RESOLUTIONS OF THE BOARD OF DIRECTORS OF REDSTONE GAMING CORP.

RESOLUTIONS OF THE BOARD OF DIRECTORS OF REDSTONE GAMING CORP.
Adopted at a Special Meeting Held on November 14, 2022
These resolutions were adopted at a duly called special meeting of the Board of Directors (the "Board") of Redstone Gaming Corp., a Delaware corporation (the "Company"), held at the Company's principal offices located at 8700 Las Vegas Boulevard South, Suite 2200, Las Vegas, NV 89123, and via videoconference, on November 14, 2022, commencing at 4:00 p.m. Pacific Time.
1. Call to Order and Quorum
The special meeting of the Board of Directors of the Company was called to order by Diane K. Sheridan, Chair of the Board, at 4:00 p.m. Pacific Time on November 14, 2022.
The Corporate Secretary confirmed that the following directors were present in person or via videoconference, constituting a quorum of the nine-member Board of Directors:
All nine members of the Board being present, a quorum existed for the transaction of business pursuant to the Company's Amended and Restated Bylaws.
Also in attendance by invitation of the Board Chair was Patricia "Trish" Nakamura, General Counsel and Corporate Secretary of the Company, who served as Secretary of the meeting. Ms. Nakamura confirmed her attendance and her readiness to record the minutes and resolutions of the meeting.
The Chair confirmed that written notice of the special meeting had been duly given to all directors not fewer than forty-eight (48) hours prior to the meeting, in accordance with Article III, Section 3.6 of the Company's Amended and Restated Bylaws (as last amended September 12, 2021) and the applicable provisions of the General Corporation Law of the State of Delaware (the "DGCL"). The notice set forth the date, time, place, and purpose of the meeting. No director objected to the sufficiency of notice or the conduct of the meeting.
The Chair declared that the meeting was duly convened and that the Board was prepared to transact business.
2. Purpose of the Meeting
The Chair stated that the special meeting had been called to address an urgent matter requiring prompt action by the Board: the activist campaign initiated by Pinnacle Harbor Capital Partners, LP ("Pinnacle Harbor"), a Delaware limited partnership, and its general partner, Pinnacle Harbor Capital Management, LLC (together with Pinnacle Harbor, the "Pinnacle Harbor Parties").
The Chair informed the Board that the Pinnacle Harbor Parties had undertaken the following actions:
(a) Accumulation of Ownership Stake. Pinnacle Harbor has accumulated a 6.8% ownership stake in the Company's common stock, par value $0.01 per share (Nasdaq: RGC), representing approximately 7,119,600 shares of the Company's 104,700,000 shares of common stock issued and outstanding as of the record date most recently established by the Company.
(b) Private Demand Letter. By letter dated October 28, 2022, addressed to the Chair of the Board, Pinnacle Harbor demanded the appointment of two Pinnacle Harbor-designated nominees to the Board and a formal strategic review of the Company's interactive gaming division. The letter was delivered via overnight courier and electronic mail and was promptly shared with all directors upon receipt.
(c) Schedule 13D Filing. On November 10, 2022, Pinnacle Harbor filed a preliminary Schedule 13D with the United States Securities and Exchange Commission (the "SEC"), publicly disclosing its 6.8% ownership stake in the Company and its activist intent. The filing was made available on the SEC's EDGAR system and was promptly reported by financial media outlets.
(d) Specific Demands. Through the demand letter and the Schedule 13D filing, Pinnacle Harbor has formally demanded: (i) the appointment of two board nominees designated by Pinnacle Harbor, specifically Dr. Sandra Trevelyan and Hugh Desmond Grayson; (ii) a formal strategic review of the Company's interactive gaming segment, including a potential sale, spin-off, or other disposition of the segment; and (iii) the return of $300 million to stockholders through either a special dividend or an accelerated stock repurchase program.
