Exhibit 10.27
EMPLOYMENT AND CONSULTING AGREEMENT
This Employment and Consulting Agreement (the "Agreement") is entered into
between Pinnacle Entertainment, Inc., a Delaware corporation (the "Company"),
and G. Xxxxxxx Xxxxxxxx ("Xxxxxxxx") as of April 11, 2002 in accordance with the
parties' mutual desire to extend Xxxxxxxx'x current employment relationship with
a subsidiary of the Company through December 31, 2002 and thereafter to convert
Xxxxxxxx'x relationship with the Company into a consulting relationship.
1. Xxxxxxxx'x current employment as President and Chief Executive Officer
of Realty Investment Group, Inc. will continue on the same terms as those
currently applicable to such employment until December 31, 2002. Upon
termination of such employment on such date, Xxxxxxxx will be eligible to
receive such bonus or additional option grants, if any, as the Board of
Directors of the Company may determine to award in its sole discretion.
2. Effective January 1, 2003, Xxxxxxxx will be retained by the Company
hereunder as a consultant for a five-year term ending December 31, 2007. As
consideration for Xxxxxxxx'x services and for the promises described in this
Agreement, the Company shall compensate Xxxxxxxx at the rate of $400,000 per
year, payable monthly. In addition, Xxxxxxxx shall be eligible to receive such
bonus or additional option grants, if any, as the Board of Directors of the
Company may determine to award in its sole discretion. Xxxxxxxx'x existing
options to purchase shares of the Company's common stock (and any new grants)
shall remain outstanding throughout the term of the consultancy and shall be
exercisable in accordance with their terms and for a three year term thereafter
(or the remaining life of the options, if shorter). In addition, during the term
of the consultancy, Xxxxxxxx will continue to receive at the Company's expense
such fringe and health benefits and perquisites as are available to Xxxxxxxx
currently. If continued participation in one or more of these fringe benefits is
not possible due to legal or other constraints, the Company shall provide
Xxxxxxxx with sufficient funds on a monthly basis to enable Xxxxxxxx to secure
fringe benefits, on an after-tax basis, substantially similar to those to which
Xxxxxxxx was entitled immediately prior to termination of his employment.
3. During the term of the consultancy, Xxxxxxxx will provide to the Company
and its affiliates executive consulting services similar in nature to services
previously provided by Xxxxxxxx at such times and in such locations as the
Company and Xxxxxxxx may mutually agree. The Company acknowledges and agrees
that Executive shall be free to accept other employment during the term of the
consultancy and that his inability or unwillingness to perform consulting
services requested by the Company due to conflicting work, personal commitments
or otherwise shall not be cause for termination of this agreement. To the extent
travel is required in connection with Xxxxxxxx'x services, such travel shall be
at the Company's expense.
4. Xxxxxxxx agrees that, during the duration of the consultancy, he will be
bound by the same rules and duties, including the duty of loyalty, as are
employees of the Company generally. In addition, Xxxxxxxx agrees that he will
not engage in any activities
which are directly or indirectly inconsistent with his status as a consultant to
the Company nor will he disclose during the period of the consultancy or
thereafter any confidential or proprietary information gained during or as a
result of his employment by or consultancy with the Company. Xxxxxxxx also
agrees that, when his consultancy with the Company under this Agreement ends, he
will immediately deliver to the Company any documents and materials, of whatever
nature, relating to the Company, its products and/or its services which he
acquired during the period of his consultancy or which were otherwise in his
possession.
5. During the term of the consultancy, Xxxxxxxx may pursue other business
interests but shall not directly or indirectly compete as an officer, director,
employee, consultant or shareholder of any gaming company which competes with
the Company's gaming businesses. Notwithstanding the foregoing, Xxxxxxxx may
have passive interests not to exceed 3% in each case in publicly traded
companies engaged in the gaming business.
6. Xxxxxxxx shall have the right at any time to designate any person(s) or
trust(s) as beneficiaries to whom any benefits payable under this Agreement
shall be made in the event of Xxxxxxxx'x death prior to the distribution of all
benefits due Xxxxxxxx under this Agreement. Each beneficiary designation shall
be effective only when filed in writing with the Company during Xxxxxxxx'x
lifetime. If Finnigan designates more than one beneficiary, distributions of
cash payments shall be made in equal proportions to each beneficiary unless
otherwise provided for in Xxxxxxxx'x beneficiary designation. The filing of a
new beneficiary designation shall cancel all designations previously filed. Any
finalized marriage or divorce (other than common law marriage) of Xxxxxxxx'x
subsequent to the date of filing a beneficiary designation shall revoke such
designation unless (a) in the case of divorce, the previous spouse was not
designated as beneficiary, and (b) in the case of marriage, Xxxxxxxx'x new
spouse had previously been designated as beneficiary. If Xxxxxxxx fails to
designate a beneficiary as provided for above, or if the beneficiary designation
is revoked by marriage, divorce or otherwise without execution of a new
designation, or if the beneficiary designated by Xxxxxxxx dies prior to
distribution of the benefits due Xxxxxxxx under this Agreement, the Company
shall direct the distribution of any benefits due under this Agreement to
Xxxxxxxx'x estate.
7. In the event of a "change of control" with respect to the Company, any
unvested options then held by Finnigan shall immediately become exercisable and
Xxxxxxxx may terminate this Agreement by written notice to the Company at
anytime thereafter. Upon such termination, the Company shall pay to Xxxxxxxx a
lump sum payment of the amounts payable to Xxxxxxxx pursuant to paragraph 2
through the end of the term of this Agreement (whether or not a change of
control occurs prior to commencement of the consultancy portion of this
agreement). For purposes of this Agreement, a change of control shall mean (a) a
sale of all or substantially all of the property of the Company; (b) 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 the Company to another person, corporation or entity; (c) 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; (d) the dissolution for liquidation
of the Company; or (e) 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.
8. The Company may assign its rights and delegate its duties under this
Agreement. Xxxxxxxx may assign his rights under this Agreement only with the
Company's prior written consent or as provided herein. Xxxxxxxx may not delegate
his duties. This Agreement shall be binding upon and shall inure to the benefit
of the parties hereto and their respective heirs, legal representatives,
successors and assigns, except as otherwise provided herein.
9. At the end of the consultancy, Xxxxxxxx may purchase any of the
furniture or equipment he has been principally using at its then depreciated
book value.
10. This Agreement constitutes the total and complete agreement of the
parties and supersedes all prior and contemporaneous understandings and
agreements heretofore made, and there are no other representations,
understandings or agreements. The provisions of this Agreement may not be
waived, altered, amended or repealed in whole or in part except by the signed
written consent of the parties sought to be bound by such waiver, alteration,
amendment or repeal. The failure or delay on the part of the Company or Xxxxxxxx
to exercise any right or remedy, power or privilege hereunder shall not operate
as a waiver thereof. A waiver, to be effective, must be in writing and signed by
the party making the waiver. A written waiver of default shall not operate as a
waiver of any other default or of the same type of default on a future occasion.
11. This Agreement and all subsequent agreements between the parties shall
be governed by and interpreted, construed and enforced in accordance with the
laws of the State of California.
12. This Agreement may be executed in one of more counterparts, each of
which shall be deemed and original, but all of which shall together constitute
one and the same instrument.
Executed May 14, 2002 and effective as of the 10th day of April, 2002.
PINNACLE ENTERTAINMENT, INC.
/s/ Xxxxxx X. Xxx
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By: Xxxxxx X. Xxx
Its: Chief Executive Officer
/s/ G. Xxxxxxx Xxxxxxxx
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G. Xxxxxxx Xxxxxxxx
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Address for notices
