Exhibit 10.1






Exhibit 10.1




AMENDED AND RESTATED




EMPLOYMENT AGREEMENT



THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the “Agreement”) is made this 1st
day of March, 2011, by and between PINNACLE ENTERTAINMENT, INC., a Delaware corporation (the
“Company”), and ANTHONY M. SANFILIPPO, an individual (“Executive”), with respect to the following
facts and circumstances:



RECITALS




The Company employed Executive as its Chief Executive Officer and President pursuant to the
terms and conditions of an Employment Agreement executed on March 13, 2010, to be effective as of 5
p.m. Central Standard Time on March 14, 2010 (the “Effective Date”), (the “Employment Agreement”).



The Company and Executive wish to amend and restate the Employment Agreement in order to
better reflect the agreement of the parties as to the terms of Executive’s employment and to
eliminate certain discrepancies between Executive’s Agreement and that of other executive officers
of the Company.



NOW, THEREFORE, in consideration of the mutual promises, covenants and agreements set forth
herein, the Employment Agreement is amended and restated to read in its entirety as follows:



ARTICLE 1.




EMPLOYMENT AND TERM



1.1 Employment. The Company agrees to engage Executive in the capacity as Chief
Executive Officer and President of the Company, and Executive hereby accepts such engagement by the
Company upon the terms and conditions specified below. Throughout the Term (as hereinafter
defined) the Company will recommend that Executive be elected as a member of the Board of Directors
(the “Board”). Executive agrees to resign from the Board of Directors immediately upon the
termination of his employment for any reason.



1.2 Term. The term of this Agreement shall commence as of the Effective Date and,
unless earlier terminated under Article 6 below, shall continue in force until March 13, 2014 (the
“Initial Term”); provided that commencing on November 14, 2013 and as of November 14 of each year
thereafter (a “Renewal Date”), this Agreement shall automatically renew for additional one-year
periods (each, a “Renewal Period”), unless either party gives notice of non-renewal at least one
hundred twenty (120) days prior to the next each Renewal Date. The Initial Term of this Agreement,
together with any Renewal Periods, is referred to as the “Term.”


 


 









 





ARTICLE 2.




DUTIES OF EXECUTIVE



2.1 Duties. Executive shall perform all the duties and obligations generally
associated with the position of Chief Executive Officer and President subject to the control and
supervision of the Company’s Board of Directors (or a committee thereof), and such other executive
duties consistent with the foregoing as may be assigned to him from time to time by the Company.
Executive shall perform the services contemplated herein faithfully, diligently, to the best of his
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 his authority, shall to the best of his 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 during the Term, 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 headquarters in Las Vegas, Nevada, or at such other location as Executive and the Board
of Directors shall agree upon. The Company understands that Executive maintains a home office in
Germantown, Tennessee. The Company shall reimburse Executive for his business travel expenses to
and from such office. Executive understands he will be required to travel to the Company’s various
operations as part of his employment. For six (6) months following the Effective Date, Executive
may commute to Las Vegas, Nevada. During such time the Company will pay or reimburse Executive for
the reasonable costs of travel, a furnished executive apartment in Las Vegas, Nevada, car rental
and other related and reasonable expenses. The Company shall also reimburse Executive for the
reasonable commercial travel of Executive’s wife and three (3) dependent children during this six
(6) month period. When Executive relocates to Las Vegas, Nevada, the Company will pay on a one time
basis for the reasonable moving expenses of Executive and his family, in accordance with the
Company’s relocation policy in effect as of the Effective Date or as subsequently approved by the
Compensation Committee. The Company acknowledges and agrees to consider that Executive has
circumstances which may require Executive to exceed the Company’s current relocation allowance
cap, subject to the Board’s approval. Executive shall only be reimbursed for commuting and
relocation expenses upon receipt from Executive of supporting receipts in accordance with the
Company’s reimbursement policies. Executive shall be responsible for his taxes, if any, on
amounts reimbursed under this Section 2.2.



