Contract analysis

I. Purpose This memorandum memorializes the closing of Matter No. 1033-00005 following the formal decline by Chief Financial Officer candidate Marcus J. Ellender of the executive employment offer extended by Redstone Gaming Corp. ("RGC" or the "Client"). Mr. Ellender's formal decline was communicated on January 19, 2024, through his counsel, Victoria R. Saldana of Harlan & Mosley LLP. As a consequence, the negotiatio

II. Client Information A. Entity Details The client in this matter is Redstone Gaming Corp., a corporation organized and existing under the laws of the State of Delaware. RGC's shares of common stock are publicly traded on the Nasdaq Stock Market under the ticker symbol RDGM. The company's principal executive offices are located at 4100 Sandstone Ridge Boulevard, Las Vegas, Nevada 89119. RGC's registered agent in the

III. Engagement Team The following attorneys at Calderwood & Harkness LLP comprised the engagement team for this matter: Renata Vasquez — Responsible Partner, Labor & Employment Practice Group, Las Vegas office. Ms. Vasquez served as the responsible partner with supervisory authority over all work product, strategic advice, and client communications. Ms. Vasquez personally managed the relationship with opposing couns

IV. Scope of Engagement A. General Scope Calderwood & Harkness LLP was retained to advise Redstone Gaming Corp. on the negotiation, structuring, and drafting of an executive employment agreement for the position of Executive Vice President & Chief Financial Officer. The scope of the engagement, as set forth in the engagement letter dated November 8, 2023 (Ref. 1033-00005), encompassed the following: (a) Preparation o

V. Opposing Counsel and Third Parties A. Candidate's Counsel Mr. Ellender was represented in the employment negotiation by Harlan & Mosley LLP, located at 200 West Liberty Street, Suite 1400, Reno, Nevada 89501. The lead attorney representing Mr. Ellender was Victoria R. Saldana, a partner in the firm's Executive Compensation & Employment practice. Ms. Saldana was supported by Christopher F. Ngata, an associate at Ha

VI. Background and Matter History A. CFO Vacancy and Executive Search The circumstances giving rise to this engagement began with the departure of Richard Halvorsen from the position of Chief Financial Officer of Redstone Gaming Corp. Mr. Halvorsen's departure was effective September 15, 2023. The specific circumstances of Mr. Halvorsen's departure were not within the scope of this engagement and were not the subject

VII. Chronological Summary of Negotiations The following is a detailed chronological account of the negotiation from the opening of the engagement through the candidate's formal decline. A. Initial Term Sheet (November 17, 2023) Following the execution of the engagement letter and an initial strategy call with Ms. Narasimhan and Mr. Fulbright, the engagement team prepared an initial term sheet summarizing the key eco

Section 280G Treatment: The agreement would include a best-net cutback provision (as opposed to a Section 280G gross-up), meaning that if any payments to Mr. Ellender in connection with a change in control would be subject to excise tax under Section 4999 of the Internal Revenue Code, the payments would be reduced to the safe harbor amount under Section 280G if the reduction would result in a greater after-tax benefi

1. Reduction of Non-Competition Period. Harlan & Mosley proposed reducing the post-employment non-competition period from eighteen months to twelve months. Ms. Saldana's position was that an eighteen-month non-compete was overly broad and commercially unreasonable for a CFO-level role, particularly in light of the relatively concentrated nature of the gaming industry in Nevada.

2. Narrowing of Restrictive Covenant Geographic Scope. The candidate's counterproposal sought to narrow the geographic scope of the restrictive covenants from the United States (and any jurisdiction in which RGC operates or has filed gaming license applications) to Nevada and New Jersey only. Ms. Saldana contended that this narrower scope adequately protected RGC's legitimate business interests while permitting Mr. E

3. Full Acceleration of Equity Awards. The first redline proposed full acceleration of all unvested RSUs and PSUs upon termination without cause or resignation for good reason, regardless of whether the termination occurred in a change-in-control context. This was in contrast to the pro-rata acceleration provision included in the first draft, which would have vested only a proportionate share of outstanding equity ba

4. Elimination of Signing Bonus Clawback. Harlan & Mosley proposed the complete elimination of the signing bonus repayment obligation. Ms. Saldana's position was that the clawback provision was unnecessary given the candidate's significant career risk in leaving a stable position at Grandview and relocating to Las Vegas.