Ms. Nakamura then provided a detailed summary of the October 28, 2022 demand letter and the Schedule 13D filing for the benefit of the full Board. Ms. Nakamura noted that Pinnacle Harbor is led by its Managing Partner and Chief Investment Officer, Viktor S. Kessler, and that the fund manages approximately $4.2 billion in assets under management. Pinnacle Harbor pursues an event-driven and activist equity strategy with a particular focus on mid-cap companies operating in the gaming, hospitality, and consumer-discretionary sectors. Ms. Nakamura further noted that Pinnacle Harbor has conducted activist campaigns against at least four other publicly traded companies in the gaming and hospitality sectors within the past three years, including campaigns that resulted in board representation and operational changes at those companies.
The Chair further noted, for the record, the following financial data relevant to the Board's consideration of the Pinnacle Harbor campaign:
•  The Company's current market capitalization is approximately $3.14 billion, based on the closing price of the Company's common stock on November 14, 2022, as reported on the Nasdaq Global Select Market.
•  The Company reported total consolidated revenue of $2.87 billion for fiscal year 2021, the most recently completed fiscal year.
•  The Company's interactive gaming division reported revenue of $412 million for fiscal year 2021, representing approximately 14.4% of total consolidated revenue.
•  Management's current projections estimate total consolidated revenue of approximately $3.05 billion for fiscal year 2022, reflecting anticipated year-over-year growth of approximately 6.3%.
The Chair stated that, in light of the seriousness and urgency of the Pinnacle Harbor campaign, she was recommending that the Board take immediate action to form a special committee of independent directors to oversee the Company's evaluation of and response to the activist campaign, and to authorize the engagement of outside legal counsel, financial advisors, and other advisors to assist the Company and the special committee in their work. A discussion among the directors ensued regarding the appropriate scope and composition of such a special committee.
Following robust discussion and deliberation, the Board proceeded to consider and adopt the following resolutions.
3. Formation of Special Committee
3.1 Resolution Establishing the Special Committee
After due consideration and deliberation, the following resolution was presented, and upon motion duly made, seconded, and unanimously adopted:
RESOLVED, that the Board of Directors hereby establishes a special committee of the Board (the "Special Committee") to oversee the Board's evaluation of, response to, and defense against the activist campaign initiated by Pinnacle Harbor Capital Partners, LP and its affiliates (including Pinnacle Harbor Capital Management, LLC and any other entities or persons acting in concert with Pinnacle Harbor) (collectively, the "Pinnacle Harbor Activist Campaign"), and that the Special Committee shall have the authority, responsibilities, and powers set forth in these resolutions and as may be further delegated to the Special Committee by the Board from time to time.
3.2 Composition.  RESOLVED, that the Special Committee shall consist of the following three (3) independent directors of the Company:
1.  James "Jim" Delacroix — Chair of the Special Committee
2.  Carmen Vasquez — Member of the Special Committee
3.  Randall Morse — Member of the Special Committee
Each member of the Special Committee has been determined by the Board, upon the recommendation of the Governance Committee and after due consideration of all relevant facts and circumstances, to qualify as an "independent director" within the meaning of Nasdaq Listing Rule 5605(a)(2), and to satisfy the independence requirements set forth in the Company's Corporate Governance Guidelines (as adopted by the Board on March 18, 2020, and most recently amended on June 7, 2022). No member of the Special Committee has any material relationship with Pinnacle Harbor, any of its affiliates, or any of the individuals nominated by Pinnacle Harbor for appointment to the Board, and no member of the Special Committee has any interest in the matters to be considered by the Special Committee that would impair such member's ability to exercise independent judgment.
For the record, the existing Board committee memberships of the Special Committee members are as follows:
•  Mr. Delacroix: Audit Committee (member); Special Committee (Chair, as established by these resolutions)
•  Ms. Vasquez: Nominating and Corporate Governance Committee (member); Special Committee (member, as established by these resolutions)
•  Mr. Morse: Compensation Committee (member); Special Committee (member, as established by these resolutions)
The Board determined that the existing committee assignments of the Special Committee members do not give rise to any conflict of interest and that each member is well-positioned to serve on the Special Committee by virtue of his or her experience, independence, and familiarity with the Company's business and strategic objectives.
3.3 Mandate and Scope of Authority
RESOLVED, that the Special Committee is authorized, empowered, and directed to undertake the following actions in connection with the Pinnacle Harbor Activist Campaign:
(a) Oversight of Company Response. To oversee and direct the Company's response to the Pinnacle Harbor Activist Campaign, including any proxy contest, board nomination demands, stockholder proposals, consent solicitations, or public communications related thereto, and to coordinate with management, outside counsel, and other advisors in connection with the formulation and execution of such response.
