
The same day, Mr.
Sanfilippo communicated the January 16 Proposal to the Pinnacle Board.
On January 27, 2015, Mr.
Carlino that Pinnacle?s management team would send Mr.
Carlino a list of specific questions regarding GLPI?s January 16 Proposal.
Carlino also discussed scheduling an in-person meeting on February 18, 2015 in New York City to discuss such proposal.
The next day, Mr.
Sanfilippo that GLPI would be available for an in-person meeting on February 18, 2015.
On February 2, 2015, representatives of Pinnacle?s and GLPI?s senior management held a telephone call to discuss the January 16 Proposal.
Those on the call included Mr.
Ruisanchez, Geoffrey Goodman, Vice President of Strategic Planning, Analytics and Development of Pinnacle, William Clifford, Chief Financial Officer, Senior Vice President and Treasurer of GLPI and Desiree Burke, Chief Accounting Officer and Senior Vice President of GLPI.
During the call, GLPI?s representatives explained certain of the assumptions underlying the January 16 Proposal.
On February 4, 2015, another party in the gaming and leisure industry ?Party A? government-issued photo identification; ? Telephone: GLPI shareholders may submit their proxy by calling the toll-free telephone number shown on their proxy card.
Telephone voting is available 24 hours a day and will be accessible until 11:59 p.
Easy-to-follow voice prompts will guide shareholders through the voting and allow them to confirm that their instructions have been properly recorded.
GLPI shareholders who vote this way should mail the proxy card early enough so that it is received before the date of the special meeting.
? the adoption of the merger agreement; ?FOR? In Person: Pinnacle stockholders may vote in person at the special meeting or by sending a representative with an acceptable proxy that has been signed and dated.
Attendance at the special meeting will not, however, in and of itself constitute a vote or a revocation of a prior proxy.
Each valid proxy received in time will be voted at the special meeting according to the choice specified, if any.
Executed but uninstructed proxies i.
Proxies and Revocation Pinnacle stockholders of record may revoke their proxies at any time before their shares are voted at the Pinnacle special meeting in any of the following ways: ? Rights Under the PBCL as well as the governing documents of GLPI, the shareholders of GLPI are not entitled to appraisal rights or dissenters? attending the Pinnacle special meeting and voting in person.
Attendance at the special meeting will not, however, in and of itself, constitute a vote or revocation of a prior proxy.
Beneficial owners of Pinnacle common stock may change their voting instruction only by submitting new voting instructions to the brokers, banks or other nominees that hold their shares of record.
Additional information can be found under the section entitled ?Pinnacle Special Meeting.
? expectations of value and reducing its leverage.
Pinnacle?s long-term strategy includes disciplined capital expenditures to improve and maintain its existing properties, while growing the number and quality of its facilities by pursuing gaming entertainment opportunities it can improve, develop, or acquire.
In making decisions, Pinnacle considers its stockholders, guests, team members and other constituents in the communities in which it operates.
See ?Where You Can Find More Information.
? For additional information regarding the spin-off, please see PNK Entertainment, Inc.
?s Form 10 filed with the SEC File No.
Q: Who will own OpCo and GLPI immediately following the transactions?
Q: How important is my vote?
A: The votes of GLPI?s shareholders ?FOR? sending a written notice of revocation to GLPI at 845 Berkshire Boulevard, Suite 200, Wyomissing, Pennsylvania 19610, Attention: Secretary, which must be received before their shares are voted at the special meeting; 6 ? with JPMorgan Chase Bank, N.
In connection with the transactions, GLP Capital has entered into Amendment No.
See ?The Merger?Financing of the Transactions? , and all other conditions to the merger must be satisfied or waived.
GLPI and Pinnacle will hold separate special meetings to obtain these approvals and other related matters, including, in the case of Pinnacle, a vote to approve on an advisory non-binding basis the compensation that may be paid or become payable to Pinnacle?s named executive officers that is based on or otherwise related to the proposed merger the ?compensation proposal?.
No vote of Pinnacle stockholders is required or being sought in connection with the separation and spin-off of Pinnacle?s operating business.
Q: What are the key steps in the proposed transactions?
A: Below is a summary of the key steps of the proposed transactions.
For additional information see ?The Merger Agreement.
No fractional shares of GLPI?s common stock will be issued in the merger.
Instead, Pinnacle?s stockholders will receive cash in lieu of any such fractional shares.
Prior to the merger, Pinnacle will cause assets relating to its operating business to be transferred to, and the liabilities relating thereto to be assumed by, PNK Entertainment, Inc.
?OpCo? by my broker, bank or other nominee, will my broker, bank or other nominee automatically vote my shares for me?
If your shares are held in the name of a broker, bank or other nominee, you will receive separate instructions from your broker, bank or other nominee describing how to vote your shares.
The availability of Internet or telephonic voting will depend on the nominee?s voting process.
Please check with your broker, bank or other nominee and follow the voting procedures your broker, bank or other nominee provides.
You should instruct your broker, bank or other nominee how to vote your shares.
Under the rules applicable to broker-dealers, your broker, bank or other nominee does not have discretionary authority to vote your shares on any of the proposals scheduled to be voted on at the GLPI special meeting or the Pinnacle special meeting.
With respect to the merger agreement proposal, a broker non-vote will have the same effect as a vote ?against? unanimously determined that it is advisable and in the best interests of Pinnacle?s stockholders to enter into the merger agreement, and unanimously approved the merger agreement and the transactions contemplated by the merger agreement, including the merger, and resolved to recommend adoption of the merger agreement by Pinnacle?s stockholders and that the adoption of the merger agreement be submitted to a vote at a meeting of Pinnacle?s stockholders.
The Pinnacle board recommends that Pinnacle stockholders vote ?FOR? attending the Pinnacle special meeting and voting in person.
Attendance at the special meeting will not, however, in and of itself, constitute a vote or revocation of a prior proxy.
Pinnacle beneficial owners may change their voting instruction only by submitting new voting instructions to the brokers, banks or other nominees that hold their shares of record.
Inspector of Election The board of directors of Pinnacle has appointed a representative of First Coast Results, Inc.
Solicitation of Proxies Pinnacle will pay for the proxy solicitation costs related to the Pinnacle special meeting.
In addition to sending and making available these materials, some of Pinnacle?s directors, officers and other employees may solicit proxies by contacting Pinnacle stockholders by telephone, by mail, by e-mail or in person.
None of Pinnacle?s directors, officers or employees will receive any extra compensation for their solicitation services.
Pinnacle has also retained D.
Pinnacle will also reimburse brokers, banks and other nominees for their expenses in sending proxy solicitation materials to the beneficial owners of Pinnacle common stock and obtaining their proxies.
Adjournments The Pinnacle special meeting may be adjourned in the absence of a quorum by the affirmative vote of holders of a majority of the Pinnacle shares having voting power present in person or represented by proxy at the special meeting.
Even if a quorum is present, the Pinnacle special meeting could also be adjourned in order to provide more time to solicit additional proxies in favor of adoption of the merger agreement if sufficient votes are cast in favor of Proposal 3.
No Appraisal Rights Under the DGCL as well as the governing documents of Pinnacle, the stockholders of Pinnacle are not entitled to appraisal rights or dissenters? ?The Merger Agreement?Termination of the Merger Agreement? notice to Pinnacle or, if not so specified, on the last day of such GLPI marketing period subject to certain conditions and b the ?end date? Q: When do GLPI and Pinnacle expect to complete the merger?
A: GLPI and Pinnacle currently expect to complete the merger in the first calendar quarter of 2016.
However, neither GLPI nor Pinnacle can predict the actual date on which the merger will be completed, nor can the parties assure that the merger will be completed, because completion is subject to conditions beyond either company?s control.
See the sections entitled ?The Merger?Regulatory Approvals? the approval of the share issuance proposal; and ? ?project,? the adjournment of the special meeting, if necessary or appropriate, to solicit additional proxies if there are not sufficient votes to adopt the merger agreement.
The close of business on February 8, 2016 has been fixed as the record date for determination of Pinnacle stockholders entitled to receive notice of, and to vote at, the Pinnacle special meeting or any adjournments or postponements thereof.
Only holders of record of Pinnacle common stock at the close of business on the record date are entitled to receive notice of, and to vote at, the Pinnacle special meeting.
A complete list of registered Pinnacle stockholders entitled to vote at the Pinnacle special meeting will be available for inspection at the principal place of business of Pinnacle at 3980 Howard Hughes Parkway, Las Vegas, Nevada 89169, during regular business hours for a period of no less than 10 days before the special meeting and at the place of the Pinnacle special meeting during the meeting.
YOUR VOTE IS VERY IMPORTANT REGARDLESS OF THE NUMBER OF SHARES THAT YOU OWN.
The merger between Pinnacle and GLPI cannot be completed without the adoption of the merger agreement by the affirmative vote, in person or by proxy, of holders of a majority of the outstanding shares of Pinnacle common stock, entitled to vote as of the record date for the special meeting, voting together as a single class.
Whether or not you expect to attend the Pinnacle special meeting in person, we urge you to submit a proxy to have your shares voted as promptly as possible by either: 1 logging onto the website shown on your proxy card and following the instructions to vote online; 2 dialing the toll-free number shown on your proxy card and following the instructions to vote by phone; or 3 signing and returning the enclosed proxy card in the postage-paid envelope provided, so that your shares may be represented and voted at the Pinnacle special meeting.
If your shares are held in a Pinnacle plan or in the name of a broker, bank or other nominee, please follow the instructions on the voting instruction card furnished by the plan trustee or administrator, or such broker, bank or other nominee, as appropriate.
