EX-10.26 8 pnkex102612312011.htm EXHIBIT 10.26
Exhibit 10.26
EMPLOYMENT AGREEMENT
THIS AGREEMENT (the “Agreement”) is made effective this 15th day of November,
2011, (the “Effective Date”), by and between Pinnacle Entertainment, Inc., a
Delaware corporation (the “Company”), and Daniel Boudreaux, an individual
(“Executive”), with respect to the following facts and circumstances:
RECITALS
The Company wishes to continue to employ Executive as its Senior Vice President
and Chief Accounting Officer pursuant to the terms and conditions of this
Agreement and Executive desires to be so employed.
NOW, THEREFORE, in consideration of the mutual promises, covenants and
agreements set forth herein, the parties hereto agree as follows:
ARTICLE 1.
EMPLOYMENT AND SEVERANCE
1.1 Employment. The Company agrees to continue to engage Executive in the
capacity as Senior Vice President and Chief Accounting Officer, and Executive
hereby accepts such engagement by the Company upon the terms and conditions
specified below. Executive agrees to resign from all positions with the Company
immediately upon the termination of employment for any reason.
1.2 Term. The term of this Agreement shall commence on the Effective Date and,
unless earlier terminated under Article 6 below, shall continue in force until
November 14, 2014 (the “Term”).
1.3 Failure to Renew Agreement. In the event this Agreement is not renewed,
Executive agrees that all of the terms, conditions and provisions contained
herein, and the Agreement itself, terminate at the end of the Term. If Executive
continues to perform the same or similar services for the Company following the
failure to renew this Agreement, Executive shall be considered to be an at-will
employee, and no term, condition or provision of this Agreement shall govern any
continued employer/employee relationship.

 

 

ARTICLE 2.
DUTIES OF EXECUTIVE
2.1 Duties. Executive shall perform all the duties and obligations generally
associated with the position of Senior Vice President and Chief Accounting
Officer subject to the control and supervision of the Company’s President and
Chief Executive Officer, and such other executive duties consistent with the
foregoing as may be assigned to Executive from time to time by the Company.
Executive shall perform the services contemplated herein faithfully, diligently,
to the best of Executive’s ability and in the best interests of the Company.
Executive shall at all times perform such services in compliance with, and to
the extent of Executive’s authority, shall to the best of Executive’s ability
cause the Company to be in compliance with, any and all laws, rules and
regulations applicable to the Company of which Executive is aware. Executive
shall, at all times and in all material respects adhere to and obey any and all
written internal rules and regulations governing the conduct of the Company’s
employees, as established or modified from time to time; provided, however, in
the event of any conflict between the provisions of this Agreement and any such
rules or regulations, the provisions of this Agreement shall control.
2.2 Location of Services. Executive’s principal place of employment shall be at
the Company’s facility in Las Vegas, Nevada, or at such other location as
designated by the Company. Executive understands Executive will be required to
travel to the Company’s various operations as part of Executive’s employment.
2.3 Exclusive Service. Except as otherwise expressly provided herein, Executive
shall devote Executive’s entire business time, attention, energies, skills,
learning and best efforts to the business of the Company. Executive may
participate in social, civic, charitable, religious, business, educational or
professional associations so long as such participation does not materially
interfere with the duties and obligations of Executive hereunder. This
Section 2.3, however, shall not be construed to prevent Executive from making
passive outside investments so long as such investments do not require material
time of Executive or otherwise interfere with the performance of Executive’s
duties and obligations hereunder. Executive shall not make any investment in an
enterprise that competes with the Company without the prior written approval of
the Company after full disclosure of the facts and circumstances; provided,
however, that this sentence shall not preclude Executive from owning up to
one-half percent (0.5%) of the securities of a publicly traded entity (a
“Permissible Investment”). While employed by the Company or one of its
subsidiaries, Executive shall not directly or indirectly work for or provide
services to or, except as permitted above, own an equity interest in any person,
firm or entity engaged in, or actively seeking to be engaged in, the casino
gaming, card club horse racing or pari-mutuel wagering business (collectively,
the “Gaming Business”). In this regard, and for purposes of this section only,
Executive acknowledges that the gaming industry is national and international in
scope, and accordingly, this covenant shall apply throughout the United States,
and to the extent the Company secures a presence or ownership internationally,
this covenant shall apply internationally as well.

 

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ARTICLE 3.
COMPENSATION
3.1 Base Salary. In consideration for Executive’s services hereunder, the
Company shall pay Executive an annual base salary at the rate of Three Hundred
Twenty-Four Thousand Dollars ($324,000.00) per year during each of the years of
the Term; payable in accordance with the Company’s regular payroll schedule from
time to time (less any deductions required for Social Security, state, federal
and local withholding taxes, and any other authorized or mandated similar
withholdings).
3.2 Annual and Other Bonuses. In its sole and absolute discretion and subject to
the following, each year the Company may develop an annual bonus program that is
approved by the Company’s Board of Directors. Executive shall be eligible to
participate in the annual bonus program provided that Executive is actively
employed with the Company before October 1 of the applicable calendar year. In
the event Executive commences active employment with the Company before October
1 of the applicable calendar year but is employed less than a full calendar
year, Executive shall be eligible for a prorated annual bonus. Executive is not
eligible to participate in the annual bonus program if Executive commences
active employment with the Company on or after October 1 of the applicable
calendar year. Any such bonus shall be structured to comply with Section 162(m)
(4) (C) of the Internal Revenue Code of 1986, as amended (the “Code”), and
Treasury Regulation Section 1.162-27(e) unless otherwise determined by the
Company. Any such bonus earned by Executive shall be paid annually within ninety
(90) days after the conclusion of the Company’s fiscal year. Unless otherwise
approved in the sole and absolute discretion of the Company, Executive is not
eligible to participate in the annual bonus program and shall not receive an
annual bonus if Executive’s employment with the Company is terminated by the
Company or Executive for any reason prior to the date on which the Company pays
its annual bonus. Executive shall at all times be subject to the Company’s
policy on recovery of incentive compensation as it may be amended from time to
time.
ARTICLE 4.
EXECUTIVE BENEFITS
4.1 Vacation. Executive shall be entitled to vacation (paid time off) each year,
without reduction in compensation, in accordance with the general policies of
the Company applicable generally to other similarly situated executives of the
Company pursuant to the Company’s personnel policies from time to time.
4.2 Benefits. Executive shall receive all other such benefits as the Company may
offer to other similarly situated executives of the Company generally under the
Company personnel plans, practices, policies and programs in effect from time to
time, such as health and disability insurance coverage, paid sick leave and
fully eligible participation in deferred compensation plans.
ARTICLE 5.
REIMBURSEMENT FOR EXPENSES
5.1 Executive shall be reimbursed by the Company for all ordinary and necessary
expenses incurred by Executive in the performance of Executive’s duties or
otherwise in furtherance of the business of the Company in accordance with the
policies of the Company in effect from time to time. Executive shall keep
accurate and complete records of all such expenses, including but not limited
to, proof of payment and purpose. Executive shall account fully for all such
expenses to the Company. No reimbursement will be made later than the close of
the calendar year following the calendar year in which the expense was incurred.
Expenses eligible for reimbursement in any one taxable year shall not affect the
amount of expenses eligible for reimbursement in any other taxable year, and the
right to expense reimbursement shall not be subject to liquidation or exchange
for any other benefit.

