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PRIVILEGED AND CONFIDENTIAL — DRAFT — SUBJECT TO REVIEW AND APPROVAL

EXECUTIVE EMPLOYMENT AGREEMENT

THIRD DRAFT — REVISED ENHANCED OFFER

DRAFT — Subject to Review and Approval — Privileged and Confidential

January 15, 2024

Prepared by: Calderwood & Harkness LLP 3900 Howard Hughes Parkway, Suite 800 Las Vegas, NV 89169

Matter No.: 1033-00005 Engagement Reference: 1033-00005

On behalf of: Redstone Gaming Corp.

Reflects enhanced compensation package authorized by Compensation Committee Resolution No. CC-2024-002, dated January 12, 2024

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EXECUTIVE EMPLOYMENT AGREEMENT

This Executive Employment Agreement (this "Agreement") is entered into and made effective as of February 15, 2024 (the "Effective Date"), by and between:

Redstone Gaming Corp., a Delaware corporation, with its principal executive offices located at 4100 Sandstone Ridge Boulevard, Las Vegas, Nevada 89119 (hereinafter referred to as the "Company" or "Employer");

and

Marcus Jonathan Ellender, an individual residing at 2288 Bristlecone Pines Drive, Reno, Nevada 89511 (hereinafter referred to as the "Executive").

The Company and Executive are referred to herein collectively as the "Parties" and individually as a "Party."

RECITALS

WHEREAS, the Company is a publicly traded gaming and media entertainment corporation, the common stock of which is listed and traded on the Nasdaq Stock Market under the ticker symbol "RDGM," incorporated in the State of Delaware and headquartered in Las Vegas, Nevada, with estimated annual revenues of approximately Two Billion Eight Hundred Seventy Million Dollars ($2.87 billion) and approximately fourteen thousand two hundred (14,200) employees as of the most recently completed fiscal year;

WHEREAS, the Company's former Chief Financial Officer, Richard Halvorsen, departed the Company effective September 15, 2023, and Sandra K. Ouellet has been serving in the capacity of Interim Chief Financial Officer and Vice President, Finance since September 18, 2023, pursuant to an interim appointment approved by the Board;

WHEREAS, the Company retained Kensington Brace Partners, a nationally recognized executive search firm, to conduct a comprehensive search for a permanent Chief Financial Officer, and Executive was identified as a finalist candidate through that process on or about October 20, 2023;

WHEREAS, the Company's Board of Directors Compensation Committee (the "Compensation Committee"), chaired by Theodore S. Iglesias, approved the initial framework for this offer pursuant to Resolution No. CC-2023-014, dated November 3, 2023, and subsequently authorized the enhanced compensation package set forth herein pursuant to Resolution No. CC-2024-002, dated January 12, 2024, following further negotiations between the Parties;

WHEREAS, Executive currently serves as Executive Vice President and Chief Accounting Officer at Grandview Resorts International, Inc., a privately held hospitality and gaming company headquartered in Reno, Nevada, and holds an active Certified Public Accountant license issued by the Nevada State Board of Accountancy (License No. CPA-NV-041882);

WHEREAS, the Company desires to employ Executive as Executive Vice President and Chief Financial Officer of the Company, and Executive desires to accept such employment with the Company, on the terms and conditions set forth herein;

WHEREAS, the Company has engaged Halcyon Meridian Advisors LLC, an independent compensation consultant, to provide benchmarking data and compensation structuring advice to the Compensation Committee in connection with the negotiation and finalization of this Agreement, and such benchmarking analysis supports the compensation levels set forth herein as competitive within the applicable peer group for chief financial officers of publicly traded gaming and entertainment companies;

NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:

ARTICLE I — DEFINITIONS

As used in this Agreement, the following terms shall have the meanings ascribed to them below. Capitalized terms used in this Agreement and not otherwise defined in this Article I shall have the meanings assigned to them elsewhere in this Agreement.

Section 1.1 "Affiliate" means any entity that, directly or indirectly, controls, is controlled by, or is under common control with the Company. For purposes of this definition, "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of an entity, whether through ownership of voting securities, by contract, or otherwise.

Section 1.2 "Annual Base Salary" shall have the meaning set forth in Section 4.1 of this Agreement.

Section 1.3 "Annual Bonus" shall have the meaning set forth in Section 4.2 of this Agreement.

Section 1.4 "Board" means the Board of Directors of Redstone Gaming Corp., as constituted from time to time.

Section 1.5 "Cause" shall have the meaning set forth in Section 8.1 of this Agreement, which provides for a detailed enumeration of the circumstances constituting Cause for termination.

Section 1.6 "Change in Control" or "CIC" shall have the meaning set forth in Section 9.1 of this Agreement, which defines the specific corporate transactions and changes in ownership or control that constitute a Change in Control for purposes of this Agreement.

Section 1.7 "Code" means the Internal Revenue Code of 1986, as amended from time to time, and the Treasury Regulations promulgated thereunder. References to any section of the Code shall include any successor provisions thereto.

Section 1.8 "Compensation Committee" means the Compensation Committee of the Board, as constituted from time to time, or any successor committee performing substantially similar functions.

Section 1.9 "Confidential Information" shall have the meaning set forth in Section 10.1 of this Agreement.

Section 1.10 "Effective Date" means February 15, 2024, the date on which this Agreement becomes effective and Executive's employment with the Company commences.

Section 1.11 "Employment Term" shall have the meaning set forth in Section 3.1 and Section 3.2 of this Agreement, encompassing the Initial Term and any Renewal Term(s).

Section 1.12 "Good Reason" shall have the meaning set forth in Section 8.3 of this Agreement, which provides for a detailed enumeration of the circumstances constituting Good Reason for Executive's resignation.

Section 1.13 "Performance Stock Units" or "PSUs" means the performance-vesting restricted stock units granted to Executive pursuant to Section 4.4(b) of this Agreement, each of which represents the contingent right to receive one share of the Company's common stock, subject to the achievement of specified performance metrics and the other terms and conditions set forth in the applicable PSU Award Agreement and the Company's Equity Incentive Plan.

Section 1.14 "Restricted Stock Units" or "RSUs" means the time-vesting restricted stock units granted to Executive pursuant to Section 4.4(a) of this Agreement, each of which represents the right to receive one share of the Company's common stock, subject to the satisfaction of applicable time-based vesting conditions and the other terms and conditions set forth in the applicable RSU Award Agreement and the Company's Equity Incentive Plan.

Section 1.15 "Restrictive Covenant Period" means, as applicable, the non-competition period, non-solicitation period, and confidentiality obligations as defined and set forth in Article X of this Agreement.

Section 1.16 "Signing Bonus" shall have the meaning set forth in Section 4.3 of this Agreement.

Section 1.17 "Target Bonus" shall have the meaning set forth in Section 4.2(a) of this Agreement.

ARTICLE II — EMPLOYMENT AND POSITION

Section 2.1 — Position and Title. The Company hereby agrees to employ Executive, and Executive hereby agrees to serve, as Executive Vice President and Chief Financial Officer ("EVP & CFO") of the Company, commencing on the Effective Date of February 15, 2024. Executive shall hold the title of Executive Vice President and Chief Financial Officer throughout the Employment Term, unless a change in title is mutually agreed upon by the Parties or is otherwise permitted or required under the terms of this Agreement. Executive shall report directly to the Company's Chief Executive Officer, Gavin T. Ashford, or to any successor Chief Executive Officer of the Company. Executive's principal place of employment shall be the Company's corporate headquarters located at 4100 Sandstone Ridge Boulevard, Las Vegas, Nevada 89119, subject to reasonable business travel requirements consistent with Executive's duties and responsibilities and the Company's operational needs.

Section 2.2 — Duties and Responsibilities. Executive shall have such duties, responsibilities, and authority as are customary for the position of Chief Financial Officer of a publicly traded company of comparable size, scope, and complexity in the gaming and entertainment industry. Without limiting the generality of the foregoing, Executive's duties and responsibilities shall include oversight and management of all financial reporting, treasury operations, tax planning and compliance, accounting functions, internal audit, investor relations, financial planning and analysis, capital markets activities, and such other financial and administrative functions as are customarily within the purview of a chief financial officer. Executive shall serve as the Company's principal financial officer and principal accounting officer under applicable rules and regulations of the Securities and Exchange Commission ("SEC"), including, without limitation, Rules 13a-14 and 15d-14 under the Securities Exchange Act of 1934, as amended. Executive shall further perform such other duties and responsibilities consistent with Executive's position, qualifications, and experience as may be reasonably assigned from time to time by the Chief Executive Officer or the Board.

Section 2.3 — Full-Time and Best Efforts. Executive shall devote substantially all of Executive's professional business time, energy, skill, and attention to the faithful and diligent performance of the duties and responsibilities assigned to Executive hereunder. Executive shall perform such duties in a manner consistent with the highest professional standards and shall use Executive's best efforts to promote the interests and welfare of the Company and its Affiliates. During the Employment Term, Executive shall not engage in any other business, professional, or employment activity, whether or not such activity is pursued for compensation, without the prior written consent of the Board; provided, however, that the foregoing shall not prevent Executive from:

(a) managing Executive's personal, passive investments, so long as such investments do not involve a conflict of interest with the Company or require Executive's active involvement in the management or operations of any enterprise;

(b) serving on the board of directors of one (1) outside company (whether for-profit or not-for-profit), subject to the prior written approval of the Board and provided that such service does not create a conflict of interest with the Company or materially interfere with Executive's duties hereunder; and

(c) participating in charitable, civic, educational, or professional organizations and activities, provided that such activities do not materially interfere with Executive's duties and responsibilities under this Agreement.

Section 2.4 — Board Observation and Attendance. In Executive's capacity as EVP & CFO, Executive shall attend all meetings of the Board of Directors and committees thereof as reasonably requested by the Chief Executive Officer or the Board. Executive shall have the right to attend meetings of the Board in an advisory, non-voting capacity, and shall provide such financial reports, analyses, and other information as the Board or its committees may reasonably request from time to time. Nothing in this Section 2.4 shall be construed as conferring upon Executive any right to vote on matters brought before the Board or to serve as a member of the Board.

ARTICLE III — TERM OF EMPLOYMENT

Section 3.1 — Initial Term. The initial term of Executive's employment under this Agreement shall commence on the Effective Date (February 15, 2024) and shall continue for a period of three (3) years, expiring on February 14, 2027, unless earlier terminated in accordance with the provisions of Article VIII of this Agreement (the "Initial Term"). The commencement of Executive's employment on the Effective Date is subject to the satisfaction of any conditions precedent set forth herein, including, without limitation, the execution by Executive of the equity award agreements referenced in Sections 4.4(a) and 4.4(b), Executive's satisfactory completion of the Company's background verification and reference check process, and Executive's ability to obtain all necessary gaming regulatory approvals as described in Article XIII.

Section 3.2 — Renewal Terms. Following the expiration of the Initial Term, this Agreement shall automatically renew for successive periods of one (1) year each (each such period, a "Renewal Term"), unless either Party provides the other Party with written notice of non-renewal at least ninety (90) calendar days prior to the expiration of the then-current Initial Term or Renewal Term, as applicable. The written notice of non-renewal shall be delivered in accordance with the notice provisions set forth in Section 15.7 of this Agreement. The Initial Term and any Renewal Term(s) shall be collectively referred to herein as the "Employment Term." For the avoidance of doubt, the automatic renewal of this Agreement shall not alter, modify, or extend the vesting schedules or performance periods applicable to any equity awards previously granted to Executive, unless otherwise determined by the Compensation Committee.