Godfrey Secretary ADDITIONAL INFORMATION Both GLPI and Pinnacle file annual, quarterly and current reports, proxy statements and other business and financial information with the Securities and Exchange Commission the ?SEC?.
You may read and copy any materials that either GLPI or Pinnacle files with the SEC at the SEC?s Public Reference Room at 100 F Street, N.
Please call the SEC at 800 732-0330 for further information on the Public Reference Room.
You may read and copy the registration statement, including any amendments, schedules and exhibits in the SEC?s reading room at the address set forth above or at the SEC?s website mentioned above.
In each case, you should refer to the copy of the applicable agreement or other document filed as an exhibit to the registration statement.
This information is available to you without charge upon your request.
It also constitutes a notice of meeting with respect to the special meeting of GLPI shareholders and a notice of meeting with respect to the special meeting of Pinnacle stockholders.
For additional information regarding the spin-off, please see PNK Entertainment, Inc.
?s Form 10 filed with the SEC File No.
TABLE OF CONTENTS 1 10 10 11 12 13 13 14 15 15 16 16 16 17 17 18 20 20 20 21 21 21 21 22 22 22 22 24 25 26 26 26 26 27 29 32 33 34 36 38 47 48 i 49 49 49 49 49 49 50 50 50 51 51 51 52 52 53 53 53 53 53 53 54 54 54 54 54 55 56 56 56 56 57 58 58 58 58 59 59 59 59 60 60 60 74 76 81 83 86 95 100 ii 104 110 110 125 125 126 127 127 129 129 129 130 130 130 131 131 132 132 133 135 137 139 140 140 144 146 146 148 148 149 149 151 151 152 152 153 153 153 157 161 161 162 170 184 199 199 iii 200 202 203 iv QUESTIONS AND ANSWERS The following are some questions that you, as a shareholder of Gaming and Leisure Properties, Inc.
?GLPI? proof of beneficial ownership as of the record date e.
? Pinnacle?s common stock is listed on NASDAQ under the symbol ?PNK.
The following table sets forth, for the periods indicated, the high and low sales prices per share of GLPI common stock and Pinnacle common stock as reported on NASDAQ and the New York Stock Exchange where Pinnacle?s common stock traded until the closing of the market on November 16, 2015 , respectively, and cash dividends declared and paid for the same periods.
As a result, you should obtain recent market prices of GLPI common stock and Pinnacle common stock prior to voting your shares.
See ?Risk Factors?Risks Relating to the Merger.
? Proposal 1: to approve the issuance of shares of GLPI common stock to Pinnacle stockholders in connection with the merger, referred to previously as the share issuance proposal; and ? provision, with GLPI taking the position that no such provision should be included.
That same day, GLPI sent Pinnacle a revised draft of the NDA, which did not contain a standstill provision, along with a list of priority diligence requests.
On February 27, 2015, Mr.
Sanfilippo sent a letter to Mr.
Carlino stating that Pinnacle?s board had determined the January 16 Proposal did not adequately value Pinnacle?s real estate assets, and that Pinnacle would be willing to share confidential information with GLPI under an acceptable NDA in order to explore whether there would 63 be a path to a more attractive transaction for Pinnacle?s stockholders.
That same day representatives of Pinnacle?s and GLPI?s senior management communicated regarding the parties? the ability to obtain the regulatory approvals, including gaming approvals, required to complete the spin-off and the merger as contemplated by the merger agreement, and the timing and conditions for such approvals; ? government-issued photo identification; and ? A person who holds a validly executed proxy entitling such person to vote on behalf of a record owner of GLPI shares a ?proxy holder? A Pinnacle stockholder who holds shares directly registered in such stockholder?s name with Pinnacle?s transfer agent, American Stock Transfer and Trust Company, LLC a ?stockholder of record? the other matters to be considered at the Pinnacle special meeting.
This merger consideration is in addition to the shares of the new operating company that will previously have been received by Pinnacle stockholders in the spin-off.
Although the number of shares of GLPI common stock that Pinnacle stockholders will receive is fixed, the market value of the merger consideration will fluctuate with the market price of GLPI common stock and will not be known at the time that Pinnacle stockholders vote to adopt the merger agreement or at the time GLPI shareholders vote to approve the share issuance.
Based on the closing price of GLPI?s common stock on NASDAQ on July 20, 2015, the last trading day before the public announcement of the merger, the 0.
We urge you to obtain current market quotations for GLPI trading symbol ?GLPI? the validly executed proxy naming such person as the proxy holder, signed by the Pinnacle stockholder; and ? , following which GLPI will own all of Pinnacle?s real property assets, other than Pinnacle?s Belterra Park property and excess land at certain locations.
In order to complete the merger, GLPI shareholders must approve the proposal to issue GLPI common stock to the Pinnacle stockholders pursuant to the merger agreement the ?share issuance proposal? proof of the signing stockholder?s record ownership as of the record date.
No cameras, recording equipment or other electronic devices will be allowed in the meeting room.
Failure to provide the requested documents at the door or failure to comply with the procedures for the special meeting may prevent stockholders from being admitted to the Pinnacle special meeting.
Please write to Pinnacle?s principal executive offices at 3980 Howard Hughes Parkway, Las Vegas, Nevada 89169, Attention: Corporate Secretary.
Record Date The record date for the determination of stockholders entitled to notice of and to vote at the Pinnacle special meeting is February 8, 2016.
Only Pinnacle stockholders who held shares of record at the close of business on February 8, 2016 are entitled to vote at the Pinnacle special meeting and any adjournment or postponement of the Pinnacle special meeting, as long as such shares remain outstanding on the date of the Pinnacle special meeting.
Outstanding Shares as of Record Date As of the close of business on the record date, there were 61,074,913 shares of Pinnacle common stock outstanding, held by 1,796 holders of record.
Each share entitles its holder of record to one vote at the Pinnacle special meeting.
Pinnacle common stock is the only class of stock entitled to vote, and holders of Pinnacle common stock are entitled to vote on each proposal presented at the Pinnacle special meeting.
A complete list of registered Pinnacle stockholders entitled to vote at the Pinnacle special meeting will be available for inspection at the principal place of business of Pinnacle at 3980 Howard Hughes Parkway, Las Vegas, Nevada 89169, during regular business hours for a period of no less than 10 days before the special meeting and at the place of the Pinnacle special meeting during the meeting.
Quorum In order for business to be conducted at the Pinnacle special meeting, a quorum must be present.
A quorum requires the presence, in person or by proxy, of holders of a majority of voting power of all the shares of stock entitled to vote at the Pinnacle special meeting.
For purposes of determining whether there is a quorum, all shares that are present will count towards the quorum, which includes abstentions but excludes broker non-votes.
Broker non-votes occur when a beneficial owner holding shares in ?street name? determination that GLPI management should present a revised offer to Pinnacle?s Board of Directors generally reflecting the economic terms discussed at the meeting and continue negotiations with Pinnacle, with the caveat that any agreed transaction between GLPI and Pinnacle would be subject to the GLPI board of directors? proof of the signing shareholder?s record ownership as of the record date.
No cameras, recording equipment or other electronic devices will be allowed in the meeting room.
Failure to provide the requested documents at the door or failure to comply with the procedures for the special meeting may prevent shareholders from being admitted to the GLPI special meeting.
Record Date The record date for the determination of shareholders entitled to notice of and to vote at the GLPI special meeting is the close of business on February 8, 2016.
Only GLPI shareholders who held shares of record at the close of business on February 8, 2016 are entitled to vote at the special meeting and any adjournment or postponement of the special meeting, so long as such shares remain outstanding on the date of the special meeting.
Outstanding Shares as of Record Date As of the close of business on the record date, there were 117,265,314 shares of GLPI common stock outstanding, held by 521 holders of record in each case, including restricted shares entitled to vote , and no shares of GLPI preferred stock outstanding.
Each share of GLPI common stock entitles its holder of record to one vote at the GLPI special meeting.
GLPI common stock is the only class of stock entitled to vote at the special meeting, and holders of GLPI common stock are entitled to vote on each proposal presented.
A complete list of registered GLPI shareholders entitled to vote at the GLPI special meeting will be available for inspection at the principal place of business of GLPI at 845 Berkshire Blvd.
Shareholder Voting Agreements with Pinnacle Concurrently with the execution of the merger agreement, Pinnacle entered into voting agreements with certain shareholders of GLPI, including 1 the Carlino Group, which collectively beneficially owns approximately 12% of GLPI?s outstanding shares excluding shares beneficially owned in respect of vested options that are not 50 currently capable of being voted and 2 the Fortress Group, which collectively beneficially owns approximately 9% of GLPI?s outstanding shares.
The voting agreements generally require, subject to certain exceptions, such shareholders to vote all of the shares of GLPI common stock beneficially owned by them and capable of being voted in favor of adoption of the share issuance proposal and certain related matters as applicable and against matters that would reasonably be expected to prevent, impede, materially delay or materially impair the ability of GLPI to consummate the merger.
Quorum In order for business to be conducted at the special meeting, a quorum must be present.
A quorum requires the presence, in person or by proxy, of holders of a majority of the issued and outstanding shares of GLPI common stock entitled to vote at the special meeting.
For purposes of determining whether there is a quorum, all shares that are present, including abstentions and broker non-votes only when accompanied by broker votes with respect to at least one matter at the meeting , will count towards the quorum.
Broker non-votes occur when a beneficial owner holding shares in ?street name? 54 Section 14A of the Exchange Act, which was enacted as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, requires that Pinnacle provides its shareholders with the opportunity to vote to approve, on an advisory non-binding basis, the payment of certain compensation that will or may become payable by Pinnacle to its named executive officers in connection with the merger: ?RESOLVED, that the stockholders of Pinnacle Entertainment, Inc.
