On November 6, 2013, Lakes Entertainment, Inc. (“Lakes”) entered into an Employment Agreement with Lyle Berman, Chief Executive Officer of Lakes (“Berman Agreement”). The term of the Berman Agreement is 36 months, renewable for successive additional two year terms if not terminated by either party. Mr. Berman shall be compensated at an annual rate of $500,000 or such other amount as may be determined by Lakes. Mr. Berman shall also be entitled to participate in Lakes’s incentive compensation program, and shall be provided benefits that are provided to other named executive officers of Lakes. If Lakes terminates the Berman Agreement for any reason except for cause or as a result of a change of control, Mr. Berman shall be entitled to a severance payment, equal to his base salary plus the equivalent of bonus or incentive compensation (based on the average bonus percent rate for the two fiscal years preceding the termination), for 24 months or the period of time remaining in the term of the Berman Agreement, whichever is longer. Additionally, for such period, Mr. Berman shall continue to be entitled to all medical and dental insurance benefits of the type that he received immediately prior to the date of such termination. Further, any outstanding options to purchase shares of stock in Lakes shall immediately vest and become immediately exercisable for a period ending on the earlier of three years after the date of termination or the expiration of the options.

If Mr. Berman is terminated within three years following a change of control without cause, Mr. Berman shall receive a lump sum payment equal to two times Mr. Berman’s annual compensation (as defined in the Berman Agreement), all outstanding options to purchase shares of stock in Lakes shall immediately vest and become immediately exercisable for a period ending on the earlier of three years after the date of termination or the expiration of the options, and Lakes shall use its best efforts to convert any then existing life insurance and accidental death and disability insurance policies to individual policies in the name of Mr. Berman.

The Berman Agreement further includes a prohibition, for the two years after Mr. Berman’s termination, against soliciting any person or entity doing business with Lakes or any active prospect of Lakes for the purpose of diverting Lakes’s business.