2.3 Exclusive Service. Except as otherwise expressly provided herein, Executive shall
devote his entire business time, attention, energies, skills, learning and best efforts to the
business of the Company. Executive may serve as a consultant for Multimedia Games, Inc., a Texas
corporation (“MGAM”), for a reasonable period of time, not to exceed six (6) months, to facilitate
the smooth transition of leadership of MGAM. Executive shall recuse himself from all MGAM matters
that involve actual or potential conflicts with 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


 


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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”). During the Term, 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 the casino gaming, card club or horse racing business. In this regard, and for
purposes of this section only, Executive acknowledges that the gaming industry is national in scope
and that accordingly this covenant shall apply throughout the United States. With the prior
approval of the Board of Directors (which approval may subsequently be revoked by the Board in its
discretion) Executive may (i) serve on boards of charitable and not for profit organizations; (ii)
serve on one board of a for profit public corporation in addition to the Company’s Board (and
retain any compensation received therefrom); and (iii) serve on boards of privately held entities
in which Executive has an ownership interest (and retain any compensation received therefrom); so
long as such activities, individually or in the aggregate do not materially interfere with
Executive’s duties hereunder.




2.4 Stock Purchase. Executive purchased One Hundred Twenty Five Thousand (125,000)
shares of the Company’s Common Stock pursuant to the Common Stock Purchase Agreement dated March
13, 2010 between the Company and Executive.



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 Eight Hundred Forty Thousand Dollars
($840,000) 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). Executive shall not receive any compensation for services as a member of the
Company’s Board of Directors.



3.2 Annual and Other Bonuses. Executive shall be entitled to earn bonuses with
respect to each year of the Term during which Executive is employed under this Agreement up to not
less than One Hundred Fifty Percent (150%) of his base salary, with a targeted bonus of One Hundred
Percent (100%) of Executive’s base salary, determined under the Company’s Annual Performance Based
Plan for Executive Officers, or any successor Plan (the “Bonus Plan”). Any such Bonus shall be
structured to comply with Section 162(m) of the Internal Revenue Code unless otherwise determined
by the Committee and shall be based on performance criteria developed by the Committee. Any such
bonus shall be subject to (i) the Executive being employed by the Company on the day after the end
of the Company’s fiscal year or such later date as the Bonus Plan shall specify; and (ii) the
Company’s Policy on Recovery of Incentive Compensation in Event of Financial Restatement attached
as Appendix A hereto. Any such


 


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bonus earned by Executive shall be paid annually within ninety (90) days after the conclusion
of the Company’s fiscal year, except for any portion of the bonus with respect to 2010 which is
paid in Executive’s discretion in restricted stock, any portion of the bonus with respect to a year
later than 2010 which is paid in the Company’s discretion in restricted stock, and any portion of
the bonus which Executive shall elect to defer under the Company’s deferred compensation plan.
Bonuses relative to partial years shall be prorated. Executive may also receive special bonuses in
addition to his annual bonus eligibility at the discretion of the Board of Directors or the
Committee; it being understood that there is no entitlement thereto hereunder. Any bonuses paid
hereunder with respect to 2010 shall be paid, at the Executive’s discretion, in cash and/or
restricted stock. Any bonuses paid hereunder with respect to later years of the Term shall be
paid, in the Company’s discretion, in cash and/or restricted stock; provided, however, that
Executive’s allocation of cash and restricted stock shall be the same as that of other senior
executive officers for the year.




3.3 Equity Awards.



3.3.1 As an inducement to Executive entering into this Agreement, on the Effective Date the
Company shall grant Executive an option to purchase 650,000 shares of the Company’s common stock
(the “Option Grant”). Such option shall vest in five equal annual installments, with an exercise
price equal to the closing price of the Company’s common stock on the last trading day before the
Effective Date. The terms of the option shall be subject to the Option Agreement executed
concurrently herewith. Such award shall constitute an “inducement grant” within the meaning of the
rules of the New York Stock Exchange and shall be granted and the underlying shares of common stock
issued outside of the stock option plans of the Company.