 

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ARTICLE 6.
TERMINATION
6.1 Termination for Cause. Without limiting the generality of Section 6.3, the
Company shall have the right to terminate Executive’s employment, without
further obligation or liability to Executive, upon the occurrence of any one or
more of the following events, which events shall be deemed termination for cause
(“Cause”).
6.1.1 Failure to Perform Duties. If Executive neglects to perform the material
duties of Executive’s employment under this Agreement in a professional and
businesslike manner, other than due to Executive’s Disability (unless such
Disability is due to substance or alcohol abuse), after having received thirty
(30) days written notice specifying such failure to perform and a reasonable
opportunity to perform.
6.1.2 Willful Breach. If Executive willfully commits a material breach of this
Agreement and fails to cure such breach within thirty (30) days of written
notice thereof or a material willful breach of Executive’s fiduciary duty to the
Company.
6.1.3 Wrongful Acts. If Executive is convicted of a felony or misdemeanor
involving acts of moral turpitude or commits fraud, misrepresentation,
embezzlement or other acts of material misconduct against the Company (including
violating or condoning the violation of any rules or regulations of gaming
authorities that could have a material adverse effect on the Company) that would
make the continuance of Executive’s employment by the Company detrimental to the
Company as determined in good faith by the Company.
6.1.4 Failure To Be Licensed or Approved by the Company’s Compliance Committee.
Executive shall promptly, accurately and truthfully complete all forms provided
by the Company’s Compliance Committee and shall fully cooperate in any
background investigation conducted pursuant to the Company’s Compliance Program.
Executive shall also apply for all applicable gaming licenses, if required,
within ninety (90) days of the Effective Date of this Agreement or such shorter
period required by law, to the extent Executive is not already licensed or on
file as of the date hereof. If Executive fails to be recommended for approval
and retention by the Compliance Committee or Executive fails to be licensed in
all jurisdictions in which the Company or its subsidiaries has gaming facilities
within the date required by any jurisdiction, or if any of such licenses shall
be revoked or suspended at any time during the Term, or if the Company is
directed to cease business with Executive by any governmental authority; or if
the Company determines in its reasonable judgment that Executive was or might be
involved in, or is about to be involved in, any activity, relationship(s) or
circumstance that could or does jeopardize the Company’s business, reputation or
any of such licenses; or any of the Company’s licenses is threatened to be, or
is, denied, curtailed, suspended or revoked as a result of Executive’s
employment by the Company or as a result of Executive’s actions, then the
Company may by written notice to Executive terminate the Agreement for Cause.
Executive agrees to promptly submit to the licensing requirements of all
jurisdictions in which the Company or its subsidiaries does business. The
Company shall bear all expenses incurred in connection with such licenses.

 

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6.2 Death or Disability. This Agreement (and Executive’s employment with the
Company) shall terminate on the death or “Disability” of Executive. Executive
will be deemed to have a “Disability” when Executive is unable to engage in any
substantial gainful activity by reason of any medically determinable physical or
mental impairment that can be expected to result in death or can be expected to
last for a substantially continuous period of not less than six (6) months, or
begins receiving income replacement benefits for a period of not less than three
(3) months under an accident and health plan of the Company or an affiliate by
reason of any medically determinable physical or mental impairment that can be
expected to result in death or can be expected to last for a continuous period
of not less than six (6) months. If there should be a dispute between the
Company and Executive as to Executive’s physical or mental Disability for
purposes of this Agreement, the question shall be settled by the opinion of an
impartial reputable physician or psychiatrist agreed upon by the parties or
their representatives, or if the parties cannot agree within ten (10) days after
a request for designation of such party, then a physician or psychiatrist
designated by the Clark County Medical Society or similar body. The
certification of such a physician or psychiatrist as to the questioned dispute
shall be final and binding upon the parties hereto.
6.3 Termination Without Cause. Notwithstanding anything to the contrary herein,
the Company shall have the right to terminate Executive’s employment under this
Agreement at any time without Cause by giving notice of such termination to
Executive. Failure by the Company to extend the Initial Term or any Renewal
Period, if applicable, shall not be a termination of this Agreement Without
Cause.
6.4 Termination by Executive for Good Reason. Executive may terminate
Executive’s employment under this Agreement on thirty (30) days prior notice to
the Company for good reason (“Good Reason”). For purposes of this Agreement,
“Good Reason” shall mean and be limited to: (i) a material breach of this
Agreement by the Company (including without limitation the assignment to
Executive of duties materially inconsistent with Executive’s status in the
Company, or any material reduction in the authority, duties or responsibilities
of Executive); (ii) a material reduction by the Company in Executive’s then Base
Salary, a material reduction in other benefits (except as such benefits may be
changed or reduced for other similar executives), or the failure by the Company
to pay Executive any material portion of Executive’s current compensation when
due; or (iii) following a Change in Control, the failure of any acquiring or
successor company, or, if the acquiring or successor company is a subsidiary of
another company, the failure of the highest-level parent of the acquiring or
successor company, to enter into an agreement (A) naming Executive to at least
the same or equivalent position contained in this Agreement and (B) containing
at a minimum the same material terms and conditions as set forth in this
Agreement. Notwithstanding the foregoing, Executive’s resignation shall not be
treated as a resignation for Good Reason unless (iv) Executive notifies the
Company (including any acquiring and/or successor company) in writing of a
condition constituting Good Reason within thirty (30) days following Executive’s
becoming aware of such condition; (v) the Company fails to remedy such condition
within thirty (30) days following such written notice (the “Remedy Period”); and
(vi) Executive resigns within thirty (30) days following the expiration of the
Remedy Period. Further, in the event that Executive resigns for Good Reason and
within two (2) years from such date accepts employment with the Company, any
acquirer or successor to the Company’s business or any affiliate, parent, or
subsidiary of either the Company or its successor, then Executive will forfeit
any right to severance payments hereunder and will reimburse the Company for the
full amount of such payments received by Executive within thirty (30) days of
accepting such employment.

