Exhibit 10.3


 


EXECUTIVE EMPLOYMENT AGREEMENT


 


THIS EXECUTIVE EMPLOYMENT
AGREEMENT (this “Agreement”) is entered into on March 7,
2008, to be effective as of January 1, 2008 (the “Effective
Date”), between Herbst Gaming, Inc., a Nevada corporation
(together with their successors or assigns as permitted under this Agreement,
collectively, the “Company”), and
Mary E. Higgins, an individual (the “Executive”).


 


The Company desires to
continue to employ the Executive and to enter into this Agreement embodying the
terms of such employment, and the Executive desires to enter into this
Agreement and accept such employment.


 


In consideration of the
mutual covenants and for other good and valuable consideration, the Company and
the Executive (individual a “Party” and together
the “Parties”) agree as follows:


 


1.             Definitions


 


(a)           “Salary” shall
mean the salary provided for in Section 4 subject to such increases
as may be made from time to time.


 


(b)           “Board” shall
mean the Board of Directors of the Company.


 


(c)           “Business Day”
shall mean any day other than a weekend, a federal or Nevada state holiday or a
vacation day for the Executive.


 


(d)           “Cause” shall
mean:


 


(i)            the conviction of, or judgment against, the Executive by a
civil or criminal court of competent jurisdiction for a felony or any other
offense involving embezzlement or misappropriation of funds, or any act of
moral turpitude, dishonesty or lack of fidelity;


 


(ii)           the indictment of the Executive by a state or federal grand
jury of competent jurisdiction or the filing of a criminal complaint or
information, for a felony or any other offense involving embezzlement or
misappropriation of funds, or any act of moral turpitude, dishonesty or lack of
fidelity;


 


(iii)          the confession by the Executive of embezzlement or misappropriation
of funds, or any act of moral turpitude, dishonesty or lack of fidelity;


 


(iv)          the payment (or, by the operation solely of the effect of a
deductible, the failure of payment) by a surety or insurer of a claim under a
fidelity bond issued for the benefit of the Company reimbursing the Company for
a loss due to the wrongful act, or wrongful omission to act, of the Executive;


 


(v)           the denial, revocation or suspension of a license,
qualification or certificate of suitability to the Executive by any of the
Gaming Authorities; and


 


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(vi)          any action or failure to act by the Executive that the
Company reasonably believes, as a result of a communication or action by the
Gaming Authorities or on the basis of consultations with its gaming counsel
and/or other professional advisors, will likely cause any of the Gaming
Authorities to:  (A) fail to
license, qualify and/or approve the Company to own and operate a gaming
business; (B) grant any such licensing, qualification and/or approval only
upon terms and conditions that are unacceptable to the Company; (C) significantly
delay any such licensing, qualification and/or approval process; or (D) revoke
or suspend any existing license.


 


(e)           “Confidential Information”
shall mean information in whatever form, including, without limitation,
information that is written, electronically stored, orally transmitted, or
memorized, that is, in the Company’s opinion, of commercial value to the
Company and that is created, discovered, developed, or otherwise becomes known
to the Company, or in which property rights are held, assigned to, or otherwise
acquired by or conveyed to the Company, including, without limitation, any
idea, knowledge, know-how, process, system, method, technique, research and
development, technology, software, technical information, trade secret,
trademark, copyrighted material, reports, records, documentation, data,
customer or supplier lists, tax or financial information, business or marketing
plan, strategy, or forecast. 
Confidential Information does not include information that is or becomes
generally known within the Company’s industry through no act or omission by the
Executive; provided, however,
that the compilation, manipulation or other exploitation of generally known
information may constitute Confidential Information.


 


(f)            “Disability”
shall mean the Executive’s inability, for a period of six (6) consecutive
months, to render substantially the services provided for in Section 3
by reason of mental or physical disability, whether resulting from illness,
accident or otherwise, where the existence of Disability shall be determined in
the sole and absolute discretion of the Company.


