4.Commitments and Contingencies.

Lease Obligations - The Company is obligated under one operating lease, averaging approximately $9 per month, with a 2.0% annual rent escalation, for its U.S. corporate office space, expiring in March 2020. Additionally, TWC is also obligated to pay a remaining 68-year ground lease in connection with the newly acquired Hotel Freizeit Auefeld, that has an annual lease payment of €26, or approximately $30. Future aggregate minimum annual rental payments under these leases for the next five years are as follows:


Twelve Months Ending March 31,		(Unaudited)
2017	$	128
2018	$	130
2019	$	132
2020	$	134
2021	$	30

The Company is also obligated under a number of five-year, video slot machine equipment operating leases, the projected costs of which are not included in the table above due to fluctuating inventory, expiring over staggered years, which provide for a monthly fixed rental fee per slot machine, and an option for replacement with different/newer machines during the term of the lease. In the first quarter of 2016, the Company’s slot machine equipment lease expense was $588 versus $576 in the comparable quarter in 2015. All slot leases can be terminated at any time, subject to an early-termination penalty equal to three-month lease payments for each terminated slot machine lease.

Employment Agreements - The Company’s employment agreement with its Chief Executive Officer (“CEO”), Mr. Rami S. Ramadan, absent the intervention of either party by September 30th of each year, will renew automatically for another calendar year, currently ending December 31, 2016. In addition to a perpetually renewable employment term of one year absent the intervention of either party, the agreement provides for annual compensation, plus participation in the Company’s benefits programs and equity incentive plans. As of March 31, 2016, the Company is contractually obligated to pay an aggregate of approximately $338, which represents the annual base salary for the remaining nine months of 2016.

2014 Equity Incentive Plan - In April 2014, the Board unanimously adopted the 2014 Equity Incentive Plan (“2014 Equity Plan”), which was subsequently approved by the shareholders of the Company at its Annual Meeting held in June 2014. The 2014 Equity Plan supercedes the 2004 Equity Incentive Plan, which expired in May 2014.

The 2014 Equity Plan provides that certain awards made under the plan may be eligible for designation as “qualified performance-based compensation” which may be exempt from the $1,000 deduction limit imposed on publicly-held corporations by Section 162(m) of the Internal Revenue Code. The type of awards that may be granted, under the 2014 Equity Plan, by the Compensation Committee of the Board, in its discretion from time to time, include stock options, stock appreciation rights, restricted stock and restricted stock units, other stock-based awards and performance awards.

The 2014 Equity Plan provides the Committee with the discretion to grant to any participant annually any awards not to exceed 200,000 shares of Common Stock and/or any restricted stock or restricted stock units that are not subject to the achievement of a performance target or targets covering more than an aggregate of 150,000 shares. The plan stipulates the authorized number of shares available with respect to which awards may be granted under the plan shall be 660,750, of which 335,750 remained available for issuance as of March 31, 2016. See also Mr. Ramadan’s option grant on November 11, 2014 in Note 11 “Stock Options and Warrants,” above.

Additionally, option awards will be available for grants to the executive officers and non-employee directors as well as other key employees, except that non-employee directors are eligible to receive only awards of non-qualified stock options.

The 2014 Equity Plan also contains the following provisions: (i) no stock option repricings (without the approval of the Company’s shareholders); (ii) limitations on shares other than for stock options; (iii) no discounts on stock options; (iv) minimum three year vesting periods for restricted stock and other stock-based awards; (v) no “evergreen” provisions; and (vi) conformity to Section 409A of the Internal Revenue Code.

On January 29, 2016, the Compensation Committee recommended and the Board approved a bonus of $168,750 to Mr. Ramadan, our chief executive officer, pursuant to his achievement of certain pre-set operational and financial targets. In addition, he was also granted, pursuant to the Company’s 2014 Equity Plan, five-year options to purchase 75,000 shares of Common Stock that vest in four equal parts, with the options to acquire 18,750 shares vesting immediately upon the date of grant and options to acquire 18,750 shares vesting subsequently upon each anniversary of the grant date. The exercise price of all these options was initially set at $2.59 per share, the closing stock price on the date of grant, and will escalate by 4.0% annually on each anniversary date. The fair value of the grant was approximately $78,000, or $1.04 per option.

