Exhibit
10.1


 


EMPLOYMENT
AGREEMENT


 


This
EMPLOYMENT AGREEMENT (the “Agreement”) is entered into on this 31st day
of July, 2006 (the “Commencement Date”) by and between Penn National Gaming,
Inc., a Pennsylvania corporation (the “Company”), and Leonard DeAngelo, an
individual residing in Pennsylvania (“Executive”).


 


WHEREAS,
Executive and the Company are party to a certain Employment Agreement, dated as
of June 10, 2003 (as amended and extended from time to time, the “Initial
Agreement”); and


 


WHEREAS, the parties
now desire to terminate the Initial Agreement and to enter into a new agreement
reflecting, among other things, certain additional covenants and consideration
exchanged by the parties, all as more specifically set forth herein.


 


NOW,
THEREFORE, the parties hereto, intending to be legally bound, hereby agree as
follows:


 


1.  Employment.
The Company hereby agrees to employ Executive and Executive hereby accepts such
employment, in accordance with the terms, conditions and provisions hereinafter
set forth.


 


1.1.          Duties and
Responsibilities. Executive shall serve as Executive Vice President,
Operations of the Company. Executive shall perform all duties and accept all
responsibilities incident to such position as may be reasonably assigned to him
by the President and Chief Operating Officer, the Chief Executive Officer or the
Board of Directors of the Company (the “Board”). Executive’s principal place of
employment shall be in Wyomissing, Pennsylvania.


 


1.2.          Term. The term of
this Agreement shall begin on the date hereof and shall terminate at the close
of business on the third anniversary of the Commencement Date (the “Initial
Term”), unless earlier terminated in accordance with Section 3 hereof. This
Agreement shall automatically renew for additional three-year periods (each, a “Renewal
Term” and, together with the Initial Term, the “Employment Term”) unless either
party has delivered written notice of non-renewal at least 60 days prior to the
start of a Renewal Term or unless earlier terminated in accordance with Section
3 hereof.


 


1.3.          Extent of Service.
Executive agrees to use Executive’s best efforts to carry out Executive’s
duties and responsibilities and, consistent with the other provisions of this
Agreement, to devote substantially all of Executive’s business time, attention
and energy thereto. The foregoing shall not be construed as preventing
Executive from serving on the board of philanthropic organizations, or
providing oversight with respect to his personal investments, so long as such
service does not materially interfere with Executive’s duties hereunder.


 


2.  Compensation.
For all services rendered by Executive to the Company, the Company shall
compensate Executive as set forth below.


 


 


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2.1.          Base Salary. The
Company shall pay Executive a base salary (“Base Salary”) at the annual rate of
seven hundred fifty thousand ($750,000), payable in installments at such times
as the Company customarily pays its other senior executives (“Peer Executives”).
Executive’s performance shall be reviewed annually. Any increase in Base Salary
or other compensation shall be made at the sole discretion of the compensation
committee of the Board (the “Compensation Committee”); it being understood that
the Compensation Committee has no intention of increasing Executive’s Base
Salary during the Initial Term.


 


2.2.          Cash Bonuses. Executive
shall participate in the Company’s incentive compensation plan for senior
management as such may be adopted, amended and approved, from time to time, by
the Compensation Committee.


 


2.3.          Equity Compensation.
In connection herewith, the Company shall grant to Executive options pursuant
to, and subject to the terms and conditions of, the Company’s current equity
compensation plan for 250,000 shares of common stock at an exercise price
determined in accordance with the governing plan. The Company acknowledges that
the Compensation Committee approved the grant of such options on the date
hereof. Such options shall vest in four equal annual installments. The terms of
such options and the amount and terms of any future equity compensation shall
be determined in the sole discretion of the Compensation Committee; it being
understood that the Compensation Committee has no intention of awarding any additional
equity compensation during the Initial Term.


