EXHIBIT 10.1
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT IS MADE AND ENTERED INTO AS OF, OCTOBER 21, 2002
(EMPLOYMENT AGREEMENT") BY AND BETWEEN THE MAJESTIC STAR CASINO, LLC, AN INDIANA
LIMITED LIABILITY COMPANY D/B/A MAJESTIC STAR AND MAJESTIC INVESTOR ("THE
COMPANY") AND JON SCOTT BENNETT ("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, including employee's current employment agreement dated July
20, 2001.
B. The Company and the Executive agree that the Executive's Employment
Period with the Company shall commence on or about OCTOBER 21, 2002, at
which time the Employment Agreement between the Company and Executive
will become effective.
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 TWENTY-FOUR (24) MONTH PERIOD ("Period of
Employment") commencing on the Executive's date of hire with the
Company (such Period of Employment being subject to earlier termination
as provided herein). If it is determined by the Company or Executive
not to renew the Employment Agreement either party agrees to give A SIX
(6) MONTH ADVANCE NOTICE prior to the expiration of the initial twenty-
four (24) month "Period of Employment".
2. Duties and Services
During the period(s) of employment, Executive agrees to serve the
Company and its affiliates as its VICE PRESIDENT AND CHIEF FINANCIAL
OFFICER 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 position(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. The position of Vice President and Chief Financial Officer shall
report to the Executive Vice President and Chief Operating Officer.
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 will be based in Las Vegas, Nevada and
may be reasonably required to travel outside Las Vegas, Nevada from
time to time. Executive acknowledges and agrees that this Employment is
subject to the licensing and regulatory control of the Indiana Gaming
Control Board 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
1
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, an annual
salary of Two Hundred Fifty Thousand Dollars ($250,000.00) 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 first
anniversary of his date of hire, Executive shall receive an annual
performance review at which time he shall be considered for a
merit increase in his annual salary.
(b) Bonuses. For the calendar year ended December 31, 2002, Executive
shall be entitled to receive incentive compensation in accordance
with bonus and incentive plans in place during 2002 at Barden
Mississippi Gaming, LLC, d/b/a Fitzgeralds Tunica. Effective for
the year beginning January 1, 2003, and each subsequent year
thereafter, Executive and the Company will negotiate, in good
faith, a reasonable and fair bonus program for the Executive.
(c) Fringe Benefits. For such period of time as Executive is employed
by the Company during the Period of Employment, the Executive
shall receive coverage under the Company's medical insurance
program (as such program is in effect from time to time). The
Company agrees to pay the Executive's monthly premium
contributions on behalf of the Executive and his eligible
dependents. The Executive shall receive a five thousand dollar
($5,000.00) per annum allowance for unreimbursed medical expenses
submitted in accordance with Company expense procedures, and less
all applicable federal, state and local taxes. The Company agrees
to provide Executive a one million dollar ($1,000,000.00) annually
renewing term life insurance policy during the Period of
Employment subject to medical and financial underwriting. 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 therefore.
(d) Vacation. Executive shall be entitled to four (4) weeks vacation
per year, to be taken at time or times mutually acceptable to
Executive and the Company, in accordance with the vacation policy
in effect at the time. The Company also acknowledges that
Executive is entitled to transfer up to two (2) weeks of vacation
time earned in his present position at Barden Mississippi Gaming,
LLC.
2
(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 the 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. Relocation
(a) The Company agrees to provide to the Executive an allowance of up
to Thirty Thousand Dollars ($30,000.00) to be used in connection
with selling Executive's Home in Southaven, Mississippi and
purchase of a home in Las Vegas, Nevada. Executive can use his
discretion as to how the $30,000.00 should be applied as long as
it is used in conjunction with the sale of his Southaven,
Mississippi residence and purchase of a Las Vegas residence.
Executive will submit relocation expenses in accordance with
Company Expense procedures.
(b) The Company will either pay directly to a mutually agreed upon
moving contractor, or reimburse the Executive for usual, customary
and reasonable expenses related to the moving of Executive's
household goods, automobiles and recreational vehicles from
Southaven, Mississippi to Las Vegas, Nevada. If applicable, the
Company, subject to prior approval, will pay for the storage of
the Executive's household items.
(c) The Company agrees to reimburse the Executive and his spouse (or
other legal dependent) for a total of three (3) house-hunting
trips to the Las Vegas metropolitan area.
(d) The Company agrees to reimburse Executive the monthly loan
installment and impounds on his current residence in Southaven,
Mississippi for a period of twelve (12) months from the date
Executive purchases or leases a residence in the Las Vegas area.
