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EXHIBIT 10.99-2
EXECUTIVE EMPLOYMENT AGREEMENT
XXXXXXX X. XXXXXX
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EXECUTIVE EMPLOYMENT AGREEMENT
("AGREEMENT")
EXECUTIVE EMPLOYMENT AGREEMENT, effective January 1, 2000 ("Effective
Date"), by and between Black Hawk Gaming & Development Company, Inc., a Colorado
corporation (the "Company") and Xxxxxxx X. Xxxxxx (the "Executive").
WHEREAS, the Company desires to continue to employ the Executive and the
Executive desires to be so employed by the Company, from and after the date of
this Agreement it being specifically acknowledged by each party hereto that upon
execution and delivery of this Agreement the Employment Agreement dated November
12, 1996 between the parties hereto shall be terminated and superseded by this
Agreement.
NOW, THEREFORE, in consideration of the mutual covenants contained herein,
the parties agree as follows:
ARTICLE I
EMPLOYMENT DUTIES AND BENEFITS
SECTION 1.1 EMPLOYMENT. The Company hereby employs the Executive as Chief
Executive Officer of the Company. The Executive accepts such employment and
agrees to perform the duties and responsibilities assigned to him under this
Agreement.
SECTION 1.2 DUTIES AND RESPONSIBILITIES. During the Period of
Employment, Executive agrees to serve the Company as Chief Executive Officer and
Chairman of the Board of the Company and in such other offices and directorships
of the Company and of its subsidiaries and related companies (collectively,
"Affiliates") to which he may be elected or appointed, and to perform the duties
commensurate with such positions and such other reasonable and appropriate
duties as may be requested of him by the board of directors of the Company (the
"Board of Directors"), in accordance with this Agreement and in compliance with
all applicable laws and regulations. Excluding periods of vacation and sick
leave to which Executive is entitled, Executive shall devote such time, energy,
and skill to the business and affairs of the Company and its affiliates and to
the promotion of their interests as is necessary to perform the duties required
of him by this Agreement.
SECTION 1.3 WORKING FACILITIES; LOCATION. The Executive shall be
furnished with facilities and services suitable to his position and adequate for
the performance of his duties under this Agreement. The principal place of
performance by Executive of his duties hereunder shall be in West Palm Beach,
Florida or at such other location as he may reasonably be required to travel in
the performance of his responsibilities.
SECTION 1.4 VACATIONS. The Executive shall be entitled each year during
the Term, as defined below, to a vacation with full salary and benefits, for the
number of weeks set forth in the Company's Employee Handbook.
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SECTION 1.5 EXPENSES. The Executive is authorized to incur reasonable
expenses for promoting the business of the Company in all respects, including
expenses for entertainment, travel and similar items. The Company will promptly
reimburse the Executive for all such expenses upon the presentation by the
Executive, from time-to-time, of an itemized account of such expenditures.
SECTION 1.6 BENEFIT PLANS. From the effective date of this Agreement, the
Executive shall be entitled to participate in benefit plans provided to
employees of the Company. Such participation shall be based upon the policies
established in the Company's Employee Handbook as applicable to Executive.
ARTICLE II
COMPENSATION
SECTION 2.1 BASE SALARY. During the Term, the Company shall pay to the
Executive a Base Salary equal to the greater of: (i) $300,000 per year payable
in accordance with the Company's payroll and withholding policies; or (ii) an
amount equal to 1.5% of the Company's annual EBITDA up to $50 million; provided
however, any amounts payable under (ii) shall be accrued but payment deferred
unless and until the Company is In Ratio. In connection with its annual audit
each year, the Company shall compute the amount, if any, by which the Base
Salary in subsection (ii) exceeds the amount in subsection (i) above and shall
pay any such excess to the Executive on or before the next April 15 following
the computational year, if the Company was In Ratio at the end of such year.
For purposes of the foregoing, these definitions control:
"Annual" means the one year period ending on December 31 of each year
during the Term.
