Exhibit 10.1


 


PENN NATIONAL GAMING, INC.


 


CHANGE IN CONTROL PAYMENT
ACKNOWLEDGEMENT AND AGREEMENT


 


This Change in Control Payment Acknowledgement and
Agreement (this “Agreement”) is made as of December 26, 2007 by and
between Penn National Gaming, Inc. (the “Company”) and                           
(the “Executive”).  The Company
and the Executive are sometimes referred to in this Agreement as the “Parties”.


 


WHEREAS, the Company entered in to an Agreement and
Plan of Merger, dated as of June 15, 2007, by and among the Company, PNG Acquisition
Company Inc. and PNG Merger Sub Inc. (the “Merger Agreement”) providing
for the acquisition of the Company by certain funds managed by affiliates of
Fortress Investment Group LLC and Centerbridge Partners LP (the “Merger”);


 


WHEREAS, pursuant to Section 8 of the
Employment Agreement dated as of July 31, 2006 by and between the Company
and the Executive (the “Employment Agreement”), the Executive was
granted the right to receive certain payments in the event of a Change of
Control (as defined in the Employment Agreement);


 


WHEREAS, the consummation of the Merger will result
in a Change of Control of the Company triggering the Change of Control payments
required by the Employment Agreement;


 


WHEREAS, the Company desires to accelerate the
payment of a portion of the Change of Control payment due on the effective date
of the Merger and has received the written consent of PNG Acquisition Company
Inc., Deutsche Bank Securities Inc., Deutsche Bank AG New York Branch, Wachovia
Capital Markets, LLC, Wachovia Bank, National Association and Wachovia
Investment Holdings, LLC to make such payment under the circumstances set forth
in this Agreement; and


 


WHEREAS, the Company has requested that the
Executive accept such payment pursuant to the terms set forth in this
Agreement.


 


NOW THEREFORE, in consideration of the foregoing and
of the mutual covenants hereinafter set forth, and for good and valuable
consideration, the receipt of sufficiency of which are hereby acknowledged, the
Parties, intending to be legally bound, hereby agree as follows:


 


1.             The Company represents and acknowledges that the sole
purpose of accelerating the timing of the Change of Control payment contemplated
by Section 8.2(i) of the Employment Agreement in the amount of                                                           
Dollars ($                                )
(the “Initial Change of Control Payment”), otherwise due and payable upon the effective date of the
Merger, is to advance the business of the Company in anticipation of the Merger
and is not in response to a request by, or as the provision of an additional
benefit to, the Executive.


 





















 


2.             The Company hereby agrees to pay the Executive the Initial
Change of Control Payment on or prior to December 31, 2007.


 


3.             Except as otherwise specified in the foregoing
paragraph 2, the balance, if any, of the amount due under Section 8.2(i) or
any other provision of the Employment Agreement shall be made in accordance
with its terms.


 


4.             Upon the occurrence of any of the following
circumstances, the Executive shall return the Initial Change of Control Payment
(the “Return Payment”) in accordance with paragraphs 5 and 6 below:


 


(a)           if the Merger is terminated pursuant to Section 9.1
of the Merger Agreement or the Closing otherwise fails to occur on the Closing
Date (as such terms are defined in Section 2.1(d) of the Merger
Agreement); or


 


(b)           if the Executive’s employment with the
Company is terminated prior to the effective date of the Merger and the
Executive does not remain entitled to receive the remainder of the Change of
Control payment under the applicable provisions of the Employment Agreement.


 


5.             The Company shall exercise its right to
require a Return Payment promptly after the first occurrence of one of the circumstances
set forth in paragraph 4 by delivering a written notice (the “Return Notice”)
to the Executive requesting the Return Payment and specifying the reason
therefore.  Upon the occurrence of a
Change of Control, the Company’s right to demand a Return Payment hereunder
shall immediately terminate.


 


6.             The Return Payment shall be made by delivering the following
to the Company: (i) an amount equal to the Return Payment minus the
Federal, state and local income taxes actually paid, if any, by the Executive
with respect to the Return Payment shall be paid in cash within 20 days after the
date the Executive receives the Return Notice and (ii) together with such
payment, if applicable, an assignment agreement in form and substance to be
agreed upon by the Parties providing for the assignment of the Executive’s right
to receive a refund from the Federal, state and local taxing authorities for
taxes actually paid with respect to the Return Payment.  The Executive hereby agrees to use all
commercially reasonable efforts to diligently pursue the refund of all such
amounts and to cooperate with the Company in its efforts to obtain such
refunds, if necessary.


 


7.             The Parties agree that the accelerated payment of
the Initial Change of Control Payment pursuant to the terms and conditions
contained in this Agreement constitutes the payment of compensation to the
Executive and, notwithstanding the contingent agreement to repay such amounts
in the event of certain unexpected circumstances as set forth above, is not intended
to constitute a loan.


 


8.             The Employment Agreement shall remain in full force
and effect following the execution of this Agreement and nothing in this
Agreement is intended to amend, waive or otherwise change the terms and
conditions of the Employment Agreement in any manner other than as specifically
provided herein.


 


9.             The Company acknowledges that the Executive is
accepting the Initial Change of Control Payment at the time specified herein to
advance the business of the Company, 


 


2

















 


and the Company hereby agrees to indemnify and hold harmless the
Executive from and against any and all losses, claims, demands, liabilities,
costs and expenses incurred by the Executive arising from or relating to the
matters contemplated herein other than in respect of ordinary Federal, state
and local income taxes paid or payable by Executive with respect to payment of
the Initial Change of Control Payment.


 


10.           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.


 


11.           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.


 


12.           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.


 


13.           This Agreement may be executed in counterparts, each of which shall be
deemed an original, but which together shall constitute one instrument.


 


IN WITNESS WHEREOF, the Parties have executed this Agreement as of the
day and year first written above.


 


 


	
  PENN NATIONAL GAMING, INC.

  	
  [EXECUTIVE]

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  Signature:

  	
   

  
	
   

  	
  Name:

  	
  Print:

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
					



 


3