RESOLUTIONS OF THE BOARD OF DIRECTORS OF REDSTONE GAMING CORP.
Adopted by Unanimous Written Consent in Lieu of a Special Meeting
March 31, 2023
The undersigned, being all of the members of the Board of Directors (the "Board") of Redstone Gaming Corp., a Delaware corporation (the "Company"), acting pursuant to Section 141(f) of the Delaware General Corporation Law (the "DGCL") and Article III of the Amended and Restated Bylaws of Redstone Gaming Corp. (as last amended September 12, 2021) (the "Bylaws"), which collectively permit any action required or permitted to be taken at a meeting of the Board to be taken without a meeting if all members of the Board consent thereto in writing, hereby adopt the following recitals and resolutions by unanimous written consent, effective as set forth herein:
RECITALS
WHEREAS, the Board of Directors of the Company, at a duly convened meeting held on or about March 9, 2023, at which a quorum was present and acting throughout, approved and authorized the execution and delivery of that certain Cooperation and Standstill Agreement, dated as of March 10, 2023 (the "Cooperation Agreement"), by and among the Company, Pinnacle Harbor Capital Partners, LP, a Delaware limited partnership ("Pinnacle Harbor"), Pinnacle Harbor Capital Management, LLC, a Delaware limited liability company and the general partner of Pinnacle Harbor, and Viktor S. Kessler, an individual, which Cooperation Agreement is governed by the laws of the State of Delaware; and
WHEREAS, pursuant to Section 2.1 of the Cooperation Agreement, the Company agreed to appoint one (1) new independent director to the Board, such director to be mutually agreed upon by the Company and Pinnacle Harbor, and to be neither a nominee of Pinnacle Harbor nor a current officer, employee, or insider of the Company, and the Cooperation Agreement further contemplated that such director would be selected from a pool of three (3) candidates identified by a joint committee comprised of representatives of the Company and Pinnacle Harbor (the "Joint Selection Committee"); and
WHEREAS, following the selection process contemplated by the Cooperation Agreement, the Joint Selection Committee identified and the Company and Pinnacle Harbor mutually agreed upon Franklin Chu, age 52, as the new independent director to be appointed to the Board, and Mr. Chu is the former Chief Executive Officer of Prism Digital Entertainment, LLC, a California limited liability company, and brings extensive experience in the digital entertainment and interactive media industries, including significant experience with public company board governance and regulatory compliance; and
WHEREAS, Mr. Chu is not and has not been an officer, director, employee, consultant, or affiliate of either Pinnacle Harbor Capital Partners, LP or Pinnacle Harbor Capital Management, LLC, and is not a current officer, employee, or insider of the Company, and accordingly satisfies the mutual independence criteria set forth in the Cooperation Agreement; and
WHEREAS, the Board currently consists of nine (9) directors, and pursuant to Article III of the Bylaws and the Company's Amended and Restated Certificate of Incorporation (filed with the Delaware Secretary of State under file number 5734821) (the "Certificate of Incorporation"), the Board has the authority to fix the number of directors constituting the full Board and to fill newly created directorships resulting from any increase in the authorized number of directors, and the Board desires to increase the size of the Board from nine (9) to ten (10) directors in order to accommodate the appointment of Mr. Chu as contemplated by the Cooperation Agreement; and
WHEREAS, the Board, upon the recommendation of the Governance and Nominating Committee of the Board (chaired by Diane K. Sheridan), has evaluated the independence of Mr. Chu under the applicable listing standards of the Nasdaq Stock Market LLC ("Nasdaq"), including Nasdaq Listing Rule 5605(a)(2), and the rules and regulations of the United States Securities and Exchange Commission (the "SEC"), and, based on such evaluation and a thorough review of all relevant relationships and transactions, the Board has affirmatively determined that Mr. Chu qualifies as an "independent director" within the meaning of Nasdaq Listing Rule 5605(a)(2) and that no relationship exists between Mr. Chu and the Company or any of its subsidiaries, affiliates, officers, or directors that would impair his independence; and