 


2.4.          Other Benefits. Executive
shall be entitled to participate in all other employee benefit plans and
programs, including, without limitation, health, vacation, retirement, deferred
compensation or SERP, made available to other Peer Executives, as such plans
and programs may be in effect from time to time and subject to the eligibility
requirements of the each plan. Nothing in this Agreement shall prevent the
Company from amending or terminating any retirement, welfare or other employee
benefit plans or programs from time to time, as the Company deems appropriate.


 


2.5.          Vacation, Sick Leave
and Holidays. Executive shall be entitled in each calendar year to four (4)
weeks of paid vacation time. Each vacation shall be taken by Executive at such
time or times as agreed upon by the Company and Executive, and any portion of
Executive’s allowable vacation time not used during the calendar year shall be
subject to the Company’s payroll policies regarding carryover vacation. Executive
shall be entitled to holiday and sick leave in accordance with the Company’s
holiday and other pay for time not worked policies.


 


2.6.          Reimbursement of
Expenses. Executive shall be provided with reimbursement of reasonable
expenses related to Executive’s employment by the Company on a basis no less
favorable than that authorized from time to time for Peer Executives.


 


2.7.          Insurance. The
Company shall maintain life insurance on the life of Executive in the amount of
$1,000,000, to the extent it can be issued at standard rates, and Executive may
name the beneficiary of such policy.


 


3.  Termination.
Executive’s employment may be terminated prior to the end of the Employment
Term in accordance with, and subject to the terms and conditions, set forth
below.


 


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3.1.          Termination by the
Company.


 


(a)           Without Cause. The
Company may terminate Executive at any time without Cause (as such term is
defined in subsection (b) below) upon delivery of written notice to Executive,
which notice shall set forth the effective date of such termination.


 


(b)           With Cause. The
Company may terminate Executive at any time for Cause effective immediately
upon delivery of written notice to Executive. As used herein, the term “Cause”
shall mean:


 


(i)            Executive
shall have been convicted of a felony or any misdemeanor involving allegations
of fraud, theft, perjury or conspiracy;


 


(ii)           Executive
is found disqualified or not suitable to hold a casino or other gaming license
by a governmental gaming authority in any jurisdiction where Executive is
required to be found qualified, suitable or licensed;


 


(iii)          Executive
materially breaches any material Company policy or any material term hereof,
including, without limitation, Sections 4 through 7 and, in each case, fails to
cure such breach within 15 days after receipt of written notice thereof; or


 


(iv)          Executive
misappropriates corporate funds as determined in good faith by the audit
committee of the Board.


 


3.2.          Termination by the
Executive.


 


(a)           Executive may
voluntarily terminate employment for any reason effective upon 90 days’ prior
written notice to the Company, unless the Company waives such notice
requirement (in which case the Company shall notify Executive in writing as to
the effective date of termination).


 


(b)           On or after such time
as Executive is required to report to an individual other than the individual
to whom Executive reports as of the date hereof, Executive shall also have the
right to voluntarily terminate employment for Good Reason (as defined in
Section 8.4(b) but, for this purpose, excluding clause (iii) thereof).


 


3.3.          Termination for Death
or Disability. In the event of the death or total disability of Executive,
this Agreement shall terminate effective as of the date of Executive’s death or
total disability. The term “total disability” shall have the definition set
forth in the Company’s Long Term Disability Insurance Policy in effect at the
time of such determination.


 


3.4.          Payments Due Upon
Termination.


 


(a)           Generally. Upon
any termination described in Sections 3.1, 3.2 or 3.3 above, Executive shall be
entitled to receive any amounts due for Base Salary earned or expenses incurred
through the effective date of termination and any benefits accrued or earned on
or prior to such date in accordance with the terms of any applicable benefit
plans and programs.