5. Broader Good Reason Definition. The candidate sought expansion of the definition of "Good Reason" to include, among other things, any material adverse change in the executive's reporting structure (e.g., the insertion of an intermediate reporting layer between the CFO and the CEO, or the appointment of a co-CFO). The first draft's Good Reason definition was limited to more traditional triggers such as a material r

6. Guaranteed Minimum Annual Bonus in Year One. Harlan & Mosley proposed a guaranteed minimum annual bonus of 75% of the target bonus for the first year of employment (i.e., a floor of approximately $414,375 based on the initial 85% target), regardless of actual company or individual performance. The rationale advanced was that Mr. Ellender would be joining mid-cycle and would have limited ability to influence perfor

I. Enhanced Offer / Third Draft Executive Employment Agreement (January 15, 2024) On January 15, 2024, the engagement team transmitted a revised enhanced Executive Employment Agreement and an updated term sheet to Harlan & Mosley, reflecting the enhanced compensation terms authorized by the Compensation Committee. The key terms of the enhanced offer were as follows: Base Salary: Increased to $725,000 per year, repres

Section 280G Treatment: Best-net cutback provision maintained; no gross-up. D&O Coverage: Maintained under RGC's existing Pinnacle Investors Indemnity Group policy. Proposed Start Date: February 15, 2024. It is worth noting that, while the enhanced offer significantly improved the economic terms, RGC maintained its positions on the restrictive covenant provisions (duration, geographic scope) and the equity accelerati

VIII. Key Unresolved Negotiation Points at Termination At the time Mr. Ellender withdrew from negotiations, the following substantive issues remained unresolved between the parties. These issues are documented here both for the completeness of the matter record and because they may be informative in the event RGC re-engages the Firm for a subsequent CFO or executive employment negotiation.

1. Restrictive Covenant Duration. RGC maintained its position of an eighteen-month post-employment non-competition period throughout the negotiation, supported by the Nevada case law analysis prepared by the engagement team. The candidate, through Harlan & Mosley, continued to seek a reduction to twelve months. The parties did not reach any intermediate compromise on this point. The eighteen-month duration was a firm

2. Equity Acceleration on Termination Without Cause. RGC offered pro-rata acceleration of unvested RSUs and PSUs upon termination without cause or resignation for good reason (outside of the CIC context). The candidate sought full acceleration of all unvested equity upon any such qualifying termination. This represented a significant economic difference, particularly in the early years of the employment term, and was

3. Guaranteed Minimum Annual Bonus. The candidate sought a guaranteed minimum annual bonus of 75% of the target bonus amount for the first year of employment. Under the enhanced offer, this would have equated to a guaranteed floor of $543,750 (75% of $725,000 target bonus). RGC's position was that the annual bonus remained subject to the discretion of the Compensation Committee based on actual performance, and that a

4. Good Reason Definition. The candidate sought the inclusion of any "material adverse change in reporting structure" as a Good Reason trigger. RGC, in the second draft, agreed to a modest expansion of the definition to cover a change in the executive's direct reporting line from the CEO to a different officer, but the parties had not reached final agreement on the specific operative language. The precise scope of wh

5. Restrictive Covenant Geographic Scope. RGC maintained its position that the geographic scope of the non-competition and non-solicitation covenants should extend to the United States and any jurisdiction in which RGC operates or has filed gaming license applications. The candidate's position, as articulated by Harlan & Mosley, was that the geographic scope should be limited to Nevada and New Jersey only, on the gro

IX. Billing Summary A. Fee Structure All work performed in connection with this matter was billed on a standard hourly basis in accordance with the engagement letter dated November 8, 2023 (Ref. 1033-00005). The applicable hourly rates for the engagement team were as follows: The estimated fee budget communicated to the Client at the outset of the engagement was $75,000 to $100,000. B. Hours by Timekeeper The followi

X. Document Inventory The following is a complete inventory of all documents created or received during the course of the engagement. All documents listed below are to be retained in the Firm's document management system ("DMS") under Matter No. 1033-00005, in accordance with the Firm's document retention policies and the recommendations set forth in Section XI below.