WHEREAS, the Company operates in the gaming industry and is subject to gaming regulatory requirements and licensing obligations in the State of Nevada (including under the Nevada Gaming Control Act, NRS Chapter 463, and the regulations of the Nevada Gaming Commission and the Nevada Gaming Control Board) and in other jurisdictions in which the Company conducts gaming operations, and Mr. Chu has been evaluated with respect to gaming regulatory suitability by the Company's regulatory compliance team and outside regulatory counsel, and such evaluation has not identified any impediment, disqualifying factor, or concern with respect to his service as a director of the Company; and
WHEREAS, the Cooperation Agreement contemplates that Mr. Chu will serve on the Board effective as of April 1, 2023, and will stand for election by the Company's stockholders at the Company's 2025 Annual Meeting of Stockholders, and the Company's 2023 Annual Meeting of Stockholders is currently scheduled for May 18, 2023, and Mr. Chu will serve through the 2025 annual meeting cycle as set forth in greater detail in the resolutions below; and
WHEREAS, the Board, having considered all relevant factors and after careful deliberation, has determined that the appointment of Mr. Chu to the Board is in the best interests of the Company and its stockholders, is consistent with the Board's fiduciary duties of care and loyalty under the laws of the State of Delaware, and furthers the objective of ensuring that the Board is composed of directors who collectively possess the skills, experience, and diverse perspectives necessary for the effective oversight and governance of the Company.
RESOLUTIONS
NOW, THEREFORE, BE IT RESOLVED, that the authorized number of directors constituting the full Board of Directors of the Company is hereby increased from nine (9) to ten (10) directors, effective as of April 1, 2023, and Article III of the Bylaws and any prior resolution of the Board fixing the number of directors are hereby deemed amended and superseded to the extent necessary to give effect to this resolution.
RESOLVED FURTHER, that Franklin Chu is hereby appointed as a director of the Company, effective as of April 1, 2023, to hold office until the Company's 2025 Annual Meeting of Stockholders and until his successor is duly elected and qualified, or until his earlier death, resignation, removal, or disqualification, in each case in accordance with the Company's Certificate of Incorporation, the Bylaws, applicable law, and the terms of the Cooperation Agreement. For the avoidance of doubt, Mr. Chu's term of service shall commence on April 1, 2023, and, subject to the foregoing, shall extend through the conclusion of the Company's 2025 Annual Meeting of Stockholders, at which meeting Mr. Chu will stand for election by the Company's stockholders in accordance with the Cooperation Agreement.
RESOLVED FURTHER, that the Board hereby determines and confirms that Franklin Chu is an "independent director" within the meaning of Nasdaq Listing Rule 5605(a)(2) and meets all applicable independence requirements under the rules and regulations of the SEC, including, without limitation, the independence requirements applicable to audit committee membership set forth in Rule 10A-3 under the Securities Exchange Act of 1934, as amended, to the extent applicable to his future committee assignments, and that such determination has been made after consideration of all relevant facts and circumstances, including Mr. Chu's prior professional engagements, business relationships, and any direct or indirect material relationships with the Company.
RESOLVED FURTHER, that the Board Chair, Diane K. Sheridan, in consultation with the respective chairs of the standing committees of the Board (including the Audit Committee, the Compensation Committee, and the Governance and Nominating Committee), is hereby authorized to assign Mr. Chu to one or more committees of the Board at such time as the Board deems appropriate, taking into account Mr. Chu's qualifications, experience, and preferences, and subject in all cases to applicable Nasdaq listing standards, SEC rules and regulations, gaming regulatory requirements, and the provisions of the Bylaws and the respective committee charters, and such committee assignments shall be effective upon notice to Mr. Chu and the Corporate Secretary.