 


(g)           “Term of Employment”
shall mean the initial period specified in Section 2 and if, but
only if, automatically renewed as provided in Section 2, shall
include the period of such renewal.


 


2.             Term of Employment


 


(a)           The Company hereby employs the Executive and the Executive
hereby accepts employment with the Company, in the position and with the duties
and responsibilities as set forth in Section 3 for the Term of
Employment, subject to the terms and conditions of this Agreement.


 


(b)           The initial Term of Employment shall commence as of the
Effective Date and shall, unless sooner terminated as provided in Section 7
terminate at 11:59 p.m. (Pacific Standard Time) on December 31, 2009;
provided that the Term of Employment shall automatically renew for successive
one (1) year periods unless (i) it has sooner terminated as provided
in Section 7 or (ii) either Party has notified the other in
writing at least sixty (60) days prior to the otherwise scheduled expiration of
the Term of Employment that such Term of Employment shall not so renew.


 


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3.             Position, Duties and Authorities


 


(a)           During the Term of Employment, the Executive shall be
employed as Chief Financial Officer with the duties, responsibilities and
authorities customarily associated with such positions for other businesses of
the same size and in the same industry, together with any other duties of a
senior executive nature as may be reasonably requested by the Board from time
to time, which may include duties for one or more subsidiaries or affiliates of
the Company.  In performing the Executive’s
duties under this Agreement, the Executive shall perform such duties subject to
supervision and in accordance with the policies and directives established by
the Board.


 


(b)           The Executive is permitted to engage in charitable,
community and business affairs, managing personal investments and serving as a
member of boards of directors of industry associations or non-profit or for
profit organizations and companies so long as such activities do not materially
interfere, in the opinion and reasonable discretion of the Board, with the
Executive carrying out her duties and responsibilities under this
Agreement.  Thereafter, not less often
than on January 1 of each renewal year, the Executive shall disclose in
writing to the Board any changes to the information with respect to involvement
in such entities or organizations.


 


4.             Salary


 


During the Term of
Employment, the Executive shall be paid by the Company a Salary payable in
accordance with the Company’s payroll practices in effect from time to time at
an annualized rate of Five Hundred Thousand Dollars ($500,000); salary is
subject to a five percent (5%) increase on January 1 of each year
following Effective Date.  The first such
increase shall take effect in January 2009.


 


5.             Employee Benefit Programs


 


During the Term of
Employment, the Executive and her dependents shall be entitled to participate
in, at the Company’s expense, whatever employee benefit plans the Company
endorses to obtain, if the Company in its sole discretion elects to obtain,
such as, but not in limitation, medical, surgical, hospitalization, dental and
visual insurance coverage.  If the
Company obtains an employee benefit plan, the Company will pay all expenses for
these insurance program(s) or plan(s).


 


6.             Business Expense Reimbursement and Perquisites


 


(a)           During the Term of Employment, the Executive shall be
entitled to receive reimbursement by the Company, upon submission of adequate
documentation, for all reasonable out-of-pocket expenses incurred by the Executive
in performing services under this Agreement.


 


(b)           During the Term of Employment, the Executive shall be
entitled to all other perquisites, incentive compensation and benefits provided
to other senior level executives of the Company (as referenced in Exhibit A
attached hereto).


 


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7.             Termination of Employment


 


(a)           Termination Due to Death or Disability.  In the event of the
cessation of the Executive’s employment under this Agreement due to death or
Disability, the Executive or the Executive’s legal representatives, as the case
may be, shall be entitled to:


 


(i)            (A) in the case of death, continued Salary at the rate
in effect at the time of death for a period of twenty-four (24) months
following the month in which such cessation of employment due to death occurs,
or (B) in the case of Disability, Salary at the rate in effect at the
determination of Disability through the date of such determination of
Disability;


 


(ii)           reimbursement for expenses incurred but not yet reimbursed
by the Company; and


 


(iii)          any other compensation and benefits to which the Executive
or legal representatives may be entitled to under the applicable plans,
programs and agreements of the Company.


