EXHIBIT 10.17
February 2, 1999
Xx. Xxxxxxx X. Xxxxx
000 X. Xxxxxxxx Xxxx, 00x
Xxxxxxx, Xxxxxxxx 00000
Dear Xx. Xxxxx:
This letter constitutes an employment agreement ("Agreement") between the
Majestic Star Casino, LLC (or its successor Company) ("Majestic") and you
("Employee") with respect to Majestic's operation of a casino gaming vessel
and related facilities at Xxxxxxxxxx Harbor in Gary, Indiana (the "Casino").
This Agreement supersedes the April 12, 1996 agreement previously entered
into and mutually extended to January 1, 1999 by and amongst Majestic and
yourself.
1. Term. The initial term of this Agreement is two (2) years
(the"Period of Employment") commencing January 1, 1999. The Period
of Employment may be extended on terms and conditions agreed to by
Majestic and Employee.
2. Base Salary. Majestic agrees to pay you a base salary of $275,000
annually, payable in substantially equal payments with usual and
customary payroll deductions.
3. Incentive Compensation. Employee is eligible to participate in
Majestic's Managerial Bonus Program (the "Plan") which provides
incentive compensation based upon Employee's personal performance
and Majestic's performance. For purposes of the Plan employee is
designated level 1.
4. Title and Responsibilities. You will initially be employed to serve
in an executive capacity and to perform those duties generally
associated with the duties of Vice President, Chief Operating and
Financial Officer. Your duties and title may be changed from time-
to-time by Majestic, but any new responsibilities or title shall be
consistent with your experience, knowledge and skills. Majestic
reserves the right, in its sole discretion to hire or place someone
in a position superior to you at the Casino. Majestic agrees to
reimburse to you all reasonable expenses incurred by you in the
performance of your duties of employment incurred in accordance with
Company policies. You will not be assigned responsibilities that
will require you to maintain a residence outside of the Chicago area
without your consent.
5. Termination of Employment. Majestic shall be permitted to terminate
this Agreement and your employment only upon occurrence of any of
the following:
(a) your death;
(b) your permanent disability (defined as continuous disability)
and inability to perform the duties and functions of your
position for sixty (60) continuous days;
(c) your inability to obtain and/or maintain licensure required
by Indiana or other gaming authorities; or
(d) upon a Change in Control (as defined under section g); or
(e) cause, which shall mean (i) Employee's willful misconduct
which directly, materially and adversely affects Majestic or
personal dishonesty; (ii) breach of fiduciary duty to
Majestic resulting in Employee's personal profit; (iii)
criminal conviction for violation (after a trial and final
non-appealable judgement) of any law, rule or regulation
(other than traffic violations or other minor offenses); or
(iv) Employee repeatedly and intentionally fails to
reasonably perform his stated duties and fails to cure such
non-performance within 30 days after his receipt of written
notice from Majestic specifically identifying the manner in
which Employee has failed to reasonably per-form such stated
duties.
(f) upon termination of the Period of Employment by reason of
the Employee's disability, Majestic shall continue to pay
Employee the entire compensation (via insurance or directly)
otherwise payable to him under Section 2 and 3 hereof, for
the lesser of one year or the remaining Period of
Employment. Upon termination of the Period of Employment by
a reason of Change in Control, Majestic will pay Employee
all payments Majestic would have been obligated to make
pursuant to Section 2, and 3 hereof, based upon a
termination date that is 12 months after the date on which
the Period of Employment would have expired but for such
termination by reason of a Change in Control.
(g) for purposes of this Agreement, "Change in Control" shall be
deemed to have occurred if (i) any "person" (as defined in
Sections 3 (a)(9) and 13 (d)(3) of the Securities Exchange
Act of 1934, as amended), other than (y) a trustee or other
fiduciary holding securities under an employee benefit plan
of the Company acting in such capacity, or (z) a corporation
partnership or limited liability company owned, directly or
indirectly, by the members of the Company in substantially
the same proportions as their ownership of membership
interests and voting power of the Company, is or becomes the
beneficial owner (as defined in Rule 13d-3 under said Act),
directly or indirectly, of membership interests of the
Company represented 51% or more of the total members share
Company's then outstanding; (ii) there shall occur a change
in the composition of a majority of the members of the
Company within a two-year period, which change shall not
have been approved by a majority of the persons then holding
membership interests who were also members immediately prior
to the commencement of such period; (iii) the members of the
Company approve a merger or consolidation of the Company
with any other corporation, other than a merger or
consolidation which would result in the Voting Securities of
the Company (membership interests) outstanding immediately
prior thereto continuing to represent (either by remaining
outstanding or by being converted into Voting Securities of
the surviving entity) at least 51% of the total voting power
represented by the Voting Securities of the Company or such
surviving entity outstanding immediately after such merger
or consolidation; or (iv) the members of the Company approve
a plan of complete, liquidation of the Company or an
agreement for the sale or disposition by the Company (in one
transaction or a series of transactions) of all or
substantially all of the Company's assets. For purposes of
this Section 5 the term "Voting Securities" shall mean any
type of share, securities or membership interest having the
right under normal circumstances to vote in an election of
the board of directors or members. For purposes hereof the
term shareholder and member are interchangeable.