 


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(b)           Certain
Circumstances. In the event the Company terminates Executive’s employment
without Cause or due to death or a total disability or in the event that the
Company elects not to renew this Agreement or Executive terminates employment
for Good Reason, and subject to Executive executing the release attached hereto
as Exhibit A, Executive shall be entitled to receive the following in
lieu of any other severance:


 


(i)            Executive
shall receive a payment equal to Executive’s monthly Base Salary at the highest
rate in effect for Executive during the 24-month period immediately preceding
the effective date of termination and Executive’s monthly bonus value
(determined by dividing the highest amount of annual cash bonus compensation
paid to Executive in respect of either the first or second full calendar year
immediately preceding the effective date of termination by twelve) for a period
equal to the greater of (1) the number of months remaining in the Employment
Term or (2) 24 months (the “Severance Period”).


 


(ii)           Executive
shall continue to receive the health benefits coverage in effect on the
effective date of termination (or as the same may be changed from time to time
for Peer Executives) for Executive and, if any, Executive’s spouse and
dependents for the Severance Period. At the option of the Company, the Company
may elect to pay Executive cash in lieu of such coverage in an amount equal to
Executive’s after-tax cost of obtaining generally comparable coverage for such
period.


 


(iii)          Executive
shall continue to serve as a non-officer employee of the Company during the
Severance Period and, as such, all options and other equity compensation granted
to Executive shall continue vesting for such period.


 


(c)           Payments. Cash
Payments due under this Section 3.4 shall be made as follows: 75% shall be made
within 15 days of the effective date of termination and the balance shall be
made in accordance with the payroll practices in effect on the date of
termination, unless, at the Company’s sole option, the Company elects to make
all such payments in a single lump sum. Except as otherwise provided in this
Section 3.4, Section 8 or Section 9, no other payments or benefits shall be due
under this Agreement to Executive.


 


3.5.          Notice of Termination.
Any termination of Executive’s employment shall be communicated by a written
notice of termination delivered within the time period specified in this
Section 3. The notice of termination shall (i) indicate the specific
termination provision in this Agreement relied upon, (ii) briefly summarize the
facts and circumstances deemed to provide a basis for a termination of employment
and the applicable provision hereof, and (iii) specify the termination date in
accordance with the requirements of this Agreement.


 


4.  No Conflicts of Interest. Executive agrees that
throughout the period of Executive’s employment hereunder or otherwise,
Executive will not perform any activities or services, or accept other
employment that would materially interfere with or present a conflict of
interest concerning Executive’s employment with the Company. Executive agrees
and acknowledges that Executive’s employment by the Company is conditioned upon
Executive adhering to and complying with the business practices and
requirements of ethical conduct set forth in writing from time to time by the
Company in its employee manual or similar publication. Executive represents 


 


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and warrants
that no other contract, agreement or understanding to which Executive is a
party or may be subject will be violated by the execution of this Agreement by
Executive.


 


5.  Confidentiality. Executive recognizes and
acknowledges that Executive will have access to certain confidential
information of the Company and that such information constitutes valuable,
special and unique property of the Company (including, but not limited to, information
such as business strategies, identity of acquisition or growth targets,
marketing plans, customer lists, and other business related information for the
Company’s customers). Executive agrees that Executive will not, for any reason
or purpose whatsoever, during or after the term of employment, use or disclose
any of such confidential information to any party, and that Executive will keep
inviolate and secret all confidential information or knowledge which Executive
has access to by virtue of Executive’s employment with the Company, except as
otherwise may be necessary in the ordinary course of performing Executive’s
duties with the Company.


 


6.  Non-Competition.


 


(a)           As used herein, the
term “Restriction Period” shall mean a period of 90 days following the
effective date of termination (regardless of the circumstances), except in
cases where the Executive elects to terminate employment without Good Reason,
in which case the Restriction Period shall mean a period equal to the remainder
of the Employment Term in effect on the effective date of termination.


 


(b)           During Executive’s
employment by the Company and for the duration of the Restriction Period
thereafter, Executive shall not, except with the prior written consent of the
Company, directly or indirectly, own, manage, operate, join, control, finance
or participate in the ownership, management, operation, control or financing
of, or be connected as an officer, director, employee, partner, principal,
agent, representative, consultant or otherwise with, or use or permit Executive’s
name to be used in connection with, any business or enterprise which owns or
operates a gaming or pari-mutuel facility located within 150 miles of any gaming or pari-mutuel property
owned or operated by the Company or any of its affiliates at such time.