 


(b)           Termination by the Company for Cause.  At any time after
learning of an event constituting Cause, the Company may elect to give the
Executive written notice of its intention to terminate for Cause, specifying in
such notice the event forming the basis for Cause.  Subject only to the following sentence,
termination shall be effective immediately upon delivery of notice
hereunder.  If the written notice is of
an event constituting Cause under Section 1(d)(i) or 1(d)(v),
and if the event is capable of being cured, the Company may allow the Executive
to have ten (10) Business Days following actual receipt of the notice of
termination in which to cure, so long as the Executive advises the Company in
writing within forty-eight (48) hours of receiving the notice of termination of
the Executive’s intention to attempt cure. 
In the event the Executive’s employment is terminated by the Company for
Cause, the Executive shall be entitled to:


 


(i)            Salary at the rate in effect at the time of termination
through the date of termination of employment;


 


(ii)           reimbursement for expenses incurred but not yet reimbursed
by the Company; and


 


(iii)          any other compensation and benefits to which the Executive
may be entitled under applicable plans, programs and agreements of the Company.


 


The
Executive’s entitlement to the foregoing shall be without prejudice to the
right of the Company to claim or sue for any damages or other legal or
equitable remedy to which the Company may be entitled as a result of such
Cause; provided, however, that offset shall not
be available to the Company in any event.


 


(c)           Termination without Cause.  In the event the
Executive’s employment is terminated by the Company without Cause (which shall
not include a termination pursuant to Section 7(a)) (“Termination Without Cause”), the Executive
shall be entitled to those items described in the subparagraphs (i) through
(iii) of this Section 7(c) below.  Termination Without 


 


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Cause
shall be effective immediately, unless a later date is stated, upon delivery of
a written notice of such termination from the Company to the Executive.


 


(i)            an amount equal to twelve (12) months of Salary (the “Salary Termination Payment”).  The Executive may elect, at the Executive’s
option to receive the Salary Termination Payment either (A) in equal
monthly installments over a one (1) year period commencing on the next
regularly scheduled payday upon termination of the Executive’s employment, or (B) in
a lump-sum payment within ten (10) Business Days following termination of
the Executive’s employment;


 


(ii)           reimbursement for expenses incurred but not yet reimbursed
by the Company; and


 


(iii)          any other compensation and benefits to which the Executive
may be entitled under applicable plans, programs and agreements of the Company.


 


(d)           Voluntary Termination.  A “Voluntary Termination” shall mean a
termination of employment by the Executive on her own initiative.  In the event of a Voluntary Termination, the
Executive shall be entitled to:


 


(i)            Salary at the rate in effect at the time of termination
through the date of termination of employment;


 


(ii)           reimbursement for expenses incurred but not yet reimbursed
by the Company; and


 


(iii)          any other compensation and benefits to which the Executive
may be entitled under applicable plans, programs and agreements of the Company.


 


A
Voluntary Termination shall not, solely due to a Voluntary Termination, be
deemed a breach of this Agreement and shall be effective upon the expiration of
sixty (60) days after written notice is delivered to the Company, unless
another period of time is agreed to in writing by the Parties.


 


(e)           No Mitigation; No Offset.  In the event of any
termination of the Executive’s employment under this Agreement, the Executive
shall be under no obligation to seek other employment, and there shall be no
offset against amounts due the Executive under this Agreement on account of any
remuneration attributable to any subsequent employment that the Executive may
obtain.


 


(f)            Nature of Payments.  Any amounts due the
Executive under this Agreement in the event of any termination of employment
with the Company are (i) in the nature of severance payments, or (ii) liquidated
damages that contemplate both direct damages and consequential damages that the
Executive may suffer as a result of the termination of employment, or both, and
are not in the nature of a penalty.