? the proposal to adjourn the special meeting of GLPI shareholders, if necessary or appropriate, to solicit additional proxies in favor of the share issuance proposal if there are not sufficient votes at the time of such adjournment to approve the share issuance the ?GLPI adjournment proposal?.
Pinnacle?s board of directors, after considering the various factors described under ?The Merger?Recommendation of the Pinnacle Board and Reasons for the Merger,? 8 Q: Do Pinnacle stockholders or GLPI shareholders have appraisal or dissenters? and lease from Landlord real property assets associated with fourteen 14 of Pinnacle?s gaming facilities the ?facilities?.
Immediately upon closing of the merger, a subsidiary of GLPI will become successor by merger to Landlord.
The obligations of the Tenant under the master lease will be guaranteed by OpCo and all subsidiaries of Tenant that will operate the facilities leased under the master lease, or that own a gaming license, other license or other material asset or permit necessary to operate any portion of the facilities.
A default by Tenant with regard to any facility will cause a default with regard to the entire portfolio.
The master lease will provide for an initial term of ten years with no purchase option.
At Tenant?s option, the master lease may be extended for up to five five-year renewal terms beyond the initial ten-year term, on the same terms and conditions.
If Tenant elects to renew the term of the master lease, the renewal will be effective as to all, but not less than all, of the leased property then subject to the master lease.
The master lease is commonly known as a triple-net lease.
Accordingly, in addition to rent, the Tenant will be required to pay the following: 1 all facility maintenance, 2 all insurance required in connection with the leased properties and the business conducted on the leased properties, 3 taxes levied on or with respect to the leased properties other than taxes on the income of the Landlord and 4 all utilities and other services necessary or appropriate for the leased properties and the business conducted on the leased properties.
GLPI and Pinnacle encourage you to read the master lease carefully because it is the principal document governing the relationship between OpCo and GLPI following the merger.
Employee Matters Agreement see page 161 The employee matters agreement, a form of which is attached to the merger agreement as Exhibit A thereto, will generally allocate liabilities and responsibilities relating to employee compensation and benefit plans and programs.
The Employee Matters Agreement, in conjunction with the merger agreement, will provide for the treatment of Pinnacle?s outstanding equity awards in connection with the spin-off as described more fully below in ??The Merger?Treatment of Pinnacle Long-Term Incentive Compensation?.
In addition, the Employee Matters Agreement will set forth the general principles relating to employee matters, including with respect to the assignment of employees and the transfer of employees from Pinnacle to OpCo, the assumption and retention of liabilities and related assets, workers? , the separation and distribution agreement the ?separation agreement? duties.
After discussion, the Pinnacle board of directors concluded that the March 6 Proposal did not adequately value Pinnacle?s real estate assets and determined to continue to pursue the steps necessary to implement the REIT Separation Plan, as well as to continue to explore potential third party interest in a transaction, including with GLPI and Party A.
On March 13, 2015, Mr.
Carlino sent a letter to Mr.
Sanfilippo reiterating the March 6 Proposal and GLPI?s outstanding diligence requests, suggesting that the senior management teams of both companies meet to negotiate a transaction.
On March 15, 2015, members of Pinnacle?s senior management contacted representatives of a third party in the gaming and leisure industry ?Party B? Proposal 1 : ?FOR? 5 Q: What should I do if I receive more than one set of voting materials for the GLPI special meeting or the Pinnacle special meeting?
For example, if you hold your GLPI common stock or Pinnacle common stock in more than one brokerage account, you will receive a separate voting instruction card for each brokerage account in which you hold shares.
If you are a holder of record and your shares are registered in more than one name, you will receive more than one proxy card.
Please submit each separate proxy or voting instruction card that you receive by following the instructions set forth in each separate proxy or voting instruction card.
Q: What?s the difference between holding shares as a shareholder of record and as a beneficial owner?
If your shares of GLPI common stock or Pinnacle common stock are held through a bank, broker or other nominee, you are considered the beneficial owner of the shares of GLPI common stock or Pinnacle common stock held in ?street name.
As the beneficial owner, you have the right to direct your bank, broker or other nominee how to vote your shares by following their instructions for voting.
You are also invited to attend the special meeting.
However, because you are not the shareholder of record, you may not vote your shares in person at the special meeting unless you request and obtain a valid proxy from your bank, broker or nominee.
Q: If my shares are held in ?street name? , Gold Merger Sub, LLC, a direct, wholly owned subsidiary of GLPI ?Merger Sub? ; and 2.
Please refer to the attached document, including the merger agreement and all other annexes and any documents incorporated by reference, for further information with respect to the business to be transacted at the special meeting.
You are encouraged to read the entire document carefully before voting.
In particular, see the section titled ?The Merger? and under the section titled ?Pinnacle Special Meeting.
? Accordingly, GLPI?s board of directors unanimously recommends that GLPI shareholders vote ?FOR? , a wholly owned subsidiary of Pinnacle the ?separation? each of the conditions to the merger agreement has been fulfilled or waived other than those conditions that by their nature can only be satisfied at the closing of the merger agreement and GLPI has confirmed to Pinnacle in writing that it is prepared to consummate the merger, subject only to the distribution; ? does not instruct the broker, bank or other nominee that is the record owner of such shareholder?s shares on how to vote those shares on a particular proposal.
Vote Required The votes required for each proposal are as follows: Proposal 1?the share issuance proposal.
The affirmative vote, in person or by proxy, of a majority of the votes cast on the share issuance proposal by the holders of shares of GLPI common stock is required to approve the proposal.
The required vote on the share issuance proposal is based on the number of shares voted?not the number of shares outstanding.
Abstentions are treated as votes cast and, as a result, any abstention from voting by a GLPI shareholder will have the same effect as a vote against the share issuance proposal.
The failure of any GLPI shareholder to submit a vote i.
Because the share issuance proposal is non-routine, brokers, banks and other nominees do not have discretionary authority to vote on the share issuance proposal and will not be able to vote on the share issuance proposal absent instructions from the beneficial owner.
As a result, the failure of a beneficial owner to provide voting instructions to its broker, bank or other nominee will have the effect of not being counted in determining the votes cast in connection with the share issuance proposal.
Proposal 2?the GLPI adjournment proposal.
The affirmative vote, in person or by proxy, of a majority of the votes cast on the GLPI adjournment proposal by the holders of shares of GLPI common stock is required to approve the proposal.
The required vote on the GLPI adjournment proposal is based on the number of shares voted?not the number of shares outstanding.
Abstentions are treated as votes cast and, as a result, any abstention from voting by a GLPI shareholder will have the same effect as a vote against the GLPI adjournment proposal.
The failure of any GLPI shareholder to submit a vote i.
Because the GLPI adjournment proposal is non-routine, brokers, banks and other nominees do not have discretionary authority to vote on the GLPI adjournment proposal and will not be able to vote on the GLPI adjournment proposal absent instructions from the beneficial owner.
As a result, the failure of a beneficial owner to provide voting instructions to its broker, bank or other nominee will have the effect of not being counted in determining the votes cast in connection with the GLPI adjournment proposal.
How to Vote GLPI shareholders as of the record date may have their shares voted by submitting a proxy or may vote in person at the special meeting by following the instructions provided on the enclosed proxy card.
GLPI recommends that GLPI shareholders entitled to vote submit a proxy even if they plan to attend the special meeting.
GLPI shareholders who hold their shares beneficially and wish to vote in person at the special meeting must obtain proxies issued in their own names known as a ?legal proxy?.
GLPI shareholders of record may submit a proxy in one of three ways or vote in person at the special meeting: ? {INSERTKEYS}?GLPI? within the meaning of Section 368 a of the Code, it is possible that the Internal Revenue Service the ?IRS? ?predict,? Q: When and where is the special meeting of the GLPI shareholders?
A: The special meeting of GLPI the ?GLPI special meeting? the merger agreement proposal; ? the share issuance proposal and ?FOR? the compensation proposal; and ?FOR? reaction to public announcements by GLPI following the merger; ? from JPMorgan Chase Bank, N.
The borrower under the Pinnacle Takeout Facilities will be OpCo and the obligations of OpCo under the Pinnacle Takeout Facilities will be guaranteed by each existing and subsequently acquired or formed direct and indirect domestic wholly-owned subsidiary of OpCo, subject to customary exceptions.
Both the issuance of the Pinnacle Notes and the receipt by the Pinnacle Takeout Commitment Parties of commitments from lenders for the Term Loan B Facility, in each case, on or prior to the closing date of the merger, are conditions to the availability of the Pinnacle Takeout Facilities.
Further, the Pinnacle Notes are only contemplated in connection with the Pinnacle Takeout Facilities.
However, Pinnacle intends to use the Pinnacle Takeout Facilities if market conditions are favorable at the time of the distribution and not use the Pinnacle Bridge Facility.
The funding under either the Pinnacle Bridge Commitment Letter or the Pinnacle Takeout Commitment Letter, as applicable, is subject to customary conditions, including conditions that do not relate directly to the conditions to closing in the merger agreement.
See ?The Merger?Financing of the Transactions? the disruption from the merger making it more difficult for Pinnacle to maintain relationships with their respective customers, employees or suppliers; ? rights in connection with the share issuance proposal.
Other Matters At this time, GLPI knows of no other matters to be submitted at the GLPI special meeting.
Each shareholder in the household will continue to receive a separate proxy card.
This process, known as ?householding,? Internet: GLPI shareholders may submit their proxy over the Internet at the web address shown on their proxy card.
Internet voting is available 24 hours a day and will be accessible until 11:59 p.
Shareholders will be given an opportunity to confirm that their voting instructions have been properly recorded.
? ?possible,? respective General Counsels, Mr.
