EXHIBIT 10.4
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
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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, 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.
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(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
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repay 100% of the amounts advanced to him pursuant to paragraph 4,
sections a and b to 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
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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
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Executive shall continue to be bound by the provisions of
Section 5 hereof. 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
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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 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.
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(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
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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:
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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.
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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
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