RESOLVED FURTHER, that the officers of the Company are hereby authorized and directed to take all actions necessary or advisable to ensure that Mr. Chu is covered as an insured person under the Company's existing directors' and officers' liability insurance policies, including, without limitation:
(a) the primary directors' and officers' liability insurance policy issued by Northbridge Indemnity Company (Policy No. NBI-DOP-2022-04871), providing coverage with a limit of liability of Fifteen Million Dollars ($15,000,000) and a retention of Five Hundred Thousand Dollars ($500,000); and
(b) the first excess directors' and officers' liability insurance policy issued by Creston National Insurance Co. (Policy No. CNI-XS-2022-31004), providing coverage of Ten Million Dollars ($10,000,000) in excess of Fifteen Million Dollars ($15,000,000);
and to provide timely written notice of Mr. Chu's appointment to the Board to Glenmore Caulfield Insurance Brokers, Inc. (contact: Sarah Voss, Senior Vice President), the Company's insurance broker of record, and to take such additional steps as may be required under the applicable policies to confirm or effectuate Mr. Chu's coverage thereunder.
RESOLVED FURTHER, that the officers of the Company are hereby authorized and directed to execute and deliver, on behalf of the Company, an indemnification agreement with Franklin Chu in substantially the form previously approved by the Board for use with the Company's independent directors (the "Standard Form Indemnification Agreement"), consistent with Article VIII of the Company's Certificate of Incorporation and Section 145 of the DGCL, which indemnification agreement shall provide Mr. Chu with contractual indemnification rights and advancement of expenses to the fullest extent permitted by applicable law, and the execution and delivery of such indemnification agreement is hereby authorized, approved, and ratified.
RESOLVED FURTHER, that the officers of the Company, including, without limitation, Patricia Nakamura, General Counsel and Corporate Secretary, and Raymond Choi, Chief Financial Officer, are hereby authorized and directed to prepare and file, or cause to be prepared and filed, all necessary or appropriate reports, notices, and filings with:
(a) the SEC, including any Current Report on Form 8-K pursuant to Item 5.02 thereof (Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers), which Form 8-K shall be filed within four (4) business days of the effective date of Mr. Chu's appointment;
(b) the Nasdaq Stock Market, including any notifications required under the Nasdaq Listing Rules in connection with a change in the composition of the Board of Directors;
(c) the Nevada Gaming Control Board and the Nevada Gaming Commission, including any notifications, applications for findings of suitability, or other filings required under the Nevada Gaming Control Act and the regulations promulgated thereunder; and
(d) any other applicable federal, state, local, or foreign regulatory authorities in jurisdictions in which the Company or its subsidiaries hold gaming licenses, permits, or approvals, or are otherwise subject to regulatory oversight;
in each case in connection with the appointment of Mr. Chu to the Board and the increase in the authorized number of directors, and such officers are further authorized to execute and deliver any certificates, instruments, or other documents as may be required in connection with such filings.
RESOLVED FURTHER, that the Corporate Secretary of the Company is hereby authorized and directed to notify Continental Share Services, Inc. (contact: Jason Velmoran, Vice President), the Company's transfer agent and registrar, of the change in the composition of the Board of Directors, including the increase in the authorized number of directors from nine (9) to ten (10) and the appointment of Franklin Chu as a director, effective as of April 1, 2023, and to provide such additional information or documentation as Continental Share Services, Inc. may reasonably request in connection therewith.
RESOLVED FURTHER, that the appointment of Franklin Chu to the Board is made in accordance with and in fulfillment of the Company's obligations under Section 2.1 of the Cooperation and Standstill Agreement, dated as of March 10, 2023, by and among the Company, Pinnacle Harbor Capital Partners, LP, Pinnacle Harbor Capital Management, LLC, and Viktor S. Kessler, and the officers of the Company are hereby authorized and directed to provide written confirmation of Mr. Chu's appointment to Pinnacle Harbor Capital Partners, LP and its legal counsel, Hargrove Sloane & Birch LLP, in such form and with such supporting documentation as may be required by the Cooperation Agreement or as may be reasonably requested by Pinnacle Harbor.