 


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8.             Covenants to Protect Confidential Information


 


The Executive shall not,
during the Term of Employment or anytime thereafter, without prior written
consent of the Company, divulge, publish or otherwise disclose to any other
person any Confidential Information regarding the Company except in the course
of carrying out the Executive’s responsibilities on behalf of the Company (e.g., providing information to the company’s attorneys,
accounts, bankers, etc.) or if required to do so pursuant to the order of a
court having jurisdiction over the subject matter or a summons, subpoena or
order in the nature thereof of any legislative body (including any committee
thereof and any litigation or dispute resolution method against the Company
related to or arising out of this Agreement) or any governmental or
administrative agency.


 


9.             Non-Solicitation


 


Except with the prior written
consent of the Board, the Executive shall not solicit customers, clients or
employees of the Company or any of its affiliates for a period of twelve (12)
months after the date of the expiration or termination of this Agreement.  Without limiting the generality of the
foregoing, the Executive will not, for a period of twelve (12) months after the
date of the expiration or termination of this Agreement, willfully canvas or
solicit any such business in competition with the business of the Company from
any customers of the Company with whom the Executive had contact during, or of
which the Executive had knowledge solely as a result of, her performance of
services for the Company pursuant to this Agreement.  The Executive will not, for a period of
twelve (12) months after the date of the expiration or termination of this
Agreement, directly or indirectly request, induce or advise any customers of
the Company with whom the Executive had contact during the terms of this
Agreement to withdraw, curtail or cancel their business with the Company.  The Executive will not, for a period of
twelve (12) months after the date of the expiration or termination of this
Agreement, induce or attempt to induce any employee of the Company to terminate
her or her employment with the Company.


 


10.           Remedies.


 


(a)           The Executive acknowledges and agrees that immediate and
irreparable harm, for which damages would be an inadequate remedy, would occur
in the event any of the provisions of Section 8 or 9 were not
performed in accordance with their specific terms or were otherwise
breached.  Accordingly, the Executive
agrees that the Company shall be entitled to an injunction or injunctions to
prevent breaches of such provisions of this Agreement and to enforce
specifically the terms and provisions thereof without the necessity of proving
actual damages or securing or posting any bond or providing prior notice, in
addition to any other remedy to which it may be entitled at law or equity.


 


(b)           Nothing herein contained is intended to waive or diminish
any rights the Company may have at law or in equity at any time to protect and
defend its legitimate property interests (including its business relationship
with third parties), the foregoing provisions being 


 


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intended
to be in addition to and not in derogation or limitation of any other rights
the Company may have at law or equity.


 


(c)           The Executive shall have not rights, remedies or claims for
damages, at law, in equity or otherwise with respect to any termination of the
Executive’s employment by the Company other than as set forth in Section 7.


 


11.           Indemnification


 


(a)           The Company shall indemnify the Executive to the fullest
extent permitted by Nevada law in effect as of the date hereof against all
costs, expenses, liabilities and losses (including, without limitation,
attorneys’ fees, judgments, fines, penalties, ERISA excise taxes and amounts
paid in settlement) reasonably incurred by the Executive in connection with a
Proceeding.  For the purposes of this Section 11,
a “Proceeding” shall mean any
action, suit or proceeding by reason of the fact that the Executive is or was
an officer, director or employee, trustee or agent of any other entity at the
request of the Company.  The
indemnification allowed by this Section does not include suits initiated
by the Executive against the Company.


 


(b)           The Company shall advance to the Executive all reasonable
costs and expenses incurred by the Executive in connection with a Proceeding
within twenty (20) days after receipt by the Company of a written request for
such advance.  Such request shall include
an itemized list of the costs and expenses and an agreement by the Executive to
repay the amount of such advance if it is determined by a court of competent jurisdiction
that she is not entitled to be indemnified by the Company against such costs
and expenses.