 

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6.5 Effect of Termination.
6.5.1 Payment of Salary and Expenses Upon Termination. Any termination under
this Section 6 shall be effective upon receipt of notice by Executive or the
Company, as the case may be, of such termination or upon such other later date
as may be provided herein or specified by the Company or Executive in the notice
(the “Termination Date”), except as otherwise provided in this Section 6. If
this Agreement is terminated, all benefits provided to Executive by the Company
hereunder shall thereupon cease, except as provided in this Section 6.5, and the
Company shall pay or cause to be paid to Executive all accrued but unpaid base
salary, any compensation previously voluntarily deferred by Executive payable in
accordance with the provisions of the applicable deferred compensation plan and
in accordance with Executive’s election under such plan. In addition, promptly
upon submission by Executive of Executive’s unpaid expenses incurred prior to
the Termination Date and owing to Executive pursuant to Article 5, reimbursement
for such expenses shall be made. If the Agreement is terminated for “Cause,” or
due to Executive’s death or Disability or by the Executive without “Good
Reason”, Executive shall not be entitled to receive any payments other than as
specified in this Section 6.5.1. Termination by the Company for Cause shall be
in addition to and without prejudice to any other right or remedy that the
Company may be entitled to at law, in equity, or under this Agreement.
6.5.2 Termination Without Cause or Termination by Executive for Good Reason
Other than in Connection with a Change of Control. If the Company terminates
Executive without Cause or Executive terminates for Good Reason other than in
connection with a Change of Control as contemplated by Section 6.5.3, the
following shall apply:

  (a)   Executive shall be entitled to receive severance compensation as set
forth in Appendix A attached hereto.

6.5.3 Termination Without Cause or Termination by Executive for Good Reason on
or Within the Eighteen (18) Months After a Change of Control. If the Company
terminates Executive without Cause or Executive terminates for Good Reason
within eighteen (18) months:

  (a)   Executive shall be entitled to receive severance compensation as set
forth in Appendix A attached hereto.

  (b)   For purposes of this Agreement, a “Change of Control” shall mean the
occurrence of any of the following:

  (i)   The direct or indirect acquisition by an unrelated “Person” or “Group”
or “Beneficial Ownership” (as such terms are defined below) of more than 50% of
the voting power of the Company’s issued and outstanding voting securities in a
single transaction or a series of related transactions;

 

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  (ii)   The direct or indirect sale or transfer by the Company of substantially
all of its assets to one or more unrelated Persons or Groups in a single
transaction or a series of related transactions; or

  (iii)   The merger, consolidation or reorganization of the Company with or
into another corporation or other entity in which the Beneficial Owners of more
than 50% of the voting power of the Company’s issued and outstanding voting
securities immediately before such merger or consolidation do not own more than
50% of the voting power of the issued and outstanding voting securities of the
surviving corporation or other entity immediately after such merger,
consolidation or reorganization.

None of the foregoing events, however, shall constitute a Change of Control if
such event is not a “Change in Control Event” under Treasury
Regulation Section 1.409A-3(i) (5) or successor IRS guidance. For purposes of
determining whether a Change of Control has occurred, the following Persons and
Groups shall not be deemed to be “unrelated”: (A) such Person or Group directly
or indirectly has Beneficial Ownership of more than fifty percent (50%) of the
issued and outstanding voting power of the Company’s voting securities
immediately before the transaction in question, (B) the Company has Beneficial
Ownership of more than fifty percent (50%) of the voting power of the issued and
outstanding voting securities of such Person or Group, or (C) more than fifty
percent (50%) of the voting power of the issued and outstanding voting
securities of such Person or Group are owned, directly or indirectly, by
Beneficial Owners of more than fifty percent (50%) of the issued and outstanding
voting power of the Company’s voting securities immediately before the
transaction in question. The terms “Person,” “Group,” “Beneficial Owner,” and
“Beneficial Ownership” shall have the meanings used in the Securities Exchange
Act of 1934, as amended. Notwithstanding the foregoing, (I) Persons shall not be
considered to be acting as a “Group” solely because they purchase or own stock
of the Company at the same time, or as a result of the same public offering,
(II) however, Persons will be considered to be acting as “Group” if they are
owners of a corporation that enters into a merger, consolidation, purchase or
acquisition of stock, or similar business transaction, with the Company, and
(III) if a Person, including an entity, owns stock both in the Company and in a
corporation that enters into a merger, consolidation, purchase or acquisition of
stock, or similar transaction, with the Company, such shareholders shall be
considered to be acting as a Group with other shareholders only with respect to
the ownership in the corporation before the transaction.
6.5.4 Code Section 409A. Notwithstanding any other provision herein, the parties
hereto intend that payments and benefits under this Agreement comply with or be
exempt from Section 409A of the Internal Revenue Code of 1986, as amended, and
the regulations and guidance promulgated thereunder (collectively,
“Section 409A”) and, accordingly, to the maximum extent permitted, this
Agreement shall be interpreted to be in compliance therewith or exempt
therefrom, and the Company may adopt such amendments to the Agreement or adopt
other policies and procedures (including amendments, policies and procedures
with retroactive

 

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effect), or take any other actions, that the Company determines are necessary or
appropriate to exempt any payment hereunder from Section 409A and/or preserve
the intended tax treatment of any payment provided hereunder, or comply with the
requirements of Section 409A and thereby avoid the application of any penalty
taxes under Section 409A; provided that, in no event whatsoever shall the
Company be liable for any additional tax, interest or penalty that may be
imposed on the Executive by Section 409A or damages for failing to comply with
Section 409A. In the event that any compensation with respect to Executive’s
separation from service is “nonqualified deferred compensation” within the
meaning of Section 409A, the stock of the Company or any affiliate is publicly
traded on an established securities market or otherwise, and Executive is
determined to be a “specified employee,” as defined in Section 409A(a)(2)(B)(i)
of the Code, payment of such compensation shall be delayed as required by
Section 409A. Such delay shall last six (6) months from the date of Executive’s
separation from service, except in the event of Executive’s death. Within thirty
(30) days following the end of such six-month period, or, if earlier,
Executive’s death, the Company will make a catch-up payment to Executive equal
to the total amount of such payments that would have been made during the
six-month period but for this Section 6.5.4. Whenever payments under this
Agreement are to be made in installments, each such installment shall be deemed
to be a separate payment for purposes of Section 409A. Payments of compensation
or benefits on Executive’s termination of employment (other than accrued salary
and other accrued amounts that must be paid under applicable law, and “welfare
benefits” specified in Treasury Regulation Section 1.409A-1(a)(5)) shall be paid
only if and when the termination of employment constitutes a “separation from
service” under Treasury Regulation Section 1.409A-1(h). In no event shall any
payment under this Agreement that constitutes “nonqualified deferred
compensation” subject to Section 409A be subject to offset unless otherwise
permitted by Section 409A. To the extent that reimbursements or other in-kind
benefits under this Agreement constitute “nonqualified deferred compensation”
for purposes of Section 409A, (i) all expenses or other reimbursements hereunder
shall be made on or prior to the last day of the taxable year following the
taxable year in which such expenses were incurred by the Employee, (ii) any
right to reimbursement or in-kind benefits shall not be subject to liquidation
or exchange for another benefit, and (iii) no such reimbursement, expenses
eligible for reimbursement, or in-kind benefits provided in any taxable year
shall in any way affect the expenses eligible for reimbursement, or in-kind
benefits to be provided, in any other taxable year. Any payments made in
accordance with the Company’s customary payroll practices shall be made within
30 days of each payroll date pursuant to the payroll schedule in effect on the
Effective Date of this Agreement.
6.5.5 Suspension. In lieu of terminating Executive’s employment hereunder for
Cause under Section 6.1, the Company shall have the right, at its sole election,
to suspend the performance of duties by Executive under this Agreement during
the continuance of events or circumstances under Section 6.1 for an aggregate of
not more than thirty (30) days during the Term (the “Default Period”) by giving
Executive written notice of the Company’s election to do so at any time during
the Default Period. The Company shall have the right to extend the Term beyond
its normal expiration date by the period(s) of any suspension(s). The Company’s
exercise of its right to suspend the operation of this Agreement shall not
preclude the Company from subsequently terminating Executive’s employment
hereunder; provided nothing herein shall eliminate the Company’s obligation to
provide required written notice, or prevent Executive from having the
opportunity to cure any defect raised in such notice, to the extent applicable
under the relevant subsection of Section 6.1. Executive shall not render
services to any other person, firm or corporation engaged in, or actively
seeking to become engaged in the Gaming Business during any period of
suspension. Executive shall be entitled to continued compensation and benefits
pursuant to the provisions of this Agreement during the Default Period.