 


(c)           The foregoing
restrictions shall not be construed to prohibit Executive’s ownership of less
than 5% of any class of securities of any corporation which is engaged in any
of the foregoing businesses and has a class of securities registered pursuant
to the Securities Exchange Act of 1934, provided that such ownership represents
a passive investment and that neither Executive nor any group of persons
including Executive in any way, either directly or indirectly, manages or exercises
control of any such corporation, guarantees any of its financial obligations,
otherwise takes any part in its business, other than exercising Executive’s
rights as a shareholder, or seeks to do any of the foregoing.


 


(d)           Executive acknowledges that
the covenants contained in Sections 5 through 7 hereof are reasonable and
necessary to protect the legitimate interests of the Company and its
affiliates and, in particular, that the duration and geographic scope of such
covenants are reasonable given the nature of this Agreement and the position
that Executive will hold within the
Company. Executive further agrees to disclose the existence and terms of such
covenants to any employer that Executive works for during the Restriction
Period.


 


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7.  Non-Solicitation. During Executive’s employment by
the Company and for a period equal to the greater of the Restriction Period or
one year after the effective date of termination, Executive will not, except
with the prior written consent of the Company, (i) directly or indirectly,
solicit or hire, or encourage the solicitation or hiring of, any person who is,
or was within a six month period prior to such solicitation or hiring, an
executive or management employee of the Company or any of its affiliates for
any position as an employee, independent contractor, consultant or otherwise or
(ii) divert or attempt to divert any existing business of the Company or any of
its affiliates.


 


8.  Change of Control.


 


8.1.          Consideration


 


(a)           Change of Control. In
the event of a Change of Control (as defined below), Executive shall be
entitled to receive a cash payment in an amount equal to the product of three
times the sum of (i) the highest annual rate of Base Salary in effect for Executive
during the 24-month period immediately preceding the effective date of the
Change in Control (the “Trigger Date”) and (ii) the highest amount of annual
cash bonus compensation paid to Executive in respect of either the first or
second full calendar year immediately preceding the Trigger Date.


 


(b)           Restrictive
Provisions. As consideration for the foregoing payments, Executive agrees
not to challenge the enforceability of any of the restrictions contained in
Sections 5, 6 or 7 of this Agreement upon or after the occurrence of a Change
of Control; provided, however, that on or after a Change of Control, the term Restriction
Period for purposes of this Agreement shall mean a period of 90 days from the
termination date of Executive’s employment.


 


8.2.          Payment Terms. This
change of control payment shall be made in two lump sum payments as follows:
(i) 75% to Executive on the Trigger Date; and (ii) 25% into a mutually
acceptable escrow account on the Trigger Date, payable to Executive on the 90th
day following the Trigger Date provided Executive has not elected to terminate
employment without Good Reason prior to such date. Notwithstanding any of the
foregoing to the contrary, the payment contemplated by clause (ii) shall be
paid immediately upon the occurrence of any of the following: (a) Executive’s
employment is terminated by the Company with or without Cause, due to death or
disability or due to non-renewal of this Agreement; or (b) Executive terminates
employment for Good Reason (as defined below).


 


8.3.          Certain Other Terms.
In the event payments are being made to Executive under this Section 8, no
payments shall be due under Section 3.4(b)(i) of this Agreement with respect to
any termination of Executive’s employment following a Change of Control. At the
option of the Company, the Company may require Executive to execute the release
attached hereto as Exhibit A; provided, however, that this requirement
shall not in any way alter the timing of the payments to be made under Section
8.2. In the event that the Company publicly announces that it has signed a
definitive agreement with respect to a Change of Control, the provisions of
this Section 8 shall continue to apply to Executive if, during the period commencing
on the date of such announcement and ending on the Trigger Date, the Company
terminates Executive’s 


 


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employment
without Cause; provided, however, that, in such event, any payments due under
Section 8 shall be reduced by any prior payments made under Section 3.4(b)(i).