1. Engagement Letter — Calderwood & Harkness LLP to Redstone Gaming Corp., dated November 8, 2023 (Ref. 1033-00005). Executed by Priya Narasimhan on behalf of RGC.

2. Executive Employment Term Sheet — Initial Offer, dated November 17, 2023. Prepared by N. Petrov and J. Underwood; reviewed and approved by R. Vasquez. Transmitted to Harlan & Mosley LLP on November 17, 2023.

3. Executive Employment Agreement — First Draft, dated November 17, 2023. Prepared by N. Petrov and J. Underwood; reviewed and approved by R. Vasquez. Transmitted to Harlan & Mosley LLP contemporaneously with the initial term sheet.

4. Harlan & Mosley First Redline of Executive Employment Agreement, received December 1, 2023. Prepared by Victoria R. Saldana and Christopher F. Ngata of Harlan & Mosley LLP on behalf of Marcus J. Ellender.

5. Internal Memorandum re Key Negotiation Issues, dated December 5, 2023. Prepared by N. Petrov and J. Underwood; addressed to R. Vasquez. Contains Nevada restrictive covenant case law analysis and strategic recommendations.

6. Executive Employment Agreement — Second Draft, dated December 15, 2023. Prepared by N. Petrov and J. Underwood; reviewed and approved by R. Vasquez. Transmitted to Harlan & Mosley LLP on December 15, 2023.

7. Harlan & Mosley Second Redline of Executive Employment Agreement, received January 3, 2024. Prepared by Victoria R. Saldana and Christopher F. Ngata of Harlan & Mosley LLP on behalf of Marcus J. Ellender.

8. Email from Victoria R. Saldana re Competing Offer from Pinnacle Crest Entertainment, Inc., dated January 10, 2024. Email from V. Saldana to R. Vasquez (cc: P. Narasimhan) disclosing the competing offer and requesting reconsideration of the RGC compensation package.

9. Memorandum to Compensation Committee re Enhanced Compensation Package, dated January 11, 2024. Prepared by R. Vasquez and N. Petrov for submission through P. Narasimhan to the Compensation Committee of RGC's Board of Directors.

10. Executive Employment Agreement — Third Draft (Enhanced Offer), dated January 15, 2024. Prepared by N. Petrov; reviewed and approved by R. Vasquez. Transmitted to Harlan & Mosley LLP on January 15, 2024, together with an updated term sheet.

11. Email — Transmittal of Enhanced Offer Package, dated January 15, 2024. Email from R. Vasquez to V. Saldana (cc: P. Narasimhan) transmitting the enhanced offer and third draft agreement.

12. Email from Victoria R. Saldana re Ellender Decline of RGC Offer, dated January 19, 2024. Email from V. Saldana to R. Vasquez (cc: P. Narasimhan) formally confirming Mr. Ellender's decline of the RGC offer and acceptance of the CFO position at Pinnacle Crest Entertainment, Inc.

13. Matter Closing Memorandum, dated January 22, 2024. This document, prepared by N. Petrov and reviewed and approved by R. Vasquez.

14. All Related Correspondence, Internal Strategy Notes, and Halcyon Meridian Advisors Benchmarking Materials Received from Client. This includes all email correspondence between C&H and Harlan & Mosley, all internal email correspondence among the engagement team, telephone conference notes, and compensation benchmarking data and analyses received from RGC (including materials prepared by Halcyon Meridian Advisors LL

XI. Recommendations A. Document Retention It is recommended that all drafts, correspondence, memoranda, and related materials generated or received during this engagement be retained in the Firm's document management system under Matter No. 1033-00005 in accordance with the Firm's standard document retention policies for closed matters. The rationale for this recommendation is twofold. First, RGC has not yet conclude

XII. Signature block PREPARED BY: ________________________________________ Nadia Petrov Lead Associate, Labor & Employment Calderwood & Harkness LLP 3900 Howard Hughes Parkway, Suite 800 Las Vegas, NV 89169 Date: January 22, 2024 REVIEWED AND APPROVED BY: ________________________________________ Renata Vasquez Responsible Partner, Labor & Employment Calderwood & Harkness LLP 3900 Howard Hughes Parkway, Suite 800 Las