Exhibit 10.47
PINNACLE ENTERTAINMENT, INC.
DIRECTOR HEALTH AND MEDICAL INSURANCE PLAN
1. Purposes of the Plan. The purposes of this Plan are to attract and retain
qualified individuals to serve as members of the Company’s Board of Directors
and to provide them and their Eligible Dependents with Health and Medical
Insurance Coverage as additional incentive for such service.
2. Definitions. For the purposes of this Plan, the following terms will have the
following meanings:
(a) “Board” means the Board of Directors of the Company.
(b) “Change of Control” means
(i) The acquisition by any individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended
(the “Exchange Act”)) (a “Person”) of beneficial ownership (within the meaning
of Rule 13d 3 promulgated under the Exchange Act) of 20% or more of either
(A) the then-outstanding shares of common stock of the Company (the “Outstanding
Company Common Stock”) or (B) the combined voting power of the then outstanding
voting securities of the Company entitled to vote generally in the election of
directors (the “Outstanding Company Voting Securities”); provided, however,
that, for purposes of this clause (i), the following acquisitions shall not
constitute a Change of Control: (i) any acquisition directly from the Company;
(ii) any acquisition by the Company; (iii) any acquisition by any employee
benefit plan (or related trust) sponsored or maintained by the Company or any
subsidiary; or (iv) any acquisition by any corporation pursuant to a transaction
that complies with clauses (b)(iii)(A); (iii)(B) and (iii)(C);
(ii) Any time at which individuals who, as of the date hereof, constitute the
Board (the “Incumbent Board”) cease for any reason to constitute at least a
majority of the Board; provided, however, that any individual becoming a
director subsequent to the date hereof whose election, or nomination for
election by the Company’s stockholders, was approved by a vote of at least a
majority of the directors then comprising the Incumbent Board shall be
considered as though such individual were a member of the Incumbent Board, but
excluding, for this purpose, any such individual whose initial assumption of
office occurs as a result of an actual or threatened election contest with
respect to the election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other than the
Board;
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(iii) Consummation of a reorganization, merger, consolidation or a sale or other
disposition of all or substantially all of the assets of the Company (each, a
“Business Combination”), in each case unless, following such Business
Combination, (A) all or substantially all of the individuals and entities that
were the beneficial owners of the Outstanding Company Common Stock and the
Outstanding Company Voting Securities immediately prior to such Business
Combination beneficially own, directly or indirectly, more than 50% of the then
outstanding shares of common stock and the combined voting power of the then
outstanding voting securities entitled to vote generally in the election of
directors, as the case may be, of the entity resulting from such Business
Combination (including, without limitation, a corporation that, as a result of
such transaction, owns the Company or all or substantially all of the Company’s
assets either directly or through one or more subsidiaries) in substantially the
same proportions as their ownership immediately prior to such Business
Combination of the Outstanding Company Common Stock and the Outstanding Company
Voting Securities, as the case may be, (B) no Person (excluding any corporation
resulting from such Business Combination or any employee benefit plan (or
related trust) of the Company or such corporation resulting from such Business
Combination) beneficially owns, directly or indirectly, 20% or more of,
respectively, the then outstanding shares of common stock of the corporation
resulting from such Business Combination or the combined voting power of the
then outstanding voting securities of such corporation, except to the extent
that such ownership existed prior to the Business Combination, and (C) at least
a majority of the members of the board of directors of the corportion resulting
from such Business Combination were members of the Incumbent Board at the time
of the execution of the initial agreement or of the action of the Board
providing for such Business Combination; or
(iv) Approval by the stockholders of the Company of a complete liquidation or
dissolution of the Company.
(c) “Company” means Pinnacle Entertainment, Inc., a Delaware corporation and any
successor as provided in Section 5(a).
(d) “Covered Period” means (i) as to the Director, five years following the date
on which the director leaves the Company’s Board of Directors (ii) as to a
Spouse, five years following the date on which the director leaves the Company’s
Board of Directors, unless either (A) he or she shall have divorced Director
prior to the end of such five year period, in which case the Covered Period for
the Spouse shall end on the date such divorce is final, or (B) he or she shall
have remarried following the death of the Director, in which case the Covered
Period for the Spouse shall end on the date of remarriage; and (iii) as to a
Minor Child, the period of time during which such person remains a Minor Child,
as defined.
(e) “Director” means a member of the Board.
(f) “Eligible Dependent” means a Spouse and a Minor Child.