 

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6.6 Exercisability of Equity Grants. All equity grants, if any, shall be
governed by the terms and conditions of the governing equity grant agreement(s)
and any related stock option plan or other equity plan.
6.7 No Exclusivity of Rights. Nothing in this Agreement shall prevent or limit
Executive’s continuing or future participation in any plan, program, policy or
practice provided by the Company or its subsidiaries and for which the Executive
may qualify, nor shall anything herein limit or otherwise affect such rights as
Executive may have under any other contract or agreement with the Company or its
subsidiaries at or subsequent to the Date of Termination (“Other Benefits”),
which such Other Benefits shall be payable in accordance with such plan, policy,
practice or program or contract or agreement, except as explicitly modified by
this Agreement. Notwithstanding the foregoing, if Executive receives payments
and benefits pursuant to Article 6 of this Agreement, Executive shall not be
entitled to any severance pay or benefits under any severance plan, program or
policy of the Company and its subsidiaries, unless otherwise specifically
provided therein in a specific reference in or to this Agreement.
6.8 Full Settlement. The provisions of this Agreement constitute the sole and
complete understanding and resolution of the parties regarding rights upon
termination.
6.9 Release. It shall be a condition for Executive’s right to receive any
severance benefits hereunder that Executive execute a general release in favor
of the Company and its affiliates in the form as attached hereto and Appendix B
or as presented to Executive by the Company, in the Company’s sole discretion,
and covering such additional matters as may be reasonably requested by the
Company, which release shall not encompass the payments contemplated hereby. The
timing of payments under this Agreement upon the execution of the general
release shall be governed by the following provisions:

  (a)   The Company must deliver the release to Executive for execution no later
than fourteen (14) days after Executive’s termination of employment. If the
Company fails to deliver the release to Executive within such fourteen (14) day
period, Executive will be deemed to have satisfied the release requirement and
will receive payments conditioned on execution of the release as though
Executive had executed the release and all revocation rights had lapsed at the
end of such fourteen (14) day period.

  (b)   Executive must execute the release within forty-five (45) days from its
delivery to Executive.

  (c)   If Executive has revocation rights, Executive shall exercise such
rights, if at all, not later than seven (7) days after executing the release.

 

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  (d)   In any case in which the release (and the expiration of any revocation
rights) could only become effective in a particular tax year of Executive,
payments conditioned on execution of the release shall begin within thirty
(30) days after the release becomes effective and revocation rights have lapsed.

  (e)   In any case in which the release (and the expiration of any revocation
rights) could become effective in one of two (2) taxable years of Executive
depending on when Executive executes the release, payments conditioned on
execution of the release shall not begin before the first business day of the
later of such tax years.

6.10 Excise Tax Limitation.
6.10.1 Notwithstanding anything contained in this Agreement to the contrary,
(i) in the event that any “parachute payment” (within the meaning of
Section 280G(b)(2) of the Code) to be paid or made payable to Executive or for
Executive’s benefit pursuant to the terms of this Agreement or otherwise in
connection with, or arising out of, Executive’s employment with the Company or
any of its Subsidiaries on a change in the ownership or effective control of the
Company or its assets (a “Change of Control”) within the meaning of Section 280G
of the Code (a “Payment” or “Payments”) would be subject to the excise tax
imposed by Section 4999 of the Code (the “Excise Tax”), and (ii) (A) the net
amount of the Payments Executive would retain after payment of the Excise Tax
and federal and state income taxes on the Payments would be less than (B) the
net amount of the Payments Executive would retain, after payment of the Excise
Tax and federal and state income taxes on the Payments, if the Payments were
reduced to the extent necessary that no portion of the Payments would be subject
to the Excise Tax (the “Section 4999 Limit”), then the Payments shall be reduced
(but not below zero) to the Section 4999 Limit. Unless Executive shall have
given prior written notice specifying a different order to the Company to
effectuate the limitations described in the preceding sentence, the Company
shall reduce or eliminate the Payments by first reducing or eliminating those
Payments or benefits which are not payable in cash and then by reducing or
eliminating cash Payments, in each case in reverse order beginning with payments
or benefits that are to be paid the farthest in time from the Determination (as
hereinafter defined) ; provided, however, that any such reduction will be made
first to any Payments that are not subject to Section 409A, and if further
reduction is required, will then be made to Payments subject to Section 409A.
Any notice given by Executive pursuant to the preceding sentence shall take
precedence over the provisions of any other Agreement, arrangement or agreement
governing Executive’s rights and entitlements to any benefits or compensation.
For purposes of the calculations described above, it shall be assumed that
Executive’s tax rate will be the maximum marginal federal and state income tax
rate on earned income.
6.10.2 All determinations required to be made under this Section 6.10 (each, a
“Determination”) shall be made, at the Company’s expense, by the accounting firm
which is the Company’s accounting firm prior to a “Change of Control” (within
the meaning of Section 280G of the Code) or another nationally recognized
accounting firm designated by the Board (or a committee thereof) prior to the
Change of Control (the “Accounting Firm”). The Accounting Firm shall provide its
calculations, together with detailed supporting documentation, both to the
Company and to Executive before payment of Executive’s Severance Payment

 