ARTICLE IV — COMPENSATION AND BENEFITS

Section 4.1 — Annual Base Salary. During the Employment Term, the Company shall pay Executive an Annual Base Salary at the rate of Seven Hundred Twenty-Five Thousand Dollars ($725,000) per annum (the "Annual Base Salary"), payable in installments in accordance with the Company's standard payroll practices for senior executive officers, less all applicable federal, state, and local tax withholdings and authorized deductions. The Annual Base Salary reflects an enhancement of Seventy-Five Thousand Dollars ($75,000) over the initial offer amount of Six Hundred Fifty Thousand Dollars ($650,000), as authorized by the Compensation Committee pursuant to Resolution No. CC-2024-002, dated January 12, 2024. The Compensation Committee shall review Executive's Annual Base Salary at least annually, taking into account such factors as the Company's performance, Executive's individual performance, competitive market data, and such other factors as the Compensation Committee deems relevant. The Compensation Committee may, in its sole discretion, increase Executive's Annual Base Salary following any such review; provided, however, that the Annual Base Salary shall not be decreased below Seven Hundred Twenty-Five Thousand Dollars ($725,000) without Executive's prior written consent. Any increase in the Annual Base Salary shall thereafter become the "Annual Base Salary" for all purposes of this Agreement.

Section 4.2 — Annual Cash Bonus.

(a) Target Bonus. For each fiscal year during the Employment Term, Executive shall be eligible to receive an annual performance-based cash bonus (the "Annual Bonus") with a target amount equal to one hundred percent (100%) of Executive's Annual Base Salary as in effect for such fiscal year (the "Target Bonus"). Based on the current Annual Base Salary, the Target Bonus equals Seven Hundred Twenty-Five Thousand Dollars ($725,000). The Target Bonus percentage shall be reviewed annually by the Compensation Committee and may be increased (but not decreased without Executive's written consent) in the Compensation Committee's sole discretion.

(b) Maximum Bonus. The maximum Annual Bonus that Executive may earn for any fiscal year shall not exceed two hundred percent (200%) of the Annual Base Salary as in effect for such fiscal year. Based on the current Annual Base Salary, the maximum Annual Bonus equals One Million Four Hundred Fifty Thousand Dollars ($1,450,000). For the avoidance of doubt, the Compensation Committee retains discretion to award an Annual Bonus in any amount from zero dollars ($0) to the maximum Annual Bonus, based on the achievement of applicable performance metrics.

(c) Performance Metrics. The Annual Bonus for each fiscal year shall be determined by the Compensation Committee based upon the achievement of Company financial performance metrics, business unit performance metrics, and individual performance objectives. Such performance metrics and objectives shall be established by the Compensation Committee in consultation with the Chief Executive Officer and communicated to Executive in writing within the first ninety (90) days of each fiscal year. Performance metrics may include, without limitation, revenue, adjusted EBITDA, net income, earnings per share, cash flow from operations, cost management targets, strategic initiative milestones, and such other quantitative or qualitative measures as the Compensation Committee may determine are appropriate for such fiscal year.

(d) Proration. For any fiscal year in which Executive is employed for less than the full fiscal year, including the fiscal year in which the Effective Date occurs, the Annual Bonus shall be prorated based on the number of days during such fiscal year during which Executive was employed by the Company, divided by the total number of days in such fiscal year.

(e) Payment Timing. The Annual Bonus, if earned, shall be paid to Executive no later than March 15 of the calendar year following the fiscal year to which such Annual Bonus relates. The Annual Bonus shall be paid in a single lump sum cash payment, less applicable withholdings and deductions.

(f) Compensation Committee Discretion. The determination of whether the applicable performance objectives have been achieved and the calculation of the amount of any Annual Bonus shall be within the sole discretion of the Compensation Committee; provided, however, that the Compensation Committee shall exercise such discretion in good faith and in a manner consistent with the pre-established performance metrics communicated to Executive for the applicable fiscal year. The Compensation Committee's determination of the Annual Bonus amount shall be final, conclusive, and binding on all parties, subject to the foregoing good faith requirement.

Section 4.3 — Signing Bonus.

(a) Amount. In recognition of the compensation and benefits that Executive will forfeit by leaving Executive's current employer, and as an inducement to Executive to accept employment with the Company, the Company shall pay Executive a one-time signing bonus in the amount of Five Hundred Thousand Dollars ($500,000) (the "Signing Bonus"), less applicable federal, state, and local tax withholdings and deductions. The Signing Bonus shall be payable within thirty (30) calendar days following the Effective Date.

(b) Clawback. If Executive's employment with the Company is terminated by Executive voluntarily (other than for Good Reason as defined in Section 8.3) or by the Company for Cause (as defined in Section 8.1) at any time within twenty-four (24) months following the Effective Date, Executive shall be obligated to repay to the Company a pro-rata portion of the Signing Bonus (the "Clawback Amount"). The Clawback Amount shall be calculated as follows: Five Hundred Thousand Dollars ($500,000) multiplied by a fraction, the numerator of which is the number of full calendar months remaining in the twenty-four (24)-month period following the Effective Date as of the date of Executive's termination of employment, and the denominator of which is twenty-four (24). By way of illustration and not limitation, if Executive voluntarily terminates employment (other than for Good Reason) twelve (12) months after the Effective Date, the Clawback Amount would equal $500,000 × (12/24) = $250,000. The monthly clawback rate is approximately Twenty Thousand Eight Hundred Thirty-Three Dollars and Thirty-Three Cents ($20,833.33) per remaining full month. For the avoidance of doubt, no Clawback Amount shall be owed if Executive's employment terminates after the twenty-four (24)-month anniversary of the Effective Date, or if Executive's employment is terminated by the Company without Cause or by Executive for Good Reason at any time.

(c) Repayment Mechanism. Any Clawback Amount required to be repaid by Executive pursuant to Section 4.3(b) may, at the Company's election, be offset against any amounts otherwise payable to Executive by the Company (including, without limitation, any accrued and unpaid base salary, accrued and unused paid time off, expense reimbursements, or other payments), to the extent permitted by applicable law. Any remaining balance of the Clawback Amount not satisfied through such offset shall be paid by Executive to the Company in cash within sixty (60) calendar days following the date of Executive's termination of employment. Executive hereby authorizes such offset and agrees to execute any additional documentation reasonably required by the Company to effectuate the repayment obligation set forth in this Section 4.3.

Section 4.4 — Equity Compensation.

(a) Restricted Stock Units (RSUs). As soon as practicable following the Effective Date, and in any event within thirty (30) days thereof, the Company shall grant to Executive Forty-Five Thousand (45,000) Restricted Stock Units (the "Initial RSU Grant"), each RSU representing the contingent right to receive one (1) share of the Company's common stock, par value $0.01 per share, as listed on the Nasdaq Stock Market under the ticker symbol "RDGM." The Grant Date Fair Market Value of the Company's common stock for purposes of this grant is Thirty-Eight Dollars and Twenty Cents ($38.20) per share, resulting in an aggregate grant value of One Million Seven Hundred Nineteen Thousand Dollars ($1,719,000). The Initial RSU Grant shall vest ratably over a three (3)-year period in equal annual installments of Fifteen Thousand (15,000) shares per year, with the first installment vesting on the first anniversary of the Effective Date, the second installment vesting on the second anniversary of the Effective Date, and the third and final installment vesting on the third anniversary of the Effective Date, in each case subject to Executive's continued employment with the Company through each applicable vesting date. The terms and conditions of the Initial RSU Grant shall be governed by the Company's Equity Incentive Plan, as in effect from time to time, and a separate RSU Award Agreement in the form attached hereto as Exhibit B, to be executed by the Company and Executive on or about the Effective Date. In the event of any conflict between the terms of this Agreement and the terms of the RSU Award Agreement or the Equity Incentive Plan, the terms of this Agreement shall control with respect to the specific provisions set forth herein (including, without limitation, the acceleration provisions set forth in Section 4.4(e) and Article IX).

(b) Performance Stock Units (PSUs). As soon as practicable following the Effective Date, and in any event within thirty (30) days thereof, the Company shall grant to Executive Thirty Thousand (30,000) target Performance Stock Units (the "Initial PSU Grant"), each PSU representing the contingent right to receive one (1) share of the Company's common stock. The Grant Date Fair Market Value of the Company's common stock for purposes of this grant at target is Thirty-Eight Dollars and Twenty Cents ($38.20) per share, resulting in an aggregate target grant value of One Million One Hundred Forty-Six Thousand Dollars ($1,146,000). The payout range for the Initial PSU Grant shall be from zero percent (0%) to two hundred percent (200%) of the target number of PSUs, representing a payout range of zero (0) to Sixty Thousand (60,000) shares, based on the level of achievement of performance metrics established by the Compensation Committee. The Initial PSU Grant shall cliff-vest at the end of a three (3)-year performance period commencing on the Effective Date and ending on the third anniversary thereof (the "Performance Period"), subject to Executive's continued employment with the Company through the end of the Performance Period, except as otherwise provided in Section 4.4(e) and Article IX. The performance metrics applicable to the Initial PSU Grant shall be established by the Compensation Committee in writing within ninety (90) days following the Effective Date, and may include, without limitation, Company revenue growth, adjusted EBITDA margins, total shareholder return relative to a designated peer group of gaming and entertainment companies, return on invested capital, and/or such other financial or operational metrics as the Compensation Committee determines are appropriate. The terms and conditions of the Initial PSU Grant shall be governed by the Company's Equity Incentive Plan and a separate PSU Award Agreement in the form attached hereto as Exhibit C, to be executed by the Company and Executive on or about the Effective Date.

(c) Total Equity Grant Value. The combined initial equity grant value of the Initial RSU Grant and the Initial PSU Grant at target is as follows:

The annualized equity grant value, calculated by dividing the total initial equity grant value by the three (3)-year vesting/performance period, is Nine Hundred Fifty-Five Thousand Dollars ($955,000) per year.

(d) Future Equity Awards. In addition to the Initial RSU Grant and the Initial PSU Grant, Executive shall be eligible to receive annual equity awards under the Company's Equity Incentive Plan, as determined by the Compensation Committee in its sole discretion. Such annual equity awards shall commence with respect to the Company's fiscal year beginning after the Effective Date and may be in the form of restricted stock units, performance stock units, stock options, or such other equity-based awards as the Compensation Committee may determine from time to time. The Compensation Committee shall consider the competitive benchmarking data provided by its independent compensation consultant in establishing the size and form of any such annual equity awards.

(e) Acceleration of Equity on Termination Without Cause or for Good Reason (Non-CIC). Upon termination of Executive's employment by the Company without Cause (as defined in Section 8.1) or by Executive for Good Reason (as defined in Section 8.3), other than a Qualifying CIC Termination as described in Section 9.2, a pro-rata portion of any then-unvested RSUs and PSUs held by Executive shall immediately vest as of the date of such termination. The pro-rata portion shall be calculated by multiplying the total number of unvested RSUs or PSUs (at target, in the case of PSUs) by a fraction, the numerator of which is the number of complete calendar months elapsed from the commencement of the applicable vesting period or Performance Period through the date of termination, and the denominator of which is the total number of months in the applicable vesting period or Performance Period. In the case of PSUs, the payout level for the pro-rata vested portion shall be determined based on actual Company performance through the most recently completed fiscal quarter preceding the date of termination, as determined by the Compensation Committee in good faith. Settlement of any accelerated RSUs and PSUs shall occur within sixty (60) days following the date of termination, subject to Executive's execution and non-revocation of the general release of claims described in Section 8.2. Any RSUs or PSUs that do not vest pursuant to this Section 4.4(e) shall be forfeited as of the date of termination.

Section 4.5 — Total Annual Compensation Summary. The following table summarizes Executive's anticipated total annual compensation at target performance levels, exclusive of employee benefits and perquisites:

In addition, Executive's total year-one compensation, inclusive of the Signing Bonus, is projected to be approximately Two Million Nine Hundred Five Thousand Dollars ($2,905,000), calculated as $2,405,000 in at-target annual compensation plus the $500,000 Signing Bonus.