(b) Evaluation of Demands. To evaluate, analyze, and consider the demands made by Pinnacle Harbor, including but not limited to (i) the demands for the appointment of Dr. Sandra Trevelyan and Hugh Desmond Grayson to the Board, (ii) the demand for a strategic review of the Company's interactive gaming division, including a potential sale, spin-off, or other disposition thereof, and (iii) the demand for the return of $300 million to stockholders through a special dividend, accelerated stock repurchase program, or other capital return mechanism.
(c) Retention of Advisors. To retain, at the Company's expense, outside legal counsel, financial advisors, proxy solicitors, investor relations advisors, public relations firms, and such other advisors and consultants as the Special Committee, in its sole discretion, deems necessary, advisable, or appropriate to assist the Special Committee in fulfilling its mandate, and to determine the terms and conditions of any such engagement.
(d) Negotiations and Settlement. To authorize and direct negotiations, discussions, or settlement conversations with Pinnacle Harbor and its representatives, agents, and advisors, and to explore, evaluate, and consider potential settlement or resolution frameworks; provided, however, that any binding agreement, settlement, or commitment with Pinnacle Harbor or its affiliates shall be subject to final review and approval by the full Board of Directors prior to execution.
(e) Review of Defensive Measures. To review, evaluate, and recommend to the full Board any defensive measures that the Special Committee deems advisable in light of the Pinnacle Harbor Activist Campaign, including but not limited to: (i) amendments to the Company's Amended and Restated Bylaws; (ii) amendments to the Company's Amended and Restated Certificate of Incorporation (Delaware Secretary of State file number 5734821); (iii) the adoption of a stockholder rights plan (commonly referred to as a "poison pill"); (iv) the adoption of advance notice bylaw provisions or amendments to existing advance notice provisions; and (v) any other defensive or responsive actions available under the DGCL, applicable federal securities laws, or the Nasdaq listing standards.
(f) Coordination with Management and Service Providers. To coordinate with the Company's management, including Chief Executive Officer Gerald R. Whitmore, Chief Financial Officer Raymond Choi, and General Counsel and Corporate Secretary Patricia Nakamura, and to coordinate with the Company's independent registered public accounting firm, Kettering Marsh & Associates LLP (lead audit partner: Robert Ogawa), the Company's transfer agent, Continental Share Services, Inc. (account representative: Jason Velmoran), and the Company's directors' and officers' liability insurance broker, Glenmore Caulfield Insurance Brokers, Inc. (contact: Sarah Voss, Senior Vice President), as necessary and appropriate in connection with the Special Committee's mandate.
(g) Reporting to the Full Board. To report regularly to the full Board of Directors on the status of the Pinnacle Harbor Activist Campaign, the Special Committee's activities, and any material developments, including by providing written reports or oral briefings at regularly scheduled or special meetings of the Board.
(h) General Authority. To take any and all other actions that the Special Committee, in its sole discretion, deems necessary, advisable, or appropriate in furtherance of, or in connection with, the foregoing, including the authority to establish rules and procedures for the conduct of its meetings and deliberations, to delegate authority to one or more of its members for specified purposes, and to exercise all powers of the Board that the Board may lawfully delegate to a committee of the Board under Section 141(c) of the DGCL, in each case as the Special Committee may determine to be within the scope of its mandate as set forth herein.
The Board further noted that the Special Committee shall have no authority to bind the Company to any merger, acquisition, disposition, or other extraordinary corporate transaction without the prior approval of the full Board, and that the delegation of authority to the Special Committee shall not limit or restrict the authority of the full Board with respect to any matter, whether or not within the scope of the Special Committee's mandate.
3.4 Compensation of Special Committee Members
RESOLVED, that each member of the Special Committee shall receive additional compensation for service on the Special Committee in amounts consistent with the Company's non-employee director compensation program and commensurate with the time commitment and responsibilities associated with service on the Special Committee, as determined by the Compensation Committee of the Board in accordance with its charter and the Company's existing policies and practices for the compensation of directors serving on special committees. The Chair of the Special Committee shall receive an additional retainer reflecting the additional responsibilities of the Chair role.