"Company Debt" means on a consolidated basis the Company's long term and
current portion (without duplication) of all bank borrowings and institutional
debt, including capitalized lease obligations, but excluding the outstanding
balance and accrued interest on The Lodge Casino's Special Improvement District
Bonds.
"EBITDA" means the net income of the Company determined in accordance with
generally accepted accounting principles, consistently applied, for any Annual
reporting period beginning with the period ended December 31, 2000, before
deductions for interest, taxes, depreciation and amortization charges.
"In Ratio" means at December 31 of each year that: (i) the ratio of EBITDA
to interest on Company Debt is at least 2:1; and (ii) the Company is in full
compliance with the financial ratios under the Xxxxx Fargo Credit Agreement
dated April 23, 1999 (or any substituted facility).
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SECTION 2.2 BONUS AND BONUS PLAN PARTICIPATION. The Executive will be
entitled to an annual bonus for each year ended December 31 during the Term in
an amount equal to a minimum of 25% and a maximum of 40% of the Executive's Base
Salary. The amount of the percentage within the foregoing range shall be
determined in the sole discretion of the Compensation Committee of the Company's
Board of Directors and shall be based on written objectives defined by such
Committee.
SECTION 2.3 STOCK OPTIONS. The Company will grant as of the date of this
Agreement to the Executive, 45,000 stock options under the Company's 1994 or
1996 Incentive Stock Option Plan as follows: All options will have an exercise
price of $6.46, vesting as follows: the first 15,000 options will vest on
January 1, 2001, the second 15,000 options will vest on January 1, 2002 and the
final 15,000 options will vest on January 1, 2003. All options will expire on
January 1, 2005.
ARTICLE III
TERM OF EMPLOYMENT AND TERMINATION
SECTION 3.1 TERM. This Agreement shall be for a period of three years
commencing on January 1, 2000 and ending on December 31, 2002, subject, however,
to termination during such period as provided in this Article (the "Term").
SECTION 3.2 TERMINATION BY THE COMPANY WITH CAUSE. The Company may
terminate the Executive's employment, at any time, for cause upon ten days'
written notice and opportunity for the Executive to remedy any non-compliance
with the terms of this Agreement (if such non-compliance can be remedied).
Grounds for termination "for cause" shall be one or more of the following: (i)
intentional and material breach of his duty of loyalty or care to the Company,
(ii) gross negligence or willful misconduct in performance of his duties during
the course of his employment, (iii) persistent failure to abide by the corporate
policies and procedures set forth in the Company's Employee Handbook; (iv)
persistent failure to execute the reasonable and lawful instructions of the
Company's Board of Directors relating to the operation of the Company's
business, and (v) conviction of any felony crime or loss of his gaming license
in Colorado. Upon the date of termination of the Executive's employment pursuant
to this Section 3.2, the Company's obligation to pay any compensation including
bonuses shall terminate, at which time the Company shall be responsible for
compensating the Executive for any unpaid salary and vacation time not taken.
Subject to this exception and the obligation of the Company to compensate the
Executive through the notice period, no other compensation shall be payable to
the Executive should this Agreement be terminated pursuant to this Section 3.2.
SECTION 3.3 TERMINATION OR CESSATION OF EMPLOYMENT WITHOUT CAUSE. In the
event that Executive's employment is terminated or ceased without cause, all
compensation shall cease, but the Company shall be obligated to compensate the
Executive with lump sum severance pay equal to the present value of his salary
otherwise payable during the Term of this Agreement. In the event Executive's
employment is terminated pursuant to this Section 3.3, the Executive shall be
entitled to participate in the bonus payable pursuant to Section 2.2 with
respect to the year in which his employment is terminated pro rated for
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the year based on the number of full months employed during such year compared
to 12; and provided further that the non-competition covenant in Section 4.1(c)
below shall be automatically terminated.