3.3.2 The Option Grant is intended to be the only grant of options, restricted stock units, or
(except as set forth in Section 3.2) restricted stock to Executive during the first two years of
the Initial Term. Thereafter, the Company may grant to Executive options or other equity
compensation pursuant to, and subject to the terms and conditions of, the then current equity
compensation plan of the Company. The Company’s Compensation Committee shall set the amount and
terms of such options or other equity compensation.



ARTICLE 4.




EXECUTIVE BENEFITS



4.1 Vacation. In accordance with the general policies of the Company applicable
generally to other senior executives of the Company pursuant to the Company’s personnel policies
from time to time, Executive shall be entitled to not less than four (4) weeks vacation each
calendar year, without reduction in compensation. Vacation expense will not accrue and unused
vacation time will not accrue for severance purposes.


 


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4.2 Benefits. Executive shall receive all other such benefits as the Company may
offer to other senior 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. Executive is currently covered by a previous employer’s health insurance plan. In the
event the Executive chooses to retain his existing healthcare coverage, the Company shall
reimburse Executive for the current co-pay owed for the coverage of Executive, spouse, and
dependent children in lieu of Company medical benefit. In the event Executive chooses to no longer
remain on his previous employer’s plan, then Executive, his spouse and his dependent children will
become eligible for the Company’s medical benefit plan. The Company will provide an executive
physical on an annual basis to Executive and his spouse. The Company shall provide Executive
coverage for those benefit items made generally available to its senior level executive employees
that are not currently covered under Executive’s plan through his previous employer (e.g. short and
long-term disability and so forth) on the same terms provided to its other senior level executive
employees.



4.3 Indemnification. Executive shall have the benefit of indemnification to the
fullest extent permitted by applicable law, which indemnification shall continue after the
termination of this Agreement for such period as may be necessary to continue to indemnify
Executive for his acts while an officer of the Company. In addition, the Company shall cause
Executive to be covered by the Company’s policies of directors and officers liability insurance in
effect from time to time in accordance with their terms, to the maximum extent of the coverage
available for any director or officer of the Company.



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 his 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.



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 his employment under this Agreement in a professional and businesslike manner, other than due to
his 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.


 


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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 his 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 material
rules or regulations of gaming authorities which could have a material adverse effect on the
Company) that would make the continuance of his employment by the Company materially detrimental to
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, 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 which 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 his actions, then
the Company may by thirty (30) days 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.



6.2 Death or Disability. This Agreement shall terminate on the death or “Disability”
of Executive. Executive will be deemed to have a “Disability” when he is unable to engage in any
substantial gainful activity by reason of any medically determinable physical or mental impairment
which can be expected to result in death or can be expected to last for a substantially continuous
period of not less than 180 days, or begins receiving income replacement benefits for a period of
not less than three months under an accident and health plan of the Company or an affiliate by
reason of any medically determinable physical or mental impairment which can be expected to result
in death or can be expected to last for a continuous period of not less than 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 designed by the Clark County Medical
Association 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.


 


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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 thirty (30) days written notice of such termination to Executive. Failure
by the Company to extend the Term for any Renewal Period shall not be a termination of this
Agreement Without Cause.