4. Authorization to Engage Calderwood & Harkness LLP as Outside Counsel
4.1 Engagement Approval
The Chair noted that the General Counsel had identified and recommended Calderwood & Harkness LLP as outside legal counsel to advise the Company and the Special Committee in connection with the Pinnacle Harbor Activist Campaign. The General Counsel presented a summary of Calderwood & Harkness's qualifications, including the firm's extensive experience in shareholder activism defense, proxy contests, corporate governance, and Delaware corporate law. A draft engagement letter had been circulated to the Board prior to the meeting.
After due consideration and deliberation, the following resolution was presented, and upon motion duly made, seconded, and unanimously adopted:
RESOLVED, that the Company is hereby authorized to engage Calderwood & Harkness LLP ("Calderwood & Harkness"), a New York limited liability partnership, as outside legal counsel to the Company and the Special Committee in connection with the defense against the Pinnacle Harbor Activist Campaign and all matters related thereto, upon terms and conditions substantially consistent with the engagement letter presented to the Board at this meeting, a copy of which shall be appended to the minutes of this meeting as Exhibit A.
The following key terms of the engagement were noted for the record:
•  Engagement Partner (Responsible Partner): Douglas Fairchild, Esq., partner in the Real Estate practice group of Calderwood & Harkness, who will serve as the primary relationship partner overseeing the engagement.
•  Billing Partner: Angela Fontaine, Esq., partner in the Real Estate practice group of Calderwood & Harkness, who will be responsible for billing management and compliance with the terms of the engagement letter.
•  Lead Associate: Claire Dempsey, Esq., of the Capital Markets practice group of Calderwood & Harkness, who will serve as the senior associate assigned to the engagement.
•  Working Associate: Marcus Leung, Esq., of the Banking & Finance practice group of Calderwood & Harkness, who will provide additional associate-level support as needed.
•  Primary Office: 3960 Howard Hughes Parkway, Suite 1400, Las Vegas, NV 89169.
•  Delaware Office: 1200 Market Street, Suite 3100, Wilmington, DE 19801.
•  Hourly Rates: Partners — $1,450 per hour; Senior Associates — $1,050 per hour; Associates — $850 per hour.
•  Retainer: $150,000, payable upon execution of the engagement letter, to be held and applied against the final invoice rendered in connection with the engagement.
•  Matter Number: To be assigned by Calderwood & Harkness upon execution of the engagement letter.
The Board acknowledged that the engagement of Calderwood & Harkness is subject to Calderwood & Harkness's standard conflict clearance procedures and that Calderwood & Harkness has represented that it has conducted a preliminary conflicts check and is not aware of any conflict of interest that would preclude the engagement.
4.2 Authorization to Execute
RESOLVED, that Patricia "Trish" Nakamura, General Counsel and Corporate Secretary of the Company, is hereby authorized and directed to execute the engagement letter with Calderwood & Harkness LLP on behalf of the Company, effective as of November 15, 2022, and to coordinate with Calderwood & Harkness on all aspects of the defense against the Pinnacle Harbor Activist Campaign, subject to the oversight and direction of the Special Committee. Ms. Nakamura is further authorized to take such additional actions as may be necessary to formalize the engagement, including the payment of the retainer and the provision of such information and documentation as Calderwood & Harkness may reasonably request in connection with the engagement.
5. Authorization to Engage Additional Advisors
The Chair noted that, in addition to outside legal counsel, the Special Committee and the Company would benefit from the retention of a financial advisor, a proxy solicitor, and an investor relations advisor experienced in shareholder activism matters. The General Counsel and the members of the Special Committee presented their recommendations, which the Board considered and discussed. After due deliberation, the following resolutions were presented and unanimously adopted:
5.1 Financial Advisor
RESOLVED, that the Company is hereby authorized to engage Calloway Pinnacle Trust Bank ("Calloway Wainwright") as the Company's financial advisor in connection with the defense against the Pinnacle Harbor Activist Campaign, under the direction and oversight of the Special Committee, upon terms and conditions to be negotiated and approved by the Special Committee. The lead banker assigned to the engagement shall be Thomas V. Ashford, Managing Director, Activism & Corporate Defense group, located at 200 Park Avenue, 28th Floor, New York, NY 10166. Calloway Wainwright shall provide the Company and the Special Committee with financial advisory services, including strategic analysis, valuation support, and such other financial advisory services as the Special Committee may direct.