ARTICLE V — EMPLOYEE BENEFITS

Section 5.1 — Benefit Plans. During the Employment Term, Executive shall be eligible to participate in all employee benefit plans, programs, policies, and arrangements maintained or sponsored by the Company for its senior executive officers generally, as such plans, programs, policies, and arrangements may be in effect from time to time. Such plans and programs shall include, without limitation, medical insurance, dental insurance, vision insurance, group term life insurance, short-term and long-term disability insurance, flexible spending accounts, health savings accounts, the Company's 401(k) plan (including any employer matching contributions), and any other welfare or retirement benefit plans generally available to similarly situated senior executives of the Company. Executive's participation in such plans and programs shall be subject to the terms, conditions, and eligibility requirements of such plans and programs, as they may be amended, modified, or terminated by the Company from time to time in its discretion. Nothing in this Agreement shall be construed to obligate the Company to establish, maintain, or continue any particular benefit plan, program, or arrangement, or to prevent the Company from amending, modifying, or terminating any such plan, program, or arrangement, provided that any such amendment, modification, or termination shall be applied on a basis consistent with its application to other similarly situated senior executives of the Company.

Section 5.2 — Vacation and Paid Time Off. During the Employment Term, Executive shall be entitled to paid time off ("PTO") in accordance with the Company's executive PTO policy as in effect from time to time; provided, however, that Executive shall be entitled to not less than four (4) weeks (twenty (20) business days) of PTO per calendar year, prorated for any partial calendar year of employment. PTO shall accrue and may be carried over in accordance with the Company's standard policies applicable to senior executives. Executive shall schedule PTO at times that are reasonably consistent with the needs of the business and shall coordinate PTO scheduling with the Chief Executive Officer.

Section 5.3 — Expense Reimbursement. The Company shall reimburse Executive for all reasonable and documented business expenses incurred by Executive in the course of performing Executive's duties and responsibilities hereunder, in accordance with the Company's expense reimbursement policy as in effect from time to time. Executive shall submit expense reports and supporting documentation within the time periods required by the Company's policy. All reimbursements shall be made in accordance with the Company's standard reimbursement practices and shall comply with the requirements of Section 409A of the Code, including, without limitation, the requirement that reimbursements be made no later than the end of the calendar year following the calendar year in which the expense was incurred.

Section 5.4 — D&O Insurance and Indemnification. During the Employment Term and for a period of not less than six (6) years following the termination of Executive's employment with the Company for any reason (or, if longer, the applicable statute of limitations for any claim arising from Executive's service), the Company shall maintain and provide Executive with coverage under the Company's directors' and officers' liability insurance policy maintained with Pinnacle Investors Indemnity Group (or a successor carrier providing coverage at least as favorable as such policy) on terms and conditions no less favorable than those applicable to other current or former senior executive officers and directors of the Company. In addition, Executive shall be entitled to indemnification and advancement of expenses (including reasonable attorneys' fees) to the fullest extent permitted by applicable law, including the Delaware General Corporation Law, and to the fullest extent provided under the Company's Certificate of Incorporation and Bylaws, in connection with any threatened, pending, or completed action, suit, or proceeding arising out of Executive's service as an officer, employee, or agent of the Company or any of its Affiliates, or at the Company's request as a director, officer, employee, or agent of another entity. The Company shall enter into an indemnification agreement with Executive in the form customarily provided to other senior executive officers and directors of the Company, to the extent such agreements are in effect. The obligations of the Company under this Section 5.4 shall survive the termination of this Agreement and Executive's employment hereunder.

ARTICLE VI — RELOCATION

Section 6.1 — Relocation Allowance. The Company acknowledges that Executive currently resides in Reno, Nevada and that Executive's acceptance of employment hereunder will require Executive to relocate to the Las Vegas, Nevada metropolitan area. In connection with such relocation, the Company shall provide Executive with a relocation allowance of up to One Hundred Fifty Thousand Dollars ($150,000) (the "Relocation Allowance") to cover reasonable and documented costs and expenses associated with Executive's relocation from Reno, Nevada to the Las Vegas, Nevada metropolitan area. Eligible relocation expenses shall include, without limitation:

(a) costs of packing, moving, transporting, unpacking, and insuring household goods and personal effects;

(b) temporary housing and living expenses in the Las Vegas metropolitan area for a period not to exceed ninety (90) days following the Effective Date;

(c) customary closing costs, real estate commissions, and transfer taxes associated with the sale of Executive's existing primary residence in Reno, Nevada;

(d) customary closing costs and fees associated with the purchase of a new primary residence in the Las Vegas, Nevada metropolitan area;

(e) travel expenses for house-hunting trips for Executive and Executive's immediate family (not to exceed three (3) such trips); and

(f) related incidental expenses reasonably associated with the relocation, including utility connection fees, vehicle registration and driver's license transfer fees, and similar costs.

Executive shall submit all relocation expense documentation in accordance with the Company's expense reimbursement policies and within the time periods specified therein. Executive shall use commercially reasonable efforts to complete Executive's relocation to the Las Vegas metropolitan area within one hundred eighty (180) calendar days following the Effective Date. Any portion of the Relocation Allowance that is not utilized by Executive within twelve (12) months following the Effective Date shall be forfeited.

Section 6.2 — Tax Gross-Up on Relocation. To the extent that any relocation benefits, reimbursements, or payments received by Executive pursuant to this Article VI constitute taxable income to Executive for federal, state, or local income tax purposes, the Company shall provide Executive with an additional payment (a "Tax Gross-Up Payment") in an amount sufficient to cover Executive's estimated federal, state, and local income tax liability (including any taxes on the Tax Gross-Up Payment itself) attributable to such taxable relocation benefits, so that Executive is placed in the same after-tax position as if such relocation benefits had not been taxable. The calculation of the Tax Gross-Up Payment shall be performed by the Company's tax department or its designated tax advisor, and such calculation shall be final and binding on both Parties absent manifest error. The Tax Gross-Up Payment shall be made to Executive no later than the end of the calendar year following the calendar year in which Executive remits the applicable taxes.

ARTICLE VII — SECTION 280G

Section 7.1 — Best-Net Cutback. Notwithstanding any other provision of this Agreement or any other plan, arrangement, or agreement to the contrary, if any payment, benefit, or distribution of any type to or for the benefit of Executive by the Company, any Affiliate, any person who acquires ownership or effective control of the Company or ownership of a substantial portion of the Company's assets (within the meaning of Section 280G of the Code and the regulations thereunder), or any affiliate of such person, whether paid, payable, distributed, distributable, or provided pursuant to the terms of this Agreement or otherwise (collectively, the "Payments"), would constitute an "excess parachute payment" within the meaning of Section 280G of the Code, then the aggregate amount of such Payments shall be reduced (but not below zero) to the minimum extent necessary so that no portion of the Payments, as so reduced, would constitute an excess parachute payment and would not be subject to the excise tax imposed by Section 4999 of the Code; provided, however, that such reduction shall be made only if, and to the extent that, the net after-tax benefit to Executive of the reduced Payments (taking into account federal, state, and local income taxes, employment taxes, and the absence of the Section 4999 excise tax) would exceed the net after-tax benefit to Executive of receiving the full Payments without any reduction (taking into account federal, state, and local income taxes, employment taxes, and the Section 4999 excise tax). For the avoidance of doubt, this is a "best net" approach, and in no event shall the Company be obligated to provide Executive with any tax gross-up payment with respect to any excise tax imposed under Section 4999 of the Code.

The determination of whether the Payments would constitute "excess parachute payments" and whether a reduction in the Payments is required under this Section 7.1 shall be made by Calloway Firth & Associates LLP, the Company's independent registered public accounting firm, or such other nationally recognized independent accounting or consulting firm as may be designated by the Company (the "Determining Firm"). The Determining Firm shall provide its determination, together with detailed supporting calculations, to both the Company and Executive within fifteen (15) business days of the date on which the determination is requested by the Company or Executive, or such earlier time as may be required by applicable law. All fees, costs, and expenses of the Determining Firm in connection with any determination under this Section 7.1 shall be borne solely by the Company.

Section 7.2 — Order of Reduction. In the event that a reduction in Payments is required under Section 7.1, the Payments shall be reduced in the following order of priority, to the extent necessary to eliminate the excess parachute payment:

(i) first, any cash severance payments payable to Executive under Article VIII or Article IX of this Agreement;

(ii) second, any accelerated vesting of equity-based awards (with acceleration reversed in the reverse order of the scheduled vesting dates, beginning with the awards that would vest last);

(iii) third, any other cash payments or benefits payable to Executive that are not described in clause (i) above; and

(iv) fourth, any non-cash benefits provided to Executive.

Within each category, if a further ordering is required, amounts that are not subject to Section 409A of the Code shall be reduced before amounts that are subject to Section 409A. Executive shall have no right to determine the order in which the Payments are reduced.

ARTICLE VIII — TERMINATION OF EMPLOYMENT

Section 8.1 — Termination by the Company for Cause.

(a) Definition of Cause. For purposes of this Agreement, "Cause" shall mean the occurrence of any one or more of the following events, as determined in good faith by the Board (or a designated committee thereof):

(i) Executive's conviction of, or plea of guilty or nolo contendere to, a felony under federal or state law, or any crime (whether a felony or misdemeanor) involving fraud, dishonesty, embezzlement, theft, or moral turpitude;

(ii) Executive's willful and material breach of any provision of this Agreement, including, without limitation, any breach of the restrictive covenant obligations set forth in Article X;

(iii) Executive's gross negligence or willful misconduct in the performance of Executive's duties and responsibilities under this Agreement, which is materially injurious to the Company or any of its Affiliates;

(iv) Executive's material violation of any written policy of the Company, including, without limitation, the Company's Code of Business Conduct and Ethics, anti-harassment policy, substance abuse policy, or insider trading policy;

(v) Executive's willful and continued failure or refusal to perform the duties and responsibilities assigned to Executive hereunder (other than any such failure resulting from Executive's Disability), after written notice from the Board specifying the nature of such failure and a thirty (30)-calendar-day cure period within which Executive may remedy such failure;

(vi) Executive's commission of fraud or embezzlement involving the assets, funds, or property of the Company or any of its Affiliates;

(vii) the revocation, denial, suspension, or non-renewal of any gaming license, registration, finding of suitability, or other regulatory approval required for Executive to perform Executive's duties and responsibilities under this Agreement, by any gaming regulatory authority in any jurisdiction in which the Company or any of its Affiliates operates or is licensed; or

(viii) Executive's material failure to cooperate with any internal investigation or any investigation or inquiry by a governmental or regulatory authority, provided that Executive has been given reasonable written notice of the required cooperation and the specific actions requested.

For purposes of this definition, no act or failure to act on Executive's part shall be considered "willful" unless it is done, or omitted to be done, by Executive in bad faith or without a reasonable belief that Executive's action or omission was in the best interests of the Company. Any act, or failure to act, based upon authority given pursuant to a resolution duly adopted by the Board, based upon the advice of counsel for the Company, or based upon the instructions of the Chief Executive Officer shall be conclusively presumed to be done, or omitted to be done, by Executive in good faith and in the best interests of the Company.

(b) Consequences of Termination for Cause. Upon termination of Executive's employment for Cause, Executive shall be entitled to receive only the following (collectively, the "Accrued Obligations"):

(i) any accrued and unpaid Annual Base Salary through the date of termination, payable within the time period required by applicable law;

(ii) any accrued and unused PTO through the date of termination, payable in accordance with applicable law and Company policy;

(iii) any benefits vested as of the date of termination under any employee benefit plan in which Executive participated, payable in accordance with the terms of such plan; and

(iv) reimbursement of any unreimbursed business expenses properly incurred by Executive prior to the date of termination, in accordance with the Company's expense reimbursement policy.

Upon termination for Cause, Executive shall not be entitled to any Annual Bonus (whether accrued, prorated, or otherwise), any acceleration of unvested equity awards, or any severance payments or benefits. All unvested RSUs, PSUs, and any other unvested equity awards shall be immediately and automatically forfeited as of the date of termination. The Signing Bonus clawback provisions set forth in Section 4.3(b) shall apply.