RESOLVED FURTHER, that the officers of the Company are hereby authorized and directed to issue such press releases, investor communications, and public disclosures as they deem necessary, advisable, or appropriate in connection with the appointment of Mr. Chu to the Board, in coordination with Harlan Ridge Communications, LLC (contact: Philip Navarette, Partner), the Company's public relations advisor, and Whitfield Morrow Partners, LLC (contact: Denise Cavanaugh, Senior Vice President), the Company's investor relations advisor, and to make such communications available on the Company's website and through such other channels as they may deem appropriate, in each case in compliance with Regulation FD and all other applicable securities laws and regulations.
RESOLVED FURTHER, that each of the officers of the Company is hereby authorized and directed, for and on behalf of the Company, to execute and deliver such documents, instruments, agreements, certificates, and notices, and to take all such further actions, as such officer may deem necessary, advisable, or appropriate to carry out the intent and purposes of the foregoing resolutions, with such changes, modifications, amendments, or supplements as such officer may approve (such approval to be conclusively evidenced by the execution and delivery thereof or the taking of such action), and no such action taken by any officer shall be deemed to exceed the authority granted hereby unless such action is inconsistent with the express terms of the foregoing resolutions.
RESOLVED FURTHER, that all actions heretofore taken by any officer or director of the Company in connection with any of the matters contemplated by the foregoing resolutions, including, without limitation, any actions taken in anticipation of the adoption of these resolutions, are hereby ratified, confirmed, and approved in all respects as the valid and authorized acts of the Company.
SIGNATURES
IN WITNESS WHEREOF, the undersigned, being all of the members of the Board of Directors of Redstone Gaming Corp., have executed this Unanimous Written Consent as of March 31, 2023, effective as of April 1, 2023. This Unanimous Written Consent may be executed in counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. Delivery of an executed signature page by facsimile or electronic transmission (including .pdf format) shall be as effective as delivery of an original executed signature page.
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Diane K. Sheridan Board Chair, Independent Director
Date: ________
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Gerald R. Whitmore Chief Executive Officer & Director
Date: ________
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Raymond Choi Chief Financial Officer & Director
Date: ________
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Dr. Miriam Kaplan Independent Director
Date: ________
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Theodore "Ted" Barlowe Independent Director
Date: ________
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Lorraine Fujikawa Independent Director
Date: ________
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James "Jim" Delacroix Independent Director
Date: ________
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Carmen Vasquez Independent Director
Date: ________
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Randall Morse Independent Director
Date: ________
CERTIFICATE OF CORPORATE SECRETARY
I, Patricia "Trish" Nakamura, hereby certify that:
1. I am the duly elected, qualified, and acting General Counsel and Corporate Secretary of Redstone Gaming Corp., a Delaware corporation (the "Company"), with its principal executive offices located at 8700 Las Vegas Boulevard South, Suite 2200, Las Vegas, Nevada 89123, and I am authorized to execute this Certificate on behalf of the Company.
2. The Company is a corporation duly organized, validly existing, and in good standing under the laws of the State of Delaware, with its Certificate of Incorporation on file with the Delaware Secretary of State under file number 5734821.
3. The foregoing Resolutions of the Board of Directors of the Company (the "Resolutions") were duly adopted by the unanimous written consent of all nine (9) members of the Board of Directors of the Company as of March 31, 2023, in accordance with Section 141(f) of the Delaware General Corporation Law and Article III of the Company's Amended and Restated Bylaws (as last amended September 12, 2021), and in compliance with all applicable requirements of the Company's Amended and Restated Certificate of Incorporation.
4. As of the date hereof, the Resolutions have not been amended, modified, rescinded, or revoked in any respect and remain in full force and effect.
5. The persons who executed the Unanimous Written Consent were, at the time of such execution, all of the duly elected, qualified, and acting members of the Board of Directors of the Company, and the signatures appearing on the Unanimous Written Consent are the genuine signatures of such persons.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the corporate seal of the Company as of this _ day of ____, 2023.
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Patricia "Trish" Nakamura General Counsel & Corporate Secretary Redstone Gaming Corp.
Date: ________
[CORPORATE SEAL]