Contract analysis

I. EXECUTIVE SUMMARY This memorandum presents a comprehensive review of the defensive provisions contained in the governing documents of Redstone Gaming Corp. ("RGC," the "Company," or "Redstone"), a Delaware corporation headquartered at 8700 Las Vegas Boulevard South, Suite 2200, Las Vegas, Nevada 89123, in connection with the board-seat campaign initiated by Pinnacle Harbor Capital Partners, LP ("Pinnacle Harbor,"

II. SCOPE AND METHODOLOGY The scope of our engagement and the methodology employed in this defensive review are set forth below. Document Review. We reviewed the Charter as currently on file with the Delaware Secretary of State (file no. 5734821), including all amendments thereto. We also reviewed the Bylaws as last amended September 12, 2021, and confirmed with General Counsel Patricia Nakamura that no further amend

III. CURRENT BOARD STRUCTURE AND COMPOSITION A. Board Size and Classification RGC's Board of Directors currently consists of nine (9) directors. Article IV, Section 4.01 of the Charter provides that the business and affairs of the Company shall be managed by or under the direction of the Board of Directors. A threshold question for this defensive analysis is whether the Company has a classified (staggered) board stru

Article IV, Section 4.03 of the Charter provides that "[t]he number of directors which shall constitute the whole Board shall be determined from time to time exclusively by resolution of the Board of Directors, but in no event shall the number be less than five (5) or more than thirteen (13)." This provision vests the authority to fix the number of directors exclusively in the Board, not in the stockholders. The perm

Article II, Section 2.12 of the Bylaws sets forth certain eligibility requirements for director nominees. Each nominee must: (i) be a natural person; (ii) be at least twenty-one (21) years of age; (iii) not have been convicted of a felony involving moral turpitude; and (iv) be willing and able to serve as a director for the full term if elected. These requirements are relatively standard but not particularly robust f

IV. ADVANCE-NOTICE BYLAW PROVISIONS (ARTICLE II, SECTION 2.11) A. Overview of the Advance-Notice Framework The advance-notice provisions are among the most important procedural defenses available to a public company facing an activist campaign. Article II, Section 2.11 of the Bylaws (the "Advance-Notice Provisions"), adopted in connection with the September 12, 2021 bylaw amendment, establishes a framework that requi

Article II, Section 2.11(a)(ii) of the Bylaws establishes the following timing requirements for stockholder nominations at annual meetings: The window for delivery of a valid nomination notice opens not earlier than one hundred fifty (150) days before the first anniversary of the date of the Company's annual meeting of stockholders held in the immediately preceding year. The window for delivery of a valid nomination

Article II, Section 2.11(b) of the Bylaws sets forth detailed informational requirements that must be included in any valid nomination notice. The current requirements include the following: (i) The full legal name, age, business address, and residence address of each proposed nominee; (ii) The principal occupation or employment of each proposed nominee for the preceding five (5) years, including the name and princip

Article II, Section 2.11(d) of the Bylaws currently provides that, if the Corporate Secretary determines that a nomination notice does not satisfy the requirements of Section 2.11, the Corporate Secretary shall notify the nominating stockholder of the deficiency in writing, and the nominating stockholder shall have ten (10) business days from the date of such notification to cure the deficiency. If the deficiency is

V. BOARD VACANCY FILLING RIGHTS A. Current Provisions The authority to fill vacancies on the Board is a critical element of the Company's defensive architecture. Article IV, Section 4.05 of the Charter provides as follows: "Any vacancy or vacancies on the Board of Directors, whether arising from death, resignation, removal, an increase in the authorized number of directors, or any other cause, shall be filled solely

Article III, Section 3.04 of the Bylaws contains a parallel provision that is consistent with the Charter provision. B. Defensive Significance The Board's exclusive vacancy-filling authority is one of the strongest defensive provisions in the Company's governing documents. Its significance in the context of the Pinnacle Harbor campaign is substantial: (i) Prevention of Interim Stockholder Action. Because vacancies ma

