Exhibit 10.1

AGREEMENT

The purpose of this Agreement (the “Agreement”) is to set forth the agreed upon
terms, conditions and arrangements regarding Timothy J. Parrott’s resignation
from Pinnacle Entertainment, Inc.’s Board of Directors. Timothy J. Parrott
(“Parrott”) and Pinnacle Entertainment, Inc. (the “Company”) may be hereinafter
referred to as “Parties.” The Parties acknowledge and agree that Mr. Parrott’s
decision to resign was not related to any disagreement with the Company or its
management on any matter relating to its operations, policies or practices.

In consideration of the following promises, obligations and commitments, the
sufficiency of which is expressly acknowledged by the Parties, Parrott and the
Company agree as follows:

 

  1. Parrott’s retirement from the Company’s Board of Directors was effective
August 31, 2006 (“Retirement Date”).

 

  2. Parrott shall be entitled to continued coverage under the Company’s medical
plan until the earlier of (i) twelve (12) months from the Retirement Date or
(ii) the date he is eligible for, or covered by, any other medical plan (the
“Medical Coverage Period”). At the conclusion of the Medical Coverage Period,
Parrott may elect to avail himself of his rights under COBRA, if applicable. If
Parrott makes such election, the payment of any and all COBRA premiums shall be
at Parrott’s sole cost and expense.

 

  3. All Company stock options previously granted to Parrott vested on the
Retirement Date. The total number of such outstanding stock options as of the
Retirement Date is forty three thousand six hundred (43,600). Parrott shall have
ninety (90) days from the Retirement Date to exercise said options, except in
respect of the options granted June 18, 2002 (of which three thousand six
hundred (3,600) options remain outstanding) which must be exercised within
thirty (30) days from the Retirement Date. Except as provided in this Paragraph
3, all other terms and conditions of the Stock Option Plans under which the
stock options were issued remain applicable to and control the exercise of said
options. Parrott shall be responsible for any and all taxes that may arise out
of such exercise. All of Parrott’s deferred shares shall be handled in
accordance with the Director’s Deferred Compensation Plan.

 

  4.

In consideration of the promises set forth in this Agreement and other good and
valuable consideration, and except for the purpose of enforcing this Agreement,
Parrott, on behalf of himself, his spouse, children and all affiliates, hereby
irrevocably and unconditionally releases, acquits, and forever discharges
Company, Company’s parent companies, subsidiaries, affiliates, and divisions, as
well as each of their respective present and former officers, directors,
employees, consultants, and agents (being collectively referred to herein as the
“Releasees”), or any of them, from any and all charges, complaints, claims,
liabilities, obligations, promises, agreements, controversies, damages, actions,
causes of action, suits, rights, demands, costs, losses, debts, and expenses
(including attorney’s fees and costs actually incurred), of any

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nature whatsoever, known or unknown, in law or equity (collectively “Claims”),
which Parrott, his spouse, children or affiliates now have, own, hold, or claim
to have, own or hold, or which Parrott, his spouse, children or affiliates, or
any of them had, owned, held or claimed to own at any time before the execution
of this Agreement against any or all of the Releasees.

 

  5. In consideration of the covenants and agreements set forth herein, and
except for the purpose of enforcing this Agreement, the Company, on behalf of
its subsidiaries, affiliates and divisions (“Releasors”), hereby irrevocably and
unconditionally releases, acquits, and forever discharges Parrott from any and
all charges, complaints, claims, liabilities, obligations, promises, agreements,
controversies, damages, actions, causes of action, suits, rights, demands,
costs, losses, debts, and expenses (including attorney’s fees and costs actually
incurred), of any nature whatsoever, known or unknown, in law or in equity,
which Releasors, or any of them, now have, own or hold, or claim to have, own or
hold or which Releasors, or any of them had owned or held or claimed to own at
any time before the execution of this Agreement, against Parrott, provided that
such release shall not extend to any claim premised on willful misconduct or
fraud which the Company may discover after the date hereof. Parrott acknowledges
that he has not assigned any claim or purported claim released hereby to third
parties.

IN WITNESS WHEREOF, the Parties have executed this Agreement as of the 11th day
of September 2006.

 

    PINNACLE ENTERTAINMENT, INC. /s/ Timothy J. Parrott     By:   /s/ John A.
Godfrey TIMOTHY J. PARROTT    

Its:

  Executive VP