EXHIBIT 10.7
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is made and entered into as of, June 25, 2001,
(Employment Agreement") by and between Xxxxxx Colorado Gaming, LLC, a Colorado
limited liability company d/b/a Fitzgeralds Black Hawk ("the Company") and Xxx
X. Xxxxxxx ("Executive").
RECITALS
A. The Company and the Executive desire to enter into an Employment
Agreement, which supersedes any and all other agreements, either oral
or in writing with respect to the employment of Executive by the
Company.
B. The Company and the Executive desire that the Employment Agreement only
become effective upon the successful completion of the acquisition of
Fitzgeralds Black Hawk by the Company ("Acquisition Date").
1. Terms
The Company hereby agrees to employ Executive, and Executive hereby
agrees to serve the Company, on the terms and conditions of the
Employment Agreement, for a two year period ("Period of Employment")
commencing on the Acquisition Date (such Period of Employment being
subject to earlier termination provided herein). Upon the expiration of
the Period of Employment, Executive's employment with the Company shall
cease, unless mutually extended by both parties.
2. Duties and Services
During the period(s) of employment, Executive agrees to serve the
Company as its Vice President and General Manager and in such other
offices and positions of the Company within his areas of expertise and
to perform such other reasonable and appropriate duties consistent with
such positions (s) as may be requested of him by the President and
Chief Executive Officer and/or his designee of the Company, In
accordance with the terms herein set forth. Excluding periods of
personal time off to which Executive is entitled, Executive shall
devote his full time energy and skills to the business and affairs of
the Company and to the promotion of its interests. The Executive shall
perform all such duties to the best of his ability and in a diligent
manner. Executive may be reasonably required to travel outside Black
Hawk, Colorado from time to time. Executive acknowledges and agrees
that this Employment is subject to the licensing and regulatory control
of the Colorado Division of Gaming and various other state, county and
city gaming regulatory enforcement agencies (collectively the "Gaming
Authorities") which may require that Executive be Investigated for
personal suitability and licensing. Executive shall fully cooperate
with the Gaming Authorities in order that he may obtain all required
licenses, permits, approvals or findings of suitability required in
connection with his employment hereunder. Company agrees to pay all
reasonable costs associated with licensing of Executive.
3. Compensation
(a) Salary. As compensation for his services hereunder, the
Company shall pay Executive during the Period of Employment,
annual salary of One Hundred Sixty Thousand Dollars ($160,000)
less all applicable federal, state and local taxes, social
security and other governmental mandated deductions, which
shall be payable in installments in accordance with the
Company's compensation schedule as in existence from time to
time. On the anniversary of the Acquisition Date, the
Executive shall receive an annual performance review at which
time he shall be considered for a merit increase in his annual
salary.
(b) Bonus. On the one (1) year anniversary of the Acquisition
Date, Executive shall be eligible to receive a retention bonus
of Twelve Thousand Dollars ($12,000), provided the Executive
is then employed by the Company and in good standing. In
addition, Executive shall be entitled to such bonuses and
other benefits as the Company may periodically award in its
sole discretion.
(c) Fringe Benefits. For such period of time as Executive is
employed by the Company during the Period of Employment,
Executive shall receive coverage under the Company's medical
insurance program (as such program is in effect from time to
time) on terms no less favorable than those generally made
available to the Company's executives, shall receive a five
hundred dollar ($500) per month car allowance, and shall
receive a five thousand dollar ($5,000) per annum allowance
for unreimbursed medical expenses submitted in accordance with
expense procedures. Nothing contained herein shall preclude
the Executive from participating in any present or future
employee benefit plans of the Company, including without
limitation any 401 (k) plan, profit-sharing plan, savings
plan, deferred compensation plan and health and accident plan
or arrangement, if he meets the eligibility requirements
therefor.
(d) Vacation. Executive shall be entitled to maintain his current
vacation schedule to be taken at time or times mutually
acceptable to Executive and the Company, in accordance with
the policy in effect at the time.
(e) Business Expenses. All reasonable travel and other expenses
incident to the rendering of services by Executive hereunder
shall be paid by the Company. If any such expenses are paid in
the first instance by Executive, the Company shall reimburse
him therefor on presentation of appropriate documentation
required by the Internal Revenue Code and Regulations or
otherwise required under the Company policy in connection with
such expenses.
4. Early Termination
(a) Notwithstanding the provisions of Section 1 hereof, the
Executive may be terminated by the Company for Cause (as
defined herein), in which event the period of employment
hereunder shall cease and terminate and the Company
shall have no further obligation or duties under this
Employment Agreement, except for obligations accrued under
Section 3 as of the date of termination.
(b) Prior to termination for a performance deficiency as described
in Sections 4(a)(v),(vi), (vii) and (viii). Executive shall be
given notice of deficiency and thirty (30) days within which
to cure the same.