(h) If the Agreement is not to be renewed by the Company at the
conclusion of Period of Employment, employee will receive
written notice of such intent (90) ninety days prior to the
expiration of the Period of Employment. Second, at the
conclusion of the Period of Employment employee will also be
entitled to receive a lump sum relocation allowance of
$20,000.
6. Benefits. Majestic will provide you with benefits. These benefits
shall include, at a minimum:
(a) health and disability (short and long, term) insurance
covering you and your dependents, including medical, dental,
and prescription coverage. The Company also agrees to
provide a sum of $5,000 from which you will be reimbursed
for health related expenses incurred by you for you and your
dependents not otherwise compensible by the Company's
insurance plans.
(b) continued access to a 401 (k) plan, or similar retirement
plan, to which Majestic will make annual matching
contributions equal to three (3%) percent of your base and
cash bonus compensation.
(c) life insurance equal to four times your annual base salary,
which shall automatically be adjusted upward annually in the
event of increases to your base salary.
(d) three (3) weeks of paid vacation annually.
7. Non-Competition. You, as consideration for your employment and the
information you will obtain as an employee of Majestic agree that
during the term of this Agreement and for a period of 12 months
thereafter, you will not, directly or indirectly, individually or as
an employee, partner, officer, or director in any other capacity
whatsoever of any person, :firm, partnership or corporation, (i)
recruit, hire, assist otherwise in recruiting or hiring, discuss
employment with, or refer to others concerning employment, any
person who is, or within the preceding twelve (12) months was, an
employee of Majestic, or any parent, subsidiary, or affiliated
company, (ii) compete with Majestic or any parent, subsidiary, or
affiliated company in any location in Xxxx, Will and Xxxx County,
Illinois, including Xxxxxx'x, Empress Joliet, & Grand Xxxxxxxx
Xxxxx, Lake County and XxXxxxx County Indiana including Empress
Casino Hammond, Showboat East Chicago, Xxxxx Indiana Gary, Blue Chip
Casino Michigan City or any of their subsequent purchasers, assigns,
executors, trustees, or (iii) use in competition with Majestic or
any parent, or affiliated company any of the methods, information,
or systems developed by Majestic or any parent, or subsidiary, or
affiliated company.
8. Confidentiality. Except as your assigned duties may require or as
Majestic may otherwise consent in writing, you will not disclose at
any time either during or subsequent to your employment, any
information, knowledge or data of Majestic which you may develop or
receive during the course of your employment relating to financial
data, writings, computer software, policies, plans designs, business
processes, methods, data, trade secrets, know-how, plans and
programs, or any other knowledge of Majestic which is of a
proprietary or confidential nature, and upon termination of your
employment with Majestic for any reason, you agree to immediately
deliver to Majestic all physical property, plans, designs, computer
programs for software, customer lists, prospect lists, manuals,
letters, notes, reports and any other materials relating to Majestic
in your possession or under your control.
9. Arbitration. Any differences, claims, or matters in dispute arising
between Majestic and Employee out of or connected with this
Agreement, shall be submitted by them to be settled exclusively by
arbitration in Chicago, Illinois, in accordance with voluntary labor
arbitration rules of the American Arbitration Association, or its
successor, then in effect. The arbitrator's sole authority-shall be
to interpret or apply the provisions of this agreement. The
arbitrator shall not change, add to or subtract from any of the
provisions of this agreement. The arbitrator shall have the power
to compel attendance of witnesses at any hearing.
The arbitration award shall be final and binding and shall be the
sole remedy for any claimed breach of this agreement except for
claims that the arbitrator has exceeded his jurisdiction and except
for any alleged violation by Employee of the nondisclosure of
confidential information provisions of this agreement. The expense
of any arbitration shall be borne equally by Employee and Majestic.
Judgment may be entered on the arbitrator's award in any court
having jurisdiction, but neither party may otherwise resort to any
court or administrative agency with respect to any dispute that is
arbitrable under this section except for claims that the arbitrator
has exceeded his jurisdiction.
10. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Illinois, without giving
effect to the choice of law or conflicts of laws, rules and laws of
such jurisdiction.
11. Attorney Fees. In the event that any action is filed to interpret
or enforce the provisions of this Agreement, in addition to all sums
that either party may be called upon to pay, the prevailing party
shall be entitled to reasonable attorneys fees and costs.
12. Severability. The invalidity of any portion of this Agreement shall
not be deemed to affect the validity of any other provision. In the
event that any provision of this Agreement is held to be invalid the
parties agree that the remaining provisions shall be deemed to be in
full force and effect as if they had been executed by both parties
subsequent to the expungment of the invalid portion.
13. Entire Agreement. You agree that this letter supersedes any and all
prior agreements and understandings between you and Majestic. No
representations have been made by Majestic concerning the terms and
conditions of employment other than those representations contained
in this letter. This letter may be modified only by a written
document signed by both you and a duly authorized officer of
Majestic.
14. Acknowledgment. You have read this letter before signing it and
acknowledge receipt of a copy.
15. Effective Date. This agreement shall take effect on January 1,
1999.
If this letter accurately sets forth the terms of our agreement, sign and
return the enclosed copy.
Very truly yours,
THE MAJESTIC STAR CASINO, L.L.C.
By: /S/ XXX X. XXXXXX
Xxx X. Xxxxxx
Agreed to and accepted on this 2nd day of February, 1999
/S/ XXXXXXX X. XXXXX
Xxxxxxx X. Xxxxx
