FORM OF
COLORADO GAMING & ENTERTAINMENT COMPANY
CASH BONUS PLAN
TABLE OF CONTENTS
Page
1. Purpose . . . . . . . . . . . . . . . . . . . . . . . 1
2. Definitions . . . . . . . . . . . . . . . . . . . . . 1
3. Administration of the Plan . . . . . . . . . . . . . . 2
4. Bonus Pool . . . . . . . . . . . . . . . . . . . . . . 3
5. Eligibility and Terms . . . . . . . . . . . . . . . . 4
6. Amendment or Termination . . . . . . . . . . . . . . . 4
7. Miscellaneous . . . . . . . . . . . . . . . . . . . . 5
CASH BONUS PLAN
1. Purpose
The purpose of the Colorado Gaming & Entertainment Company
Cash Bonus Plan is to attract and retain, as employees of the
Company or its subsidiaries, senior level persons whose
responsibilities and decisions directly affect the performance of
the Company and its subsidiaries, to motivate and reward good
performance, and to encourage such employees to continue to exert
their best efforts on behalf of the Company and its subsidiaries
by providing opportunities for cash bonuses to these Key
Employees (including officers and directors who are also
employees). Such cash bonuses shall be subject to such
requirements as the Committee may determine or as provided
herein.
2. Definitions
When used herein, the following terms shall have the
following meanings:
(a) "Base Period EBITDA" means, in respect of a Plan
Period, the consolidated EBITDA of the Company and its Operating
Subsidiaries determined for the same period in the immediate
preceding fiscal year of the Company.
(b) "Board" means the Board of Directors of the Company.
(c) "Bonus" means a cash bonus payable in accordance with
the provisions of the Plan.
(d) "Bonus Pool" means the amount available for the payment
of Bonuses hereunder for any Plan Period as determined in Section
4.
(e) "Committee" means the Committee appointed by the Board
pursuant to Section 3.
(f) "Company" means Hemmeter Enterprises, Inc., a Delaware
corporation, which shall, on the Effective Date, change its name
to Colorado Gaming & Entertainment Company, its successors and
assigns.
(g) "EBITDA" means for any entity, its net income, as
determined in accordance with generally accepted accounting
principles, before interest, taxes, amortization and depreciation
expense, with each such item determined in accordance with
generally accepted accounting principles, provided; however, that
in determining EBITDA, extraordinary gains and gains resulting in
changes in accounting practices, expenses incurred in connection
with the bankruptcy of the Company and certain of its Operating
Subsidiaries and gains, and losses incurred in connection with
the Riverboat operations of the Company's Grand Palais subsidiary
shall all be disregarded.
(h) "Effective Date" means the date on which the First
Amended Joint Plan of Reorganization, as approved by the United
States Bankruptcy Court for the Eastern District of Louisiana, is
consummated in accordance with its terms.
(i) "Employee" means a common law employee of the Company
or its subsidiaries.
(j) "Key Employee" means any Employee of the Company or any
of its Operating Subsidiaries who, by the terms of his or her
employment contract, are designated as a participant in the Plan,
and such other officers or Employees of the Company or its
subsidiaries who are designated by the Committee as participants
in the Plan because they are responsible for or contribute to the
management, growth or profitability of the business of the
Company or its subsidiaries.
(k) "Operating Subsidiaries" means BWBH, Inc., BWCC, Inc.,
Silver Hawk Casinos, Inc., Millsite 27, Inc., and any other
subsidiary of the Company which is engaged during the period in
question in the operation of a casino or related facilities.
(l) "Plan" means the Colorado Gaming & Entertainment
Company Cash Bonus Plan, as the same may be amended, administered
or interpreted from time to time.
(m) "Plan Period" means the period commencing on the
Effective Date and ending on December 31, 1996 and each
subsequent six month period thereafter.
3. Administration of the Plan
(a) The Plan shall be administered by the Committee, which
shall be appointed by the Board and shall serve at the Board's
pleasure. All members of the Committee shall be "outside
directors" of the Company as that term is defined in Code Section
162(m).
(b) Bonuses paid under the Plan are intended to be
"performance-based compensation" within the meaning of Code
Section 162(m).
(c) All decisions, determinations or actions of the
Committee made or taken pursuant to grants of authority under the
Plan shall be made or taken in the sole discretion of the
Committee and shall be final, conclusive and binding on all
persons for all purposes.
(d) The Committee shall have full power, discretion and
authority to interpret, construe and administer the Plan and any
part thereof, and its interpretations and constructions thereof
and actions taken thereunder shall be final, conclusive and
binding on all persons for all purposes.
(e) The Committee's decisions and determinations under the
Plan need not be uniform and may be made selectively among Key
Employees, whether or not such Key Employees are similarly
situated.
(f) The Committee shall keep minutes of its actions under
the Plan. The act of a majority of the members present at a
meeting duly called and held shall be the act of the Committee.
Any decision or determination reduced to writing and signed by
all members of the Committee shall be fully as effective as if
made by unanimous vote at a meeting duly called and held.
(g) The Committee may employ such legal counsel, including
without limitation counsel regularly employed by the Company,
consultants and agents as the Committee may deem appropriate for
the administration of the Plan and may rely upon any opinion
received from any such counsel or consultant and any computations
received from any such consultant or agent. All expenses
incurred by the Committee in interpreting and administering the
Plan, including without limitation, meeting fees and expenses and
professional fees, shall be paid by the Company.
