Document:

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:

  	
   

  	
   

  
					

 

3Exhibit 4.1

 

 

 

	
  No.

  	
   

  	
   

  	
   

  	
  FIFTH STREET FINANCE CORP.

  	
   

  	
   

  	
  Shares

  
	
  Incorporated
  under the Laws of the State of Delaware

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  CUSIP NO.   [

  	
   

  	
  ]

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Common Stock

  	
   

  	
   

  	
   

  	
  Par Value $.01
  Per Share

  
										

 

 

SEE
REVERSE FOR CERTAIN DEFINITIONS

 

 

THIS
CERTIFIES THAT                                                                                                              
IS THE OWNER OF                                                                                                                                                      
FULLY PAID AND NON-ASSESSABLE SHARES OF COMMON STOCK, WITH A PAR VALUE OF $.01
PER SHARE, OF FIFTH STREET FINANCE CORP. (the “Corporation”), transferable on
the books of the Corporation in person or by duly authorized attorney upon
surrender of this certificate if properly endorsed. This certificate is not
valid unless countersigned by the Transfer Agent and registered by the
Registrar.

 

WITNESS
the seal of the Corporation and the facsimile signatures of its duly authorized
officers.

 

	
  Dated:
  

  	
   

  	
  , 2007

  

 

	
   

  	
   

  	
  FIFTH STREET FINANCE CORP.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Secretary

  	
   

  	
  CORPORATE
  SEAL

  	
   

  	
  Chief Executive Officer

  
	
   

  	
   

  	
  2007

  	
   

  	
   

  
	
   

  	
   

  	
  DELAWARE

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Transfer
  Agent

  	
   

  	
   

  	
   

  	
   

  

 

 

The
following abbreviations, when used in the inscription on the face of this
certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:

 

 

 

 

 

 

 

	
  TEN COM

  	
   

  	
  as tenants in common

  	
  Unif Gift Min Act -

  	
   

  	
  Custodian

  	
   

  
	
  TEN ENT

  	
   

  	
  tenants by the entireties

  	
                                          (Cust)                              (Minor)

  
	
  JT TEN

  	
   

  	
  as joint tenants with right of

  	
  Under Uniform Gifts to
  Minors

  
	
   

  	
   

  	
  survivorship and
  not as tenants

  	
   

  
	
   

  	
   

  	
  in common

  	
   

  	
  Act:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (State)

  	
   

  
										

 

Additional Abbreviations may also be used though not in the above list.

 

IMPORTANT NOTICE

 

A statement of the powers, designations, preferences
and relative participating, optional or other special rights of each class of
stock or series thereof and the qualifications, limitations or restrictions of
such preferences and/or rights as established, from time to time, by the
Certificate of Incorporation and by any certificate of designation, the number
of shares constituting each class and series, and designations thereof, may be
obtained by the holder hereof upon request and without charge at the principal
office of the Corporation.

 

	
  KEEP THIS CERTIFICATE IN A SAFE
  PLACE. IF IT IS LOST, STOLEN OR DESTROYED, THE CORPORATION WILL REQUIRE A
  BOND OF INDEMNITY AS A CONDITION TO THE ISSUANCE OF A REPLACEMENT
  CERTIFICATE.

  

 

	
  For Value Received,

  	
   

  	
   hereby sell, assign and transfer unto

  

 

PLEASE
INSERT SOCIAL SECURITY OR OTHER

IDENTIFYING NUMBER OF ASSIGNEE

 

 

	
   

  
	
  (PLEASE PRINT OR TYPEWRITE
  NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE)

  

 

shares
of the Common Stock represented by this Certificate, and do hereby irrevocably
constitute and appoint                     
 Attorney, to transfer the said stock on the books of the within named
Corporation with full power of substitution in the premises.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

	
  Dated

  	
   

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  NOTICE:
  THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS WRITTEN
  UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR, WITHOUT ALTERATION OR
  ENLARGEMENT OR ANY CHANGE WHATEVER.

  

 

 

 

 

	
  Signature(s) Guaranteed:

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
  THE
  SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION
  (BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH
  MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM, PURSUANT TO
  S.E.C. RULE 17Ad-15).

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