Section 8.2 — Termination by the Company Without Cause. The Company may terminate Executive's employment at any time without Cause by providing Executive with not less than thirty (30) calendar days' prior written notice of such termination. Upon any termination of Executive's employment by the Company without Cause (other than a Qualifying CIC Termination described in Section 9.2), and subject to Executive's execution and non-revocation of a general release of claims substantially in the form attached hereto as Exhibit A within the time period specified therein (and in no event later than sixty (60) calendar days following the date of termination), Executive shall be entitled to receive the following payments and benefits:

(a) Accrued Obligations. All Accrued Obligations as defined in Section 8.1(b), payable in accordance with the terms thereof.

(b) Severance Payment. A cash severance payment equal to one and one-half times (1.5×) the Annual Base Salary as in effect on the date of termination. Based on the current Annual Base Salary, the severance payment equals Seven Hundred Twenty-Five Thousand Dollars ($725,000) multiplied by 1.5, for a total severance amount of One Million Eighty-Seven Thousand Five Hundred Dollars ($1,087,500). The severance payment shall be payable in a single lump sum within sixty (60) calendar days following the date of termination, subject to Executive's timely execution and non-revocation of the general release of claims and compliance with Section 15.8 (Section 409A).

(c) Pro-Rata Annual Bonus. A pro-rata Annual Bonus for the fiscal year in which Executive's termination occurs, based on actual Company and individual performance for such fiscal year as determined by the Compensation Committee in its good faith discretion, prorated for the number of days during such fiscal year during which Executive was employed by the Company, divided by the total number of days in such fiscal year. The pro-rata Annual Bonus, if any, shall be payable at the same time that Annual Bonuses are paid to other senior executive officers of the Company for such fiscal year, but in no event later than March 15 of the calendar year following the fiscal year to which the Annual Bonus relates.

(d) COBRA Continuation. Subject to Executive's timely election of continuation coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended ("COBRA"), the Company shall subsidize the cost of COBRA continuation coverage for Executive and Executive's eligible dependents at the same rate of employer subsidy as was in effect immediately prior to Executive's termination, for a period of eighteen (18) months following the date of termination, or until Executive becomes eligible for substantially comparable group health insurance coverage through a subsequent employer, whichever occurs first. Executive shall promptly notify the Company in writing upon becoming eligible for such alternative coverage. If the Company's subsidization of COBRA coverage would result in adverse tax consequences to the Company or other plan participants, the Company may, in its discretion, provide a taxable cash payment to Executive in an amount equal to the applicable COBRA subsidy.

(e) Pro-Rata Acceleration of Equity. Pro-rata acceleration of unvested RSUs and PSUs as set forth in Section 4.4(e) of this Agreement.

Section 8.3 — Termination by Executive for Good Reason.

(a) Definition of Good Reason. For purposes of this Agreement, "Good Reason" shall mean the occurrence of any one or more of the following events without Executive's prior written consent:

(i) a material reduction in Executive's Annual Base Salary, other than a reduction of less than ten percent (10%) that is applied on a substantially proportionate basis to all similarly situated senior executive officers of the Company;

(ii) a material diminution in Executive's title, authority, duties, or responsibilities, including, without limitation, any change in Executive's position such that Executive is no longer serving as the Chief Financial Officer of the Company (as opposed to a subsidiary or division thereof);

(iii) the relocation of Executive's principal place of employment to a location more than fifty (50) miles from 4100 Sandstone Ridge Boulevard, Las Vegas, Nevada 89119, unless such relocation is to a location closer to Executive's then-current primary residence;

(iv) the Company's material breach of any provision of this Agreement; or

(v) any material adverse change in Executive's reporting structure such that Executive no longer reports directly to the Chief Executive Officer of the Company.

(b) Notice and Cure Requirements. Notwithstanding the foregoing, no event or condition shall constitute Good Reason unless: (A) Executive provides the Company with written notice of the existence of the Good Reason condition within sixty (60) calendar days following Executive's first becoming aware of the initial occurrence of such condition, which notice shall specifically identify the nature of the Good Reason condition and the facts and circumstances giving rise thereto; (B) the Company fails to cure or remedy such condition within thirty (30) calendar days following its receipt of Executive's written notice (the "Cure Period"); and (C) Executive actually resigns from employment within thirty (30) calendar days following the expiration of the Cure Period (assuming the Company has not cured the Good Reason condition during the Cure Period). If Executive fails to provide timely written notice, or if the Company cures the Good Reason condition within the Cure Period, or if Executive fails to resign within the thirty (30)-day period following the Cure Period, then Executive shall be deemed to have waived Executive's right to terminate employment for Good Reason with respect to such occurrence.

(c) Payments and Benefits. Upon Executive's termination of employment for Good Reason in accordance with the procedures set forth in this Section 8.3, Executive shall be entitled to the same payments and benefits as provided in Section 8.2 for a termination without Cause, subject to the same conditions (including execution and non-revocation of the general release of claims).

Section 8.4 — Resignation Without Good Reason. Executive may voluntarily resign from employment at any time without Good Reason by providing the Company with not less than sixty (60) calendar days' prior written notice of such resignation. The Company may, in its sole discretion, waive all or any portion of the notice period and accelerate Executive's date of termination, provided that the Company shall continue to pay Executive's Annual Base Salary and maintain Executive's benefits through the earlier of the original notice period expiration date or such accelerated termination date. Upon Executive's resignation without Good Reason, Executive shall be entitled to receive only the Accrued Obligations as defined in Section 8.1(b). The Signing Bonus clawback provisions set forth in Section 4.3(b) shall apply. All unvested RSUs, PSUs, and other unvested equity awards shall be immediately and automatically forfeited as of the date of termination. Executive shall not be entitled to any Annual Bonus (whether accrued, prorated, or otherwise), any severance payments, COBRA continuation subsidy, or any other post-termination payments or benefits.

Section 8.5 — Termination Due to Death or Disability.

(a) Death. Executive's employment shall terminate automatically upon Executive's death. In the event of Executive's death, Executive's estate, designated beneficiary, or legal representative (as applicable) shall be entitled to receive:

(i) all Accrued Obligations as defined in Section 8.1(b);

(ii) a prorated Target Bonus for the fiscal year in which Executive's death occurs, calculated by multiplying the Target Bonus by a fraction, the numerator of which is the number of days during such fiscal year during which Executive was employed by the Company, and the denominator of which is the total number of days in such fiscal year, payable at the same time Annual Bonuses are paid to other senior executives for such fiscal year;

(iii) full and immediate acceleration of all then-unvested RSUs held by Executive as of the date of death; and

(iv) vesting of all then-unvested PSUs held by Executive at the target level (100% of target), regardless of actual performance during the Performance Period, with settlement occurring within sixty (60) days following the date of death.

(b) Disability. The Company may terminate Executive's employment upon Executive's Disability. For purposes of this Agreement, "Disability" means Executive's inability to perform the essential functions of Executive's position, with or without reasonable accommodation, due to a physical or mental condition, for a period of one hundred eighty (180) or more consecutive calendar days, or for a cumulative period of two hundred seventy (270) or more calendar days in any three hundred sixty-five (365)-calendar-day period, as determined by a licensed physician mutually agreed upon by the Company and Executive (or Executive's legal representative). In the event of termination due to Disability, Executive shall be entitled to receive the same payments and benefits described in Section 8.5(a)(i) through (iv) above for termination due to death.

Section 8.6 — Expiration and Non-Renewal. If either Party provides a notice of non-renewal pursuant to Section 3.2 and Executive's employment terminates upon the expiration of the Employment Term (i.e., at the conclusion of the Initial Term or any Renewal Term, as applicable), such termination shall be treated as a termination by the Company without Cause for purposes of severance payments and benefits under Section 8.2 of this Agreement, and Executive shall be entitled to the payments and benefits set forth therein, subject to the same conditions (including execution and non-revocation of the general release of claims); provided, however, that this Section 8.6 shall not apply if the Company has offered Executive a renewal of this Agreement on terms and conditions that are, in the aggregate, at least as favorable as those then in effect and Executive has declined such offer. For the avoidance of doubt, if it is Executive who provides the notice of non-renewal and the Company has not offered a renewal on terms at least as favorable, the expiration shall still be treated as a termination without Cause under this Section 8.6.

ARTICLE IX — CHANGE IN CONTROL PROVISIONS

Section 9.1 — Definition of Change in Control. For purposes of this Agreement, a "Change in Control" shall mean the occurrence of any one or more of the following events:

(i) Acquisition of Voting Securities. The acquisition by any "person" (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended) or "group" (within the meaning of Rule 13d-5 under such Act) of beneficial ownership (within the meaning of Rule 13d-3 under such Act) of more than fifty percent (50%) of the combined voting power of the then-outstanding voting securities of the Company entitled to vote generally in the election of directors; excluding, however, (A) any acquisition directly from the Company (other than an acquisition by virtue of the exercise of a conversion privilege), (B) any acquisition by the Company, (C) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any Affiliate, or (D) any acquisition by any corporation pursuant to a transaction described in clause (iii)(A) below;

(ii) Change in Board Composition. A change in the composition of the Board such that the individuals who, as of the Effective Date, constitute the Board (the "Incumbent Board") cease for any reason to constitute at least a majority of the Board; provided, however, that for purposes of this definition, any individual who becomes a member of the Board subsequent to the Effective Date whose election, or nomination for election by the Company's shareholders, was approved by a vote of at least a majority of those individuals then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board; and provided, further, that any individual whose initial assumption of office occurs as a result of an actual or threatened solicitation of proxies or consents by or on behalf of a person other than the Board shall not be so considered;

(iii) Business Combination. The consummation of a merger, consolidation, statutory share exchange, reorganization, or similar business combination involving the Company (a "Business Combination"), unless, following such Business Combination, (A) the shareholders of the Company immediately prior to such Business Combination beneficially own, directly or indirectly, more than fifty percent (50%) of the combined voting power of the then-outstanding voting securities entitled to vote generally in the election of directors of the resulting or surviving entity (or its ultimate parent) in such Business Combination in substantially the same proportions as their ownership immediately prior to such Business Combination;

(iv) Liquidation or Dissolution. The approval by the shareholders of the Company of a plan of complete liquidation or dissolution of the Company; or

(v) Asset Sale. The consummation of a sale, transfer, or other disposition of all or substantially all of the assets of the Company, other than to an entity with respect to which, following such sale or disposition, more than fifty percent (50%) of the combined voting power of the then-outstanding voting securities of such entity entitled to vote generally in the election of directors is then beneficially owned, directly or indirectly, by all or substantially all of the individuals and entities who were the beneficial owners of the voting securities of the Company immediately prior to such sale or disposition in substantially the same proportions as their ownership immediately prior to such sale or disposition.

Notwithstanding the foregoing, a Change in Control shall not be deemed to have occurred if it does not also constitute a "change in control event" within the meaning of Treasury Regulation Section 1.409A-3(i)(5), to the extent necessary to avoid the imposition of additional taxes under Section 409A of the Code.

Section 9.2 — Double-Trigger CIC Severance. If, within twenty-four (24) months following a Change in Control, Executive's employment is terminated by the Company (or its successor in interest) without Cause or by Executive for Good Reason (a "Qualifying CIC Termination"), then, in lieu of (and not in addition to) the severance payments and benefits described in Section 8.2, Executive shall be entitled to receive the following payments and benefits, subject to Executive's execution and non-revocation of the general release of claims as described in Section 9.3:

(a) Accrued Obligations. All Accrued Obligations as defined in Section 8.1(b), payable in accordance with the terms thereof.