6.4 Termination by Executive for Good Reason. Executive may terminate his 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 his status Chief Executive Officer and President
of the Company, or any material reduction in the authority, duties or responsibilities of
Executive, including any such material reduction caused by the appointment of an Executive Chairman
of the Board of Directors whose authority materially limits Executive’s authority, duty or
responsibility); (ii) any relocation of his or its principal place of business outside the greater
Las Vegas metropolitan area (without Executive’s consent); (iii) the requirement that Executive
report to anyone other than the Board or a committee thereof; (iv) the failure of Executive to be
nominated and recommended for election or re-election, as appropriate, as a member of the Board;
(v) a material reduction by the Company in Executive’s then Base Salary or Bonus targets, a
material reduction in other benefits (except as such benefits may be changed or reduced for other
senior executives), or the failure by the Company to pay Executive any material portion of his
current compensation when due; or (vi) following a Change in Control, (A) 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 naming Executive as the Chief Executive Officer of the acquiring or
successor company, or of the highest-level parent, as the case may be; (B) a requirement that
Executive, as Chief Executive Officer of the acquiring or successor company or highest-level
parent, must report to an executive or non-executive Chairman of the Board of Directors whose
authority materially limits Executive’s authority, duty or responsibility; or (C) Executive’s
termination for Good Reason from the Company and any parent entity or termination without cause by
the Company and any parent entity within eighteen (18) months of a Change in Control.
Notwithstanding the foregoing, except with respect to a termination by Executive following a Change
in Control, Executive’s resignation shall not be treated as a resignation for Good Reason unless
(a) 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; (b) the Company fails to remedy such condition within thirty (30) days following
such written notice (the “Remedy Period”); and (c) 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 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, and, except
in the case of Termination for Cause, as additional severance and notwithstanding the provisions of
Section 3.2 hereof, a prorated bonus for the year of termination. Such prorated bonus shall be
determined and paid as follows: (a) First, the performance criteria shall be applied to the entire
year of termination to determine the bonus that Executive would have received for the entire year
if his employment had not terminated, (b) Second, amount determined under clause (a) of this
sentence shall be multiplied by a fraction, the numerator of which is the number of days in the
year before the date of the termination of Executive’s employment and the denominator of which is
three hundred sixty five (365), to determine the amount of the prorated bonus, and (c) Third, the
prorated bonus shall be paid at the times and in the form specified when the Compensation Committee
determined the performance criteria for the year, or, if no such time was then specified, within
ninety (90) days after the end of the year in which the termination of employment occurred. If at
the Termination Date, Executive shall have satisfied all the requirements to earn an annual bonus
relative to the calendar year immediately preceding the Termination Date but such bonus has not yet
been paid, then except in the case of a Termination for Cause, such bonus shall be paid to
Executive at the same time such bonus was otherwise scheduled to have been paid. In addition,
promptly upon submission by Executive of his 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 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 or due to Death or Disability. 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, or due to death or disability, the following
shall apply (but only clause (b) hereof in the case of death or disability):




	 	(a)	 	Executive shall be entitled to receive an
amount equal to one hundred fifty percent (150%) times (i) Executive’s
annual base salary (the “Base Severance Benefit”) in effect on the date
of termination; plus (ii) the Bonus Amount (as hereinafter defined).



 


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	 	 	 	The Bonus Amount shall equal the average annual bonus paid to
Executive in the three years prior to termination (or such shorter
period, during which Executive is employed); provided, however, for
purposes of calculating the Bonus Amount, any bonus paid to Executive
for any period less than a full calendar year shall be annualized.
The Base Severance Benefit shall be paid to Executive in equal
monthly installments over eighteen (18) months immediately following
the date of termination in accordance with the Company’s regular
salary payment schedule from time to time. The Bonus Amount shall be
paid in two equal annual installments on the first and second
anniversaries of the termination of employment. In addition,
Executive shall be entitled to receive any amounts payable under
Section 6.5.1 above. The payments contemplated herein shall not be
subject to any duty of mitigation by Executive nor to offset for any
income earned by Executive following termination.
	 