Godfrey of Pinnacle and Brandon Moore of GLPI, have a call to further discuss the terms of the proposed NDA.
On February 25, 2015, Messrs.
Godfrey and Moore had a telephone call to discuss the terms of the NDA.
The parties expressed differing views as to whether the NDA should contain a ?standstill? Proposal 1.
Record Date; Voting Rights.
The record date for the determination of shareholders entitled to notice of and to vote at the GLPI special meeting is the close of business on February 8, 2016.
Only GLPI shareholders who held shares at the close of business on February 8, 2016 are entitled to vote at the special meeting and any adjournment or postponement of the special meeting.
Each share of GLPI common stock entitles its holder of record to one vote at the GLPI special meeting.
The affirmative vote, in person or by proxy, of a majority of the votes cast on the share issuance proposal by the holders of shares of GLPI common stock entitled to vote at the GLPI special meeting is required to approve the share issuance proposal.
The affirmative vote, in person or by proxy, of a majority of the votes cast on the GLPI adjournment proposal by the holders of shares of GLPI common stock entitled to vote at the GLPI special meeting is required to approve the GLPI adjournment proposal.
As of the record date, there were 117,265,314 shares of GLPI common stock outstanding, held by 521 holders of record in each case, including restricted shares entitled to vote.
In addition, as of the record date, GLPI directors and executive officers, as a group, owned and were entitled to vote 22,519,697 shares of GLPI common stock, or approximately 19.
Pinnacle Special Meeting see page 54 Date, Time and Place.
The Pinnacle special meeting will be held on March 15, 2016, beginning at 10 a.
The special meeting of Pinnacle stockholders is being held to consider and vote on the following proposals: ? time and resources committed by GLPI?s and Pinnacle?s management to matters relating to the transactions could otherwise have been devoted to pursuing other beneficial opportunities; ? contacted Pinnacle?s management indicating its possible interest in a potential strategic transaction involving Pinnacle?s operating assets.
On February 5, 2015, GLPI provided additional information to Pinnacle with respect to the financial aspects of its proposal.
On February 6, 2015, representatives of Morgan Stanley, GLPI?s financial advisor, contacted representatives of Goldman Sachs to discuss GLPI?s proposal.
The representatives of Goldman Sachs indicated that they would follow up the next week with feedback on the January 16 Proposal.
A regularly scheduled meeting of the Pinnacle board of directors was held on February 10, 2015 at which representatives of Pinnacle?s management were present.
At that meeting, members of Pinnacle management provided an update regarding the status of the REIT Separation Plan, the communications with Party A and 62 analysis of that potential transaction, and updated the Pinnacle board of directors regarding GLPI?s January 16 Proposal and subsequent communications with GLPI.
The Pinnacle board of directors determined to schedule a meeting for the following week to review further the January 16 Proposal and alternatives available to Pinnacle, and determined that management representatives should not meet with representatives of GLPI prior to that meeting.
Following the meeting, the independent directors on the Pinnacle board of directors determined to retain additional legal counsel to represent the independent directors, and subsequently Mr.
Pinnacle?s independent directors are all of the Pinnacle directors other than Mr.
On February 13, 2015, Mr.
Carlino to cancel the in-person meeting that the parties had previously discussed.
On February 19, 2015, the Pinnacle board of directors held a telephonic meeting at which representatives of Pinnacle?s management, Goldman Sachs, Skadden and Gibson were present.
At this meeting, the Pinnacle board reviewed the January 16 Proposal and certain other strategic alternatives potentially available to Pinnacle, including the REIT Separation Plan and the communications from Party A regarding its possible interest in a potential strategic transaction with Pinnacle.
Representatives of Goldman Sachs reviewed financial aspects of the various alternatives available to Pinnacle.
Representatives from Skadden and Gibson also discussed legal matters including the Pinnacle board?s fiduciary duties.
Following discussions, the Pinnacle board determined that the January 16 Proposal did not adequately value Pinnacle?s real estate assets, and that Pinnacle?s management should continue to explore the strategic alternatives potentially available to Pinnacle, including a potential transaction with GLPI, the REIT Separation Plan and transactions with other parties that had contacted Pinnacle?s management.
The independent members of Pinnacle?s board of directors then met separately to discuss the REIT Separation Plan and alternatives available to Pinnacle, and to receive legal advice from Gibson, after which Mr.
Sanfilippo rejoined the meeting to receive guidance regarding next steps.
On February 20, 2015, Mr.
Sanfilippo had a telephone call in which they agreed to request that the parties? Interests of Certain Pinnacle Persons in the Merger see page 104 When considering the recommendation of the Pinnacle board with respect to the merger, you should be aware that Pinnacle?s executive officers and directors may have interests in the merger that are different from, or in addition to, those of Pinnacle?s stockholders more generally.
Pinnacle?s board of directors was aware of these interests during its deliberations on the merits of the merger and in deciding to recommend that Pinnacle stockholders vote for the adoption of the merger agreement at the Pinnacle special meeting.
Board of Directors and Management of GLPI following Completion of the Merger see page 110 Upon completion of the merger, the current directors and executive officers of GLPI are expected to continue in their current positions, other than as may be publicly announced by GLPI in the normal course.
Federal Income Tax Considerations Relating to the Merger see page 110 The merger is intended to be non-taxable to shareholders, provided it qualifies as a ?reorganization? respective positions regarding the terms of the NDA, with no resolution.
On March 3, 2015, the GLPI board of directors held a telephonic meeting at which members of GLPI management were also in attendance.
At this meeting, GLPI management updated the GLPI board of directors on developments in GLPI?s attempts to engage with Pinnacle with respect to a transaction between the companies and provided the GLPI board of directors with a detailed overview of GLPI?s most recent proposal to Pinnacle.
The GLPI board of directors also discussed with management the potential benefits and risks of making GLPI?s proposal public as a means of facilitating and accelerating progress towards an agreed transaction with Pinnacle, and determined to authorize GLPI management to do so.
On March 4, 2015, representatives of Pinnacle?s senior management spoke with members of senior management of Party A and scheduled a meeting for March 18, 2015 to discuss the possibility of a potential strategic transaction between the parties.
On March 6, 2015, Mr.
Carlino sent a letter with a revised proposal to Mr.
Later on March 6, 2015, a representative of Morgan Stanley called a representative of Goldman Sachs to follow up on Mr.
Carlino?s email and discuss next steps.
The representative of Goldman Sachs indicated that while Pinnacle?s board of directors was reviewing the proposal, it was unlikely that GLPI would receive a substantive response to Mr.
Carlino?s email by the March 9, 2015 date that Mr.
Carlino had requested and they believed that GLPI?s March 6 Proposal was unlikely to be accepted.
In a follow-up call on March 8, 2015, representatives of Goldman Sachs reiterated to representatives of Morgan Stanley the same view.
On March 9, 2015, Mr.
Carlino acknowledging receipt of the March 6 Proposal and indicated that such proposal was being reviewed by the Pinnacle board of directors.
Shortly thereafter on that same day, GLPI sent a letter to the Pinnacle Board of directors describing the March 6 Proposal in greater detail and issued a press release which included a copy of GLPI?s proposal letter and an investor presentation regarding the March 6 Proposal.
On March 12, 2015, the Pinnacle board of directors held a telephonic meeting.
Representatives of Pinnacle?s management, Goldman Sachs, Skadden, and Gibson were in attendance at the meeting.
Representatives from Goldman Sachs then discussed the financial aspects of the March 6 Proposal and offered perspectives on potential alternatives available to Pinnacle.
Representatives from Skadden and Gibson also discussed certain legal matters, including directors? government-issued photo identification; ? each of the transaction documents contemplated by the merger agreement and the separation agreement having been duly executed and delivered by the parties thereto; ? reduces the volume of duplicate information received at your household and helps to reduce our expenses.
Questions and Additional Information Pinnacle stockholders may contact Pinnacle?s proxy solicitor, D.
Stockholders may call toll-free at 1-800-697-6975 or call collect at 1-212-269-5550.
This section may not contain all of the information that is important to you.
See the section titled ?Where You Can Find More Information.
? the merger-related compensation proposal.
Q: How do the GLPI board and the Pinnacle board recommend that I vote?
A: GLPI?s board of directors unanimously determined that it is in the best interests of GLPI and its shareholders, and declared it advisable, to enter into the merger agreement, and approved the execution, delivery and performance of the merger agreement and the consummation of the transactions contemplated by the merger agreement, including the share issuance proposal.
For a detailed description of the various factors considered by the GLPI board of directors, see the section titled ?The Merger?Recommendation of GLPI?s Board of Directors and Reasons for the Merger.
? the plan of reorganization to effectuate the separation having been substantially completed in accordance with the plan of reorganization; ? and, together with the separation, the ?spin-off?.
OpCo will then be a stand-alone, publicly traded company owned 100% by Pinnacle stockholders.
Prior to, at the time of or immediately following the distribution of the shares of OpCo, OpCo will enter into debt financings.
The proceeds of the OpCo Cash Payment will be used by GLPI, together with certain GLPI proceeds, to pay off Pinnacle?s existing debt.
Q: What will Pinnacle stockholders receive for their shares of Pinnacle common stock in the merger?
A: At the effective time of the merger, each Pinnacle stockholder will be entitled to receive 0.
The shares of GLPI common stock received pursuant to the merger agreement will be in addition to the shares of OpCo common stock that Pinnacle stockholders will be entitled to receive in connection with the spin-off.
Immediately after the spin-off, Pinnacle stockholders will own 100% of the issued and outstanding shares of OpCo.