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hereunder (if requested at that time by the Company or Executive) or such other
time as requested by the Company or Executive (in either case provided that the
Company or Executive believes in good faith that any of the Payments may be
subject to the Excise Tax). Within ten (10) calendar days of the delivery of the
Determination to Executive, Executive shall have the right to dispute the
Determination (the “Dispute”). The existence of any Dispute shall not in any way
affect Executive’s right to receive the Payments in accordance with the
Determination. If there is no Dispute, the Determination by the Accounting Firm
shall be final, binding and conclusive upon the Company and Executive, subject
to the application of Section 6.10.3.
6.10.3 As a result of the uncertainty in the application of Sections 4999 and
280G of the Code, it is possible that the Payments either will have been made or
will not have been made by the Company, in either case in a manner inconsistent
with the limitations provided in Section 6.10.1 (an “Excess Payment” or
“Underpayment”, respectively). If it is established pursuant to (i) a final
determination of a court for which all appeals have been taken and finally
resolved or the time for all appeals has expired, or (ii) an Internal Revenue
Service (the “IRS”) proceeding that has been finally and conclusively resolved,
that an Excess Payment has been made, such Excess Payment shall be deemed for
all purposes to be a loan to Executive made on the date Executive received the
Excess Payment and Executive shall repay the Excess Payment to the Company on
demand, together with interest on the Excess Payment at one hundred twenty
percent (120%) of the applicable federal rate (as defined in Section 1274(d) of
the Code) compounded semi-annually from the date of Executive’s receipt of such
Excess Payment until the date of such repayment. If it is determined (i) by the
Accounting Firm, the Company (which shall include the position taken by the
Company, together with its consolidated group, on its federal income tax return)
or the IRS, (ii) pursuant to a determination by a court, or (iii) upon the
resolution to Executive’s satisfaction of the Dispute, that an Underpayment has
occurred, the Company shall pay an amount equal to the Underpayment to Executive
within ten (10) calendar days of such determination or resolution, together with
interest on such amount at one hundred twenty percent (120%) of the applicable
federal rate compounded semi-annually from the date such amount should have been
paid to Executive pursuant to the terms of this Agreement or otherwise, but for
the operation of this Section 6.10.3, until the date of payment.
ARTICLE 7.
CONFIDENTIALITY
7.1 Nondisclosure of Confidential Material. In the performance of Executive’s
duties, Executive may have access to confidential records, including, but not
limited to, development, marketing, organizational, financial, managerial,
administrative and sales information, data, specifications and processes
presently owned or at any time hereafter developed or used by the Company or its
agents or consultants that is not otherwise part of the public domain
(collectively, the “Confidential Material”). All such Confidential Material is
considered secret and is disclosed to Executive in confidence. Executive
acknowledges that the Confidential Material constitutes proprietary information
of the Company that draws independent economic value, actual or potential, from
not being generally known to the public or to other persons who could obtain
economic value from its disclosure or use, and that the Company has taken
efforts reasonable under the circumstances, of which this Section 7.1 is an
example, to maintain its secrecy. Except in the performance of Executive’s
duties to the Company or as required by a court order or any gaming regulator or
as required for

 

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Executive’s personal tax or legal advisors to advise Executive, Executive shall
not, directly or indirectly for any reason whatsoever, disclose, divulge,
communicate, use or otherwise disclose any such Confidential Material, unless
such Confidential Material ceases to be confidential because it has become part
of the public domain (not due to a breach by Executive of Executive’s
obligations hereunder). Executive shall also take all reasonable actions
appropriate to maintain the secrecy of all Confidential Information. All
records, lists, memoranda, correspondence, reports, manuals, files, drawings,
documents, equipment, and other tangible items (including computer software),
wherever located, incorporating the Confidential Material, which Executive shall
prepare, use or encounter, shall be and remain the Company’s sole and exclusive
property and shall be included in the Confidential Material. Upon termination of
this Agreement, or whenever requested by the Company, Executive shall promptly
deliver to the Company any and all of the Confidential Material, not previously
delivered to the Company, that is in the possession or under the control of
Executive.
7.2 Assignment of Intellectual Property Rights. Any ideas, processes, know-how,
copyrightable works, maskworks, trade or service marks, trade secrets,
inventions, developments, discoveries, improvements and other matters that may
be protected by intellectual property rights, that relate to the Company’s
business and are the results of Executive’s efforts during the Term
(collectively, the “Executive Work Product”), whether conceived or developed
alone or with others, and whether or not conceived during the regular working
hours of the Company, shall be deemed works made for hire and are the property
of the Company. In the event that for whatever reason such Executive Work
Product shall not be deemed a work made for hire, Executive agrees that such
Executive Work Product shall become the sole and exclusive property of the
Company, and Executive hereby assigns to the Company Executive’s entire right,
title and interest in and to each and every patent, copyright, trade or service
mark (including any attendant goodwill), trade secret or other intellectual
property right embodied in Executive Work Product. The Company shall also have
the right, in its sole discretion to keep any and all of Executive Work Product
as the Company’s Confidential Material. The foregoing work made for hire and
assignment provisions are and shall be in consideration of this agreement of
employment by the Company, and no further consideration is or shall be provided
to Executive by the Company with respect to these provisions. Executive agrees
to execute any assignment documents the Company may require confirming the
Company’s ownership of any Executive Work Product. Executive also waives any and
all moral rights with respect to any such works, including without limitation
any and all rights of identification of authorship and/or rights of approval,
restriction or limitation on use or subsequent modifications. Executive promptly
will disclose to the Company any Executive Work Product.
7.3 No Unfair Competition After Termination of Agreement. Executive hereby
acknowledges that the sale or unauthorized use or disclosure of any of the
Company’s Confidential Material obtained by Executive by any means whatsoever,
at any time before, during or after the Term shall constitute unfair
competition. Executive shall not engage in any unfair competition with the
Company either during the Term or at any time thereafter.

 