For the purposes of this Employment Agreement ("Cause") shall be deemed to exist
only upon (i) conviction of a felony (ii) embezzlement or misappropriation of
funds or property of the Company or any affiliates; (iii) failure to obtain and
maintain during the period(s) of employment all licenses, permits, approvals or
findings or suitability with Gaming and other Regulatory Authorities approval or
finding of suitability; (iv) conviction of any criminal or other improper act
which could result in the suspension or revocation of any such license, permit
approval or finding of suitablity; (v) Executive's repeated failure to comply
with any policies or procedures of the Company whether or not now in effect;
(vi) upon the material breach by Executive of this Employment Agreement; (vii)
excessive absenteeism or tardiness on the part of the Executive or (viii) any
other conduct which has or may reasonably be expected to have a material adverse
effect on the Company or the business of the company.
(c) In addition, the Period of Employment hereunder shall cease
and terminate upon the earliest to occur the following events:
(i) death of executive, or (ii) the inability of Executive by
reason of physical or mental disability to continue the proper
performance of his duties hereunder for a period of sixty (60)
consecutive days (subject to the requirements of the Americans
with Disabilities Act and Family Medical Leave Act). Upon the
occurence of these events the Company shall continue to pay to
Executive or his estate, the entire compensation otherwise
payable to him under Section 3(a) hereof for the lesser of
sixty (60) days or the remaining Period of Employment and
shall have no further obligation or duties under this
Employment Agreement.
(d) In the event that the Executive is discharged by the Company
other than Cause pursuant to Section 4(a) hereof or is
discharged by reason of physical or mental disability pursuant
to Section 4(b) hereof, Executive shall have no further
obligations or duties under this Employment Agreement;
provided, however, that Executive shall continue to be bound
by the provisions of Section 5 hereof. However, if Executive
should die prior the end of such period, the provisions of
Section 4(a) hereof shall be applicable as though the
Executive's employment hereunder had not been terminated.
(e) This Employment Agreement may be terminated by mutual
agreement of the Company and the Executive. The terms and
conditions of any such termination agreement shall be set
forth in writing and signed by both parties.
5. Confidentiality, Intellectual Property and Non-Competition
(a) The Company and Executive acknowledge that the services to be
performed by Executive under this Employment Agreement are
unique and extraordinary and, as a result of such employment,
Executive will be in possession of confidential information,
proprietary information and trade secrets (collectively,
"Confidential Information") relating to the business practices
of the Company and its affiliates, and that these constitute
"Trade Secrets" under the Colorado Uniform Trade Secrets Act.
Trade Secrets Act. The Confidential Information referenced herein includes but
is not limited to the following which are or were developed for the Company by
Executive or any other Company employee or agent; names and addresses of guests;
computer programs; software and disks; business plans; analytical techniques and
methodology; measurement criteria; guest developement techniques; market
research; training manuals and video tapes. Executive agrees that he will not
disclose or use the Confidential Information, directly or indirectly during or
after his employment, other than in the performance of his duties for the
Company.
(b) The Company and Executive agree that violation of Executive's
obligations under Section 5(a) of this Employment Agreement
shall constitute "misappropriation" of the Company's trade
secrets under the Colorado Trade Secrets Act, and the
Company's remedies for any such violation shall be those set
out in the said Act.
(c) Upon termination of his employment with Company for any
reason, Executive shall (i) immediately return to the Company
all the materials delivered to Executive during employment of
paid for by the Company, including but not limited to,
originals, duplicates or copies of keys, tools, telephones,
pagers, manuals, plans, memoranda, reports, systems,
procedures, forms, advertising materials, offices supplies,
presentations, flow charts, narratives, organization charts
and other employment agreements, (ii) give to the Company on
computer disk and then destroy any trade secrets in any
physical form, including originals, duplicates, or copies to
the Company and (iii) give to the Company on computer disk and
then destroy any trade secrets or any other Company
information stored in any computer or electronic device owned
or used by Executive.
(d) All programs, ideas, strategies, approaches, practices or
inventions created, developed, obtained or conceived of by
executive during the term hereof by reason of his employment
by the Company, shall be owned and belong exclusively to the
Company, provided that they are related in any manner to
business or that of any of it's affiliates. Executive shall
(i) promptly disclose all such programs ideas, strategies,
approaches, practices, inventions or business opportunities to
the Company and (ii) execute and deliver to the Company,
without additional compensation, such instruments as the
Company may require from time to time to evidence its
ownership of any such terms.