In addition, Pinnacle will take all actions as may be necessary so that at the effective time of the merger, each Pinnacle stock option, restricted stock unit including phantom stock unit awards, restricted stock unit awards, other stock unit awards, performance share grants, director other stock unit awards, deferred shares and any other similar instruments and cash performance unit will be treated as described in ?The Merger?Interests of Certain Pinnacle Persons in the Merger.
? the GLPI adjournment proposal.
GLPI?s board of directors unanimously determined that it is in the best interests of GLPI and its shareholders, and declared it advisable, to enter into the merger agreement, and approved the execution, delivery and performance of the merger agreement and the consummation of the transactions contemplated by the merger agreement, including the share issuance proposal.
GLPI?s board of directors recommends that GLPI shareholders vote ?FOR? If such a termination fee is payable under any such circumstance, the payment of this fee could have material and adverse consequences to the financial condition and operations of GLPI.
The unaudited pro forma consolidated combined financial information of GLPI has been prepared with the assumption that GLPI will be identified as the acquirer under GAAP and reflects adjustments based upon preliminary estimates of the fair value of assets to be acquired and liabilities to be assumed.
If the merger does not qualify as a ?reorganization? the GLPI share issuance and ?FOR? , and Pinnacle Entertainment, Inc.
?Pinnacle? Recommendation of Pinnacle?s Board of Directors and Reasons for the Merger see page 76 Pinnacle?s board of directors recommends that Pinnacle stockholders vote ?FOR? the outcome of any legal proceedings that have been or may be instituted against GLPI, Pinnacle or others following announcement of the merger contemplated by the merger agreement; ? the share issuance proposal and ?FOR? the compensation proposal; and ? as well as, among others, risks and uncertainties relating to: ? for additional information about GLPI.
In Pinnacle?s view, the unaudited financial statements include all adjustments consisting of normal recurring adjustments necessary for a fair presentation of the interim September 30, 2015 financial information.
Interim results for the nine months ended and as of September 30, 2015 are not necessarily indicative of, and are not projections for, the results to be expected for the fiscal year ending December 31, 2015.
For more information, see the section titled ?Where You Can Find More Information.
The purchase price of these entities has been excluded from the capital expenditures shown for 2011.
In addition, the 2010 results reflect the March 2010 opening of River City and income from discontinued operations related to the recovery of insurance proceeds from our former Casino Magic Biloxi property.
The following summary selected unaudited pro forma consolidated combined financial information has been prepared for illustrative purposes only and is not necessarily indicative of what the combined company?s consolidated financial position or results of operations actually would have been had the pro forma events occurred as of the dates indicated.
In addition, the summary selected unaudited pro forma consolidated combined financial information does not purport to project the future financial position or operating results of the combined company.
Future results may vary significantly from the results reflected because of various factors, including those discussed in the section entitled ?Risk Factors.
It has been assumed for purposes of the pro forma combined financial information provided below that the pro forma events occurred on December 31, 2014 for earnings per share purposes and on September 30, 2015 for book value per share purposes.
See ?Where You Can Find More Information.
The pro forma information is presented for illustrative purposes only and is not necessarily indicative of the operating results or financial position that would have occurred if the pro forma events had occurred as of the beginning of the periods presented, nor is it necessarily indicative of the future operating results or financial position of the combined company.
The product excludes the earnings, dividends and value of OpCo.
? within the meaning of Section 368 a of the Code.
The holders of Pinnacle common stock are not expected to recognize any gain or loss for U.
You should read ?The Merger?U.
Federal Income Tax Considerations Relating to the Merger? Proposal 1.
Recommendation of Pinnacle?s Board of Directors The board of directors of Pinnacle recommends that the Pinnacle stockholders vote: ? as well as the governing documents of GLPI, the shareholders of GLPI are not entitled to appraisal rights or dissenters? and under the section titled ?Pinnacle Special Meeting.
? respective obligations to complete the merger are conditioned upon 1 the absence of any outstanding injunction by any court or other tribunal of competent jurisdiction having been entered and continuing to be in effect and the absence of any law having been adopted or be effective, in each case that prohibits the consummation of the merger or any of the transactions contemplated thereby 2 satisfaction of the regulatory approval condition defined below.
At the time of the distribution, equity incentive awards and certain cash performance unit awards granted on or prior to July 16, 2015 will be adjusted into OpCo awards and GLPI awards in proportion to the relative value of Pinnacle after giving effect to the spin-off and OpCo.
Outstanding equity incentive awards and cash performance unit awards granted after July 16, 2015 will be adjusted into OpCo awards.
Following the spin-off, all OpCo awards will continue to vest in accordance with their terms based on OpCo service.
Upon completion of the merger, each outstanding Pinnacle equity award will be cancelled in exchange for a number of shares of GLPI common stock determined based on the exchange ratio.
In addition, certain cash performance unit awards will be cancelled in the merger in exchange for GLPI common stock based on the value of GLPI common stock at the time of the merger.
Agreement with Certain GLPI Shareholders see page 129 Concurrently with the execution of the merger agreement, Pinnacle entered into separate voting agreements with i Peter M.
Carlino and the Carlino Family Trust the ?Carlino Group? if the merger agreement is terminated and the board of directors of Pinnacle seeks another business combination, Pinnacle stockholders cannot be certain that Pinnacle will be able to find a party willing to enter into a transaction agreement on terms equivalent to or more attractive than the terms agreed to in the merger agreement.
The merger agreement contains certain provisions that restrict Pinnacle?s ability to initiate, solicit, knowingly facilitate or knowingly encourage or, subject to certain exceptions, engage in, continue or otherwise participant in any discussions or negotiations with respect to, or furnish to any other person any nonpublic information in connection with or for the purpose of encouraging or facilitating, or approve, recommend or enter into or propose to approve recommend or enter into , any third-party proposal for an alternative transaction.
Further, even if the Pinnacle board of directors changes, withholds, modifies, withdraws or qualifies its recommendation with respect to the merger agreement proposal, unless the merger agreement has been terminated in accordance with its terms, Pinnacle will still be required to submit the merger agreement proposal to a stockholder vote at the Pinnacle special meeting.
In addition, GLPI generally has an opportunity to offer to modify the terms of the transactions contemplated by the merger agreement in response to any third-party alternative transaction proposal before the Pinnacle board of directors may change, withhold, modify, withdraw or qualify its recommendation 39 with respect to the merger agreement proposal.
See the sections entitled ?The Merger Agreement?No Solicitation of Alternative Proposals,? and other similar words, phrases or expressions are intended to identify such forward-looking statements.
These forward-looking statements include, without limitation, GLPI?s and Pinnacle?s expectations with respect to the costs and other anticipated financial impacts of the spin-off and merger; future financial and operating results of OpCo and GLPI; the ability of Pinnacle and GLPI to complete the contemplated financing transactions and reorganizations in connection with the transaction; OpCo?s and GLPI?s plans, objectives, expectations and intentions with respect to future operations and services; required approvals of the merger by Pinnacle?s stockholders and the share issuance by GLPI?s shareholders, and by governmental regulatory authorities, including gaming authorities; the stock price of OpCo and GLPI following the consummation of the transactions; the stock price of GLPI prior to the consummation of the transactions; the satisfaction of the closing conditions to the proposed merger; and the timing of the completion of the merger.
All forward-looking statements involve significant risks and uncertainties that could cause actual results to differ materially from those expressed or implied in the forward-looking statements, many of which are generally outside the control of GLPI and Pinnacle and difficult to predict.
These risks and uncertainties also include those set forth under the section titled ?Risk Factors? or a stockholder of Pinnacle Entertainment, Inc.
?Pinnacle? the inability of Pinnacle to retain key personnel; and ? the validly executed proxy naming such person as the proxy holder, signed by the GLPI shareholder; and ? through a broker, bank, trustee or other nominee a ?beneficial owner? ?plan,? the approval on an advisory non-binding basis of the compensation that may be paid or become payable to Pinnacle?s named executive officers that is based on or otherwise related to the proposed merger; and ?FOR? the adoption of the merger agreement and ?FOR? , a wholly owned subsidiary of GLPI, pursuant to which Pinnacle will merge with and into Merger Sub the ?merger? actual or anticipated fluctuations in GLPI?s revenue stream or future prospects; ? Proposal 3: ?FOR? ?potential,? following which GLPI will own all of Pinnacle?s real property assets, other than Pinnacle?s Belterra Park property and excess land at certain locations.
In connection with the transactions contemplated by the merger agreement, GLPI will issue shares of common stock of GLPI to stockholders of Pinnacle the ?share issuance?.
Under the rules of the NASDAQ Global Select Market ?NASDAQ? the comprehensive process conducted by the Pinnacle board and the alternatives to the merger including remaining as a stand-alone company , has unanimously determined that it is advisable and in the best interests of Pinnacle?s stockholders to enter into the merger agreement, and unanimously approved the merger agreement and the transactions contemplated by the merger agreement, including the merger, and resolved to recommend the adoption of the merger agreement by Pinnacle?s stockholders and that the adoption of the merger agreement be submitted to a vote at a meeting of Pinnacle?s stockholders.
Accordingly, the Pinnacle board recommends that you vote ?FOR? ?plan,? written opinion, the exchange ratio of 0.
Goldman Sachs? failure of GLPI to achieve the perceived benefits of the merger, including financial results, as rapidly as or to the extent anticipated by financial or industry analysts; ? PNK Entertainment, Inc.
Immediately following the closing of the merger, OpCo will be renamed ?Pinnacle Entertainment, Inc.
Date, Time and Place of the GLPI Special Meeting The GLPI special meeting will be held on March 15, 2016 at the offices of Kozloff Stoudt, 2640 Westview Drive, Wyomissing, Pennsylvania 19610, at 10 a.