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7.4 Covenant Not to Compete. In the event this Agreement is terminated by the
Company or by Executive, for a reason other than one specified in Section 6.2 or
the expiration of the Term without this Agreement being renewed, then for a
period of twelve (12) months (but only six (6) months in the case of an entity
whose only competitive relationship with the Company is in the market in which
the Company has its principal place of business but does not also own or manage
a casino), Executive shall not, directly or indirectly, work for or provide
services to or own an equity interest (except for a Permissible Investment) in
any person, firm or entity engaged (directly or indirectly or through an
investment in another entity) in the casino gaming, card club, video lottery
terminal (“VLT”) or horseracing business that competes against the Company in
any “market” in which the Company owns (in whole or in part, directly or through
an investment in another entity) or operates a casino, card club, VLT or
horseracing facility. For purposes of this Agreement, “market” shall be defined
as the area within a 100 mile radius of any casino, card club, VLT or
horseracing facility owned (directly or indirectly or through an investment in
another entity) or operated or under construction by the Company.
7.5 No Hire Away Policy. In the event this Agreement is terminated either by the
Company or by Executive for any reason, then for a period of one (1) year after
the effective date of such termination or the period of severance compensation
set forth in Appendix A, whichever is longer, Executive shall not, directly or
indirectly, for him or herself or on behalf of any entity with which Executive
is affiliated or employed, hire any person known to Executive to be an employee
of the Company or any of its subsidiaries (or any person known to Executive to
have been such an employee within six (6) months prior to such occurrence).
Executive shall not be deemed to hire any such person so long as Executive did
not directly or indirectly engage in or encourage such hiring.
7.6 No Solicitation. In the event this Agreement is terminated either by the
Company or by Executive for any reason, for a period of one (1) year after the
effective date of such termination or the period of severance compensation set
forth in Appendix A, whichever is longer, Executive shall not directly or
indirectly, for him or herself or on behalf of any entity with which Executive
is affiliated or employed, solicit any employee of the Company or any of its
subsidiaries (or any person who was such an employee within six (6) months prior
to such occurrence) or encourage any such employee to leave the employment of
the Company or any of its subsidiaries.
7.7 Non-Solicitation of Customers. In the event this Agreement is terminated
either by the Company or by Executive for any reason, for a period of one
(1) year after the effective date of such termination or the period of severance
compensation set forth in Appendix A, whichever is longer, Executive shall not
solicit any customers of the Company or its subsidiaries or any of their
respective casinos, card clubs, VLT facilities or horseracing facilities or
knowingly encourage any such customers to leave the Company’s casinos, card
clubs, VLT facilities or horseracing facilities or knowingly encourage any such
customers to use the facilities or services of any competitor of the Company or
its subsidiaries. Executive shall at no time use proprietary customer lists or
Confidential Material to solicit customers.
7.8 Irreparable Injury. The promised service of Executive under this Agreement
and the other promises of this Article 7 are of special, unique, unusual,
extraordinary, or intellectual character, which gives them peculiar value, the
loss of which cannot be reasonably or adequately compensated in damages in an
action at law.

 

- 13 -

7.9 Remedies for Breach. Executive agrees that money damages will not be a
sufficient remedy for any breach of the obligations under this Article 7 and
Article 2 hereof and that the Company shall be entitled to injunctive relief
(which shall include, but not be limited to, restraining Executive from directly
or indirectly working for or having an ownership interest (except for a
Permissible Investment) in any person engaged in the casino, card club, VLT or
horseracing businesses in any market that the Company or its affiliates owns or
operates any such business, using or disclosing the Confidential Material) and
to specific performance as remedies for any such breach. Executive agrees that
the Company shall be entitled to such relief, including temporary restraining
orders, preliminary injunctions and permanent injunctions, without the necessity
of proving actual damages and without the necessity of posting a bond or making
any undertaking in connection therewith. Any such requirement of a bond or
undertaking is hereby waived by Executive and Executive acknowledges that in the
absence of such a waiver, a bond or undertaking might otherwise be required by
the court. Such remedies shall not be deemed to be the exclusive remedies for
any breach of the obligations in this Article 7, but shall be in addition to all
other remedies available at law or in equity.
7.10 Non-disparagement. In the event this Agreement is terminated either by the
Company or by Executive for any reason: (i) Executive agrees that Executive will
not disparage (or induce or encourage others to disparage) the Company, any of
its affiliates or any of its or their officers, directors, executives, employees
or shareholders. As used herein, the term “disparage” includes, without
limitation, comments or written or oral statements to the press, the financial
community, other gaming companies, any of the Company’s or its affiliates’
officers, directors, executives, employees or shareholders or any person with
whom the Company or any of its affiliates has a business relationship, or any
other person: (A) that is designed to or would reasonably be expected to
adversely affect in any manner the conduct of any of the Company’s or any of its
affiliates’ business or the business or personal reputations of the Company, its
affiliates or any of the Company’s or its affiliates’ officers, directors,
executives, employees or shareholders; or (B) that negatively reflects upon, in
any manner whatsoever, the Company, its affiliates or any of the Company’s or
its affiliates’ officers, directors, executives, employees or shareholders; and
(ii) the Company agrees that the Company will not disparage (or induce or
encourage others to disparage) Executive. As used herein, the term “disparage”
includes, without limitation, comments or written or oral statements to the
press, the financial community, other gaming companies, any of the Company’s or
its affiliates’ officers, directors, executives, employees or shareholders or
any person with whom Executive has a business relationship, or any other person:
(A) that is designed to or would reasonably be expected to adversely affect in
any manner the conduct of any of Executive’s business or the business or
personal reputation of Executive; or (B) that negatively reflects upon, in any
manner whatsoever, Executive.

 

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ARTICLE 8.
ARBITRATION
8.1 General. Except for a claim for injunctive relief under Section 7.9, any
controversy, dispute, or claim between the parties to this Agreement, including
any claim arising out of, in connection with, or in relation to the formation,
interpretation, performance or breach of this Agreement shall be settled
exclusively by arbitration, before a single arbitrator, in accordance with this
Article 8 and the then most applicable rules of the American Arbitration
Association. Judgment upon any award rendered by the arbitrator may be entered
by any state or federal court having jurisdiction thereof. Such arbitration
shall be administered by the American Arbitration Association. Arbitration shall
be the exclusive remedy for determining any such dispute, regardless of its
nature. Notwithstanding the foregoing, either party may in an appropriate matter
apply to a court for provisional relief, including a temporary restraining order
or a preliminary injunction, on the ground that the award to which the applicant
may be entitled in arbitration may be rendered ineffectual without provisional
relief. Unless mutually agreed by the parties otherwise, any arbitration shall
take place in Las Vegas, Nevada.
8.2 Selection of Arbitrator. In the event the parties are unable to agree upon
an arbitrator, the parties shall select a single arbitrator from a list of nine
arbitrators drawn by the parties at random from the “Independent” (or “Gold
Card”) list of retired judges or, at the option of Executive, from a list of
nine persons (which shall be retired judges or corporate or litigation attorneys
experienced in executive employment agreements) provided by the office of the
American Arbitration Association having jurisdiction over Las Vegas, Nevada. If
the parties are unable to agree upon an arbitrator from the list so drawn, then
the parties shall each strike names alternately from the list, with the first to
strike being determined by lot. After each party has used four strikes, the
remaining name on the list shall be the arbitrator. If such person is unable to
serve for any reason, the parties shall repeat this process until an arbitrator
is selected.
8.3 Applicability of Arbitration; Remedial Authority. This Agreement to resolve
any disputes by binding arbitration shall extend to claims against any parent,
subsidiary or affiliate of each party, and, when acting within such capacity,
any officer, director, stockholder, employee or agent of each party, or of any
of the above, and shall apply as well to claims arising out of state and federal
statutes and local ordinances as well as to claims arising under the common law.
In the event of a dispute subject to this paragraph the parties shall be
entitled to reasonable discovery subject to the discretion of the arbitrator.
The remedial authority of the arbitrator (which shall include the right to grant
injunctive or other equitable relief) shall be the same as, but no greater than,
would be the remedial power of a court having jurisdiction over the parties and
their dispute. The arbitrator shall, upon an appropriate motion, dismiss any
claim without an evidentiary hearing if the party bringing the motion
establishes that Executive or it would be entitled to summary judgment if the
matter had been pursued in court litigation. In the event of a conflict between
the applicable rules of the American Arbitration Association and these
procedures, the provisions of these procedures shall govern.
8.4 Fees and Costs. Any filing or administrative fees shall be borne initially
by the party requesting arbitration. The Company shall be responsible for the
costs and arbitrator fees of the arbitration, unless Executive wishes to
contribute (up to 50%) of the costs and fees of the arbitration. Notwithstanding
the foregoing, the prevailing party in such arbitration, as determined by the
arbitrator, and in any enforcement or other court proceedings, shall be
entitled, to the extent permitted by law, to reimbursement from the other party
for all of the prevailing party’s costs (including but not limited to the
arbitrator’s compensation), expenses, and attorneys’ fees.