5.2 Proxy Solicitor
RESOLVED, that the Company is hereby authorized to engage Whitfield Morrow Partners, LLC ("Whitfield Morrow") as the Company's proxy solicitor in connection with the defense against the Pinnacle Harbor Activist Campaign, under the direction and oversight of the Special Committee, upon terms and conditions to be negotiated and approved by the Special Committee. The lead contact for the engagement shall be Denise Cavanaugh, Senior Vice President, located at 501 Madison Avenue, 14th Floor, New York, NY 10022. Whitfield Morrow shall provide the Company and the Special Committee with proxy solicitation services, stockholder identification and analysis, vote tracking, and such other services as the Special Committee may direct.
5.3 Investor Relations Advisor
RESOLVED, that the Company is hereby authorized to engage Harlan Ridge Communications, LLC ("Harlan Ridge") as the Company's investor relations advisor in connection with the defense against the Pinnacle Harbor Activist Campaign, under the direction and oversight of the Special Committee, upon terms and conditions to be negotiated and approved by the Special Committee. The lead contact for the engagement shall be Philip Navarette, Partner, located at 712 Fifth Avenue, Suite 900, New York, NY 10019. Harlan Ridge shall provide the Company and the Special Committee with investor relations advisory services, stockholder communication strategy, media relations support, and such other services as the Special Committee may direct.
5.4 General Authorization for Additional Advisors
RESOLVED, that the Special Committee is hereby authorized to retain such other advisors, consultants, and professional service providers as the Special Committee, in its sole discretion, deems necessary, advisable, or appropriate in connection with the Pinnacle Harbor Activist Campaign, at the Company's expense, without further approval of the full Board of Directors; provided, however, that the aggregate fees payable to any single additional advisor engaged pursuant to this resolution shall not exceed $500,000 without the prior written consent or approval of the full Board. The Special Committee shall promptly inform the full Board of any additional advisor engagements made pursuant to this authority.
6. D&O Insurance — Notice of Circumstances
The General Counsel advised the Board that, in light of the Pinnacle Harbor Activist Campaign and the potential for related claims, demands, or litigation, it would be prudent to submit a notice of circumstances to the Company's directors' and officers' liability insurance carriers in order to preserve the Company's and the directors' rights under the applicable insurance policies.
After due consideration and deliberation, the following resolution was presented, and upon motion duly made, seconded, and unanimously adopted:
RESOLVED, that the General Counsel is hereby authorized and directed to promptly submit a notice of circumstances (a "Notice of Circumstances") to the Company's directors' and officers' liability insurance carriers through the Company's insurance broker, Glenmore Caulfield Insurance Brokers, Inc. (contact: Sarah Voss, Senior Vice President), with respect to the following policies:
•  Primary Layer: Northbridge Indemnity Company, Policy No. NBI-DOP-2022-04871, with a limit of liability of $15,000,000 per claim and in the aggregate, subject to a self-insured retention of $500,000 per claim, for the policy period January 1, 2022, through January 1, 2023.
•  First Excess Layer: Creston National Insurance Co., Policy No. CNI-XS-2022-31004, providing $10,000,000 in excess of the $15,000,000 primary layer, for the policy period corresponding to the primary layer.
Such Notice of Circumstances shall describe the facts and circumstances of the Pinnacle Harbor Activist Campaign, including the accumulation of shares, the demand letter, the Schedule 13D filing, and the specific demands made by Pinnacle Harbor, as a potential claim or circumstance that could reasonably be expected to give rise to a claim under the Company's directors' and officers' liability insurance policies. The General Counsel is further authorized to provide such additional information and documentation to the insurance carriers and the insurance broker as may be necessary or requested in connection with the Notice of Circumstances and to take all actions necessary to preserve the Company's and the directors' and officers' rights under the applicable policies.
7. Confidentiality and Privilege
The Chair emphasized the critical importance of maintaining the confidentiality of the Board's and the Special Committee's deliberations and communications in connection with the Pinnacle Harbor Activist Campaign, and of preserving all applicable legal privileges.
