exhibit-10_7x1.htm


     

                                                                                                        EXHIBIT 10.7.1

    


       

       

      


      THE MAJESTIC STAR CASINO,
LLC

      


      AMENDED AND RESTATED
MANAGEMENT INCENTIVE PLAN

      


      


      Purpose and
Overview:

      The
Management Incentive Plan is the discretionary portion of the compensation
package offered to key executives by The Majestic Star Casino,
LLC.  As a key member of the management team for The Majestic Star
Casino, LLC, you play an important role in the Company’s ability to achieve its
goals, most notably:  1) developing and maintaining quality and depth
at all levels of our management team; 2) attaining the top position in the
markets we serve; and, 3) maintaining a high level of guest
service.

      


      The
Management Incentive Program is designed to:

      q             Encourage
and reward the attainment of performance results, which extend beyond your
essential job responsibilities;

      q             Encourage
fiscal responsibility and reward achievement of the Company’s realistic and
attainable fiscal year profit and revenue objectives;

      q             Maintain
the Company’s commitment to quality guest service;

      q             Retain
and recruit talented and forward-thinking key managers who are essential to the
continued growth and success of the Company; and

      q             Establish
individual non-financial performance objectives, which are developed by the Plan
Participants and their managers, with a year-end evaluation designed to measure
the individual accomplishments.

      


      What is the Intent of the
Plan?

      Provide
executives with a competitive annual incentive that is tied to their position
and base compensation.

      


      Recognize
and reward executives on the overall financial success of the
Company.

      


      Incentivize
executives to achieve a higher individual performance level in critical business
areas which are not necessarily measured by financial performance, such as
succession planning and development of staff.

      


      


      


      


      


      


      


      


      


      


      


      



      
        
          
            Revised
12/2008 

             


            
            

          

           


        

        
          1

          
            

          

        

        
           


          
             


          

        

      


      


      


      Incentive Plan
Highlights:

      


      The
Management Incentive Plan is built on “success.”  The greater the
success of the Company, the greater the reward.

      


      At the
beginning of each year, each property will set an aggressive but attainable
financial target, which is the budgeted EBITDA (including the estimate for the
bonus).

      


      Also, at
the beginning of each year, plan participants will establish, with their
managers, their non-financial individual performance goals, which will be
reviewed at the end of each year in order to evaluate the level of success as it
pertains to their individual performance accomplishments.

      


      Bonuses
for eligible Corporate Executives will be granted in conjunction with each
property’s financial goals, which are weighed against the combined individual
property’s EBITDA performance to budget; it will also include the
accomplishments achieved with their individual non-financial performance
goals.

      


      Bonuses
for eligible Property Executives will be granted in conjunction with their own
property’s financial goals, which are weighed against their property’s EBITDA
performance to budget; it will also include the accomplishments achieved with
their individual non-financial performance goals.

      


      Bonus
Calculation

      


      An
employee’s bonus is calculated as follows:

      


      Target                                %
increase
or                                           actual
base                                                   Bonus

      Bonus            
  X              decrease
in               
     
 X                 
  
compensation                  
   =                     Amount

      Award                                Financial
and                                           earned
during plan

      %                                       
Individual
Bonus                                     year

                                                
Awards

      


      


      


      


      


      


      


      


      


      


      


      



      
        
          
            Revised
12/2008 

             


            
            

          

           


        

        
          2

          
            

          

        

        
           


          
             


          

        

      


      


      


      Target Bonus
Award

      


      The
target bonus awards are a specific percentage of your base salary actually
earned during the plan year.  Only those team members’ who are in a
manager salary band and higher are eligible to participate in the bonus
plan.  Target bonus awards are determined by your position as outlined
below:

      


       

      
        	
                Salary
      Band

              	
                Bonus
      Target

              	
                Financial Performance
      %

              	
                Individual
      Accomplishments %

              
	
                EVP/COO

              	
                40%

              	
                70%

              	
                30%

              
	
                SVP

              	
                30%

              	
                70%

              	
                30%

              
	
                VP

              	
                30%

              	
                60%

              	
                40%

              
	
                Director

              	
                20%

              	
                60%

              	
                40%

              
	
                Manager

              	
                5%

              	
                50%

              	
                50%

              


      

      


      


      Increase or Decrease in
Bonus Awards

      The
amount of your “Financial Performance” bonus will increase if the actual EBITDA
is above budgeted EBITDA and decrease if the actual EBITDA is below the budgeted
EBITDA.  The table below indicates the amount of the increase or
decrease in the “Financial Performance” portion of your bonus
award.

      


      


      


         ACTUAL EBITDA AS % OF
BUDGET                                                                                                BONUS PAYOUT AS % OF BONUS
TARGET

                              100                                                                                                                                                                                100

                               99                                                                                                                                                                                   98

                               98                                                                                                                                                                                   96

                               97                                                                                                                                                                                   94

                               96                                                                                                                                                                                   92

                               95                                                                                                                                                                                   90

                               94                                                                                                                                                                                   87

                               93                                                                                                                                                                                   84

                               92                                                                                                                                                                                   81

                               91                                                                                                                                                                                   78

                               90                                                                                                                                                                                   75

                               89                                                                                                                                                                                   70

                               88                                                                                                                                                                                   65

                               87                                                                                                                                                                                   60

                               86                                                                                                                                                                                   55

                               85                                                                                                                                                                                   50

                               84                                                                                                                                                                                   -0-
NO BONUS

      


      


      


      


      


      



      
        
          
            Revised
12/2008 

             


            
            

          

           


        

        
          3

          
            

          

        

        
           


          
             


          

        

      


      


      


       

      WHEN
A PROPERTY’S ACTUAL EBITDA, OR COMBINED EBITDA FOR CORPORATE BONUS PURPOSES,
EXCEEDS BUDGETED EBITDA, THEN 25% OF THE AMOUNT OF ACTUAL EBITDA THAT EXCEEDS
BUDGETED EBITDA WILL BE APPLIED TO THE BONUS POOL FOR THAT PARTICULAR PROPERTY
OR CORPORATE AND DISTRIBUTED ON A WEIGHTED AVERAGE BASIS.