If the Executive's residence in Southaven, Mississippi is sold
within that twelve (12) month period, than any remaining payments
pursuant to this paragraph would cease. The asking price of the
Mississippi residence shall be no greater than the appraised
market value of the home.
(e) The Company will pay for a period of time, not to exceed ninety
(90) days of temporary housing at a location mutually acceptable
to Executive and the Company in the Las Vegas, Nevada area. The
Company will also, upon request, provide a rental car for the
Executive's use in the Las Vegas, Nevada area during the period of
temporary housing. In addition, the Company will pay a per diem
food allowance of twenty-five ($25.00) dollars during the period
Executive is utilizing temporary housing.
It is further understood that should the Executive voluntarily
terminate his employment within the first twelve (12) months of
employment with the Company, the Executive shall repay 100% of the
amounts advanced to him pursuant to paragraph 4, sections a and b to
3
the Company and a portion of the amounts advanced to him in sections c,
d, and e or for his benefit calculated as follows:
(12 months - number of months employed) X total relocation
--------------------------------------
12 months
5. 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 5(a)(v) and (vii), Executive shall be given notice of
deficiency and sixty (60) 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 suitability; (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 in
accordance with Company guidelines on the part of the Executive or
(viii) any other conduct, such as moral turpitude 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 of 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
occurrence 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 for Cause pursuant to Section 5(a) hereof or is discharged by
reason of physical or mental disability pursuant to Section 5(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.
4
However, if Executive should die prior to the end of such period,
the provisions of Section 5(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.
6. 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 Nevada 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 development 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 6(a) of this Employment Agreement shall
constitute "misappropriation" of the Company's trade secrets under
the Nevada 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 or 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, office 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
5
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 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.
(f) Executive agrees that for a period of one (1) year, should he
voluntarily terminate his employment with the Company within
eighteen (18) months of the commencement date of this agreement 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. Should the Executive and the
Company or any of it's affiliates mutually agree not to renew the
Employment Agreement following the eighteen (18) month period
following commencement of this agreement, the Company shall waive
the non-compete agreement as set forth in this subsection. 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.
6
(g) Executive further agrees that neither Executive nor any person or
enterprise controlled by Executive will solicit for employment any
person employed by the Company or any of its affiliated 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 6 on the part of the Executive shall
be construed as an agreement independent of any other provision in
this Employment Agreement; and the existence of any claim or cause
of action of Executive against Company, whether predicated 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 these 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 unreasonable, arbitrary or against
public policy, a lesser time period which is determined to be
reasonable, 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 twenty-four (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.
7. 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
7
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
7(a) hereof to be true and correct when made.
8. 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, the Company will pay Executive
all remaining payments due Executive under Section 3 hereof and
any payments that would be due to Executive under the expiration
of this agreement. If no agreement exists that would become
effective at the expiration of this agreement, then Executive will
receive equivalent of six (6) months of his annual salary at the
expiration of this agreement by reason of a Change of Control. In
addition, Executive will not be bound by the provisions of Section
6(f) by reason of a Change of Control.
9. Arbitration
Any dispute which may arise between the parties hereto shall be
submitted to binding arbitration in Las Vegas, Nevada in accordance
with the Rules of the American Arbitration Association; provided that
any such dispute shall first be submitted to the Board of Directors in
an effort to resolve such dispute without resort to arbitration, and
provided, further, that the Board shall have a period of sixty (60)
days within which to respond to the Executive's submitted dispute, and
of the Board of Directors fails to respond within said time, or the
Executives dispute is not resolved, the matter may then be submitted
for arbitration.
10. 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:
8
If to the Company:
The Majestic Star Casino, LLC
C/o Fitzgeralds Casino Hotel
301 Fremont Street, 12th Floor
Las Vegas, Nevada 89101
Attention: Executive Vice President and Chief Operating Officer
If to the Executive:
Jon S. Bennett
8880 Shellflower Drive
Southaven, Mississippi 38671
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.
11. 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.
12. 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.
13. 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.
9
14. Governing Law and Venue
This Agreement is to be governed by and construed in accordance with
the laws of the State of Nevada applicable to contracts made and to be
performed wholly within such State, and without regard to the conflicts
of laws principles thereof.
15. 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.
16. Effective Date
This Employment Agreement shall become effective on the Executive's
date of hire with The Majestic Star Casino, LLC.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first set forth hereinabove.
COMPANY: EXECUTIVE:
The Majestic Star Casino, LLC
By: /s/ Judith F. Talbott By: /s/ Jon Scott Bennett
------------------------- ------------------------
Judith F. Talbott Jon Scott Bennett
Corporate Vice President Vice President
of Human Resources and Chief Financial Officer
Date: October 23, 2002 Date: October 23, 2002
------------------- --------------------
10