1
EXHIBIT 10.10
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT made as of this 12th day of November, 1996, by
and between Black Hawk Gaming & Development Company, Inc., a Colorado
corporation ("Black Hawk"), and Xxxxxxx X. Xxxxxx ("Executive").
1. TERM. Black Hawk agrees to employ Executive, and Executive
agrees to serve Black Hawk, on the terms and conditions of this Agreement for a
three (3) year period (such period, subject to earlier termination as provided
herein, being referred to as the "Period of Employment") commencing as of
November 12, 1996 (the "Commencement Date").
2. DUTIES AND SERVICES. During the Period of Employment,
Executive agrees to serve Black Hawk as Chief Executive Officer and Co-Chairman
of the board of Black Hawk and in such other offices and directorships of Black
Hawk 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 Black Hawk (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 Black Hawk and its Affiliates and to the
promotion of their interests as is necessary to perform the duties required of
him by this Agreement. The principal place of performance by Executive of his
duties hereunder shall be in Cleveland, Ohio or at such other location as may
be mutually agreed upon by Black Hawk and Executive, but Executive may be
reasonably required to travel outside that area in the performance of
Executive's responsibilities.
3. COMPENSATION.
(a) Base Salary and Additional Payment. As compensation
for his services under this Agreement, Black Hawk shall pay Executive
commencing November 12, 1996 and thereafter, during the Period of Employment,
an annual base salary in the amount of $150,000 in accordance with Black Hawk's
normal payroll practices (the "Base Salary"). In addition, from and after the
time that Diversified Opportunities Group Ltd. ("Diversified") has converted
such portion of the unpaid principal balance under that certain Convertible
Note of Black Hawk of even date herewith into 820,000 or more Shares (the
"Conversion"), thereafter, Black Hawk shall pay the Executive, during the
Period of Employment, 2.5% of Black Hawk's pre-tax net income in excess of
$2,880,000 in each fiscal year determined in accordance with generally accepted
accounting principles determined for each calendar year (including the year of
the Conversion) on or before March 31 of the succeeding year (the "Additional
Payment'). Executive's Base Salary shall be subject to periodic increases by
the Board of Directors in its discretion. The Base Salary and the Additional
Payment are sometimes collectively referred to herein as the "Compensation."
2
(b) Bonus. During the Period of Employment, Executive
shall be entitled to such bonuses and other benefits as the Compensation
Committee or the Board of Directors may periodically award in its discretion.
Nothing contained herein shall preclude Executive from participating in the
present or future employee benefit plans of Black Hawk or of any Affiliate,
including without limitation any pension plan, profit-sharing plan, savings
plan, or stock option plan. Specifically, Executive shall be a participant in
Black Hawk's 1996 Incentive Stock Option Plan.
(c) Health Insurance. During the Period of Employment,
provided eligibility requirements are met, Executive shall be entitled to
family health insurance coverage, at Black Hawk's expense, under Black Hawk's
current health insurance plan or any successor plan thereto.
(d) Fringe Benefits. Executive shall receive employment
fringe benefits no less favorable than those made available to Black Hawk's
most senior executives.
(e) Expenses. All travel and other expenses incident to
the rendering of services by Executive under this Agreement shall be paid by
Black Hawk. If any such expenses are paid in the first instance by Executive,
Black Hawk shall reimburse him therefor on presentation of the appropriate
documentation required by the Internal Revenue Code and Regulations or
otherwise required under Black Hawk policy in connection with such expenses.
(f) Vacation. Executive shall be entitled to paid
vacation, to be taken at times mutually satisfactory to Executive and the Board
of Directors of Black Hawk, for such periods of time as permitted for Black
Hawk's most senior executives.
4. EARLY TERMINATION.
(a) Termination for Cause or Death and Disability.
Notwithstanding the provisions of Section 1, Executive may be discharged by
Black Hawk for Cause (as defined in Section 4(c), in which event the Period of
Employment shall terminate and Black Hawk shall have no further obligation or
duties under this Agreement, except for obligations accrued under Section 3 at
the date of termination. In addition, the Period of Employment shall terminate
upon the earliest to occur of the following events: (i) the death of Executive,
or (ii) at the election of the Board of Directors (subject to the Americans
With Disabilities Act), the inability of Executive by reason of physical or
mental disability to continue the proper performance of his duties hereunder
for a period of 180 consecutive days.
(b) Other Termination. If (i) Executive is discharged by
Black Hawk other than for Cause and other than because of death or physical or
mental disability under Section 4(a), or (ii) Executive terminates employment
with Black Hawk for "good reason" (as defined in Section 4(d)), Executive shall
have no further obligations or duties under this Agreement; provided, however,
that Executive shall continue to be bound by the provisions of Section 5. If
the Period of Employment is terminated pursuant to the preceding sentence,
Black Hawk shall, in addition
-2-
3
to paying the obligations accrued under Section 3 at the date of termination,
(i) continue to pay Executive the Compensation otherwise payable to him under
Section 3(a) for one year or the remaining Period of Employment, whichever is
shorter (the "Continuation Period") and (ii) continue to provide the health
insurance coverage described in Section 3(c) during the Continuation Period.