(b) CIC Severance Payment. A cash severance payment equal to two times (2×) the sum of (I) Executive's Annual Base Salary as in effect immediately prior to the Change in Control or the date of termination, whichever is higher, plus (II) Executive's Target Bonus. Based on the current Annual Base Salary and Target Bonus, the CIC severance payment equals ($725,000 + $725,000) × 2 = Two Million Nine Hundred Thousand Dollars ($2,900,000). The CIC severance payment shall be payable in a single

PRIVILEGED AND CONFIDENTIAL — DRAFT — SUBJECT TO REVIEW AND APPROVAL
EXECUTIVE EMPLOYMENT AGREEMENT
THIRD DRAFT — REVISED ENHANCED OFFER
DRAFT — Subject to Review and Approval — Privileged and Confidential
January 15, 2024
Prepared by: Calderwood & Harkness LLP 3900 Howard Hughes Parkway, Suite 800 Las Vegas, NV 89169
Matter No.: 1033-00005 Engagement Reference: 1033-00005
On behalf of: Redstone Gaming Corp.
Reflects enhanced compensation package authorized by Compensation Committee Resolution No. CC-2024-002, dated January 12, 2024
Right-click to update Table of Contents
EXECUTIVE EMPLOYMENT AGREEMENT
This Executive Employment Agreement (this "Agreement") is entered into and made effective as of February 15, 2024 (the "Effective Date"), by and between:
Redstone Gaming Corp., a Delaware corporation, with its principal executive offices located at 4100 Sandstone Ridge Boulevard, Las Vegas, Nevada 89119 (hereinafter referred to as the "Company" or "Employer");
and
Marcus Jonathan Ellender, an individual residing at 2288 Bristlecone Pines Drive, Reno, Nevada 89511 (hereinafter referred to as the "Executive").
The Company and Executive are referred to herein collectively as the "Parties" and individually as a "Party."
RECITALS
WHEREAS, the Company is a publicly traded gaming and media entertainment corporation, the common stock of which is listed and traded on the Nasdaq Stock Market under the ticker symbol "RDGM," incorporated in the State of Delaware and headquartered in Las Vegas, Nevada, with estimated annual revenues of approximately Two Billion Eight Hundred Seventy Million Dollars ($2.87 billion) and approximately fourteen thousand two hundred (14,200) employees as of the most recently completed fiscal year;
WHEREAS, the Company's former Chief Financial Officer, Richard Halvorsen, departed the Company effective September 15, 2023, and Sandra K. Ouellet has been serving in the capacity of Interim Chief Financial Officer and Vice President, Finance since September 18, 2023, pursuant to an interim appointment approved by the Board;
WHEREAS, the Company retained Kensington Brace Partners, a nationally recognized executive search firm, to conduct a comprehensive search for a permanent Chief Financial Officer, and Executive was identified as a finalist candidate through that process on or about October 20, 2023;
WHEREAS, the Company's Board of Directors Compensation Committee (the "Compensation Committee"), chaired by Theodore S. Iglesias, approved the initial framework for this offer pursuant to Resolution No. CC-2023-014, dated November 3, 2023, and subsequently authorized the enhanced compensation package set forth herein pursuant to Resolution No. CC-2024-002, dated January 12, 2024, following further negotiations between the Parties;
WHEREAS, Executive currently serves as Executive Vice President and Chief Accounting Officer at Grandview Resorts International, Inc., a privately held hospitality and gaming company headquartered in Reno, Nevada, and holds an active Certified Public Accountant license issued by the Nevada State Board of Accountancy (License No. CPA-NV-041882);
WHEREAS, the Company desires to employ Executive as Executive Vice President and Chief Financial Officer of the Company, and Executive desires to accept such employment with the Company, on the terms and conditions set forth herein;
WHEREAS, the Company has engaged Halcyon Meridian Advisors LLC, an independent compensation consultant, to provide benchmarking data and compensation structuring advice to the Compensation Committee in connection with the negotiation and finalization of this Agreement, and such benchmarking analysis supports the compensation levels set forth herein as competitive within the applicable peer group for chief financial officers of publicly traded gaming and entertainment companies;
NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:
ARTICLE I — DEFINITIONS
As used in this Agreement, the following terms shall have the meanings ascribed to them below. Capitalized terms used in this Agreement and not otherwise defined in this Article I shall have the meanings assigned to them elsewhere in this Agreement.
Section 1.1 "Affiliate" means any entity that, directly or indirectly, controls, is controlled by, or is under common control with the Company. For purposes of this definition, "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of an entity, whether through ownership of voting securities, by contract, or otherwise.
Section 1.2 "Annual Base Salary" shall have the meaning set forth in Section 4.1 of this Agreement.
Section 1.3 "Annual Bonus" shall have the meaning set forth in Section 4.2 of this Agreement.
Section 1.4 "Board" means the Board of Directors of Redstone Gaming Corp., as constituted from time to time.
Section 1.5 "Cause" shall have the meaning set forth in Section 8.1 of this Agreement, which provides for a detailed enumeration of the circumstances constituting Cause for termination.
Section 1.6 "Change in Control" or "CIC" shall have the meaning set forth in Section 9.1 of this Agreement, which defines the specific corporate transactions and changes in ownership or control that constitute a Change in Control for purposes of this Agreement.
Section 1.7 "Code" means the Internal Revenue Code of 1986, as amended from time to time, and the Treasury Regulations promulgated thereunder. References to any section of the Code shall include any successor provisions thereto.
Section 1.8 "Compensation Committee" means the Compensation Committee of the Board, as constituted from time to time, or any successor committee performing substantially similar functions.
Section 1.9 "Confidential Information" shall have the meaning set forth in Section 10.1 of this Agreement.
Section 1.10 "Effective Date" means February 15, 2024, the date on which this Agreement becomes effective and Executive's employment with the Company commences.
Section 1.11 "Employment Term" shall have the meaning set forth in Section 3.1 and Section 3.2 of this Agreement, encompassing the Initial Term and any Renewal Term(s).
Section 1.12 "Good Reason" shall have the meaning set forth in Section 8.3 of this Agreement, which provides for a detailed enumeration of the circumstances constituting Good Reason for Executive's resignation.
Section 1.13 "Performance Stock Units" or "PSUs" means the performance-vesting restricted stock units granted to Executive pursuant to Section 4.4(b) of this Agreement, each of which represents the contingent right to receive one share of the Company's common stock, subject to the achievement of specified performance metrics and the other terms and conditions set forth in the applicable PSU Award Agreement and the Company's Equity Incentive Plan.
Section 1.14 "Restricted Stock Units" or "RSUs" means the time-vesting restricted stock units granted to Executive pursuant to Section 4.4(a) of this Agreement, each of which represents the right to receive one share of the Company's common stock, subject to the satisfaction of applicable time-based vesting conditions and the other terms and conditions set forth in the applicable RSU Award Agreement and the Company's Equity Incentive Plan.
Section 1.15 "Restrictive Covenant Period" means, as applicable, the non-competition period, non-solicitation period, and confidentiality obligations as defined and set forth in Article X of this Agreement.
Section 1.16 "Signing Bonus" shall have the meaning set forth in Section 4.3 of this Agreement.
Section 1.17 "Target Bonus" shall have the meaning set forth in Section 4.2(a) of this Agreement.
ARTICLE II — EMPLOYMENT AND POSITION
Section 2.1 — Position and Title. The Company hereby agrees to employ Executive, and Executive hereby agrees to serve, as Executive Vice President and Chief Financial Officer ("EVP & CFO") of the Company, commencing on the Effective Date of February 15, 2024. Executive shall hold the title of Executive Vice President and Chief Financial Officer throughout the Employment Term, unless a change in title is mutually agreed upon by the Parties or is otherwise permitted or required under the terms of this Agreement. Executive shall report directly to the Company's Chief Executive Officer, Gavin T. Ashford, or to any successor Chief Executive Officer of the Company. Executive's principal place of employment shall be the Company's corporate headquarters located at 4100 Sandstone Ridge Boulevard, Las Vegas, Nevada 89119, subject to reasonable business travel requirements consistent with Executive's duties and responsibilities and the Company's operational needs.
Section 2.2 — Duties and Responsibilities. Executive shall have such duties, responsibilities, and authority as are customary for the position of Chief Financial Officer of a publicly traded company of comparable size, scope, and complexity in the gaming and entertainment industry. Without limiting the generality of the foregoing, Executive's duties and responsibilities shall include oversight and management of all financial reporting, treasury operations, tax planning and compliance, accounting functions, internal audit, investor relations, financial planning and analysis, capital markets activities, and such other financial and administrative functions as are customarily within the purview of a chief financial officer. Executive shall serve as the Company's principal financial officer and principal accounting officer under applicable rules and regulations of the Securities and Exchange Commission ("SEC"), including, without limitation, Rules 13a-14 and 15d-14 under the Securities Exchange Act of 1934, as amended. Executive shall further perform such other duties and responsibilities consistent with Executive's position, qualifications, and experience as may be reasonably assigned from time to time by the Chief Executive Officer or the Board.
Section 2.3 — Full-Time and Best Efforts. Executive shall devote substantially all of Executive's professional business time, energy, skill, and attention to the faithful and diligent performance of the duties and responsibilities assigned to Executive hereunder. Executive shall perform such duties in a manner consistent with the highest professional standards and shall use Executive's best efforts to promote the interests and welfare of the Company and its Affiliates. During the Employment Term, Executive shall not engage in any other business, professional, or employment activity, whether or not such activity is pursued for compensation, without the prior written consent of the Board; provided, however, that the foregoing shall not prevent Executive from:
(a) managing Executive's personal, passive investments, so long as such investments do not involve a conflict of interest with the Company or require Executive's active involvement in the management or operations of any enterprise;
(b) serving on the board of directors of one (1) outside company (whether for-profit or not-for-profit), subject to the prior written approval of the Board and provided that such service does not create a conflict of interest with the Company or materially interfere with Executive's duties hereunder; and
(c) participating in charitable, civic, educational, or professional organizations and activities, provided that such activities do not materially interfere with Executive's duties and responsibilities under this Agreement.
Section 2.4 — Board Observation and Attendance. In Executive's capacity as EVP & CFO, Executive shall attend all meetings of the Board of Directors and committees thereof as reasonably requested by the Chief Executive Officer or the Board. Executive shall have the right to attend meetings of the Board in an advisory, non-voting capacity, and shall provide such financial reports, analyses, and other information as the Board or its committees may reasonably request from time to time. Nothing in this Section 2.4 shall be construed as conferring upon Executive any right to vote on matters brought before the Board or to serve as a member of the Board.
ARTICLE III — TERM OF EMPLOYMENT
Section 3.1 — Initial Term. The initial term of Executive's employment under this Agreement shall commence on the Effective Date (February 15, 2024) and shall continue for a period of three (3) years, expiring on February 14, 2027, unless earlier terminated in accordance with the provisions of Article VIII of this Agreement (the "Initial Term"). The commencement of Executive's employment on the Effective Date is subject to the satisfaction of any conditions precedent set forth herein, including, without limitation, the execution by Executive of the equity award agreements referenced in Sections 4.4(a) and 4.4(b), Executive's satisfactory completion of the Company's background verification and reference check process, and Executive's ability to obtain all necessary gaming regulatory approvals as described in Article XIII.
Section 3.2 — Renewal Terms. Following the expiration of the Initial Term, this Agreement shall automatically renew for successive periods of one (1) year each (each such period, a "Renewal Term"), unless either Party provides the other Party with written notice of non-renewal at least ninety (90) calendar days prior to the expiration of the then-current Initial Term or Renewal Term, as applicable. The written notice of non-renewal shall be delivered in accordance with the notice provisions set forth in Section 15.7 of this Agreement. The Initial Term and any Renewal Term(s) shall be collectively referred to herein as the "Employment Term." For the avoidance of doubt, the automatic renewal of this Agreement shall not alter, modify, or extend the vesting schedules or performance periods applicable to any equity awards previously granted to Executive, unless otherwise determined by the Compensation Committee.
ARTICLE IV — COMPENSATION AND BENEFITS
