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AMENDMENT NO. 1 TO
EXECUTIVE EMPLOYMENT AGREEMENT
This Amendment No. 1 to Executive Employment Agreement is effective as of
January 1, 2000, and is made between Black Hawk Gaming & Development Company,
Inc. (the "Company") and Xxxxxxx X. Xxxxx (the "Executive").
WHEREAS, the Company and the Executive entered into that certain Executive
Employment Agreement effective May 1, 1999 (the "Agreement"); and
WHEREAS, the parties thereto wish to amend the Agreement in certain
respects.
NOW, THEREFORE, in consideration of the mutual promises and covenants of
the parties herein and the continuing promises and covenants of the parties in
the Agreement,
It is agreed as follows:
1. Section 2.1 of the Agreement is deleted in its entirety and replaced
with the following:
"SECTION 2.1 BASE SALARY. The Company shall pay to the Executive a
Base Salary equal to the greater of: (i) $250,000 per year payable in
accordance with the Company's payroll and withholding policies; or (ii) an
amount equal to 1.05% 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.
"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.
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"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)."
2. Section 2.2 of the Agreement is deleted in its entirety and replaced
with the following:
"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."
3. Section 3.1 of the Agreement is deleted in its entirety and replaced
with the following:
"SECTION 3.1 TERM. This Agreement shall be for a period of three years
and eight months commencing on May 1, 1999 and ending on December 31, 2002,
subject, however, to termination during such period as provided in this
Article (the "Term")."
4. Section 3.5 is hereby added to the Agreement.
"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.
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5. All other terms and provisions of the Agreement shall remain in full
force and effect.
BLACK HAWK GAMING & DEVELOPMENT
COMPANY, INC.
By: /s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx,
Chief Executive Officer
EXECUTIVE
/s/ Xxxxxxx X. Xxxxx
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Xxxxxxx X. Xxxxx
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