SECTION 3.4 TERMINATION UPON DEATH OF THE EXECUTIVE. In addition to any
other provision relating to termination, this Agreement shall terminate upon the
Executive's death. In such event, all unpaid compensation, compensation for
vacation time not taken by the Executive and all expense reimbursements due to
the Executive shall be paid to the Executive's estate. In the event Executive's
employment is terminated pursuant to this Section 3.4, the Executive's estate
shall be entitled to a death benefit equal to six months salary and to
participate, in the bonus payable pursuant to Section 2.2 with respect to the
year in which his employment is terminated pro rated for the year based on the
number of full months worked during such year compared to 12.
SECTION 3.5 TERMINATION UPON SALE. (a) If during the Term, the Company:
(i) is merged into another company;
(ii) sells all or substantially all of its assets to another
company or person;
(iii) experiences a change in ownership of 50% or more of its
outstanding common stock; or
(iv) issues shares in excess of 50% of its then outstanding
common stock to another company or person;
and the Executive is not offered, by the acquiring company or person, an
employment position, or not offered an employment position satisfactory to
him (in his sole discretion), he shall be deemed Terminated Without Cause
and shall be entitled to a severance payment in an amount equal to one
year's Base Salary which shall be in addition to amounts payable to the
Executive under Section 3.3 above.
(b) The foregoing subsection 3.5(a) shall not apply if the Executive
is an equity participant in any of the transactions described in subsection
3.5(a)(i)-(iv) above.
ARTICLE IV
CONFIDENTIALITY AND COMPETITION
SECTION 4.1 FURTHER OBLIGATIONS OF THE EXECUTIVE DURING AND AFTER
EMPLOYMENT.
(a) The Executive agrees that during the term of his employment under
this Agreement, he will engage in no other business activities which are or
may be competitive with, or which might place him in a competing position
to that of, the Company or any subsidiary of the Company except as
authorized by the Company's Board of Directors.
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(b) The Executive realizes that during the course of his employment,
the Executive will have produced and/or have access to confidential
business plans, information, business opportunity records, notebooks, data,
specifications, trade secrets, customer lists and account lists of the
Company and its affiliates ("Confidential Information"). Therefore, during
or subsequent to his employment by the Company, or by an affiliate, the
Executive agrees to hold in confidence and not to directly or indirectly
disclose or use or copy or make lists of any such Confidential Information,
except to the extent authorized by the Company in writing. All records,
files, business plans, documents, equipment and the like, or copies
thereof, relating to Company's business, or the business of an affiliated
company, which the Executive shall prepare, or use, or come into contact
with, shall remain the sole property of the Company, or of an affiliated
company, and shall not be removed from the Company's or the affiliated
company's premises without its written consent, and shall be promptly
returned to the Company upon termination or resignation of employment with
the Company or its affiliated companies.
(c) Because of his employment by the Company, the Executive will have
access to trade secrets and confidential information about the Company, its
business plans, its business accounts, its business opportunities, its
expansion plans into other geographic areas and its methods of doing
business. The Executive agrees that for the Term of this Agreement and an
additional period of one year he will not:
(i) engage or participate, directly or indirectly, as an owner,
partner, shareholder, consultant, director, officer, employee, agent
or otherwise in any business which owns, operates, manages or provides
consulting services to a gaming casino in Black Hawk, Colorado or any
other city or town in which the Company has any significant gaming
activities; or
(ii) take any actions which are calculated to persuade any
employee, vendor or supplier of the Company to terminate or modify in
any adverse manner their association with the Company.
(d) In the event a court of competent jurisdiction finds any provision
of this Section 4.1 to be so overbroad as to be unenforceable, then such
provision shall be reduced in scope by the court, to the extent deemed
necessary by the court to render the provision reasonable and enforceable.
Executive acknowledges and agrees that any breach of this Agreement by
Executive would cause immediate irreparable harm to the Company. Executive
agrees that should he violate any of the terms and conditions of this
Agreement, the Company, at its sole discretion, shall be entitled to seek
and obtain immediate injunctive relief and enjoin further and future
violations of this Agreement.
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ARTICLE V
DISABILITY AND ILLNESS
SECTION 5.1 DISABILITY AND SALARY CONTINUATION.