 


8.4.          Defined Terms.


 


(a)           Change of Control.
The term Change of Control shall have the meaning given to such term in the
Company’s 2003 Long Term Incentive Compensation Plan, as such may be amended or
modified.


 


(b)           Good Reason. The
term Good Reason shall mean the occurrence of any of the following events that
the Company fails to cure within 10 days after receiving written notice thereof
from Executive: (i) assignment to Executive of any duties inconsistent in any
material respect with Executive’s position (including status, offices, titles
and reporting requirements), authority, duties or responsibilities or
inconsistent with Executive’s legal or fiduciary obligations; (ii) any
reduction in Executive’s compensation or substantial reduction in Executive’s
benefits taken as a whole; (iii) any travel requirements materially greater
than Executive’s travel requirements prior to the Change of Control; or (iv)
breach of any material term of this Agreement by the Company.


 


9.  Certain Tax Matters.


 


9.1.          Generally. In the
event Executive becomes entitled to receive the payments (the “Severance
Payments”) provided under Section 3 or Section 8 hereof or under any other plan
or arrangement providing for payments under circumstances similar to those
contemplated by such sections, and if any of the Severance Payments will be
subject to the tax (the “Excise Tax”) imposed by Section 4999 of the
Internal Revenue Code of 1986, as amended (the “Code”), the Company shall pay
to Executive at the time specified for such payments, an additional amount (the
“Gross-Up Payment”) such that the net amount retained by Executive shall be
equal to the amount of the Severance Payments after deducting normal and
ordinary taxes but not deducting (a) the Excise Tax and (b) any
federal, state and local income tax and Excise Tax payable on the payment
provided for by this Section 9.


 


9.2.          Illustration. For
example, if the Severance Payments are $1,000,000 and if Executive is subject
to the Excise Tax, then the Gross-Up Payment will be such that Executive will
retain an amount of $1,000,000 less only any normal and ordinary taxes on such
amount. The Excise Tax and federal, state and local taxes and any Excise Tax on
the payment provided by this Section 9 will not be deemed normal and ordinary
taxes.


 


9.3.          Certain Terms. For
purposes of determining whether any of the Severance Payments will be subject
to the Excise Tax and the amount of such Excise Tax, the following will apply:


 


(a)           Any other payments or
benefits received or to be received by Executive in connection with a Change in
Control of the Company or Executive’s termination of employment (whether
pursuant to the terms of this Agreement or any other plan, arrangement or
agreement with the Company shall be treated as “parachute payments” within the
meaning of Section 280G(b)(2) of the Code, and all “excess parachute
payments” within the meaning of Section 280G(b)(1) shall be treated as
subject to the Excise Tax, unless in the opinion of tax 


 


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counsel
selected by the Company’s Compensation Committee and acceptable to Executive,
such other payments or benefits (in whole or in part) do not constitute
parachute payments, or such excess parachute payments (in whole or in part) represent
reasonable compensation for services actually rendered within the meaning of
Section 280G(b)(4) of the Code in excess of the base amount within the
meaning of Section 280G(b)(3) of the Code, or are otherwise not subject to
the Excise Tax;


 


(b)           The amount of the
Severance Payments which shall be treated as subject to the Excise Tax shall be
equal to the lesser of (y) the total amount of the Severance Payments or
(z) the amount of excess parachute payments within the meaning of Section 280G(b)(1)
(after applying clause (a), above); and


 


(c)           The value of any
non-cash benefits or any deferred payment or benefit shall be determined by the
Company’s independent auditors in accordance with proposed, temporary or final
regulations under Sections 280G(d)(3) and (4) of the Code or, in the
absence of such regulations, in accordance with the principles of
Section 280G(d)(3) and (4) of the Code. For purposes of determining
the amount of the Gross-Up Payment, Executive shall be deemed to pay Federal
income taxes at the highest marginal rate of federal income taxation in the
calendar year in which the Gross-Up Payment is to be made and state and local
income taxes at the highest marginal rate of taxation in the state and locality
of Executive on the Trigger Date, net of the maximum reduction in Federal
income taxes which could be obtained from deduction of such state and local
taxes. In the event that the amount of Excise Tax attributable to Severance
Payments is subsequently determined to be less than the amount taken into
account hereunder at the time of determination then, subject to applicable law,
appropriate adjustments will be made with respect to the payments hereunder.