(e) Executive agrees that during the period of employment he will
not become a stockholder, director, officer, employee or agent
of or consultant to any corporation, or member of or
consultant to any partnership or other entity, or engage in
any business as a sole proprietor or act as a consultant to
any such entity, or otherwise engage, directly or indirectly,
in any enterprise, in each case which competes with or has a
vendor relationship with any business or activity engaged in,
or known by Executive to be contemplated to be engaged in, by
the Company or any of it's affiliates, provided, however,
that competition shall not include the ownership (solely as an
investor and without participation in or contact with the
management of the business) of less than one percent of the
outstanding share of stock of any corporation engaged in any
such business, which shares are regularly traded on a national
securities exchange or in an over-the-counter market. The
Company, in its sole discretion, may waive one or more of the
restrictions set forth in this subsection; however, any such
waiver must be in writing executed by an authorized Company
representative, and shall be effective only to the extent it
is set forth in writing.
(f) Executive agrees that for a one (1) year term following his
termination of employment with the Company, in Xxxxxx County,
Colorado, he will not become a stockholder, director, officer,
employee or agent of or consultant to any corporation, or
member of or consultant to any partnership or other entity or
engage in any business as a sole proprietor in or act as a
consultant to any such entity in or otherwise engage, directly
or indirectly, in any enterprise in each case which competes
with or has a vendor relationship with any business or
activity engaged in, or known by Executive to be contemplated
to be engaged in, by the Company or any of its affiliates,
provided, however, that competition shall not include the
ownership (solely as an investor and without any other
participation in or contact with the management of the
business) of less than one percent of the outstanding shares
of stock of any corporation engaged in any such business,
which shares are regularly traded on a national securities
exchange or in an over-the-counter market. The Company, in its
sole discretion, may waive one or more of the restrictions
set forth in this subsection; however, any such waiver must be
in writing executed by an authorized Company representative,
and shall be effective only to the extent it is set forth in
writing.
(g) Executive further agrees that neither Executive nor any person
enterprise controlled by Executive will solicit for employment
any person employed by the Company or any of its sister
properties during and within one year following the
termination of Executive's employment.
(h) Unless required by law, Executive shall not disclose the
existence of this Employment Agreement or the terms and
conditions hereof to any other person, except to Executive's
attorneys, accountants and financial/banking institutions who
have a need to know.
(i) The covenants in this Section 5 on the part of the Executive
shall be construed as an agreement independent of any other
provision in its Employment Agreement; and the existence of
any claim or cause of action of Executive against Company,
whether predicted on this Employment Agreement or otherwise,
shall not constitute a defense to the enforcement by Executive
of these covenants. It is agreed by the parties hereto that if
any portion of the covenants against solicitation are held to
be unreasonable, arbitrary or against public policy, the
covenants herein shall be considered divisible both as to time
and scope; and each month of the specified period shall be
deemed a separate period of time, so that the lesser period of
time shall remain effective so long as the same is not
unreasonable, arbitrary, or against public policy. The parties
hereto agree that, in the event any court determines the
specified time period to be reasonable, arbitrary or against
public policy, a lesser time period which is determined to be
unreasonable, not arbitrary and not against public policy may
be enforced against Executive. It is further agreed by the
parties hereto that, in the event of a breach or violation or
threatened breach or violation by Executive of the provisions
of this section, the Company shall be entitled to obtain
injunctive relief from a court of competent jurisdiction
restraining the activities set forth herein in breach or
violation of this section (without posting a bond therefor and
upon 24 hours notice to Executive), whether directly or
indirectly. Nothing herein shall be construed as prohibiting
Company from pursuing any other remedies available to it by
law or by this Employment Agreement for breach, violation or
threatened breach or violation of the provisions of this
section, including, by way of illustration and not by way of
limitation, the recovery of damages from Executive or any
other person, firm, corporation or entity. The provisions of
this section shall survive any termination of this Employment
Agreement for the purpose of providing Company with the
protection of Covenants of Executive provided herein.
Executive acknowledges that his capabilities and education
are such that enforcement of the restrictions contained herein
shall not prevent him from earning a livelihood.
6. Representations and Warranties
(a) Executive represents and warrants to Company that his
execution, delivery and performance of this Employment
Agreement will not result in or constitute a breach of or
conflict with any term, covenant condition, or provision of
any commitment, contract, or other agreement or instrument,
including, without limitation, any other employment agreement,
to which Executive is or has been a party.
(b) Executive shall indemnify, defend and hold harmless Company
for, from, and against any and all losses, claims, suits,
damages, expenses, or liabilities, including court costs and
counsel fees, which Company has incurred or to which Company
may become subject, insofar as such losses, claims, suits,
damages, expenses, liabilities, costs, or fees, arise out of
or are based upon any failure of any representation or
warranty of Executive in section 6(a) hereof to be true and
correct when made.