(a) Definition of Total Disability. For purposes of this Agreement,
the terms "totally disabled" and "total disability" shall mean disability
as defined in any total disability insurance policy or policies, if any, in
effect with respect to the Executive. If no insurance policy is in effect,
"total disability" shall mean a medically determinable physical or mental
condition which, in the opinion of two physicians chosen by the mutual
consent of the parties, renders the Executive unable to perform
substantially all of the duties required pursuant to this Agreement. Total
disability shall be deemed to have occurred on the date of the disabling
injury or onset of the disabling illness, as determined by the two
independent physicians. In the event that the two independent physicians
are unable to agree as to the date of the disabling injury or onset of the
disabling illness, such date shall be deemed to be the later of the two
dates determined by the physicians chosen pursuant to this Section 5.1(a).
(b) Salary Continuation. If the Executive becomes totally disabled
during the term of this Agreement, his full salary shall be continued for
90 days from the date of the disabling injury or onset of the disabling
illness as determined in accordance with the provisions of Section 5.1(a)
above and thereafter the Executive's employment may be terminated in
accordance with the provisions of Section 3.3.
Section 5.2 Illness. If the Executive is unable to perform the services
required under this Agreement by reason of illness or physical injury not
amounting zto total disability, also as determined in this Article, the
compensation otherwise payable to the Executive under this Agreement shall be
continued for a period of six months and he shall be entitled to participate in
the bonus payable in Section 2.2 with respect to the year in which the illness
occurred prorated for the year based on the number of months worked during such
year compared to 12 after which the Company shall have no further obligation to
the Executive.
ARTICLE VI
GENERAL MATTERS
SECTION 6.1 GOVERNING LAW. This Agreement shall be governed by the laws of
the State of Colorado and shall be construed in accordance therewith.
SECTION 6.2 NO WAIVER. No provision of this Agreement may be waived except
by an agreement in writing signed by the waiving party. A waiver of any term or
provision shall not be construed as a waiver of any other term or provision.
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SECTION 6.3 AMENDMENT. This Agreement may be amended, altered or revoked at
any time, in whole or in part, by filing with this Agreement a written
instrument setting forth such changes, signed by each of the parties.
SECTION 6.4 BENEFIT. This Agreement shall be binding upon the Executive and
the Company, and shall not be assignable by either party without the other
party's written consent.
SECTION 6.5 SEVERABILITY. If any provision of this Agreement is declared by
any court of competent jurisdiction to be invalid for any reason, such
invalidity shall not affect the remaining provisions. On the contrary, such
remaining provisions shall be fully severable, and this Agreement shall be
construed and enforced as if such invalid provisions had not been included in
the Agreement.
SECTION 6.6 EFFECTIVE DATE. The effective date of this Agreement shall be
January 1, 2000.
Section 6.7 Arbitration. The Company and the Executive expressly agree that
all disputes arising out of this Agreement shall be resolved by arbitration in
accordance with the following provisions. Either party must demand in writing
such arbitration within 10 days after the controversy arises by sending a notice
to arbitrate to both the other party and to the American Arbitration Association
(hereinafter referred to as "AAA"). The controversy shall then be arbitrated
pursuant to the rules promulgated by the AAA at the AAA's offices located in
Denver, Colorado. The parties will select by mutual agreement the arbitrator or
arbitrators (hereinafter collectively referred to as "arbitrator") to hear and
resolve the controversy. The arbitrator shall be governed by the express terms
of this Agreement and the laws of the State of Colorado. The arbitrator's
decision shall be final and binding on the parties and shall bar any suit,
action, or proceeding instituted in any federal, state, or local court or
administrative tribunal. Notwithstanding the preceding sentence, the
arbitrator's judgment may be entered in any court of competent jurisdiction.
These arbitration provisions shall survive the termination of this Agreement.
BLACK HAWK GAMING &
DEVELOPMENT COMPANY, INC.
By: /s/ Xxxxxxx X. Xxxxx
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Xxxxxxx X. Xxxxx, President
EXECUTIVE:
/s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx
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