       

      


       

      Property
Example:

      Joe Smith
holds the position of a Vice-President, and his base compensation actually
received for the year is $75,000.00.  Assume the budgeted EBITDA for
the year is $20,000,000; and at the end of the year, actual EBITDA is
$18,000,000.  Joe’s Target Bonus Award is 30%; the decrease as a % to
the Budgeted EBITDA is 10%.  Therefore, the bonus payout is
75%.  Joe’s Bonus is calculated as follows assuming he met his
individual goals as well:

      30% x
$75,000.00 = $22,500.00 x   60% (Financial Performance) =
$13,500.00 x 75% =   $10,125.00

                    
 30% x $75,000.00 = $22,500.00 x   40% (Individual
Goals)      =
       $ 9,000.00 x 100% =   $
9,000.00

      Thus, Joe
receives a Bonus of $10,125.00 + 9,000.00 = 19,125.00.

      


      Corporate
Example:

      Sally
Jones holds the position of a Vice-President, and her base compensation actually
received for the year is $150,000.00.

      Assume
the budgeted EBITDA for the year for each of the four properties is $99,000,000;
and at the end of the year, the properties combined EBITDA is
$89,000,000.  Sally’s Target Bonus Award is 30%, but it will be
calculated as follows assuming she met her individual goals as
well:

      


                    
 30% x $150,000.00 = $45,000.00 x 40% (Individual Goals)   =
  $18,000.00

      30% x
$150,000.00 = $45,000.00 x 60% (Financial Performance) x 75% ($89 mil divided by
$99 mil) = $20,250.00

      Sally’s
bonus award is $18,000.00 + $20,250.00 = $38,250.00

      


      Eligibility:

      To be
eligible to receive a bonus, you must

       

      1)            be
a full-time employee in good standing (no written warnings in past six months)
and in a bonus-eligible position;

      2)            be
an employee in an eligible position before October 1st of the plan year;
and

      3)           
be an
active employee at the time bonuses are distributed.

      4)            Employment
agreements covenants supersede this plan document.

      


      


      


      


      


      



      
        
          
            Revised
12/2008 

             


            
            

          

           


        

        
          4

          
            

          

        

        
           


          
             


          

        

      


      


      


      FOR THE INDIVIDUAL
PROPERTIES:

      THE
FINANCIAL PERFORMANCE OF THE PROPERTY MUST BE MET PRIOR TO THE DISTRIBUTION OF
ANY PORTION OF THE BONUS AWARD.   AS LONG AS 85%OF THE BUDGETED
EBITDA IS MET, THE NON-FINANCIAL PORTION OF THE BONUS IS ELIGIBLE TO BE PAID OUT
UP TO 100%.  HOWEVER, THE NON-FINANCIAL PORTION PAYOUT DOES NOT FOLLOW
THE FINANCIAL PORTION PAYOUT, AS OUTLINED IN THE PERCENTAGE GRID ON PAGE
4.

      


      FOR THE CORPORATE
OFFICE:

      IF
THE COMBINED PROPERTY EBITDA (AS DESCRIBED ON PAGE 2) DOES NOT ACHIEVE AT LEAST
85%OF THE BUDGETED AMOUNTS, THE FINANCIAL PORTION OF THE BONUS IS NOT ELIGIBLE
TO BE PAID OUT.  THE NON-FINANCIAL PORTION OF THE BONUS AWARD IS NOT
DEPENDENT ON ACHIEVING AT LEAST 85% OF BUDGETED EBITDA.  THEREFORE, IF
AT LEAST 85% OF BUDGETED EBITDA IS NOT ACHIEVED, THE NON FINANCIAL PORTION IS
STILL ELIGIBLE TO BE PAID OUT UP TO 100%.

      


      PAYMENT OF MANAGEMENT BONUSES IS
DISCRETIONARY. ADDITIONALLY, ANY EXCEPTIONS MADE TO PAY OUT BONUSES ABOVE AND
BEYOND THE PLAN DESIGN WILL BE AT THE DISCRETION OF THE BOARD OF
DIRECTORS.

       

      Promotions/Transfers:

      Employees
who are promoted into a bonus-eligible position before October 1, of the Plan
Year will receive bonus awards.  Awards will be calculated on a
pro-rated basis.

      


      Employees
who are promoted from one bonus-eligible position into another bonus-eligible
position will have their Bonus Award percentage calculated by using their actual
earnings during the 12-month Plan Year, but their Bonus Target percentage will
be pro-rated based on the number of months employed in each
position.

       

      Bonus
Pay Out Timetable:

      The bonus
will be paid out in one distribution, which will be in March following the Plan
Year ending on December 31.   However, if the
properties/corporate reach 90% of the budgeted EBITDA (using November actual and
budgeted EBITDA for December), one half of the Bonus Target for the “Financial
Performance” portion only will be paid in December of the Plan Year, and the
balance based on actual results will be distributed in the month of March
following the Plan Year.

      


      


      


      


      


      


      
 

      



      
        
          
            Revised
12/2008 

             


            
            

          

           


        

        
          5