EXHIBIT 10.33
May 16, 2002
Xx. Xxxxxx X. Xxx
Chairman and Chief Executive Officer
Pinnacle Entertainment,Inc.
000 X. Xxxxx Xxxxxxxxx, Xxxxx 0000
Xxxxxxxx, Xxxxxxxxxx 00000
Dear Xxx:
I very much enjoyed our recent conversations. It provides a framework for a
long term relationship between me and Pinnacle Entertainment, Inc. ("Pinnacle")
that I am quite comfortable with. The purpose of this letter is to memorialize
our agreement:
1. I will continue to be employed by Xxxxxxxx on an at-will basis.
2. If I voluntarily terminate my employment with Pinnacle and give at
least three months prior written notice of such termination to
Pinnacle, I shall be entitled to receive a severance equal to one
year's base salary (payable in monthly installments) plus a pro rated
bonus for the year, assuming other senior corporate officers receive a
bonus for the year. The bonus, if any, will be paid at the same time
other corporate officers receive their bonuses.
3. The same severance payments will be made to me if Pinnacle terminates
my employment for any reason other than for "cause" which shall mean
and be limited to the matters specified in sections 6.1.1, 6.1.2 and
6.1.3 of my former employment agreement with Pinnacle, as follows:
a) Failure to Perform Duties. If I neglect to perform the duties of
my employment in a professional and businesslike manner after
having received written notice specifying such failure to perform
and a reasonable opportunity, not to exceed ten days, to perform
or if such performance cannot be completed within such time
period, commenced within such period and diligently pursued to
completion as soon as practical thereafter.
b) Willful Breach. If I willfully commit a material breach of my
fiduciary duty to Pinnacle.
Xx. Xxxxxx X. Xxx
May 16,2002
Page 2
c) Wrongful Acts. If I am convicted of a felony or any other serious
crime, commit a serious wrongful act or engage in other
misconduct involving acts of moral turpitude that would make the
continuance of my employment by Pinnacle materially detrimental
to Pinnacle, which determination shall be made in the reasonable
exercise of Xxxxxxxx's judgment.
I understand that Pinnacle need not give me prior notice of
termination.
4. In the event of any termination of my employment for which severance
is payable under 2 and 3 above:
a) Pinnacle will continue employee health insurance coverage to me
and my domestic partner for a period of one (1) year from and
after the termination of my employment;
b) With respect to any unvested options held by me at the date of
termination, Pinnacle will vest me, as of the date of separation,
in such options that were otherwise scheduled to become vested
during the twelve month period following the date of termination;
c) All vested options, including those vesting under 4. b) would be
exercisable within three (3) years following the date of my
termination.
d) I would receive payment for any accrued but unused paid time off
(vacation).
5. I acknowledge that the severance payments to be made under Sections 2
and 3 and the other consideration contemplated under Section 4 are in
full satisfaction of all rights and claims I may have against Pinnacle
arising out of or in connection with my employment by it or its
affiliates (other than my rights of indemnity which shall survive) and
I shall deliver a general release to Pinnacle as a condition precedent
to receiving my severance payments.
Provided that a new option plan is approved by Pinnacle stockholders at the
upcoming shareholder meeting, I understand that you will recommend to the
Compensation Committee a grant to me of 100,000 options, exercisable at the
closing share price on the date of grant and vesting 20% per year over five
years.
Xx. Xxxxxx X. Xxx
May 16,2002
Page 2
6. In the event of a Change of Control (as defined below), all unvested
stock options which were otherwise scheduled to become vested during
the thirty six month period following the Change of Control shall be
deemed immediately and fully vested and exercisable. A Change of
Control shall be defined as:
a) (i) a sale of all or substantially all of the property of the
Company (ii) a sale to any one person, corporation, entity or
group of stock possessing more than thirty percent (30%) of the
aggregate voting power of the then outstanding stock of Company
to another person, corporation or entity, (iii) a change in the
majority of the Board of Directors which is not approved by a
majority of the members of the Board of Directors as of the date
of this Agreement or directors whose election or appointment to
the Board of Directors is approved by directors; (iv) the
dissolution for liquidation of Company; or (v) the
reorganization, merger or combination of the Company with one or
more corporations or entities unless the Company's shareholders
immediately before such reorganization, merger or combination own
stock or equity possessing more than 50% of the voting power of
the stock or equity of the surviving corporation or entity in
substantially the same proportions after such reorganization,
merger or combination as they owned in the Company immediately
before such reorganization, merger, or combination.
Xxx, I appreciate your thoughtfulness in this matter. I look forward to
working with you for many years to come.
Very truly yours,
/s/ Xxxxx X. Xxxxxx
Xxxxx X. Xxxxxx
Xxxxxx to and accepted this 16th
day of May, 2002
Pinnacle Entertainment, Inc.
By: /s/ Xxxxxx X. Xxx
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Xxxxxx X. Xxx, Chairman & CEO