RESOLVED, that all deliberations, discussions, communications, analyses, memoranda, reports, presentations, work product, and other materials of the Special Committee and the Board relating to the Pinnacle Harbor Activist Campaign, including all communications with Calderwood & Harkness LLP, Calloway Pinnacle Trust Bank, Whitfield Morrow Partners, LLC, Harlan Ridge Communications, LLC, and any other advisor, consultant, or professional retained pursuant to these resolutions, shall be maintained as strictly confidential and privileged to the fullest extent permitted by applicable law, including the attorney-client privilege, the work-product doctrine, the common interest privilege, and any other applicable evidentiary privilege or protection. Each director, officer, and employee of the Company who receives or has access to any such materials is directed to treat such materials as confidential and privileged and to refrain from disclosing or disseminating any such materials to any person not authorized to receive them, except as may be required by applicable law or as authorized by the Special Committee or the Board.
The General Counsel is directed to implement appropriate protocols and procedures to ensure the preservation of confidentiality and privilege in connection with the Pinnacle Harbor Activist Campaign, including the use of separate communication channels, restricted distribution lists, and privilege logs as necessary.
8. General Authorization
RESOLVED, that each of the officers of the Company, including Gerald R. Whitmore, Chief Executive Officer, Raymond Choi, Chief Financial Officer, and Patricia "Trish" Nakamura, General Counsel and Corporate Secretary, is hereby authorized and empowered, acting singly or jointly, to execute and deliver any and all documents, agreements, certificates, notices, filings, and instruments, and to take any and all actions, in the name and on behalf of the Company, as any such officer may deem necessary, advisable, or appropriate to carry out the purposes and intent of the foregoing resolutions, including the payment of all fees, costs, and expenses incurred in connection therewith, with such modifications, amendments, supplements, or changes as the officer executing or taking the same may approve, such approval to be conclusively evidenced by the execution thereof or the taking of such action.
RESOLVED, FURTHER, that all actions heretofore taken by any officer, director, or authorized agent of the Company in connection with any of the matters contemplated by the foregoing resolutions, including any preliminary discussions or communications with Calderwood & Harkness LLP, Calloway Pinnacle Trust Bank, Whitfield Morrow Partners, LLC, Harlan Ridge Communications, LLC, or any other advisor, are hereby ratified, confirmed, and approved in all respects as the acts and deeds of the Company.
9. Adjournment
There being no further business to come before the meeting, upon motion duly made by Mr. Barlowe, seconded by Ms. Fujikawa, and unanimously carried by all directors present, the special meeting of the Board of Directors was adjourned at 5:15 p.m. Pacific Time on November 14, 2022.
The Chair thanked all directors and attendees for their prompt attention to the matters addressed at the meeting and directed the Special Committee to convene its first meeting as soon as practicable following the adjournment.
The foregoing constitutes a true and correct record of the resolutions adopted at the special meeting of the Board of Directors of Redstone Gaming Corp. held on November 14, 2022.
CERTIFICATION AND ATTESTATION
IN WITNESS WHEREOF, the undersigned, being the duly appointed Corporate Secretary and the Chair of the Board of Directors of Redstone Gaming Corp., have executed this record of resolutions as of the date set forth below.
CORPORATE SECRETARY
By: ________
Name: Patricia "Trish" Nakamura
Title: General Counsel and Corporate Secretary
Redstone Gaming Corp.
Date: November 14, 2022
ATTESTED AND CONFIRMED:
By: ________
Name: Diane K. Sheridan
Title: Chair of the Board of Directors
Redstone Gaming Corp.
Date: November 14, 2022
No. | Director | Status
1 | Diane K. Sheridan | Chair, Independent Director
2 | Gerald R. Whitmore | Chief Executive Officer
3 | Raymond Choi | Chief Financial Officer
4 | Dr. Miriam Kaplan | Independent Director
5 | Theodore "Ted" Barlowe | Independent Director
6 | Lorraine Fujikawa | Independent Director
7 | James "Jim" Delacroix | Independent Director
8 | Carmen Vasquez | Independent Director
9 | Randall Morse | Independent Director