 


9.4.          Fees and Expenses.
The Company shall reimburse Executive for all reasonable legal fees and
expenses incurred by Executive in connection with any tax audit or proceeding
to the extent attributable to the application of Section 4999 of the Code
or any regulations pertaining thereto to any payment or benefit provided
hereunder.


 


10.  Document Surrender. Upon the termination of
Executive’s employment for any reason, Executive shall immediately surrender
and deliver to the Company all documents, correspondence and any other
information, of any type whatsoever, from the Company or any of its agents,
servants, employees, suppliers, and existing or potential customers, that came
into Executive’s possession by any means whatsoever, during the course of
employment.


 


11.  Governing Law. This Agreement shall be governed
by and construed in accordance with the internal laws (and not the law of
conflicts) of the Commonwealth of Pennsylvania.


 


12.  Jurisdiction. The parties hereby irrevocably
consent to the jurisdiction of the courts of the Commonwealth of Pennsylvania
for all purposes in connection with any action or proceeding which arises out
of or relates to this Agreement and agree that any action instituted under this
Agreement shall be commenced, prosecuted and continued only in the state or
federal courts having jurisdiction for matters arising in Wyomissing,
Pennsylvania, which shall be the exclusive and only proper forum for
adjudicating such a claim.


 


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13.  Notices. All notices and other communications
required or permitted under this Agreement or necessary or convenient in
connection herewith shall be in writing and shall be deemed to have been given
when hand delivered, delivered by guaranteed next-day delivery or sent by
facsimile (with confirmation of transmission) or shall be deemed given on the third
business day when mailed by registered or certified mail, as follows (provided
that notice of change of address shall be deemed given only when received):


 


If to the
Company, to:


 


Penn National Gaming, Inc.

825 Berkshire Boulevard, Suite 200

Wyomissing, PA 19610


Fax: (610) 376-2842


 


Attention:
Chairman


 


With a copy
to:


 


Penn National Gaming, Inc.


825 Berkshire Boulevard, Suite 200


Wyomissing, PA 19610


Fax: (610) 373-4710


 


Attention:
General Counsel


 


If to
Executive, to:


 


Leonard
DeAngelo


c/o Penn National Gaming, Inc.


825 Berkshire Boulevard, Suite 200


Wyomissing, PA 19610


Fax: (610) 376-2842


 


or to such other names or addresses as the
Company or Executive, as the case may be, shall designate by notice to each
other person entitled to receive notices in the manner specified in this
Section.


 


14.  Contents of Agreement; Amendment and Assignment.


 


14.1.        This Agreement sets forth
the entire understanding between the parties hereto with respect to the subject
matter hereof and supersedes all prior or contemporaneous agreements or
understandings with respect to thereto, including without limitation, the
Initial Agreement which is hereby terminated. This Agreement cannot be changed,
modified, extended, waived or terminated except upon a written instrument signed
by the party against which it is to be enforced.


 


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14.2.        Executive may not
assign any of his rights or obligations under this Agreement. The Company may
assign its rights and obligations under this Agreement
to any
successor to all or substantially all of its assets or business by means of
liquidation, dissolution, merger,
consolidation,
transfer
of assets
or otherwise.