Section 4.1 — Annual Base Salary. During the Employment Term, the Company shall pay Executive an Annual Base Salary at the rate of Seven Hundred Twenty-Five Thousand Dollars ($725,000) per annum (the "Annual Base Salary"), payable in installments in accordance with the Company's standard payroll practices for senior executive officers, less all applicable federal, state, and local tax withholdings and authorized deductions. The Annual Base Salary reflects an enhancement of Seventy-Five Thousand Dollars ($75,000) over the initial offer amount of Six Hundred Fifty Thousand Dollars ($650,000), as authorized by the Compensation Committee pursuant to Resolution No. CC-2024-002, dated January 12, 2024. The Compensation Committee shall review Executive's Annual Base Salary at least annually, taking into account such factors as the Company's performance, Executive's individual performance, competitive market data, and such other factors as the Compensation Committee deems relevant. The Compensation Committee may, in its sole discretion, increase Executive's Annual Base Salary following any such review; provided, however, that the Annual Base Salary shall not be decreased below Seven Hundred Twenty-Five Thousand Dollars ($725,000) without Executive's prior written consent. Any increase in the Annual Base Salary shall thereafter become the "Annual Base Salary" for all purposes of this Agreement.
Section 4.2 — Annual Cash Bonus.
(a) Target Bonus. For each fiscal year during the Employment Term, Executive shall be eligible to receive an annual performance-based cash bonus (the "Annual Bonus") with a target amount equal to one hundred percent (100%) of Executive's Annual Base Salary as in effect for such fiscal year (the "Target Bonus"). Based on the current Annual Base Salary, the Target Bonus equals Seven Hundred Twenty-Five Thousand Dollars ($725,000). The Target Bonus percentage shall be reviewed annually by the Compensation Committee and may be increased (but not decreased without Executive's written consent) in the Compensation Committee's sole discretion.
(b) Maximum Bonus. The maximum Annual Bonus that Executive may earn for any fiscal year shall not exceed two hundred percent (200%) of the Annual Base Salary as in effect for such fiscal year. Based on the current Annual Base Salary, the maximum Annual Bonus equals One Million Four Hundred Fifty Thousand Dollars ($1,450,000). For the avoidance of doubt, the Compensation Committee retains discretion to award an Annual Bonus in any amount from zero dollars ($0) to the maximum Annual Bonus, based on the achievement of applicable performance metrics.
(c) Performance Metrics. The Annual Bonus for each fiscal year shall be determined by the Compensation Committee based upon the achievement of Company financial performance metrics, business unit performance metrics, and individual performance objectives. Such performance metrics and objectives shall be established by the Compensation Committee in consultation with the Chief Executive Officer and communicated to Executive in writing within the first ninety (90) days of each fiscal year. Performance metrics may include, without limitation, revenue, adjusted EBITDA, net income, earnings per share, cash flow from operations, cost management targets, strategic initiative milestones, and such other quantitative or qualitative measures as the Compensation Committee may determine are appropriate for such fiscal year.
(d) Proration. For any fiscal year in which Executive is employed for less than the full fiscal year, including the fiscal year in which the Effective Date occurs, the Annual Bonus shall be prorated based on the number of days during such fiscal year during which Executive was employed by the Company, divided by the total number of days in such fiscal year.
(e) Payment Timing. The Annual Bonus, if earned, shall be paid to Executive no later than March 15 of the calendar year following the fiscal year to which such Annual Bonus relates. The Annual Bonus shall be paid in a single lump sum cash payment, less applicable withholdings and deductions.
(f) Compensation Committee Discretion. The determination of whether the applicable performance objectives have been achieved and the calculation of the amount of any Annual Bonus shall be within the sole discretion of the Compensation Committee; provided, however, that the Compensation Committee shall exercise such discretion in good faith and in a manner consistent with the pre-established performance metrics communicated to Executive for the applicable fiscal year. The Compensation Committee's determination of the Annual Bonus amount shall be final, conclusive, and binding on all parties, subject to the foregoing good faith requirement.
Section 4.3 — Signing Bonus.
(a) Amount. In recognition of the compensation and benefits that Executive will forfeit by leaving Executive's current employer, and as an inducement to Executive to accept employment with the Company, the Company shall pay Executive a one-time signing bonus in the amount of Five Hundred Thousand Dollars ($500,000) (the "Signing Bonus"), less applicable federal, state, and local tax withholdings and deductions. The Signing Bonus shall be payable within thirty (30) calendar days following the Effective Date.
(b) Clawback. If Executive's employment with the Company is terminated by Executive voluntarily (other than for Good Reason as defined in Section 8.3) or by the Company for Cause (as defined in Section 8.1) at any time within twenty-four (24) months following the Effective Date, Executive shall be obligated to repay to the Company a pro-rata portion of the Signing Bonus (the "Clawback Amount"). The Clawback Amount shall be calculated as follows: Five Hundred Thousand Dollars ($500,000) multiplied by a fraction, the numerator of which is the number of full calendar months remaining in the twenty-four (24)-month period following the Effective Date as of the date of Executive's termination of employment, and the denominator of which is twenty-four (24). By way of illustration and not limitation, if Executive voluntarily terminates employment (other than for Good Reason) twelve (12) months after the Effective Date, the Clawback Amount would equal $500,000 × (12/24) = $250,000. The monthly clawback rate is approximately Twenty Thousand Eight Hundred Thirty-Three Dollars and Thirty-Three Cents ($20,833.33) per remaining full month. For the avoidance of doubt, no Clawback Amount shall be owed if Executive's employment terminates after the twenty-four (24)-month anniversary of the Effective Date, or if Executive's employment is terminated by the Company without Cause or by Executive for Good Reason at any time.
(c) Repayment Mechanism. Any Clawback Amount required to be repaid by Executive pursuant to Section 4.3(b) may, at the Company's election, be offset against any amounts otherwise payable to Executive by the Company (including, without limitation, any accrued and unpaid base salary, accrued and unused paid time off, expense reimbursements, or other payments), to the extent permitted by applicable law. Any remaining balance of the Clawback Amount not satisfied through such offset shall be paid by Executive to the Company in cash within sixty (60) calendar days following the date of Executive's termination of employment. Executive hereby authorizes such offset and agrees to execute any additional documentation reasonably required by the Company to effectuate the repayment obligation set forth in this Section 4.3.
Section 4.4 — Equity Compensation.
(a) Restricted Stock Units (RSUs). As soon as practicable following the Effective Date, and in any event within thirty (30) days thereof, the Company shall grant to Executive Forty-Five Thousand (45,000) Restricted Stock Units (the "Initial RSU Grant"), each RSU representing the contingent right to receive one (1) share of the Company's common stock, par value $0.01 per share, as listed on the Nasdaq Stock Market under the ticker symbol "RDGM." The Grant Date Fair Market Value of the Company's common stock for purposes of this grant is Thirty-Eight Dollars and Twenty Cents ($38.20) per share, resulting in an aggregate grant value of One Million Seven Hundred Nineteen Thousand Dollars ($1,719,000). The Initial RSU Grant shall vest ratably over a three (3)-year period in equal annual installments of Fifteen Thousand (15,000) shares per year, with the first installment vesting on the first anniversary of the Effective Date, the second installment vesting on the second anniversary of the Effective Date, and the third and final installment vesting on the third anniversary of the Effective Date, in each case subject to Executive's continued employment with the Company through each applicable vesting date. The terms and conditions of the Initial RSU Grant shall be governed by the Company's Equity Incentive Plan, as in effect from time to time, and a separate RSU Award Agreement in the form attached hereto as Exhibit B, to be executed by the Company and Executive on or about the Effective Date. In the event of any conflict between the terms of this Agreement and the terms of the RSU Award Agreement or the Equity Incentive Plan, the terms of this Agreement shall control with respect to the specific provisions set forth herein (including, without limitation, the acceleration provisions set forth in Section 4.4(e) and Article IX).
(b) Performance Stock Units (PSUs). As soon as practicable following the Effective Date, and in any event within thirty (30) days thereof, the Company shall grant to Executive Thirty Thousand (30,000) target Performance Stock Units (the "Initial PSU Grant"), each PSU representing the contingent right to receive one (1) share of the Company's common stock. The Grant Date Fair Market Value of the Company's common stock for purposes of this grant at target is Thirty-Eight Dollars and Twenty Cents ($38.20) per share, resulting in an aggregate target grant value of One Million One Hundred Forty-Six Thousand Dollars ($1,146,000). The payout range for the Initial PSU Grant shall be from zero percent (0%) to two hundred percent (200%) of the target number of PSUs, representing a payout range of zero (0) to Sixty Thousand (60,000) shares, based on the level of achievement of performance metrics established by the Compensation Committee. The Initial PSU Grant shall cliff-vest at the end of a three (3)-year performance period commencing on the Effective Date and ending on the third anniversary thereof (the "Performance Period"), subject to Executive's continued employment with the Company through the end of the Performance Period, except as otherwise provided in Section 4.4(e) and Article IX. The performance metrics applicable to the Initial PSU Grant shall be established by the Compensation Committee in writing within ninety (90) days following the Effective Date, and may include, without limitation, Company revenue growth, adjusted EBITDA margins, total shareholder return relative to a designated peer group of gaming and entertainment companies, return on invested capital, and/or such other financial or operational metrics as the Compensation Committee determines are appropriate. The terms and conditions of the Initial PSU Grant shall be governed by the Company's Equity Incentive Plan and a separate PSU Award Agreement in the form attached hereto as Exhibit C, to be executed by the Company and Executive on or about the Effective Date.
(c) Total Equity Grant Value. The combined initial equity grant value of the Initial RSU Grant and the Initial PSU Grant at target is as follows:
The annualized equity grant value, calculated by dividing the total initial equity grant value by the three (3)-year vesting/performance period, is Nine Hundred Fifty-Five Thousand Dollars ($955,000) per year.
(d) Future Equity Awards. In addition to the Initial RSU Grant and the Initial PSU Grant, Executive shall be eligible to receive annual equity awards under the Company's Equity Incentive Plan, as determined by the Compensation Committee in its sole discretion. Such annual equity awards shall commence with respect to the Company's fiscal year beginning after the Effective Date and may be in the form of restricted stock units, performance stock units, stock options, or such other equity-based awards as the Compensation Committee may determine from time to time. The Compensation Committee shall consider the competitive benchmarking data provided by its independent compensation consultant in establishing the size and form of any such annual equity awards.
(e) Acceleration of Equity on Termination Without Cause or for Good Reason (Non-CIC). Upon termination of Executive's employment by the Company without Cause (as defined in Section 8.1) or by Executive for Good Reason (as defined in Section 8.3), other than a Qualifying CIC Termination as described in Section 9.2, a pro-rata portion of any then-unvested RSUs and PSUs held by Executive shall immediately vest as of the date of such termination. The pro-rata portion shall be calculated by multiplying the total number of unvested RSUs or PSUs (at target, in the case of PSUs) by a fraction, the numerator of which is the number of complete calendar months elapsed from the commencement of the applicable vesting period or Performance Period through the date of termination, and the denominator of which is the total number of months in the applicable vesting period or Performance Period. In the case of PSUs, the payout level for the pro-rata vested portion shall be determined based on actual Company performance through the most recently completed fiscal quarter preceding the date of termination, as determined by the Compensation Committee in good faith. Settlement of any accelerated RSUs and PSUs shall occur within sixty (60) days following the date of termination, subject to Executive's execution and non-revocation of the general release of claims described in Section 8.2. Any RSUs or PSUs that do not vest pursuant to this Section 4.4(e) shall be forfeited as of the date of termination.
Section 4.5 — Total Annual Compensation Summary. The following table summarizes Executive's anticipated total annual compensation at target performance levels, exclusive of employee benefits and perquisites:
In addition, Executive's total year-one compensation, inclusive of the Signing Bonus, is projected to be approximately Two Million Nine Hundred Five Thousand Dollars ($2,905,000), calculated as $2,405,000 in at-target annual compensation plus the $500,000 Signing Bonus.
ARTICLE V — EMPLOYEE BENEFITS
Section 5.1 — Benefit Plans. During the Employment Term, Executive shall be eligible to participate in all employee benefit plans, programs, policies, and arrangements maintained or sponsored by the Company for its senior executive officers generally, as such plans, programs, policies, and arrangements may be in effect from time to time. Such plans and programs shall include, without limitation, medical insurance, dental insurance, vision insurance, group term life insurance, short-term and long-term disability insurance, flexible spending accounts, health savings accounts, the Company's 401(k) plan (including any employer matching contributions), and any other welfare or retirement benefit plans generally available to similarly situated senior executives of the Company. Executive's participation in such plans and programs shall be subject to the terms, conditions, and eligibility requirements of such plans and programs, as they may be amended, modified, or terminated by the Company from time to time in its discretion. Nothing in this Agreement shall be construed to obligate the Company to establish, maintain, or continue any particular benefit plan, program, or arrangement, or to prevent the Company from amending, modifying, or terminating any such plan, program, or arrangement, provided that any such amendment, modification, or termination shall be applied on a basis consistent with its application to other similarly situated senior executives of the Company.