(g) “Eligible Insureds” means (1) members of the Board who are in office at age
70 and who thereafter die, retire or resign from the Board or are not nominated
for re-election for any reason; (2) members of the Board who are in office at
the time of a Change of Control; and in each case (3) their Spouses and their
Minor Children, if any.
(h) “Insurance Plans” means the health and medical insurance plans of the
Company (whether or not under insurance policies) in effect from time to time
covering its corporate executives during the Covered Period; provided, however,
that if at any time during the Covered Period, the Company does not have any
such plans and in all events following a Change of Control, it shall secure, at
the Company’s expense, health and medical insurance coverage for the Eligible
Insureds from an insurance carrier rated A or higher providing health and
medical coverage in the aggregate no less favorable than that provided as of the
date the Eligible Insureds become entitled to medical and health insurance
coverage hereunder.
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(i) “Minor Child” or “Minor Children” means a child or children of the Director
who has or have been born prior to or during the time Director is a member of
the Board of Directors; provided, however, that such child or children shall
cease to be a Minor Child or Minor Children on the later of (i) the date on
which they reach their eighteenth birthday, or (ii) the date after such
eighteenth birthday on which they cease to be full time students, but in no
event after the end of the school year during which they reach their
twenty-fourth birthday.
(j) “Plan” means this Director Health and Medical Insurance Plan.
(k) “Plan Participant” means each Director, each Eligible Dependent and each
Eligible Insured.
(l) “Spouse” means and shall be limited to the Director’s spouse at the date of
the Director’s death, retirement or other departure from the Board of Directors
after age 70 or at the date of his or her departure from the Board of Directors
following a Change of Control, as the case may be.
3. Health and Medical Insurance. Directors and their Eligible Dependents shall
participate in the Company’s health and medical insurance plans applicable to
its corporate executives during the Director’s service on the Board. In
addition, Eligible Insureds shall receive health and medical coverage from the
Company under the Insurance Plans as are in effect from time to time during the
Covered Period; or, if no such plans are in effect at any time during the
Covered Period, the coverage in the aggregate no less favorable than that
provided to corporate executives under the Insurance Plans as of the date of
cessation. Following a Change of Control, the Company shall use its best efforts
to cause such coverage to be provided under insurance policies written by third
party insurance carriers and shall provide copies of such policies to the
Eligible Participants. The cost of such coverage shall be borne by the Company
except for any co-pay or similar provisions equally applicable to all insureds
under the Insurance Plans. If for any reason the Company shall fail to maintain
such coverage at all times during the Covered Period, it shall indemnify and
hold the Eligible Insureds harmless from all cost, loss, liability or expense
caused by such failure. Except as provided herein, the Eligible Insureds shall
be responsible for all imputed income taxes with respect to the premiums under
the Insurance Plans in accordance with the Company’s policies, but any taxes
relative to benefits provided under the Insurance Plans shall be paid by the
Company. Any payment or reimbursement of benefits under the Insurance Plans, or
paid by the Company by way of indemnification for failure to maintain and
Insurance Plan, that is taxable to an Eligible Insured shall be made by
December 31 of the calendar year following the calendar year in which the
Eligible Insured incurred the expense. If the Company elects to provide coverage
under the Insurance Plans other than through insurance policies issued by third
party insurance carriers, the Company shall indemnify the Eligible Insureds for
any tax liability they incur on payments of claims under the Insurance Plans
that they would not have incurred if the claims had been paid under insurance
policies (“Benefits Tax”). The Company
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shall pay to each Director a payment (the “Gross-Up Payment”) in an amount such
that, after payment by the Director of all income taxes and the excise tax
imposed by Internal Revenue Code Section 4999 or any similar provision of state
or local tax law (the “Excise Tax”) imposed on benefits under this Agreement, on
all other payments from the Company to the Director in the nature of
compensation, and on the Gross-Up Payment itself, and any interest or penalties
(other than interest and penalties imposed by reason of Director’s failure to
file timely tax returns or to pay taxes shown due on such returns and any tax
liability, including interest and penalties, unrelated to the Excise Tax or the
Gross-Up Amount), Director shall be placed in the same tax position with respect
to benefits under this Plan and all other payments from the Company to Director
in the nature of compensation as Director would have been in if the Excise Tax
had never been enacted. Any Gross-Up Payment or payment of Benefits Tax shall be
paid to or for the benefit the Eligible Insured not later than December 31 of
the calendar year following the calendar year in which the Excise Tax or
Benefits Tax is remitted, or, if no Excise Tax Benefits Tax is remitted, by
December 31 of the calendar year following the calendar year in which there is a
final and non-appealable settlement or other resolution of an audit or
litigation relating to the Excise Tax or Benefits Tax.