(h) No member or former member of the Committee or the
Board shall be liable for any action or determination made in
good faith with respect to the Plan or any Bonus granted under
it. Each member or former member of the Committee or the Board
shall be indemnified and held harmless by the Company against all
cost or expense (including counsel fees and expenses) or
liability (including any sum paid in settlement of a claim with
the approval of the Board) arising out of any act or omission to
act in connection with the Plan, unless arising out of such
member's or former member's own fraud or bad faith. Such
indemnification shall be in addition to any rights of
indemnification the members or former members may have as
directors or under the by-laws of the Company.
4. Bonus Pool
(a) The Bonus Pool for each Plan Period shall be equal to
15% of the difference between (i) the consolidated EBITDA of the
Company and its Operating Subsidiaries for such Plan Period, and
(ii) the Base Period EBITDA for such Plan Period. The Bonus Pool
for a Plan Period shall be determined by the Committee as soon as
practicable following the end of the Plan Period, provided;
however, that the Bonus Pool for the last quarter of the fiscal
year of the Company shall not be determined until after the
audited financial statements of the Company for such fiscal year
are available and shall be increased or reduced, as appropriate,
to reflect audit adjustments to the EBITDA of the Company and its
Operating Subsidiaries during the first three quarters of such
fiscal year.
5. Eligibility and Terms
(a) The Committee shall, prior to the beginning of each
Plan Period, determine the percentage of the Bonus Pool for such
Plan Period which will be payable to each Key Employee. Such
determination shall be made in the sole discretion of the
Committee based on such factors as the Committee shall determine.
Notwithstanding the foregoing, the Committee shall be bound by
any terms of an employment contract of a Key Employee which
provides that such Key Employee will participate in the Bonus
Pool at a specified level.
(b) Unless otherwise provided by the Committee, if the
employment of a Key Employee terminates prior to the end of a
Plan Period, then the Bonus, if any, such Key Employee would have
otherwise received shall be paid pro rata based on the percentage
of the Plan Period the Key Employee is employed by the Company.
The Committee shall determine how the portion not paid shall be
reallocated to other Key Employees.
(c) Subject to the provisions of the Plan, the Committee
shall determine the terms and requirements, if any, of each
Bonus.
(d) Bonus under this Plan shall be paid at the times
designated by the Committee, but in no event later than 15 days
after the filing by the Company of its Form 10-Q or Form 10-K for
the period ending on the last day of the Plan Period in respect
of which the Bonus is being paid.
6. Amendment or Termination
The Board may, at any time, amend or terminate the Plan.
The Plan may also be amended by the Committee, provided that all
such amendments shall be reported to the Board. No amendment or
termination of the Plan shall retroactively impair the rights of
any person with respect to a Bonus.
7. Miscellaneous
(a) Nothing in this Plan or any Bonus payable hereunder
shall confer upon any Employee any right to continue in the
employ of the Company or interfere in any way with the right of
the Company to terminate his or her employment at any time.
(b) No Bonus payable under the Plan shall be deemed salary
or compensation for the purpose of computing benefits under any
employee benefit plan or other arrangement of the Company for the
benefit of its employees unless the Company shall determine
otherwise.
(c) No Key Employee shall have any claim to a Bonus until
the requirements established by the Committee have been
satisfied.
(d) If the Committee shall find that any person to whom any
Bonus, or portion thereof, is payable under the Plan is unable to
care for his or her affairs because of illness or accident, or is
a minor, then any payment due (unless a prior claim therefor has
been made by a duly appointed legal representative) may, if the
Committee so directs the Company, be paid to the Key Employee's
spouse, a child, a relative, an institution maintaining or having
custody of such person, or any other person deemed by the
Committee to be a proper recipient on behalf of such person
otherwise entitled to payment. Any such payment shall be a
complete discharge of the liability of the Company therefor.
(e) The right of any Key Employee or other person to any
Bonus payable under the Plan may not be assigned, transferred,
pledged or encumbered, either voluntarily or by operation of law,
except by the laws of descent and distribution upon death or as
may otherwise be required by law. If, by reason of any attempted
assignment, transfer, pledge, or encumbrance or any bankruptcy or
other event happening at any time, any amount payable under the
Plan would be made subject to the debts or liabilities of the Key
Employee or would otherwise devolve upon anyone else and not be
enjoyed by the Key Employee, then the Committee may terminate
such person's interest in any such payment and direct that the
same be held and applied to or for the benefit of the Key
Employee in such manner as the Committee may deem proper.
(f) Copies of the Plan and all amendments, administrative
rules and procedures and interpretations shall be made available
to all Key Employees at all reasonable times at the Company's
headquarters.
(g) The Company shall withhold from the payment of any
Bonus required withholding of any Federal, state, local or
foreign taxes.
(h) All elections, designations, requests, notices,
instructions and other communications from a Key Employee,
Beneficiary or other person to the Committee, required or
permitted under the Plan, shall be in such form as is prescribed
from time to time by the Committee and shall be mailed by
certified mail return receipt requested or delivered to such
location as shall be specified by the Committee.
(i) The terms of the Plan shall be binding upon the Company
and its successors and assigns.
(j) Captions preceding the sections hereof are inserted
solely as a matter of convenience and in no way define or limit
the scope or intent of any provision hereof.
HEMMETER ENTERPRISES, INC.
By________________________________
Its President