Purposes of the GLPI Special Meeting The GLPI special meeting is being held to consider and vote upon the following proposals: ? and a related proposal to adjourn the special meeting, if necessary or appropriate, to solicit additional proxies if there are not sufficient votes to approve the share issuance proposal the ?GLPI adjournment proposal?.
Approval of the share issuance proposal requires the affirmative vote, in person or by proxy, of a majority of the votes cast on the proposal by the holders of shares of common stock of GLPI entitled to vote at the special meeting.
The special meeting of GLPI?s shareholders will be held on March 15, 2016 at the offices of Kozloff Stoudt, 2640 Westview Drive, Wyomissing, Pennsylvania 19610, at 10 a.
GLPI?s board of directors unanimously recommends that GLPI shareholders vote ?FOR? ?target,? to gauge its interest in a potential strategic transaction involving Pinnacle.
Sanfilippo sent a letter to Mr.
Carlino indicating that the Pinnacle board of directors had unanimously determined that the March 6 Proposal did not adequately value Pinnacle?s real estate assets, but that Pinnacle would be willing to explore a potential transaction and provide the limited due diligence information requested by GLPI on the condition that GLPI enter into an acceptable NDA that, while not itself including any standstill provisions, would include as an exhibit the form of a NDA with a standstill which the parties would commit to execute if Pinnacle provided any further information beyond the limited due diligence already requested by GLPI.
Drafts of both versions of the NDA were included in the e-mail containing the letter.
On March 17, 2015, Mr.
Godfrey held a telephone call to discuss the two versions of the NDA sent by Mr.
On March 18, 2015, members of Pinnacle?s senior management met with members of senior management of Party A to discuss a potential transaction involving Pinnacle?s operating assets.
That same day, members of Pinnacle?s senior management had a call with members of senior management of Party B to discuss a potential transaction involving Pinnacle?s operating assets and certain assets of Party B.
In addition, on March 18, 2015, GLPI sent a revised draft of the NDA to Pinnacle, which removed the references to a future agreement containing standstill provisions.
On March 19, 2015, the Pinnacle board of directors held a telephonic meeting at which representatives of Pinnacle?s management, Goldman Sachs, Skadden, and Gibson were in attendance.
Pinnacle?s management updated the Pinnacle board of directors on its communications with GLPI, the feedback it had received from Pinnacle?s stockholders and a review of the market?s reaction to the March 6 Proposal, as well as the discussions they had with Party A and Party B.
Representatives of Goldman Sachs also offered perspectives on the alternatives potentially available to Pinnacle.
Representatives from Goldman Sachs, Skadden and Gibson then offered advice regarding potential next steps.
After discussion, the Pinnacle board of directors determined that Pinnacle should execute an NDA not containing a standstill with GLPI, which would apply to the provision of limited information requested by GLPI, so that GLPI could further develop its proposal.
The Pinnacle board of directors also authorized management and Goldman Sachs to continue discussions with other interested third parties regarding a potential transaction, including Party A and Party B.
The independent members of Pinnacle?s board of directors then met separately with representatives from Gibson to discuss Pinnacle?s current situation, during which representatives of Gibson provided legal advice and observations on the process undertaken to date.
On March 20, 2015, Pinnacle and GLPI executed an NDA without a standstill, pursuant to which Pinnacle would provide certain limited information to GLPI, including certain tax and financial information.
On March 23, 2015, Goldman Sachs provided Morgan Stanley with certain of the due diligence information that GLPI had requested from Pinnacle, including summary information relating to Pinnacle?s estimated tax basis, net operating loss carryforward position and accumulated earnings and profits.
On March 25, 2015, Pinnacle?s senior management met with members of senior management of Party A to discuss a potential transaction involving Pinnacle?s operating assets.
During this meeting, Party A discussed a preliminary framework with respect to a potential strategic transaction, which involved purchasing Pinnacle?s operating assets and separating Pinnacle?s real estate into an independent, publicly traded REIT.
On March 25, 2015, GLPI submitted to Pinnacle a list of follow-up questions and supplemental requests related to the due diligence information that had been provided by Goldman Sachs.
On March 26, 2015, representatives of GLPI and representatives of Pinnacle held a conference call in which they discussed the due diligence information that Pinnacle had provided on March 23, 2015 and related matters.
The representatives of Pinnacle indicated that certain additional due diligence information that GLPI had requested was in the process of being prepared and would be sent when available.
That same day, representatives of Goldman Sachs spoke with Party A?s financial advisor and informed it that Party A?s proposal did not adequately value Pinnacle?s assets when compared to other alternatives potentially available to Pinnacle.
On March 31, 2015, Pinnacle signed an NDA with Party B, which contained a customary standstill provision.
On April 3, 2015, Pinnacle signed an NDA with Party A, which contained a customary standstill provision.
In the following weeks, Pinnacle provided the additional due diligence requested by GLPI and engaged in discussions with GLPI regarding the assumptions underlying the March 6 Proposal, with a goal of further assisting GLPI in developing a revised and improved proposal.
Pinnacle also continued discussions with each of Party A and Party B regarding potential strategic transactions with these parties and engaged in due diligence with each party with respect thereto.
On April 7, 2015, the GLPI board of directors held a telephonic meeting at which members of GLPI management and representatives of Morgan Stanley and Wachtell Lipton, outside legal counsel to GLPI, were also in attendance.
At this meeting, GLPI management updated the GLPI board of directors on developments since the public announcement of the March 6 Proposal, including the due diligence process and discussions with Pinnacle and certain of its stockholders regarding the March 6 Proposal.
Following discussion with GLPI management and the advisors present at the meeting regarding the financial and strategic considerations of submitting a revised proposal to Pinnacle based upon the due diligence information received to date, the GLPI board of directors requested that management work with Morgan Stanley to conduct additional analysis and present the Board with a proposed revised offer when complete.
On April 10, 2015, the GLPI board of directors held a follow-up meeting at which GLPI management presented, and the GLPI board of directors discussed, a potential revised proposal to Pinnacle.
At the conclusion of this meeting, the GLPI board of directors authorized management to present the revised proposal to Pinnacle and to continue negotiating with Pinnacle towards a mutually agreeable transaction.
That same day, Mr.
Carlino delivered a letter to the Pinnacle board with a revised proposal for a transaction pursuant to which GLPI would acquire Pinnacle?s real estate assets through the acquisition of Pinnacle, following the spin-off of Pinnacle?s operating business, at an exchange ratio of 0.
On April 13 and 14, 2015, the Pinnacle board of directors met at a regularly-scheduled meeting.
Representatives of Pinnacle?s management, Goldman Sachs, Skadden and Gibson were present during relevant portions of the meeting.
The Pinnacle board of directors reviewed Pinnacle?s current situation, including the status of the REIT Separation Plan, the April 10 Proposal and the other strategic alternatives potentially available to Pinnacle.
Pinnacle?s management and representatives of Goldman Sachs provided an update on the REIT Separation Plan and on the discussions with GLPI, Party A and Party B and provided information and advice regarding the financial elements of each of the strategic options.
Representatives from Skadden and Gibson also offered their perspectives on certain legal matters.
After discussion, the Pinnacle board of directors determined to pursue due diligence and discussions with GLPI subject to entering into a new mutual NDA appropriate to the provision of additional information.
In addition, the Pinnacle board of directors directed management to continue exploring the other strategic alternatives potentially available to Pinnacle, including with Party A and Party B.
The independent members of Pinnacle?s board of directors then met separately with representatives from Gibson to discuss Pinnacle?s current situation, during which representatives of Gibson provided legal advice and observations on the process undertaken to date.
That same day, Mr.
Carlino a letter regarding the April 10 Proposal noting that the Pinnacle board believed that such proposal did not fully reflect the value of Pinnacle?s real estate assets, requesting certain clarifications regarding such proposal and suggesting that GLPI execute a mutual NDA so that the parties could share additional information and that the parties should schedule an in-person meeting to further discuss a potential transaction.
On April 15, 2015, Mr.
Carlino sent the Pinnacle board of directors a letter including detailed responses to the questions regarding the April 10 Proposal posed in Pinnacle?s April 14, 2015 letter and noting that while GLPI was open to an in-person meeting, it would not sign a mutual NDA that contained a standstill.
On April 16, 2015, Mr.
Carlino a letter noting that, in the interest of facilitating open discussions between the parties, Pinnacle was prepared to execute a mutual NDA without a standstill.
That same day, GLPI and Pinnacle executed a mutual NDA without a standstill.
That same day, advisors and senior management of each of Pinnacle and Party B engaged in discussions regarding a potential transaction.
On April 17, 2015, Party B?s financial advisor delivered a proposal for the acquisition of certain of Pinnacle?s operating assets and Pinnacle?s acquisition of certain of Party B?s real estate assets, and on April 18, 2015, senior management of Pinnacle and Party B, along with representatives of Goldman Sachs and Party B?s financial advisor, conducted a telephone call to discuss the terms of Party B?s proposal.
On April 20, 2015, Pinnacle sent a counterproposal to Party B.
That same day, representatives of senior management of Pinnacle and GLPI, as well as representatives from Goldman Sachs, Morgan Stanley, Skadden and Wachtell Lipton met in Las Vegas to discuss a potential transaction involving GLPI and Pinnacle.
As a result of such meeting, it was agreed that Pinnacle would send GLPI a counterproposal reflecting, among other things, its positions on the terms of a potential master lease and the valuation of Pinnacle?s real estate assets.
On April 21, 2015, both Party A and Party B separately submitted revised proposals to Pinnacle with respect to their respective interest in a potential strategic transaction.
Each of the proposals involved purchasing Pinnacle?s operating assets and the separation of Pinnacle?s real estate assets into an independent, publicly traded REIT.