(c) Cause. For purposes of this Agreement, cause
("Cause") shall be deemed to exist only (i) on Executive's consistent refusal
to substantially perform, or willful misconduct in the substantial performance
of, his duties and obligations under this Agreement, (ii) on the material
breach by Executive of this Agreement, or (iii) on the revocation or suspension
of any license necessary for Executive to perform under this Agreement, in all
cases, following written notice from Black Hawk to the Executive and the
Executive's failure to cure the events described in such notice within thirty
(30) days following receipt of such notice by the Executive.
(d) Good Reason. For purposes of this Agreement, the
term "good reason" means (i) the assignment to Executive of any duties or
responsibilities that in Executive's reasonable judgment are inconsistent in
any respect with Executive's position (including status, offices, titles, and
reporting requirements), authority, duties, or responsibilities as contemplated
by Section 2, or any other action by Black Hawk that in Executive's reasonable
judgment results in a substantial diminishment in such position, authority,
duties, or responsibilities; (ii) Black Hawk's requiring relocation of
Executive, without his prior written consent, to a place of employment other
than in Ohio, except for travel reasonably required in the performance of
Executive's responsibilities; or (iii) Black Hawk's failure to substantially
comply with the provisions of Section 3 of this Agreement.
5. CONFIDENTIALITY
(a) Confidential Material. Black Hawk and Executive
acknowledge that the services to be performed by Executive under this Agreement
are unique and extraordinary and that, as a result of such employment,
Executive will possess confidential information, proprietary information, and
trade secrets (collectively, "Confidential Material") relating to the business
practices of Black Hawk and its Affiliates. Executive agrees that he will not,
directly or indirectly, (i) disclose to any other person or entity either
during or after his employment by Black Hawk, or (ii) use, except during his
employment by Black Hawk in the business and for the benefit of Black Hawk or
any of its Affiliates, any Confidential Material acquired by Executive during
his employment by Black Hawk, without the prior written consent of Black Hawk.
On termination of his employment with Black Hawk for any reason, Executive
agrees to return to Black Hawk all tangible manifestations of Confidential
Materials and all copies thereof. All programs, ideas, strategies, approaches,
practices, or inventions created, developed, obtained, or conceived of by
Executive prior to or during the term thereof, and all business opportunities
presented to Executive during the term hereof by reason of his engagement by
Black Hawk shall be owned by and belong exclusively to Black Hawk, provided
that they are related in any manner to its business or that of any of its
Affiliates. Executive shall (i) promptly disclose all such programs, ideas,
strategies,
-3-
4
approaches, practices, inventions, or business opportunities to Black Hawk and
(ii) execute and deliver to Black Hawk, without additional compensation, such
instruments as Black Hawk may require from time to time to evidence its
ownership of any such items.
(b) Injunctive Relief. Executive agrees that the remedy
at law for any breach by him of this section will be inadequate and that Black
Hawk shall be entitled to injunctive relief.
6. MISCELLANEOUS.
(a) Notices. All notices given under this Agreement must
be in writing and must be delivered, sent by facsimile transmission, or sent by
certified mail, postage paid, return receipt requested, to the following
addresses or to such other addresses as the parties may designate in writing:
If to Black Hawk: Black Hawk Gaming &
Development Company, Inc.
0000 Xxxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxx,
Senior Vice President
Fax No.: (000) 000-0000
If to Executive: Xxxxxxx X. Xxxxxx
000 Xxxxxxxx Xxx.
Xxxxxxxxx, Xxxx 00000
Fax No.: (000) 000-0000
Such notices shall be effective on delivery if delivered in person and either
on actual receipt or three days after mailing, whichever is earlier, if
delivered by mail or by facsimile.
(b) Parties in Interest. This Agreement shall be binding
upon and inure to the benefit of Executive, and it shall be binding upon and
inure to the benefit of Black Hawk and any corporation succeeding to all or
substantially all of the business and assets of Black Hawk by merger,
consolidation, purchase of assets or otherwise.
(c) Entire Agreement. This Agreement contains the entire
agreement between the parties and supersedes all other oral and written
agreements concerning the same subject matter.
(d) Governing law. This Agreement shall be governed by
Colorado law.
-4-
5
(e) Severability. If any provision is unenforceable for
any reason, it shall be deemed stricken from the Agreement but shall not
otherwise affect the intention of the parties or the remaining provisions of
this Agreement.
[THE REMAINDER OF THIS PAGE LEFT INTENTIONALLY BLANK.]
-5-
6
IN WITNESS WHEREOF, the parties have executed this Agreement effective
as of the date first written above.
BLACK HAWK GAMING &
DEVELOPMENT COMPANY, INC.
By: /s/ XXXXXXX X. XXXXX /s/ XXXXXXX X. XXXXXX
------------------------------ ------------------------------
Xxxxxxx X. Xxxxxx
Its: President
-----------------------------