Section 5.2 — Vacation and Paid Time Off. During the Employment Term, Executive shall be entitled to paid time off ("PTO") in accordance with the Company's executive PTO policy as in effect from time to time; provided, however, that Executive shall be entitled to not less than four (4) weeks (twenty (20) business days) of PTO per calendar year, prorated for any partial calendar year of employment. PTO shall accrue and may be carried over in accordance with the Company's standard policies applicable to senior executives. Executive shall schedule PTO at times that are reasonably consistent with the needs of the business and shall coordinate PTO scheduling with the Chief Executive Officer.
Section 5.3 — Expense Reimbursement. The Company shall reimburse Executive for all reasonable and documented business expenses incurred by Executive in the course of performing Executive's duties and responsibilities hereunder, in accordance with the Company's expense reimbursement policy as in effect from time to time. Executive shall submit expense reports and supporting documentation within the time periods required by the Company's policy. All reimbursements shall be made in accordance with the Company's standard reimbursement practices and shall comply with the requirements of Section 409A of the Code, including, without limitation, the requirement that reimbursements be made no later than the end of the calendar year following the calendar year in which the expense was incurred.
Section 5.4 — D&O Insurance and Indemnification. During the Employment Term and for a period of not less than six (6) years following the termination of Executive's employment with the Company for any reason (or, if longer, the applicable statute of limitations for any claim arising from Executive's service), the Company shall maintain and provide Executive with coverage under the Company's directors' and officers' liability insurance policy maintained with Pinnacle Investors Indemnity Group (or a successor carrier providing coverage at least as favorable as such policy) on terms and conditions no less favorable than those applicable to other current or former senior executive officers and directors of the Company. In addition, Executive shall be entitled to indemnification and advancement of expenses (including reasonable attorneys' fees) to the fullest extent permitted by applicable law, including the Delaware General Corporation Law, and to the fullest extent provided under the Company's Certificate of Incorporation and Bylaws, in connection with any threatened, pending, or completed action, suit, or proceeding arising out of Executive's service as an officer, employee, or agent of the Company or any of its Affiliates, or at the Company's request as a director, officer, employee, or agent of another entity. The Company shall enter into an indemnification agreement with Executive in the form customarily provided to other senior executive officers and directors of the Company, to the extent such agreements are in effect. The obligations of the Company under this Section 5.4 shall survive the termination of this Agreement and Executive's employment hereunder.
ARTICLE VI — RELOCATION
Section 6.1 — Relocation Allowance. The Company acknowledges that Executive currently resides in Reno, Nevada and that Executive's acceptance of employment hereunder will require Executive to relocate to the Las Vegas, Nevada metropolitan area. In connection with such relocation, the Company shall provide Executive with a relocation allowance of up to One Hundred Fifty Thousand Dollars ($150,000) (the "Relocation Allowance") to cover reasonable and documented costs and expenses associated with Executive's relocation from Reno, Nevada to the Las Vegas, Nevada metropolitan area. Eligible relocation expenses shall include, without limitation:
(a) costs of packing, moving, transporting, unpacking, and insuring household goods and personal effects;
(b) temporary housing and living expenses in the Las Vegas metropolitan area for a period not to exceed ninety (90) days following the Effective Date;
(c) customary closing costs, real estate commissions, and transfer taxes associated with the sale of Executive's existing primary residence in Reno, Nevada;
(d) customary closing costs and fees associated with the purchase of a new primary residence in the Las Vegas, Nevada metropolitan area;
(e) travel expenses for house-hunting trips for Executive and Executive's immediate family (not to exceed three (3) such trips); and
(f) related incidental expenses reasonably associated with the relocation, including utility connection fees, vehicle registration and driver's license transfer fees, and similar costs.
Executive shall submit all relocation expense documentation in accordance with the Company's expense reimbursement policies and within the time periods specified therein. Executive shall use commercially reasonable efforts to complete Executive's relocation to the Las Vegas metropolitan area within one hundred eighty (180) calendar days following the Effective Date. Any portion of the Relocation Allowance that is not utilized by Executive within twelve (12) months following the Effective Date shall be forfeited.
Section 6.2 — Tax Gross-Up on Relocation. To the extent that any relocation benefits, reimbursements, or payments received by Executive pursuant to this Article VI constitute taxable income to Executive for federal, state, or local income tax purposes, the Company shall provide Executive with an additional payment (a "Tax Gross-Up Payment") in an amount sufficient to cover Executive's estimated federal, state, and local income tax liability (including any taxes on the Tax Gross-Up Payment itself) attributable to such taxable relocation benefits, so that Executive is placed in the same after-tax position as if such relocation benefits had not been taxable. The calculation of the Tax Gross-Up Payment shall be performed by the Company's tax department or its designated tax advisor, and such calculation shall be final and binding on both Parties absent manifest error. The Tax Gross-Up Payment shall be made to Executive no later than the end of the calendar year following the calendar year in which Executive remits the applicable taxes.
ARTICLE VII — SECTION 280G
Section 7.1 — Best-Net Cutback. Notwithstanding any other provision of this Agreement or any other plan, arrangement, or agreement to the contrary, if any payment, benefit, or distribution of any type to or for the benefit of Executive by the Company, any Affiliate, any person who acquires ownership or effective control of the Company or ownership of a substantial portion of the Company's assets (within the meaning of Section 280G of the Code and the regulations thereunder), or any affiliate of such person, whether paid, payable, distributed, distributable, or provided pursuant to the terms of this Agreement or otherwise (collectively, the "Payments"), would constitute an "excess parachute payment" within the meaning of Section 280G of the Code, then the aggregate amount of such Payments shall be reduced (but not below zero) to the minimum extent necessary so that no portion of the Payments, as so reduced, would constitute an excess parachute payment and would not be subject to the excise tax imposed by Section 4999 of the Code; provided, however, that such reduction shall be made only if, and to the extent that, the net after-tax benefit to Executive of the reduced Payments (taking into account federal, state, and local income taxes, employment taxes, and the absence of the Section 4999 excise tax) would exceed the net after-tax benefit to Executive of receiving the full Payments without any reduction (taking into account federal, state, and local income taxes, employment taxes, and the Section 4999 excise tax). For the avoidance of doubt, this is a "best net" approach, and in no event shall the Company be obligated to provide Executive with any tax gross-up payment with respect to any excise tax imposed under Section 4999 of the Code.
The determination of whether the Payments would constitute "excess parachute payments" and whether a reduction in the Payments is required under this Section 7.1 shall be made by Calloway Firth & Associates LLP, the Company's independent registered public accounting firm, or such other nationally recognized independent accounting or consulting firm as may be designated by the Company (the "Determining Firm"). The Determining Firm shall provide its determination, together with detailed supporting calculations, to both the Company and Executive within fifteen (15) business days of the date on which the determination is requested by the Company or Executive, or such earlier time as may be required by applicable law. All fees, costs, and expenses of the Determining Firm in connection with any determination under this Section 7.1 shall be borne solely by the Company.
Section 7.2 — Order of Reduction. In the event that a reduction in Payments is required under Section 7.1, the Payments shall be reduced in the following order of priority, to the extent necessary to eliminate the excess parachute payment:
(i) first, any cash severance payments payable to Executive under Article VIII or Article IX of this Agreement;
(ii) second, any accelerated vesting of equity-based awards (with acceleration reversed in the reverse order of the scheduled vesting dates, beginning with the awards that would vest last);
(iii) third, any other cash payments or benefits payable to Executive that are not described in clause (i) above; and
(iv) fourth, any non-cash benefits provided to Executive.
Within each category, if a further ordering is required, amounts that are not subject to Section 409A of the Code shall be reduced before amounts that are subject to Section 409A. Executive shall have no right to determine the order in which the Payments are reduced.
ARTICLE VIII — TERMINATION OF EMPLOYMENT
Section 8.1 — Termination by the Company for Cause.
(a) Definition of Cause. For purposes of this Agreement, "Cause" shall mean the occurrence of any one or more of the following events, as determined in good faith by the Board (or a designated committee thereof):
(i) Executive's conviction of, or plea of guilty or nolo contendere to, a felony under federal or state law, or any crime (whether a felony or misdemeanor) involving fraud, dishonesty, embezzlement, theft, or moral turpitude;
(ii) Executive's willful and material breach of any provision of this Agreement, including, without limitation, any breach of the restrictive covenant obligations set forth in Article X;
(iii) Executive's gross negligence or willful misconduct in the performance of Executive's duties and responsibilities under this Agreement, which is materially injurious to the Company or any of its Affiliates;
(iv) Executive's material violation of any written policy of the Company, including, without limitation, the Company's Code of Business Conduct and Ethics, anti-harassment policy, substance abuse policy, or insider trading policy;
(v) Executive's willful and continued failure or refusal to perform the duties and responsibilities assigned to Executive hereunder (other than any such failure resulting from Executive's Disability), after written notice from the Board specifying the nature of such failure and a thirty (30)-calendar-day cure period within which Executive may remedy such failure;
(vi) Executive's commission of fraud or embezzlement involving the assets, funds, or property of the Company or any of its Affiliates;
(vii) the revocation, denial, suspension, or non-renewal of any gaming license, registration, finding of suitability, or other regulatory approval required for Executive to perform Executive's duties and responsibilities under this Agreement, by any gaming regulatory authority in any jurisdiction in which the Company or any of its Affiliates operates or is licensed; or
(viii) Executive's material failure to cooperate with any internal investigation or any investigation or inquiry by a governmental or regulatory authority, provided that Executive has been given reasonable written notice of the required cooperation and the specific actions requested.
For purposes of this definition, no act or failure to act on Executive's part shall be considered "willful" unless it is done, or omitted to be done, by Executive in bad faith or without a reasonable belief that Executive's action or omission was in the best interests of the Company. Any act, or failure to act, based upon authority given pursuant to a resolution duly adopted by the Board, based upon the advice of counsel for the Company, or based upon the instructions of the Chief Executive Officer shall be conclusively presumed to be done, or omitted to be done, by Executive in good faith and in the best interests of the Company.
(b) Consequences of Termination for Cause. Upon termination of Executive's employment for Cause, Executive shall be entitled to receive only the following (collectively, the "Accrued Obligations"):
(i) any accrued and unpaid Annual Base Salary through the date of termination, payable within the time period required by applicable law;
(ii) any accrued and unused PTO through the date of termination, payable in accordance with applicable law and Company policy;
(iii) any benefits vested as of the date of termination under any employee benefit plan in which Executive participated, payable in accordance with the terms of such plan; and
(iv) reimbursement of any unreimbursed business expenses properly incurred by Executive prior to the date of termination, in accordance with the Company's expense reimbursement policy.
Upon termination for Cause, Executive shall not be entitled to any Annual Bonus (whether accrued, prorated, or otherwise), any acceleration of unvested equity awards, or any severance payments or benefits. All unvested RSUs, PSUs, and any other unvested equity awards shall be immediately and automatically forfeited as of the date of termination. The Signing Bonus clawback provisions set forth in Section 4.3(b) shall apply.
Section 8.2 — Termination by the Company Without Cause. The Company may terminate Executive's employment at any time without Cause by providing Executive with not less than thirty (30) calendar days' prior written notice of such termination. Upon any termination of Executive's employment by the Company without Cause (other than a Qualifying CIC Termination described in Section 9.2), and subject to Executive's execution and non-revocation of a general release of claims substantially in the form attached hereto as Exhibit A within the time period specified therein (and in no event later than sixty (60) calendar days following the date of termination), Executive shall be entitled to receive the following payments and benefits:
(a) Accrued Obligations. All Accrued Obligations as defined in Section 8.1(b), payable in accordance with the terms thereof.
(b) Severance Payment. A cash severance payment equal to one and one-half times (1.5×) the Annual Base Salary as in effect on the date of termination. Based on the current Annual Base Salary, the severance payment equals Seven Hundred Twenty-Five Thousand Dollars ($725,000) multiplied by 1.5, for a total severance amount of One Million Eighty-Seven Thousand Five Hundred Dollars ($1,087,500). The severance payment shall be payable in a single lump sum within sixty (60) calendar days following the date of termination, subject to Executive's timely execution and non-revocation of the general release of claims and compliance with Section 15.8 (Section 409A).
(c) Pro-Rata Annual Bonus. A pro-rata Annual Bonus for the fiscal year in which Executive's termination occurs, based on actual Company and individual performance for such fiscal year as determined by the Compensation Committee in its good faith discretion, prorated for the number of days during such fiscal year during which Executive was employed by the Company, divided by the total number of days in such fiscal year. The pro-rata Annual Bonus, if any, shall be payable at the same time that Annual Bonuses are paid to other senior executive officers of the Company for such fiscal year, but in no event later than March 15 of the calendar year following the fiscal year to which the Annual Bonus relates.
(d) COBRA Continuation. Subject to Executive's timely election of continuation coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended ("COBRA"), the Company shall subsidize the cost of COBRA continuation coverage for Executive and Executive's eligible dependents at the same rate of employer subsidy as was in effect immediately prior to Executive's termination, for a period of eighteen (18) months following the date of termination, or until Executive becomes eligible for substantially comparable group health insurance coverage through a subsequent employer, whichever occurs first. Executive shall promptly notify the Company in writing upon becoming eligible for such alternative coverage. If the Company's subsidization of COBRA coverage would result in adverse tax consequences to the Company or other plan participants, the Company may, in its discretion, provide a taxable cash payment to Executive in an amount equal to the applicable COBRA subsidy.
(e) Pro-Rata Acceleration of Equity. Pro-rata acceleration of unvested RSUs and PSUs as set forth in Section 4.4(e) of this Agreement.
Section 8.3 — Termination by Executive for Good Reason.
(a) Definition of Good Reason. For purposes of this Agreement, "Good Reason" shall mean the occurrence of any one or more of the following events without Executive's prior written consent:
(i) a material reduction in Executive's Annual Base Salary, other than a reduction of less than ten percent (10%) that is applied on a substantially proportionate basis to all similarly situated senior executive officers of the Company;
(ii) a material diminution in Executive's title, authority, duties, or responsibilities, including, without limitation, any change in Executive's position such that Executive is no longer serving as the Chief Financial Officer of the Company (as opposed to a subsidiary or division thereof);
(iii) the relocation of Executive's principal place of employment to a location more than fifty (50) miles from 4100 Sandstone Ridge Boulevard, Las Vegas, Nevada 89119, unless such relocation is to a location closer to Executive's then-current primary residence;
(iv) the Company's material breach of any provision of this Agreement; or
(v) any material adverse change in Executive's reporting structure such that Executive no longer reports directly to the Chief Executive Officer of the Company.
(b) Notice and Cure Requirements. Notwithstanding the foregoing, no event or condition shall constitute Good Reason unless: (A) Executive provides the Company with written notice of the existence of the Good Reason condition within sixty (60) calendar days following Executive's first becoming aware of the initial occurrence of such condition, which notice shall specifically identify the nature of the Good Reason condition and the facts and circumstances giving rise thereto; (B) the Company fails to cure or remedy such condition within thirty (30) calendar days following its receipt of Executive's written notice (the "Cure Period"); and (C) Executive actually resigns from employment within thirty (30) calendar days following the expiration of the Cure Period (assuming the Company has not cured the Good Reason condition during the Cure Period). If Executive fails to provide timely written notice, or if the Company cures the Good Reason condition within the Cure Period, or if Executive fails to resign within the thirty (30)-day period following the Cure Period, then Executive shall be deemed to have waived Executive's right to terminate employment for Good Reason with respect to such occurrence.
(c) Payments and Benefits. Upon Executive's termination of employment for Good Reason in accordance with the procedures set forth in this Section 8.3, Executive shall be entitled to the same payments and benefits as provided in Section 8.2 for a termination without Cause, subject to the same conditions (including execution and non-revocation of the general release of claims).
Section 8.4 — Resignation Without Good Reason. Executive may voluntarily resign from employment at any time without Good Reason by providing the Company with not less than sixty (60) calendar days' prior written notice of such resignation. The Company may, in its sole discretion, waive all or any portion of the notice period and accelerate Executive's date of termination, provided that the Company shall continue to pay Executive's Annual Base Salary and maintain Executive's benefits through the earlier of the original notice period expiration date or such accelerated termination date. Upon Executive's resignation without Good Reason, Executive shall be entitled to receive only the Accrued Obligations as defined in Section 8.1(b). The Signing Bonus clawback provisions set forth in Section 4.3(b) shall apply. All unvested RSUs, PSUs, and other unvested equity awards shall be immediately and automatically forfeited as of the date of termination. Executive shall not be entitled to any Annual Bonus (whether accrued, prorated, or otherwise), any severance payments, COBRA continuation subsidy, or any other post-termination payments or benefits.
Section 8.5 — Termination Due to Death or Disability.
(a) Death. Executive's employment shall terminate automatically upon Executive's death. In the event of Executive's death, Executive's estate, designated beneficiary, or legal representative (as applicable) shall be entitled to receive:
(i) all Accrued Obligations as defined in Section 8.1(b);
(ii) a prorated Target Bonus for the fiscal year in which Executive's death occurs, calculated by multiplying the Target Bonus by a fraction, the numerator of which is the number of days during such fiscal year during which Executive was employed by the Company, and the denominator of which is the total number of days in such fiscal year, payable at the same time Annual Bonuses are paid to other senior executives for such fiscal year;
(iii) full and immediate acceleration of all then-unvested RSUs held by Executive as of the date of death; and
(iv) vesting of all then-unvested PSUs held by Executive at the target level (100% of target), regardless of actual performance during the Performance Period, with settlement occurring within sixty (60) days following the date of death.
(b) Disability. The Company may terminate Executive's employment upon Executive's Disability. For purposes of this Agreement, "Disability" means Executive's inability to perform the essential functions of Executive's position, with or without reasonable accommodation, due to a physical or mental condition, for a period of one hundred eighty (180) or more consecutive calendar days, or for a cumulative period of two hundred seventy (270) or more calendar days in any three hundred sixty-five (365)-calendar-day period, as determined by a licensed physician mutually agreed upon by the Company and Executive (or Executive's legal representative). In the event of termination due to Disability, Executive shall be entitled to receive the same payments and benefits described in Section 8.5(a)(i) through (iv) above for termination due to death.
Section 8.6 — Expiration and Non-Renewal. If either Party provides a notice of non-renewal pursuant to Section 3.2 and Executive's employment terminates upon the expiration of the Employment Term (i.e., at the conclusion of the Initial Term or any Renewal Term, as applicable), such termination shall be treated as a termination by the Company without Cause for purposes of severance payments and benefits under Section 8.2 of this Agreement, and Executive shall be entitled to the payments and benefits set forth therein, subject to the same conditions (including execution and non-revocation of the general release of claims); provided, however, that this Section 8.6 shall not apply if the Company has offered Executive a renewal of this Agreement on terms and conditions that are, in the aggregate, at least as favorable as those then in effect and Executive has declined such offer. For the avoidance of doubt, if it is Executive who provides the notice of non-renewal and the Company has not offered a renewal on terms at least as favorable, the expiration shall still be treated as a termination without Cause under this Section 8.6.
ARTICLE IX — CHANGE IN CONTROL PROVISIONS
Section 9.1 — Definition of Change in Control. For purposes of this Agreement, a "Change in Control" shall mean the occurrence of any one or more of the following events:
(i) Acquisition of Voting Securities. The acquisition by any "person" (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended) or "group" (within the meaning of Rule 13d-5 under such Act) of beneficial ownership (within the meaning of Rule 13d-3 under such Act) of more than fifty percent (50%) of the combined voting power of the then-outstanding voting securities of the Company entitled to vote generally in the election of directors; excluding, however, (A) any acquisition directly from the Company (other than an acquisition by virtue of the exercise of a conversion privilege), (B) any acquisition by the Company, (C) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any Affiliate, or (D) any acquisition by any corporation pursuant to a transaction described in clause (iii)(A) below;
(ii) Change in Board Composition. A change in the composition of the Board such that the individuals who, as of the Effective Date, constitute the Board (the "Incumbent Board") cease for any reason to constitute at least a majority of the Board; provided, however, that for purposes of this definition, any individual who becomes a member of the Board subsequent to the Effective Date whose election, or nomination for election by the Company's shareholders, was approved by a vote of at least a majority of those individuals then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board; and provided, further, that any individual whose initial assumption of office occurs as a result of an actual or threatened solicitation of proxies or consents by or on behalf of a person other than the Board shall not be so considered;
(iii) Business Combination. The consummation of a merger, consolidation, statutory share exchange, reorganization, or similar business combination involving the Company (a "Business Combination"), unless, following such Business Combination, (A) the shareholders of the Company immediately prior to such Business Combination beneficially own, directly or indirectly, more than fifty percent (50%) of the combined voting power of the then-outstanding voting securities entitled to vote generally in the election of directors of the resulting or surviving entity (or its ultimate parent) in such Business Combination in substantially the same proportions as their ownership immediately prior to such Business Combination;
(iv) Liquidation or Dissolution. The approval by the shareholders of the Company of a plan of complete liquidation or dissolution of the Company; or
(v) Asset Sale. The consummation of a sale, transfer, or other disposition of all or substantially all of the assets of the Company, other than to an entity with respect to which, following such sale or disposition, more than fifty percent (50%) of the combined voting power of the then-outstanding voting securities of such entity entitled to vote generally in the election of directors is then beneficially owned, directly or indirectly, by all or substantially all of the individuals and entities who were the beneficial owners of the voting securities of the Company immediately prior to such sale or disposition in substantially the same proportions as their ownership immediately prior to such sale or disposition.
Notwithstanding the foregoing, a Change in Control shall not be deemed to have occurred if it does not also constitute a "change in control event" within the meaning of Treasury Regulation Section 1.409A-3(i)(5), to the extent necessary to avoid the imposition of additional taxes under Section 409A of the Code.
Section 9.2 — Double-Trigger CIC Severance. If, within twenty-four (24) months following a Change in Control, Executive's employment is terminated by the Company (or its successor in interest) without Cause or by Executive for Good Reason (a "Qualifying CIC Termination"), then, in lieu of (and not in addition to) the severance payments and benefits described in Section 8.2, Executive shall be entitled to receive the following payments and benefits, subject to Executive's execution and non-revocation of the general release of claims as described in Section 9.3:
(a) Accrued Obligations. All Accrued Obligations as defined in Section 8.1(b), payable in accordance with the terms thereof.
(b) CIC Severance Payment. A cash severance payment equal to two times (2×) the sum of (I) Executive's Annual Base Salary as in effect immediately prior to the Change in Control or the date of termination, whichever is higher, plus (II) Executive's Target Bonus. Based on the current Annual Base Salary and Target Bonus, the CIC severance payment equals ($725,000 + $725,000) × 2 = Two Million Nine Hundred Thousand Dollars ($2,900,000). The CIC severance payment shall be payable in a single

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