VI. DIRECTOR REMOVAL PROVISIONS A. Removal With or Without Cause Under DGCL § 141(k), the framework for director removal depends on whether the corporation has a classified board: • Classified Board: Directors may be removed only "for cause" unless the certificate of incorporation provides otherwise. • Declassified Board: Directors may be removed with or without cause by the holders of a majority of the shares then e

Article IV, Section 4.06 of the Charter addresses director removal. The relevant provision states: "Any director or the entire Board of Directors may be removed from office at any time, but only for cause, and only by the affirmative vote of the holders of not less than sixty-six and two-thirds percent (66⅔%) of the outstanding shares of capital stock of the Corporation entitled to vote generally in the election of d

VII. SPECIAL MEETING PROVISIONS A. Who May Call a Special Meeting The right to call special meetings of stockholders is a critical governance provision with significant defensive implications. DGCL § 211(d) provides that special meetings of stockholders "may be called by the board of directors or by such person or persons as may be authorized by the certificate of incorporation or bylaws."

Article II, Section 2.03 of the Bylaws provides: "Special meetings of stockholders of the Corporation may be called only by (i) the Board of Directors pursuant to a resolution adopted by a majority of the whole Board, (ii) the Chair of the Board, or (iii) the Chief Executive Officer. No other person or persons shall be entitled to call a special meeting of stockholders."

Article III, Section 3.02 of the Charter contains a parallel provision confirming that special meetings may be called only by the Board, the Board Chair, or the Chief Executive Officer, and explicitly states that stockholders do not have the right to call special meetings. Analysis. The Company's governing documents unambiguously restrict the right to call special meetings to the Board, the Board Chair, and the CEO.

VIII. STOCKHOLDER ACTION BY WRITTEN CONSENT A. Current Provisions DGCL § 228 provides a default rule that any action required or permitted to be taken at a meeting of stockholders may be taken without a meeting, without prior notice, and without a vote, if a written consent setting forth the action so taken is signed by the holders of outstanding stock having not less than the minimum number of votes that would be ne

Article III, Section 3.03 of the Charter provides: "No action that is required or permitted to be taken by the stockholders of the Corporation at any annual or special meeting of stockholders may be effected by written consent of stockholders in lieu of a meeting of stockholders, unless such action is recommended by all members of the Board of Directors of the Corporation then in office." Analysis. The Charter effect

IX. SUPERMAJORITY VOTING REQUIREMENTS A. Charter Amendment Provisions

Article VIII of the Charter contains supermajority voting requirements for amendments to specified provisions of the Charter. Specifically, Article VIII, Section 8.01 provides: "Notwithstanding any other provision of this Amended & Restated Certificate of Incorporation or any provision of law which might otherwise permit a lesser vote or no vote, the affirmative vote of the holders of not less than sixty-six and two-

Article VII of the Charter provides: "In furtherance and not in limitation of the powers conferred by law, the Board of Directors is expressly authorized to adopt, amend, alter, or repeal the Bylaws of the Corporation."

Article X, Section 10.01 of the Bylaws contains a parallel provision, confirming that the Board may adopt, amend, alter, or repeal the Bylaws, and further providing that stockholders may also amend, alter, or repeal the Bylaws by the affirmative vote of the holders of not less than 66⅔% of the outstanding shares of capital stock entitled to vote generally in the election of directors. Analysis. This framework is high

X. EXCLUSIVE FORUM PROVISION A. Current Provision

Article IX of the Charter contains an exclusive forum provision, which provides as follows: "Unless the Corporation consents in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware (or, if the Court of Chancery does not have jurisdiction, another state court located within the State of Delaware or, if no state court located within the State of Delaware has jurisdiction, the

XI. PROXY ACCESS PROVISIONS A. Current Provisions

Article II, Section 2.13 of the Bylaws contains a proxy access provision that permits qualifying stockholders to include their own director nominees in the Company's proxy materials. The key parameters of the proxy access provision are as follows: • Ownership Threshold: A stockholder, or a group of up to twenty (20) stockholders, who collectively own at least three percent (3%) of the Company's outstanding shares of