 

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8.5 Award Final and Binding. The arbitrator shall render an award and written
opinion, and the award shall be final and binding upon the parties. If any of
the provisions of this paragraph, or of this Agreement, are determined to be
unlawful or otherwise unenforceable, in whole or in part, such determination
shall not affect the validity of the remainder of this Agreement, and this
Agreement shall be reformed to the extent necessary to carry out its provisions
to the greatest extent possible and to ensure that the resolution of all
conflicts between the parties, including those arising out of statutory claims,
shall be resolved by neutral, binding arbitration. If a court should find that
the arbitration provisions of this Agreement are not absolutely binding, then
the parties intend any arbitration decision and award to be fully admissible in
evidence in any subsequent action, given great weight by any finder of fact, and
treated as determinative to the maximum extent permitted by law.
ARTICLE 9.
MISCELLANEOUS
9.1 Amendments. The provisions of this Agreement may not be waived, altered,
amended or repealed in whole or in part except by the signed written consent of
the parties sought to be bound by such waiver, alteration, amendment or repeal.
9.2 Entire Agreement. This Agreement and the stock option agreements between the
Company and Executive constitute the total and complete agreement of the parties
and supersede all prior and contemporaneous understandings and agreements
heretofore made, including the Original Agreement, and there are no other
representations, understandings or agreements.
9.3 Counterparts. This Agreement may be executed in one of more counterparts,
each of which shall be deemed an original, but all of which shall together
constitute one and the same instrument.
9.4 Severability. Each term, covenant, condition or provision of this Agreement
shall be viewed as separate and distinct, and in the event that any such term,
covenant, condition or provision shall be deemed by an arbitrator or a court of
competent jurisdiction to be invalid or unenforceable, the court or arbitrator
finding such invalidity or unenforceability shall modify or reform this
Agreement to give as much effect as possible to the terms and provisions of this
Agreement. Any term or provision that cannot be so modified or reformed shall be
deleted and the remaining terms and provisions shall continue in full force and
effect.
9.5 Waiver or Delay. The failure or delay on the part of the Company, or
Executive to exercise any right or remedy, power or privilege hereunder shall
not operate as a waiver thereof. A waiver, to be effective, must be in writing
and signed by the party making the waiver. A written waiver of default shall not
operate as a waiver of any other default or of the same type of default on a
future occasion.
9.6 Successors and Assigns. This Agreement shall be binding on and shall inure
to the benefit of the parties to it and their respective heirs, legal
representatives, successors and assigns, except as otherwise provided herein.
Except as provided in this Section 9.6, without the prior written consent of
Executive, this Agreement shall not be assignable by the Company. The Company
will 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 this Agreement 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. “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.

 

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9.7 No Assignment or Transfer by Executive. Neither this Agreement nor any of
the rights, benefits, obligations or duties hereunder may be assigned or
transferred by Executive. Any purported assignment or transfer by Executive
shall be void.
9.8 Necessary Acts. Each party to this Agreement shall perform any further acts
and execute and deliver any additional agreements, assignments or documents that
may be reasonably necessary to carry out the provisions or to effectuate the
purpose of this Agreement.
9.9 Governing Law. This Agreement and all subsequent agreements between the
parties shall be governed by and interpreted, construed and enforced in
accordance with the laws of the State of Nevada.
9.10 Notices. All notices, requests, demands and other communications to be
given under this Agreement shall be in writing and shall be deemed to have been
duly given on the date of service, if personally served on the party to whom
notice is to be given, or forty-eight (48) hours after mailing, if mailed to the
party to whom notice is to be given by certified or registered mail, return
receipt requested, postage prepaid, and properly addressed to the party at
Executive’s address set forth as follows or any other address that any party may
designate by written notice to the other parties:

         
 
  To Executive:   Daniel Boudreaux
8545 Killians Greens Drive
Las Vegas, NV 89113
 
       
 
  To the Company:   Pinnacle Entertainment, Inc.
8918 Spanish Ridge Avenue
Las Vegas, NV 89148
Attn: General Counsel
Telephone: (702) 541-7777
Facsimile: (702) 541-7773

9.11 Headings and Captions. The headings and captions used herein are solely for
the purpose of reference only and are not to be considered as construing or
interpreting the provisions of this Agreement.
9.12 Construction. All terms and definitions contained herein shall be construed
in such a manner that shall give effect to the fullest extent possible to the
express or implied intent of the parties hereby.
9.13 Counsel. Executive has been advised by the Company that Executive should
consider seeking the advice of counsel in connection with the execution of this
Agreement and Executive has had an opportunity to do so. Executive has read and
understands this Agreement, and has sought the advice of counsel to the extent
he has determined appropriate.

 

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9.14 Withholding of Compensation. Executive hereby agrees that the Company may
deduct and withhold from the compensation or other amounts payable to Executive
hereunder or otherwise in connection with Executive’s employment any amounts
required to be deducted and withheld by the Company under the provisions of any
applicable Federal, state and local statute, law, regulation, ordinance or
order.
9.15 References to Sections of the Code. All references in this Agreement and
any Appendix hereto to sections of the Code shall be to such sections and to any
successor or substantially comparable sections of the Code or to any successor
thereto.
9.16 Effect of Delay. Executive’s or the Company’s failure to insist upon strict
compliance with any provision of this Agreement or the failure to assert any
right Executive or the Company may have hereunder, including without limitation
the right of Executive to terminate employment for Good Reason pursuant to
Section 6.5, shall not be deemed to be a waiver of such provision or right or
any other provision or right of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed this 29th day of November, 2011, and effective as of the Effective
Date.

                  EXECUTIVE       THE COMPANY    
 
                        PINNACLE ENTERTAINMENT, INC.    
 