401(k) Plan - The Company maintains a contributory 401(k) plan. This plan is for the benefit of all U.S.-based, eligible corporate employees, who may have a portion of their salary withheld, not to exceed the maximum federally allowed amount. The Company makes an employer-matching contribution of 60 cents for each employee dollar contributed.

2016 Profit Sharing Plan  The 2016 Profit Sharing Plan (the “PSP”) was recommended by the Compensation Committee of the Board and approved by the Board of Directors on February 26, 2016. The 2016 Profit Sharing Plan permits eligible KMEs to share in the pre-tax profits of the Company. The profit sharing plan provides for an incentive payout, the pool amount of which is based on 15.0% of the Company’s earned consolidated annual income before taxes. This pool is to be distributed according to the percentage of each KME’s annual salary as a ratio to the total of all salaries of participating KMEs. TWC accrued $250 and $130 for the quarters ended March 31, 2016 and 2015, respectively, toward the PSP pool. Each KME is required, pursuant to the PSP, to defer 50% of his or her annual profit sharing award, if attained, into the Deferred Compensation Plan.

2016 Individual Performance Plan  The 2016 Individual Performance Plan (the “2016 IPP”) was recommended by the Compensation Committee of the Board and approved by the Board of Directors on February 26, 2016. The 2016 IPP provides for incentive payout, based on each KME’s personal performance throughout the operating year, relative to pre-set performance criteria. The 2016 IPP bonuses will be incurred and paid in 2017.

Deferred Compensation Plan  On May 17, 2006, the Compensation Committee of the Board unanimously recommended, and the Board approved and adopted, TWC’s Deferred Compensation Plan (the “Deferred Plan”), which provides certain key employees, selected at the discretion of the Board, and all non-employee directors the opportunity to defer receipt of specified portions of their compensation and to have such deferred amounts treated as if invested in the Common Stock of the Company.

The Company adopted the Deferred Plan with the intention that it shall at all times be characterized as a “top hat” plan of deferred compensation maintained for a select group of management, as described under the Employee Retirement Income Security Act of 1974 (“ERISA”) Sections 201(2), 301(a)(3) and 401(a)(1). The Deferred Plan is required at all times to satisfy Section 409A of the Internal Revenue Code. Pursuant to a participant’s election, the unfunded Deferred Plan obligations are payable in the form of Common Stock (and cash for fractional shares) upon the earlier of: (i) a designated, in-service distribution date which must be a minimum of three years from the year of the first deferral; (ii) separation from service; (iii) disability; (iv) change in control of the Company; or (v) death. A participant’s election form must specify whether the payments will be made by lump sum or by installments, and the number of annual installments (with a minimum of two and a maximum of five installments).

Taxing Jurisdiction - Czechia and Germany currently have a number of laws related to various taxes imposed by governmental authorities. Applicable taxes include corporate income tax, value-added tax (“VAT”), and payroll (social) taxes, and, in the case of Czechia, gaming taxes. Tax declarations, together with other legal compliance areas (e.g. customs and currency control matters) are subject to review and investigation by a number of governmental authorities in each country in which TWC operates, which are enabled by law to impose fines, penalties and interest charges, and create tax risks in such countries. Management believes that it has adequately provided for all of its Czech and German tax liabilities. (See also Note 3(l) “Czech Gaming Taxes” and Note 3(m) “Income Taxes” above).

Legal Proceedings - The Company is sometimes subject to various contingencies, the resolutions of which, its management believes, will not have a material adverse effect on the Company’s consolidated financial position or results of operations. TWC was not involved in any material litigation as of March 31, 2016, or through the date of this filing.