7. Assignment and Change of Control
(a) Executive shall not assign his rights or delegate the
performance of these obligations hereunder without the prior
written consent of the Company. Subject to the provisions of
the preceding sentence, all the terms of this Employment
Agreement shall be binding upon and shall inure to the benefit
of the parties and their legal representatives, heirs,
successors and assigns.
(b) Upon a "Change of Control" the Company may assign this
Employment Agreement. For this purpose, a "Change of Control"
shall mean a sale of substantially all of the assets of the
Company. Upon the occurrence of a Change of Control, Company
Will pay Employee all payments Company would have been
obligated to make pursuant to Section 3 hereof, based upon a
termination date that is six (6) months after the date on
which the period of employment would have expired but for such
termination by reason of a Change of Control.
8. Arbitration
Any claim or controversy arising out of or relating to this Agreement
shall be settled by arbitration in Denver County Colorado, in
accordance with the Commercial Arbitration Rules of the American
Arbitration Association, and judgement on the award rendered by the
arbitrators may be entered in any court having jurisdiction. There
shall be three (3) arbitrators, one to be chosen directly by each party
at will, and the third arbitrator to be selected by the two (2)
arbitrators so chosen. Each party shall pay the fees of the arbitrator
it selects and of its own attorneys, the expenses of its witnesses and
all other expenses connected with presenting its case. Other costs of
the arbitration, including the cost of any record or transcripts of the
arbitration, administrative fees, the fee if the third arbitrator, and
all other fees and costs, shall be borne equally by the parties.
Notwithstanding this arbitration provision, if the Company deems it
necessary to seek extraordinary or equitable remedies, it may seek the
same through the appropriate court.
9. Notice
Any notice or other communication required or permitted to be given
hereunder shall be made in writing and shall be delivered in person or
mailed by prepaid registered or certified mail, return receipt
requested, addressed to the parties as follows:
If to the Company:
Xxxxxx Colorado Gaming, LLC
c/o Majestic Star Casino
0 Xxxxxxxxxx Xxxxxx Xxxxx
Xxxx, Xxxxxxx 00000-0000
Attention: President and Chief Executive Officer
If to the Executive:
Xxx X. Xxxxxxx
0000 Xxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxx 00000
or to such other addresses as the party shall have furnished in writing
in accordance with this Section. Such notices or communication shall be
effective upon delivery in person, and upon actual receipt or three (3)
days after mailing, whichever is earlier, if delivered by mail.
10. Breach of Agreement
Should the Company be in breach of this Employment Agreement and/or it
be determined that Executive has not been terminated for Cause (the
position first taken by Company for terminating the contract), then
this entire Employment Agreement shall be null and void and of no
further force or effect. Further, Executive shall be entitled to all
benefits and compensation under the Employment Agreement as well as
attorney fees and costs incurred in vindicating himself or establishing
a breach by the Company. Conversely, if the Executive is determined to
be in breach of this Employment Agreement, the Company shall be
entitled to costs and attorney fees in validating that breach.
11. Parties In Interest
The benefits and obligations of this Employment Agreement shall be
binding upon and insure to the benefit of Executive, and it shall be
binding upon and insure to the benefit of the Company, its subsidiaries
and related entities, as well as any corporation succeeding to all or
substantially all of the business assets of the Company by merger,
consolidation, purchase of assets or otherwise.
12. Entire Agreement
This Employment Agreement supersedes any and all other agreements,
either oral or in writing, between the parties hereto with respect to
the employment of Executive by the Company and contains all of the
covenants and agreements between the parties with respect to such
employment in any manner whatsoever. Any modification of this
Employment Agreement will be effective only if it is in writing signed
by the party to be charged.
13. Governing Law and Venue
This Agreement is to be governed by and construed in accordance with
the laws of the State of Colorado applicable to contracts made and to
be performed wholly within such State, and without regard to the
conflicts of laws principles thereof.
14. Acknowledgement
Executive acknowledges that he has been given a reasonable period of
time to study this Agreement before signing it. Executive certifies
that he has fully read, has received an explanation of, and completely
understands the terms, nature, and effect of this Agreement and to
seek the advice of legal counsel. Executive further acknowledges that
he is executing this Agreement freely, knowingly, and voluntarily and
that Executive's execution of this Agreement is not the result of any
fraud, duress, mistake, or undue influence whatsoever. In executing
this Agreement, Executive does not rely on any inducements, promises,
or representations by Company other than the terms and conditions of
this Agreement.
15. Effective Date
This Employment Agreement shall become effective on the Acquisition
Date.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first set forth hereinabove.
COMPANY: EXECUTIVE:
Xxxxxx Colorado Gaming, LLC
d/b/a/Fitzgeralds Black Hawk
By: /s/ Xxxxxxx X. Xxxxx By: /s/ Xxx X. Xxxxxxx
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Xxxxxxx X. Xxxxx Xxx X. Xxxxxxx
Chief Operating Officer