	 	(b)	 	Executive shall also be entitled to receive
health benefits coverage for Executive and his dependents, and
disability insurance coverage for Executive, under the same plan(s) or
arrangement(s) under which Executive and his dependents were covered
immediately before his death or Disability or plan(s) established or
arrangement(s) provided by the Company or any of its Subsidiaries
thereafter for the benefit of senior executives (the “Health and
Disability Coverage Continuation”) until the earliest of (i) eighteen
(18) months; and (ii) the date Executive (and in the case of his
dependents, the dependents) becomes covered or eligible for coverage
under any other group health plan or group disability plan (as the case
may be) 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 Section 6.5.2 shall continue (but not
beyond the period described in clause (i) of this sentence) with
respect to such pre-existing condition until such exclusion under such
other group health plan lapses or expires. The Company shall pay any
applicable premiums on such insurance coverage and shall reimburse
Executive or his estate, as the case may be, for any taxes payable
thereon. In the event Executive is required to make an 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 Section 6.5.2, the obligations of the
Company and its Subsidiaries under this Section 6.5.2 shall be
conditioned upon Executive’s timely making such an election. Nothing
contained herein shall prevent Executive or his dependants from
securing continued coverage under COBRA at their own expense to the
extent permitted by COBRA



 


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	 	 	 	or otherwise applicable law. Any payment or reimbursement of
benefits under this Section 6.5.2 that is taxable to Executive or his
dependents shall be made by December 31 of the calendar year
following the calendar year in which Executive or his 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.
	 
	 	(c)	 	Any outstanding unvested stock options,
restricted stock or restricted stock units (collectively “Equity
Grants”) at the date of termination which would otherwise vest during
the twelve (12) months following termination shall immediately become
vested and may be exercised in accordance with their terms for the
period provided in Section 6.6. The remaining unvested Equity Grants
shall immediately terminate.





6.5.3 Termination Without Cause or Termination by Executive for Good Reason in Connection
With or Within the Eighteen (18) Months After a Change of Control. If the Company terminates
Executive without Cause or Executive terminates for Good Reason in connection with or within
eighteen (18) months after a Change of Control, the following shall apply:




	 	(a)	 	The Company shall pay to Executive in lieu of
the Base Severance Benefit, in a lump sum as soon as practicable, but
in no event later than thirty (30) days after the termination of
Executive’s employment, (i) an amount (the “Change of Control Severance
Benefit”) equal to one hundred fifty percent (150%) of the sum of
Executive’s annual base salary in effect on the date of termination and
the Bonus Amount, plus (ii) any amounts payable under Section 6.5.1.
In addition, Executive shall also be entitled to receive continuation
of health and disability insurance coverage as specified in Section
6.5.2(b) and 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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	 	(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;
	 
	 	(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;
	 
	 	(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; or
	 
	 	(iv)	 	During any consecutive 12-month
period, individuals who at the beginning of such period
constituted the Board of the Company (together with any new
Directors whose election to such Board or whose nomination for
election by the stockholders of the Company was approved by a
vote of a majority of the Directors of the Company then still in
office who were either Directors at the beginning of such period
or whose election or nomination for election was previously so
approved) cease for any reason to constitute a majority of the
Board of the Company then in office.





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 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 50% of the voting power of the issued and outstanding voting
securities of such Person or Group, or (C) more than 50% of the voting power of the issued and
outstanding voting securities of such


 


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Person or Group are owned, directly or indirectly, by Beneficial Owners of more than 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 I.R.C. Section 409A. (a) The compensation arrangements under this Agreement
are intended to 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 “Code Section
409A”), and will be interpreted in a manner intended to comply with, or be exempt from, Code
Section 409A. If any payment of money or other benefits due to the Executive hereunder could cause
the application of an accelerated or additional tax under Code Section 409A (a “409A Tax”), the
Company, in its sole discretion, may decide such payments or other benefits shall be restructured,
to the extent possible, in a manner, determined by the Company, that does not cause such 409A Tax;
provided, however, neither the Company, nor its respective officers, employees and/or
representatives, shall have any liability to the Executive with respect to any such determination,
or any such taxes, interest or penalties, or liability for nay other alleged damages related
thereto. (b) In the event that any compensation with respect to Executive’s separation from
service is “deferred compensation” within the meaning of Code 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 Code Section 409A. Such delay
shall last six 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 Regulations 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).