Party A?s proposal involved the acquisition of Pinnacle?s operating assets and Party B?s proposal involved the acquisition of Pinnacle?s operating assets and the acquisition by Pinnacle of certain of Party B?s real estate assets.
On April 22, 2015, representatives of senior management of Pinnacle and Party B had a call to discuss the terms of Party B?s revised proposal.
On April 23, 2015, Party B submitted a revised proposal involving the acquisition of Pinnacle?s operating assets and the acquisition by Pinnacle of certain of Party B?s real estate assets, which revised certain of the financial terms of the proposed transaction.
Also on April 23, 2015, the Pinnacle board of directors held a telephonic meeting.
Representatives of Pinnacle?s management, Goldman Sachs, Skadden and Gibson also participated during such call.
Management updated the Pinnacle board of directors on the latest communications with each of GLPI, Party A and Party B, and representatives from Goldman Sachs reviewed financial terms and financial assumptions underlying each proposal.
Representatives from Skadden and Gibson also offered their perspectives on certain legal matters.
After discussion, the Pinnacle board of directors determined that management should continue to negotiate with GLPI and communicate to Party A and Party B that their respective proposals were inadequate.
That same day, Mr.
Sanfilippo sent a letter to Mr.
Carlino communicating the key areas where Pinnacle believed that GLPI needed to improve its proposal, including with respect to the valuation of Pinnacle?s real estate assets, the terms of a master lease and the amount of and circumstances under which any termination fees would be payable.
Sanfilippo communicated to Party A and Party B that their respective proposals did not adequately value Pinnacle?s assets, and with regard to Party B, that Pinnacle had concerns regarding the uncertainty and feasibility of implementing its proposal.
Also on April 24, 2015, representatives of GLPI, Pinnacle, Morgan Stanley and Goldman Sachs held a telephonic meeting to discuss the letter sent by Mr.
Sanfilippo on April 23, 2015, including the key areas where Pinnacle believed that GLPI needed to improve its proposal.
On April 25, 2015, Mr.
Carlino delivered a letter to the Pinnacle board of directors reflecting a revised proposal for a taxable transaction pursuant to which GLPI would acquire, at an exchange ratio of 0.
The letter also reflected GLPI?s position on certain of the other open issues between the parties, including the terms of a master lease and the size of any termination fees and circumstances under which such fees would be payable.
On April 28, 2015, the Pinnacle board of directors held a telephonic meeting.
Representatives of Pinnacle?s management, Goldman Sachs, Skadden and Gibson also participated during such call.
Management updated the Pinnacle board on the latest communications with each of GLPI, Party A and Party B, noting that neither Party A nor Party B had submitted a revised proposal.
A potential response to GLPI?s April 25 Proposal was also discussed.
After receiving advice from representatives of Goldman Sachs, Skadden and Gibson, the Pinnacle board of directors determined to respond to GLPI with Pinnacle?s position on GLPI?s proposal.
Following the meeting, Mr.
Carlino a letter regarding the April 25 Proposal stating that, despite meaningful progress in the negotiations with GLPI, key terms including the consideration to be provided to Pinnacle stockholders and the allocation of certain transaction costs remained outstanding, and communicating Pinnacle?s position on certain of the remaining open issues between the parties.
On April 29, 2015, Mr.
Carlino delivered a letter to the Pinnacle board of directors, a draft of which GLPI management had previously distributed to the GLPI board of directors and received its authorization to distribute to Pinnacle, reflecting GLPI?s positions on the open issues between the parties, including with respect to valuation of Pinnacle?s real estate assets, and proposing an exchange ratio of 0.
GLPI?s response indicated that, while GLPI could be flexible regarding allocation of certain transaction costs, the GLPI board of directors was not supportive of any further valuation enhancement.
On May 1, 2015, the Pinnacle board of directors held a telephonic meeting.
Representatives of Pinnacle?s management, Goldman Sachs, Skadden and Gibson also participated during such call.
Management updated the Pinnacle board of directors on the status of each of the alternatives Pinnacle had been exploring, including the REIT Separation Plan, the April 29 Proposal and potential transactions involving Party A and Party B, and representatives of Goldman Sachs provided a financial analysis of the April 29 Proposal.
Representatives of Skadden and Gibson also discussed certain legal matters and offered perspectives on each of the alternatives potentially available to Pinnacle.
After discussion, the Pinnacle board of directors determined to send a counterproposal to the April 29 Proposal, reflecting a fixed exchange ratio of 0.
Sanfilippo to continue negotiations with GLPI.
The independent members of Pinnacle?s board of directors then met separately with representatives from Gibson, Skadden and Goldman Sachs to discuss Pinnacle?s current situation.
The independent directors discussed certain economic factors related to the proposed transaction with GLPI with input from Goldman Sachs, as well as certain legal matters with Skadden and Gibson.
Later that same day, representatives of senior management of GLPI and Pinnacle held a telephonic meeting to discuss the April 29 Proposal.
Following this telephonic meeting, Mr.
Sanfilippo delivered a letter to Mr.
Carlino with a counterproposal to the April 29 Proposal and a request for a telephonic meeting on May 2, 2015.
Later that same day, Mr.
Carlino sent the Pinnacle board of directors a letter confirming the terms of the May 2 Proposal.
That same day, the Pinnacle board of directors held a telephonic meeting.
Representatives of Pinnacle?s management, Goldman Sachs, Skadden and Gibson also participated during such call.
Management summarized the status of discussions with GLPI, and Goldman Sachs provided an overview and financial analysis of the May 2 Proposal.
A representative of Skadden reviewed legal matters.
The Pinnacle board of directors authorized management to continue negotiations with GLPI with respect to a potential transaction based on the framework of the May 2 Proposal.
On May 4, 2015, Pinnacle issued a press release confirming its discussions with GLPI regarding a potential transaction involving its real estate assets.
That same day, during GLPI?s first quarter earnings call, GLPI updated investors regarding certain developments with respect to a potential transaction involving Pinnacle?s real estate assets.
During the ensuing weeks, Pinnacle, GLPI and their respective representatives continued their mutual due diligence and negotiations of definitive transaction documents with respect to a potential transaction based on the framework of the May 2 Proposal.
During the week of May 11, 2015, Skadden and Wachtell Lipton exchanged initial drafts of the transaction documents in connection with a potential transaction between Pinnacle and GLPI, including drafts of the merger agreement, the master lease and the agreements to effect the separation of Pinnacle?s operating business from its real estate assets.
On May 17, 2015, Skadden and Wachtell Lipton exchanged a list of the key issues in the draft transaction documents.
These issues included, among others, the allocation of Pinnacle?s existing assets and liabilities, the treatment of certain of Pinnacle?s and GLPI?s expenses, the treatment of Pinnacle?s existing indebtedness, rent adjustments and capital improvements under the master lease, the nature and extent of Pinnacle?s non-solicit obligation, the allocation of regulatory risk between the parties, the conditionality of GLPI?s obligation to close a transaction and the circumstances under which termination fees would be payable.
On May 18, 2015, representatives of management from each of Pinnacle and GLPI held a telephonic meeting to discuss the key issues each party had identified in the transaction documents.
Representatives from Skadden, Goldman Sachs, Wachtell Lipton and Morgan Stanley also participated during the call.
As a result of the call, the parties refined and clarified the open issues in the transaction documents.
During the week of May 18, 2015, Skadden and Wachtell Lipton exchanged revised drafts of the transaction documents and held calls to discuss the open issues in such transaction documents.
On May 19, 2015, the Pinnacle board of directors held an in-person meeting.
Representatives of Pinnacle?s management, Goldman Sachs, Skadden and Gibson also participated in such meeting.
During the meeting management provided an update on the status of negotiations with GLPI and the progress that had been made regarding the REIT Separation Plan.
Pinnacle senior management and representatives of Goldman Sachs also provided financial analysis regarding a potential transaction with GLPI and offered perspectives on the REIT Separation Plan.
The Pinnacle board of directors determined that management and Pinnacle?s advisors should continue negotiating with GLPI to see if a potential transaction could be negotiated on acceptable terms, while at the same time continuing to work on the REIT Separation Plan.
During the week of May 25, 2015, Skadden and Wachtell Lipton continued exchanging drafts of the transaction documents and held calls to discuss the open issues in such transaction documents.
On May 27, 2015, Skadden 69 and Wachtell Lipton exchanged a list of the key issues in the draft transaction documents.
These issues included, among others, the allocation of Pinnacle?s assets and liabilities, the amount of Pinnacle?s existing indebtedness that GLPI would be obligated to refinance, the nature and extent of Pinnacle?s non-solicit obligations, the allocation of regulatory risk between the parties and the terms of the master lease.
On May 29, 2015, representatives of senior management from each of Pinnacle and GLPI met in the New York offices of Skadden with a goal of resolving the remaining open issues.
Representatives of Goldman Sachs, Skadden, Morgan Stanley and Wachtell Lipton also attended such meeting.
As a result of the meeting, the parties were able to resolve certain open issues but other open issues remained, including, among others, the structure of the master lease and the allocation of certain expenses between the two parties.
During the week of June 1, 2015, Skadden and Wachtell Lipton continued exchanging drafts of the transaction documents and continued to discuss such documents.
On June 1, 2015, certain representatives of senior management of each of Pinnacle and GLPI had a telephone conversation to discuss certain financial diligence matters.
On June 5, 2015, the Pinnacle board of directors met telephonically.
Representatives of Pinnacle?s management, Goldman Sachs, Skadden and Gibson also participated during such call.
Representatives of management provided the Pinnacle board with an update on the status of negotiations with GLPI and representatives of Skadden updated the Pinnacle board of directors on the current status of the transaction documents.