 


15.  Severability.
If any provision of this Agreement or application thereof to anyone or under
any circumstances is adjudicated to be invalid or unenforceable in any
jurisdiction, such invalidity or unenforceability shall not affect any other
provision or application of this Agreement which can be given effect without
the invalid or unenforceable provision or application and shall not invalidate
or render unenforceable such provision or application in any other jurisdiction.
If any provision is held void, invalid or unenforceable with respect to
particular circumstances, it shall nevertheless remain in full force and effect
in all other circumstances. In addition, if any court determines that any part of Sections 5, 6 or
7 hereof is unenforceable because of its duration, geographical scope or
otherwise, such court will have the power to modify such provision and, in its
modified form, such provision will then be enforceable.


 


16.  Remedies.


 


16.1.        No remedy conferred upon a
party by this Agreement is intended to be exclusive of any other remedy, and
each and every such remedy shall be cumulative and shall be in addition to any
other remedy given under this Agreement or now or hereafter existing at law or
in equity.


 


16.2.        No delay or omission by a
party in exercising any right, remedy or power under this Agreement or existing
at law or in equity shall be construed as a waiver thereof, and any such right,
remedy or power may be exercised by such party from time to time and as often
as may be deemed expedient or necessary by such party in its sole discretion.


 


16.3.        Executive acknowledges
that money damages would not be a sufficient remedy for any breach of this
Agreement by Executive and that the Company shall be entitled to specific
performance and injunctive relief as remedies for any such breach, in addition
to all other remedies available at law or equity to the Company.


 


17.  Construction. This Agreement is
the result of thoughtful negotiations and reflects an arms’ length bargain
between two sophisticated parties, each represented by counsel. The parties
agree that, if this Agreement requires interpretation, neither party should be
considered “the drafter” nor be entitled to any presumption that ambiguities
are to be resolved in his or her favor.


 


18.  Beneficiaries/References. Executive shall be
entitled, to the extent permitted under any applicable law, to select and
change a beneficiary or beneficiaries to receive any compensation or benefit
payable under this Agreement following Executive’s death by giving the Company
written notice thereof. In the event of Executive’s death or a judicial determination
of Executive’s incompetence, reference in this Agreement to Executive shall be
deemed, where appropriate, to refer to Executive’s beneficiary, estate or other
legal representative.


 


19.  Withholding. All payments under this Agreement
shall be made subject to applicable tax withholding, and the Company shall
withhold from any payments under this Agreement all 


 


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federal, state
and local taxes, as the Company is required to withhold pursuant to any law or
governmental rule or regulation. Except as specifically provided otherwise in
this Agreement, Executive shall bear all expense of, and be solely responsible
for, all federal, state and local taxes due with respect to any payment
received under this Agreement.


 


20.  Regulatory Compliance. The terms and provisions
hereof shall be conditioned on and subject to compliance with all laws, rules,
and regulations of all jurisdictions, or agencies, boards or commissions
thereof, having regulatory jurisdiction over the employment or activities of
Executive hereunder.


 


21.  Code Section 409A. To the extent that this
Agreement or any plan, program or award of Company in which Executive
participates or which has been or is granted by Company to Executive, as applicable,
is subject to Section 409A of the Internal Revenue Code, Company and Executive
agree to cooperate and work together in good faith to timely amend this
Agreement or each such plan, program or award to comply with Section 409A of
the Code. Notwithstanding anything herein to the contrary, in the event that
Executive is subject to any payment or benefit at a time when he is a “specified
employee” (within the meaning of Section 409A), Company shall delay the making
of such payment or benefit to the extent reasonably necessary to satisfy
Section 409A.


 


IN WITNESS
WHEREOF, the undersigned, intending to be legally bound, have executed this
Agreement as of the date first above written.


 


 


	
   

  	
  PENN NATIONAL GAMING, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/Peter M. Carlino

  	
   

  
	
   

  	
  Name:

  	
  Peter M.
  Carlino

  
	
   

  	
  Title:

  	
  Chairman and Chief Executive

  Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  EXECUTIVE

  
	
   

  	
   

  
	
   

  	
    /s/Leonard
  DeAngelo

  	
   

  
	
   

  	
  Leonard
  DeAngelo

  
						



 


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