 


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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 in the casino 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.



6.6 Exercisability of Equity Grants. All vested Equity Grants will terminate on the
earlier of (a) the expiration of their stated terms or (b) one (1) year after the termination of
Executive’s employment with the Company, regardless of the cause of such termination, except that,
in the event of a termination for “Cause” or Executive’s termination without Good Reason, all
vested Equity Grants will terminate on the earlier of (I) the expiration of the stated term, or
(II) thirty (30) days after the termination. As provided in the Equity Grants, agreements,
unvested Equity Grants will terminate on the termination of Executive’s continuous status as an
employee, director, or consultant with the Company, except to the extent that such Equity Grants
become vested as a result of such termination under the terms of the governing Equity Grant
agreement or this Agreement.



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 VI
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. Except as expressly provided for herein, in no event shall
Executive be obligated to seek other employment or take any other action by way of mitigation of
the amounts payable to Executive under any of the provisions of this Agreement and such amounts
shall not be reduced whether or not Executive obtains other employment.



6.9 Release. It shall be a condition for Executive’s right to receive any severance
benefits hereunder that he execute a general release in favor of the Company and its affiliates in
the form as attached hereto and Appendix B 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:


 


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	 	(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 14 day period.
	 
	 	(b)	 	Executive must execute the release within
forty-five (45) days from its delivery to him.
	 
	 	(c)	 	If Executive has revocation rights, Executive
shall exercise such rights, if at all, not later than seven (7) days
after executing the release.
	 
	 	(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 twenty (20) 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 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 payment or benefit (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 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 which are to be paid the farthest
in time from the Determination (as hereinafter defined). 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.


 


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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 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 which
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.


 


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ARTICLE 7.




CONFIDENTIALITY



7.1 Nondisclosure of Confidential Material. In the performance of his 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 which 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 his duties to the Company or as required by a court order or any gaming regulator or
as required for his personal tax or legal advisors to advise him, 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 his 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 his 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 of 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.


 


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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.



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 above or the expiration of
the Initial Term or any Renewal Term without this Agreement being renewed, then for a period of one
year after the effective date of such termination, 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 in the casino gaming, card club or horseracing business which
competes against the Company in any “market” in which the Company owns or operates a casino, card
club 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 or horseracing facility owned or operated or
under construction by the Company.



7.5 No Hire Away Policy. In the event this Agreement is terminated prior to the
normal expiration of the Term, 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, Executive shall not, directly
or indirectly, for himself or on behalf of any entity with which he 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 he did not directly
or indirectly engage in or encourage such hiring.



7.6 No Solicitation. During the Term and for a period of one (1) year thereafter, or,
if sooner, for a period of one (1) year after earlier termination of this Agreement prior to
expiration of the Term, and regardless of the reason for such termination (whether by the Company
or Executive), Executive shall not directly or indirectly, for himself or on behalf of any entity
with which he 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. During the Term and for a period of one (1) year
thereafter, or, if sooner, for a period of one (1) year after the earlier termination of this
Agreement prior to the expiration of the Term, and regardless of the reason for such termination
(whether by the Company or Executive), Executive shall not solicit any customers of the Company or
its subsidiaries or any of their respective casinos or card clubs, or knowingly encourage any such
customers to leave the Company’s casinos or card clubs 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 times use proprietary customer lists or
Confidential Material to solicit customers.


 


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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.



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, gaming or horseracing
businesses in any market which 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.



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.


 


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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 he 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 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.



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 insure 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.