4. Insurance Offset. If at any time during the Covered Period an Eligible
Insured is insured under other health or medical plans or under Medicare, then
the Insurance Plans shall provide supplemental coverage to the extent permitted
by Law to the extent that such other plans do not provide full coverage for any
given claim. The Eligible Insureds shall notify the Company’s human resources
office upon request of their coverage under any such other plans or Medicare
but, except as provided herein shall have no obligation to seek any such
coverage. If eligible for Medicare coverage, Eligible Insureds shall enroll in
Medicare and remain enrolled through the Covered Period.
5. Miscellaneous.
(a) Successors and Assigns. This Plan will be binding upon and inure to the
benefit of the parties and, in the case of the Company, its successors and
assigns. The Company shall require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of the
business and/or assets of the Company to assume expressly and agree to perform
the Company’s obligations under the Plan in the same manner and to the same
extent that the Company would be required to perform it if no such succession
had taken place, but such successor’s obligation to do so shall not be dependent
on such express assumption. “Company” means the Company as hereinbefore defined
and any successor to its business and/or assets as aforesaid that assumes and
agrees to perform this agreement by operation of law or otherwise.
(b) Governing Law/Jurisdiction. This Plan and the rights and obligations of the
Company and the Plan Participants shall be governed by and construed in
accordance with the laws of the State of Delaware in all respects, including all
matters of construction, validity and performance, without regard to the
conflict of law rules of such state.
(c) Modification and Waiver. No provisions of this Plan will be amended, waived
or modified except by an instrument in writing and no such amendment, waiver or
modification shall adversely affect any rights of Plan Participants to health
and medical insurance coverage as provided for herein.
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(d) Attorneys’ Fees. Any dispute, controversy or claim arising out of this Plan
or the rights and obligations of the Company and any Plan Participant shall be
settled by arbitration in accordance with the Commercial Arbitration Rules of
the American Arbitration Association and judgment on the award rendered by the
arbitrators may be entered into any court having jurisdiction. If any
arbitration is instituted to remedy, prevent or obtain relief from a default in
the performance by the Company or a Plan Participant of its obligations under
this Plan, or to recover damages from a breach of a representation or warranty,
the prevailing party will recover all of such party’s attorneys’ fees incurred
in each and every such arbitration, including any and all appeals or petitions
therefrom. As used in this section, attorneys’ fees means the full and actual
costs of any legal services actually performed in connection with the matters
involved calculated on the basis of the usual fee charged by the attorney
performing such services and will not be limited to “reasonable attorneys’ fees”
as defined in any statute or rule of court.
(e) Claims Procedure. The claims procedure for benefits under this Plan shall be
the Claims Procedure under the applicable Insurance Plan.
(f) Required Delay For Certain Deferred Compensation and Section 409A. In the
event that any compensation with respect to the Director’s termination is
“deferred compensation” within the meaning of Section 409A of the Internal
Revenue Code of 1986, as amended (the “Code”) and the regulations thereunder
(“Section 409A”), the stock of the Company or any affiliate is publicly traded
on an established securities market or otherwise, and the Director is determined
to be a “specified employee,” as defined in Section 409A(a)(2)(B)(i), payment of
such compensation shall be delayed as required by Section 409A. Such delay shall
last six months from the date of the Director’s termination, except in the even
of the Director’s death. Within 30 days following the end of such six-month
period, or, if earlier, the Director’s death, the Company will make a catch-up
payment to the Director equal to the total amount of such payments that would
have been made during the six-month period but for this Section 5(f). Wherever
payments under this Plan are to be made in installments, each such installment
shall be deemed to be a separate payment for purposes of Section 409A.
(g) Notices. Any notice, request, demand, instruction or other communication to
be given to the Company or a Plan Participant shall be in writing and shall be
hand delivered or sent by FedEx or comparable overnight courier or mail service,
or mailed by U.S. or certified mail, return receipt requested, postage prepaid,
to such person at the most current address in the Company’s records.
(h) Third Party Beneficiaries. Each Plan Participant is an Express Beneficiary
hereunder and may enforce his or her rights under the Plan. The Company shall
provide each Director and each Plan Participant notice of his or her
participation in the Plan, but such participation shall not be dependent upon
such notification.
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