(EGT) Plans To Implement A Stock Option Exchange Program

HONG KONG, June 13, 2016  — Entertainment Gaming Asia Inc. (NASDAQ: EGT) announced today that its Board of Directors has approved a voluntary stock option exchange program for its employees, directors and certain others (the “Participants”). The stock option exchange program would be effected pursuant to a proposed new 2016 stock incentive plan, which amends the Company’s existing 2008 stock incentive plan to bring it more in alignment with the Hong Kong Stock Exchange listing rules, to which the Company’s equity incentive plans are subject as a result of the Company becoming a majority-owned subsidiary of Melco International Development Limited. The new 2016 stock incentive plan is subject to the approval of the Company’s shareholders and the Company expects that the exchange program will be approved, without a meeting of stockholders, by written consent of the majority shareholder. The Company expects to effect the options exchange in the third quarter of 2016, following the effectiveness of the new 2016 stock incentive plan.

Under the terms of the program, the Participants would have the opportunity to cancel their existing underwater outstanding stock options (i.e., options with exercise prices that are higher than the current market trading price of the Company’s common stock) in exchange for a replacement option grant for an equal number of shares. The replacement options would have an exercise price of $1.94, which is based on the higher of: (i) 100% of the fair market value of the Company’s common stock on the Board approval date and (ii) 100% of the average fair market value of one share of the Company’s common stock for the five business days immediately preceding the Board approval date.

The replacement options would have a ten-year term from the option exchange date and would be subject to a new vesting schedule. The replacement options would vest over three years, vesting 50% on the first anniversary and 25% on each of the second and third anniversaries of the option exchange date, subject to the Participants remaining continuously in service with the Company.

As of May 31, 2016, options to purchase 766,851 shares of common stock are outstanding under the Company’s 2008 and other stock incentive plans. Options to purchase 484,781 of these shares, or approximately 3% of total shares outstanding, are expected to be eligible for this exchange program. The number of the Company’s shares subject to outstanding options would not change as a result of this option exchange.

The Company believes the option exchange program will provide valuable incentive to retain certain individuals that are important to its future success. Further, it serves to motivate the Participants to contribute to the attainment of the Company’s business and financial objectives and, ultimately, the creation of value for all of the shareholders.

The detailed terms and conditions of the amended stock incentive plan and stock option exchange program will be contained in an Information Statement to be mailed to the Company’s shareholders and to be filed with the Securities and Exchange Commission in June 2016.

The exchange program is being structured to comply with FASB Interpretation No. 44 “Accounting for Certain Transactions Involving Stock Compensation”. As a result of the option exchange, the Company expects to incur additional non-cash compensation expense attributable to the incremental fair value of the replacement options granted to the Participants, measured as of the date such awards are granted. The incremental compensation expense associated with the replacement options would be recognized over the expected life of the replacement options.

About Entertainment Gaming Asia Inc.
Entertainment Gaming Asia Inc. (NASDAQ: EGT), an indirect, majority-owned subsidiary of Melco International Development Limited, is a gaming company in Pan-Asia engaged in the leasing of electronic gaming machines to the gaming industry in Cambodia and the Philippines and the development and operation of gaming venues in Asia under its “Dreamworld” brand.  The Company is also developing a free to play online social casino gaming platform for certain Asian markets.

Forward Looking Statements
This press release contains forward-looking statements concerning Entertainment Gaming Asia within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Those forward-looking statements include statements regarding the benefits of implementing the stock option exchange program. Such statements are subject to certain risks and uncertainties, and actual circumstances, events or results may differ materially from those projected in such forward-looking statements. Factors that could cause or contribute to differences include, but are not limited to, the risk that the Company may not achieve the expected benefits from the option exchange program and those other risks set forth in the companies’ respective annual reports on Form 10-K for the year ended December 31, 2015 filed with the SEC and subsequently filed reports. The companies caution readers not to place undue reliance on any forward-looking statements and they  do not undertake, and specifically disclaim any obligation to update or revise such statements to reflect new circumstances or unanticipated events as they occur.