 


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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, the Nonqualified Stock Option Agreement dated
March 14, 2010 between the Company and the Executive, and the Common Stock Purchase Agreement dated
March 13, 2010 between the Company and Executive constitute the total and complete agreement of the
parties and supersedes all prior and contemporaneous understandings and agreements heretofore made,
including the Employment 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 and 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 which 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 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 his address set
forth as follows or any other address that any party may designate by written notice to the other
parties:



	 	 	 	 	 
	 

	 	To Executive:
	 	Anthony M. Sanfilippo
	 

	 	 	 	c/o Butler, Snow, O’Mara, Stevens & Cannada, PLLC
	 

	 	 	 	6075 Poplar Avenue, Suite 500
	 

	 	 	 	Memphis, Tennessee 38119
	 

	 	 	 	Attention: Todd P. Photopulos, Esq.
	 
	 

	 	To the Company:
	 	Pinnacle Entertainment, Inc.
	 

	 	 	 	8918 Spanish Ridge Avenue
	 

	 	 	 	Las Vegas, Nevada 89148
	 

	 	 	 	Attn: General Counsel
	 

	 	 	 	Telephone: 702 784-7777
	 

	 	 	 	Facsimile: 702 784-7773






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 he 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. The Company shall reimburse
Executive for the reasonable fees and expenses of Executive’s counsel in connection with this
Agreement not to exceed $10,000.


 


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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 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 Amended and Restated Employment
Agreement to be duly executed this 1st day of March, 2011.



	 	 	 	 	 
	THE COMPANY  	PINNACLE ENTERTAINMENT, INC.

 	 
	 	By:  	/s/ John A. Godfrey
 	 
	 	Its:  Executive Vice President, General Counsel and Secretary 	 
	 	 	 	 
	 
	EXECUTIVE  	ANTHONY M. SANFILIPPO

 	 
	 	/s/ Anthony M. Sanfilippo
 	 
	 	 	 
	 	 	 


 


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APPENDIX A




POLICY ON RECOVERY OF INCENTIVE COMPENSATION

IN EVENT OF FINANCIAL RESTATEMENT




The following rules shall apply if (1) there is a restatement of the Company’s financial
statements for the fiscal year for which a bonus is paid, other than a restatement due to changes
in accounting principles or applicable law, (2) the restatement results in whole or in part from
the negligence, misconduct or malfeasance of the participant, and (3) the Compensation Committee
determines that a participant has received an “excess bonus” for the relevant fiscal year.




	 	1.	 	The amount of the excess bonus shall be equal to the difference between the
bonus paid to the participant and the payment or grant that would have been made based
on the restated financial results.
	 
	 	2.	 	The requirement to repay all or a portion of the excess bonus as determined by
the Compensation Committee shall only exist if the Audit Committee has taken steps to
consider restating the financials prior to the end of the third year following the year
in question.
	 
	 	3.	 	The Compensation Committee may take such action in its discretion that it
determines appropriate to recover all or a portion of the excess bonus if it deems such
action appropriate under the facts and circumstances. Such actions may include
recovery of all or a portion of such amount from the participant from any of the
following sources: prior incentive compensation payments, future payments of incentive
compensation, cancellation of outstanding equity awards, future equity awards, gains
realized on the exercise of stock options, and direct repayment by the participant.
Participant’s receipt of the bonus constitutes his agreement that, if requested by the
Compensation Committee, he shall repay to the Company the excess bonus (or that portion
thereof specified by the Committee) within 90 days of the time that he is notified by
the Committee of the overpayment. Application of this policy does not preclude the
Company from taking any other action to enforce a participant’s obligations to the
Company, including termination of employment or institution of civil or criminal
proceedings.





This Policy shall be applicable to all incentive compensation paid subsequent to the adoption
of the Policy.



This Policy is in addition to the requirements of Section 304 of the Sarbanes-Oxley Act of
2002 that are applicable to the Company’s Chief Executive Officer and Chief Financial Officer.




 


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APPENDIX B




RELEASE and RESIGNATION



For valuable consideration, receipt of which is hereby acknowledged, the undersigned Anthony
M. Sanfilippo (“Executive”), for himself and his 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 his
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 he 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 	 
	 	 	 
	 



 


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