                /s/ Daniel Boudreaux       /s/ Anthony M. Sanfilippo            
     
 
      By:   Anthony M. Sanfilippo    
 
      Its:   President & Chief Executive Officer    

 

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APPENDIX A

Daniel Boudreaux

1.   Severance Compensation under Section 6.5.2 of the Agreement: Upon
termination of Executive’s employment by the Company without Cause or by
Executive for Good Reason other than in connection with a Change of Control
pursuant to Section 6.5.2 of the Agreement, and for so long as Executive does
not compete with the Company or its Subsidiaries in the Gaming Business
following the date of termination of Executive’s employment for the period as
set forth in Section 7.4 of the Agreement, Executive shall be entitled to
receive Executive’s then current salary for eighteen (18) months following the
date of termination of Executive’s employment (the “Base Severance Benefit”)
payable in accordance with the Company’s regular salary payment schedule from
time to time. Executive shall have an affirmative obligation to mitigate the
Base Severance Benefit and should Executive compete with the Company or its
Subsidiaries prior to the end of the Base Severance Benefit period, Executive
shall not be entitled to receive any additional payments from the Company or
Company benefits described below with respect to periods after the commencement
of any such competitive activity or otherwise, and all such obligations shall be
extinguished.

2.   Severance Compensation under Section 6.5.3 of the Agreement: Upon
termination of Executive’s employment by the Company without Cause or by
Executive for Good Reason on or within eighteen (18) months after a Change of
Control pursuant to Section 6.5.3 of the Agreement, and provided that Executive
does not compete with the Company or its Subsidiaries in the Gaming Business for
the period as set forth in Section 7.4 of the Agreement, Executive shall be
entitled to receive Executive’s then current salary for eighteen (18) months
following the date of termination of Executive’s employment (the “Base Severance
Benefit”) payable in accordance with the Company’s regular salary payment
schedule from time to time. Executive shall have an affirmative obligation to
mitigate the Base Severance Benefit and should Executive compete with the
Company or its Subsidiaries prior to the end of the Base Severance Benefit
period, Executive shall not be entitled to receive any additional payments from
the Company or Company benefits described below with respect to periods after
the commencement of any such competitive activity or otherwise, and all such
obligations shall be extinguished. In addition, all unvested Equity Grants,
including any unvested replacement Equity Grants that may have been granted to
Executive to replace unvested Equity Grants that expired by their terms in
connection with a Change of Control, shall immediately become vested and may be
exercised in accordance with their terms and Section 6.6 hereof. To the extent
that any unvested Equity Grants terminate by their terms at the time of or in
connection with a Change of Control and replacement Equity Grants of at least
equivalent value are not granted to Executive, the Executive shall receive as
additional cash severance at the time of termination the consideration paid for
the securities underlying the unvested expired Equity Grants at the time of the
Change of Control less, to the extent applicable, (a) the exercise price or
other consideration payable by Executive for the Equity Grants; and (b) the
value of any replacement Equity Grants realized by Executive through or as a
result of such termination.

 

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3.   Additional Severance Benefits Upon Termination by the Company Without Cause
or by Executive For Good Reason under Sections 6.5.2 or 6.5.3 of the Agreement:
Provided that Executive does not compete with the Company or its Subsidiaries in
the Gaming Business for the period set forth in Section 7.4 of the Agreement,
Executive shall also be entitled to receive health benefits coverage for
Executive and Executive’s dependents under the same plan(s) or arrangement(s)
under which Executive and Executive’s dependents were covered immediately before
Executive’s termination (unless said plan(s) or arrangement(s) are modified for
all similarly situated executives) or plan(s) established or arrangement(s)
provided by the Company or any of its Subsidiaries thereafter for the benefit of
similar executives (the “Health Coverage Continuation”) until the earlier of
(i) the period of time to which Executive is entitled to severance compensation
(the Base Severance Benefit period set forth above in paragraphs 1 or 2, as
applicable); or (ii) the date Executive (and in the case of Executive’s
dependents, the dependents) becomes covered or eligible for coverage under any
other group health plan not maintained by the Company or any of its
Subsidiaries; provided, however, that if such other group health plan excludes
any pre-existing condition that Executive or Executive’s dependents may have
when coverage under this paragraph shall continue (but not beyond the periods
described in clauses (i) and (ii) of this sentence) with respect to such
pre-existing condition until such exclusion under such other group health plan
lapses or expires. Executive is required to make a timely election under
Sections 601 through 607 of the Employee Retirement Income Security Act of 1974,
as amended (commonly known as COBRA) to qualify for the benefits described in
this paragraph, and the obligations of the Company and its Subsidiaries under
this paragraph shall be conditioned upon Executive timely making such an
election. To effectuate Executive’s Health Coverage Continuation, the Company
shall pay Executive’s COBRA premiums until the earlier of: (i) the period of
time to which Executive is entitled to severance compensation (the Base
Severance Benefit period set forth in paragraph 1 or 2 above, as applicable); or
(ii) the date Executive (and in the case of Executive’s dependents, the
dependents) becomes covered or eligible for coverage under any other group
health plan not maintained by the Company or any of its Subsidiaries. Any
payment or reimbursement of benefits under this paragraph that is taxable to
Executive or Executive’s dependents shall be made by December 31 of the calendar
year following the calendar year in which Executive or Executive’s dependent
incurred the expense. Expenses eligible for reimbursement in any one taxable
year shall not affect the amount of expenses eligible for reimbursement in any
other taxable year, and the right to expense reimbursement shall not be subject
to liquidation or exchange for any other benefit.

 

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APPENDIX B
RELEASE and RESIGNATION
For valuable consideration, receipt of which is hereby acknowledged, the
undersigned Daniel Boudreaux (“Executive”), for Executive and Executive’s
spouse, heirs, estate, administrators and executors, hereby fully and forever
releases and discharges Pinnacle Entertainment, Inc., a Delaware corporation
(the “Company”), and each of its subsidiaries and the officers, directors,
employees, attorneys and agents of the Company and each such subsidiary, of and
from any and all claims, demands, causes of action of any kind or nature, in
law, equity or otherwise, whether known or unknown, which Executive has had, may
have had, or now has, or may have, arising out of or in connection with
Executive’s employment with the Company and/or its subsidiaries or the
termination of such employment; provided, however, that nothing contained herein
is intended to nor shall constitute a release of the Company from any
obligations it may have to Executive under any written employment agreement
between Executive and the Company in effect as of the date hereof, or any
deferred compensation plan or arrangement in which Executive participates or any
rights of indemnification under the Company’s Articles, Bylaws, Indemnity Trust
Agreement or the like, or coverage under Director and Officer Insurance, nor
shall it prevent Executive from exercising Executive’s rights, if any, under any
such employment agreement or under any stock option, restricted stock or similar
agreement in effect as of the date hereof in accordance with their terms.
Executive represents and warrants that Executive has not assigned or in any way
conveyed, transferred or encumbered all or any portion of the claims or rights
covered by this release.
Executive hereby resigns from all positions as an officer, director or employee
of the Company and each of its subsidiaries or affiliates effective the date
hereof and further agrees to execute such further evidence of such resignations
as may be necessary or appropriate to effectuate the foregoing.
Executed this  _____  day of  _____, 20__.

         
 
 
 
Executive