Representatives of Goldman Sachs also offered perspectives on the process to date and next steps to resolve open issues with GLPI, which included the allocation of regulatory risk, the nature and extent of Pinnacle?s non-solicit obligations, the circumstances under which termination fees would be payable and certain issues relating to the master lease.
After deliberation, the Pinnacle board directed management to continue the negotiations with GLPI.
During the week of June 8, 2015, Skadden and Wachtell Lipton continued to exchange revised drafts of the transaction documents and continued to discuss such documents.
Open issues at this point included, among others, allocation of regulatory risk, circumstances under which the termination fees would be payable, the nature and extent of Pinnacle?s non-solicit obligations, the treatment of Pinnacle?s existing indebtedness, cost allocation issues and the terms of the master lease.
On June 11, 2015, the Pinnacle board of directors met telephonically.
Representatives of Pinnacle?s management, Goldman Sachs, Skadden and Gibson also participated on such call.
Management updated the Pinnacle board on the progress that had been made in the negotiations with GLPI since the previous meeting of the Pinnacle board and representatives of Goldman Sachs then provided an analysis on the financial aspects of a potential transaction with GLPI, comparing it to the other options potentially available to Pinnacle.
The Pinnacle board of directors instructed Pinnacle?s management and advisors to continue negotiating with GLPI with respect to a potential transaction.
Following this meeting, Pinnacle and GLPI set up a meeting to try to resolve open issues, to be held on June 15, 2015 in New York City.
On June 13, 2015, Skadden sent Wachtell Lipton a list of the open issues in the transaction documents which included, among others, allocation of regulatory risk, circumstances under which the termination fees would be payable, the treatment of Pinnacle?s existing indebtedness, certain terms of the master lease and the nature and extent of Pinnacle?s non-solicit obligations.
On June 14, 2015, Mr.
Ruisanchez to report that, based upon changes to the terms of the transaction that had been requested by Pinnacle and negotiated between the parties in the preceding weeks, GLPI no longer believed the proposed transaction in its currently contemplated form represented a valuation acceptable to GLPI and its shareholders, and accordingly GLPI was reexamining certain value points with respect to the May 2 Proposal.
Representatives of Goldman Sachs, Skadden, Morgan Stanley and Wachtell Lipton also attended such meeting.
While the meeting had originally been scheduled to resolve the remaining open issues that had been identified between the two parties, the parties spent a substantial portion of the meeting discussing the implications of the message conveyed by GLPI on June 14, 2015, regarding GLPI?s valuation issues.
GLPI identified several possible combinations of modifying the exchange ratio, the initial rent payment under the master lease and the amount of existing Pinnacle indebtedness that GLPI would be responsible for refinancing.
Pinnacle noted to GLPI that Pinnacle would not be able to provide GLPI with a substantive response to any proposed adjustments to the transaction until GLPI provided Pinnacle with a complete revised proposal.
The parties agreed that GLPI would send Pinnacle a revised proposal.
On June 16, 2015, representatives of Goldman Sachs and Party B?s financial advisor had a call to discuss the feasibility of a potential transaction.
That same day, representatives of each of Goldman Sachs and Morgan Stanley had a call to discuss the status of discussions between Pinnacle and GLPI.
On June 17 and June 18, 2015, the GLPI board of directors met at a regularly-scheduled meeting.
Representatives of GLPI management and Morgan Stanley were present during relevant portions of the meeting.
At this meeting, GLPI management provided the GLPI board of directors with an update regarding the current status of negotiations with respect to the proposed transaction with Pinnacle, including a discussion of the valuation issues which GLPI management had recently identified to Pinnacle.
GLPI management and Morgan Stanley reviewed with the GLPI board of directors a revised form of proposal which represented acceptable value to GLPI in the judgment of GLPI management.
The GLPI board of directors discussed with Morgan Stanley and GLPI management the economic terms of the revised proposal and remaining open contractual issues, including Pinnacle?s stated position on each.
The discussion concluded with the GLPI board of directors? ?guidance,? for a more detailed discussion.
Also, either GLPI or Pinnacle may terminate the merger agreement if the merger has not been consummated by March 31, 2016 or, in GLPI?s sole discretion?if the only conditions to closing that have not been satisfied or waived by that date are those related to regulatory approvals, consents or clearances, an outstanding judgment, injunction, order or law of a governmental authority prohibiting or enjoining the transactions or an action pending before, or threatened in writing by, the U.
Antitrust Division of the Department of Justice or the Federal Trade Commission that would prevent the performance of the transactions?June 30, 2016, except that this right to terminate the merger agreement will not be available to any party whose material breach of a representation, warranty, covenant or other agreement of such party under the merger agreement resulted in the failure of the transactions to be consummated on or before that date.
If the transactions contemplated by the merger agreement are not completed on a timely basis, or at all, GLPI?s and Pinnacle?s respective ongoing businesses may be adversely affected and, without realizing any of the benefits of having completed the transactions, GLPI and Pinnacle will be subject to a number of risks, including the following: ? subject to certain exceptions, the merger is not consummated by March 31, 2016, subject to one three-month extension by GLPI to June 30, 2016, at the election of GLPI, if the only conditions not satisfied at such time relate to regulatory and other government approvals such date, as may be extended, the ?end date? the Pinnacle adjournment proposal.
In the course of reaching its decision to approve the merger agreement and the transactions contemplated by the merger agreement and the other transaction documents, including the spin-off and merger, Pinnacle?s board of directors considered a number of factors in its deliberations.
For a more complete discussion of these factors, see ?The Merger?Recommendation of Pinnacle?s Board of Directors and Reasons for the Merger.
LLC ?Morgan Stanley? in connection with the Agreement and Plan of Merger, dated as of July 20, 2015 as it may be amended from time to time, the ?merger agreement? , GLPI the ?Penn spin-off?.
In connection with the Penn spin-off, which was completed on November 1, 2013, Penn contributed to GLPI, through a series of internal corporate restructurings, substantially all of the assets and liabilities associated with Penn?s real property interests and real estate development business, as well as the assets and liabilities of Hollywood Casino Baton Rouge and Hollywood Casino Perryville the ?TRS properties? the impact of global or regional economic conditions, fluctuations in exchange rates, labor relations, competitive actions taken by other gaming operators, REITs or other competitors, terrorist attacks or natural disasters.
GLPI and Pinnacle caution that the foregoing list of factors is not exhaustive.
Additional information concerning these and other risk factors is contained in GLPI?s and Pinnacle?s most recently filed Annual Reports on Form 10-K, subsequent Quarterly Reports on Form 10-Q, recent Current Reports on Form 8-K and other SEC filings, 36 as such filings may be amended from time to time.
All subsequent written and oral forward-looking statements concerning GLPI, Pinnacle, the merger or other matters attributable to GLPI or Pinnacle or any person acting on their behalf are expressly qualified in their entirety by the cautionary statements above.
Neither GLPI nor Pinnacle undertakes any obligation to update publicly any of these forward-looking statements to reflect events or circumstances that may arise after the date hereof.
In addition, you should read and consider the risks associated with each of the businesses of Pinnacle and GLPI because these risks will relate to the combined company following the completion of the transactions.
You should also consider the other information in this document and the other documents incorporated by reference into this document.
See the section titled ?Where You Can Find More Information.
? While the obligation of GLPI to consummate the merger is not subject to any financing condition, the merger agreement provides that, without GLPI?s agreement, the closing of the merger will not occur earlier than a a date during the Pinnacle marketing period specified by Pinnacle on no less than three business days? , who wishes to attend the Pinnacle special meeting in person should bring government-issued photo identification.
? Q: What do I do if I am a Pinnacle stockholder and I want to revoke my proxy?
A: Stockholders of record may revoke their proxies at any time before their shares are voted at the Pinnacle special meeting in any of the following ways: ? contained in GLPI?s Annual Report on Form 10-K filed with the SEC on February 27, 2015, as amended by Amendment No.
For more information, see the section titled ?Where You Can Find More Information.
GLPI was spun-off from Penn on November 1, 2013.
For 2010 through 2012, the selected historical financial data sets forth the historical operations of Louisiana Casino Cruises, Inc.
See the section titled ?Information About GLPI? Internet: Pinnacle stockholders may submit their proxy over the Internet at the web address shown on their proxy card.
Internet voting is available 24 hours a day and will be accessible until 11:59 p.
Eastern Time, on March 14, 2016.
Stockholders will be given an opportunity to confirm that their voting instructions have been properly recorded.
Pinnacle stockholders who submit a proxy this way should NOT send in their proxy card.
? as defined in the merger agreement , subject to certain conditions.
The GLPI marketing period is the first period of twenty consecutive days throughout and at the end of which a GLPI and its financing sources have had access to certain required information and such information continues to be compliant during such period subject to certain exceptions and b nothing shall have occurred and no condition exists that would cause any of the conditions to closing to fail to be satisfied, assuming the closing to the merger were to be scheduled for any time during such twenty consecutive day period other than conditions to closing that i relate to the shareholder approval, which must be satisfied five business days prior to the end of the GLPI marketing period and ii conditions to closing that by their nature will not be satisfied until the closing of the merger.
Moreover, in no event will the closing of the merger occur prior to November 20, 2015, see ?The Merger Agreement?Marketing Periods.
? the taking of governmental action including the passage of legislation to block the merger or otherwise adversely affecting GLPI and Pinnacle; ? does not instruct the broker, bank or other nominee that is the record owner of such stockholder?s shares on how to vote those shares on a particular proposal.
The votes required for each proposal are as follows: ? free online blackjack tournaments ubti free online blackjack tournaments ubti free online blackjack tournaments ubti free online blackjack tournaments ubti free online blackjack tournaments ubti free online blackjack tournaments ubti

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