 


(c)           The Executive shall not be entitled to indemnification under
this Section 11 unless the Executive meets the standard of conduct
specified in the Nevada Revised Statutes. 
Actions that fail to meet the aforementioned standard of conduct shall
include, but are not limited to, the failure to act in good faith, failure to
act in the best interests of the Company, breach of the duty of loyalty,
misappropriation of business opportunities, violation of the provisions of the
articles of incorporation or the bylaws of the Company, violation of state or
federal securities laws and violation of criminal law.  Notwithstanding the foregoing, to the extent
permitted by law, neither Nevada Revised Statute, as amended, Section 78.7502
nor any similar provision shall apply to indemnification under this Section, so
that if the Executive in fact meets the applicable standard of conduct, the
Executive shall be entitled to such indemnification whether or not the Company
(whether by the Board, the stockholders, independent legal counsel or other
party) determines that indemnification is proper because the Executive has met
such applicable standard of conduct. 
Neither the failure of the Company to have made such a determination
prior to the commencement by the Executive of any suit or arbitration
proceeding seeking indemnification, nor a determination by the Company that the
Executive has not met such applicable standard of conduct, shall create a
presumption that the Executive has not met the applicable standard of conduct.


 


(d)           The Company shall not settle any Proceeding or claim in any
manner that would impose on the Executive any penalty or limitation with the
Executive’s prior written consent. 
Neither the Company nor the Executive will unreasonably withhold its or
the Executive’s consent to any proposed settlement.


 


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12.           Assignability; Binding Nature


 


This Agreement shall be
binding upon and inure to the benefit of the Parties and their respective
successors, heirs and assigns.  No rights
or obligations of the Company under this Agreement may be assigned or
transferred by the Executive or the Company except that (i) such rights or
obligations of the Company may be assigned or transferred pursuant to a merger
or consolidation in which the Company is not the continuing entity, or the sale
or liquidation of all or substantially all of the assets of the Company,
provided that the assignee or transferee is the successor to all or
substantially all of the assets of the Company and such assignee or transferee
assumes the liabilities, obligations and duties of the Company, as contained in
this Agreement, either contractually or as a matter of law, and (ii) such
obligations of the Company may be transferred by the Executive by will or
pursuant to the laws of descent or distribution.  The Company shall take all reasonable legal
action necessary to effect such assignment and assumption of the Company’s
liabilities, obligations and duties under this Agreement in circumstances
described in clause (i) of the preceding sentence.


 


13.           Representation


 


The Company and the
Executive respectively represent and warrant to each other that each respectively
is fully authorized and empowered to enter into this Agreement and that their
entering into this Agreement and the performance of their respective
obligations under this Agreement will not violate any agreement between the
Company or the Executive respectively and any other person, firm or
organization or any law or governmental regulation.


 


14.           Entire Agreement


 


This Agreement contains the
entire agreement between the Parties and supersedes all prior agreements,
understandings, discussions, negotiations and undertakings, whether written or
oral, between the Parties relating to the subject matter set forth herein.  The Parties acknowledge and agree that the
employment agreement previously entered into between the Parties has been
terminated as of the date prior to the Effective Date.


 


15.           Amendment or Waiver


 


This Agreement cannot be
changed, modified or amended without the consent in writing of both the
Executive and the Company.  No waiver by
either Party at any time of any breach by the other Party of any condition or
provisions of this Agreement shall be deemed a waiver of a similar or
dissimilar condition or provision at the same or at any prior or subsequent
time.  Any waiver must be in writing and
signed by the Executive or an authorized officer of the Company, as the case
may be.


 


16.           Severability


 


The provisions of this
Agreement shall be severable and the invalidity, illegality or unenforceability
of any provision of this Agreement shall not affect, impair or render
unenforceable this Agreement or any other provision hereof, all of which shall
remain in full force and effect.  If any
provision of this Agreement is adjudicated by a court of competent jurisdiction
as invalid, illegal or otherwise unenforceable, but such provision may be made 


 


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enforceable
by a limitation or reduction of its scope, the Parties agree to abide by such
limitation or reduction as may be necessary so that said provision shall be
enforceable to the fullest extent permitted by law.  The Parties further intend to and hereby
confer jurisdiction to enforce the covenants contained in Sections 8 and 9
(the “Restrictive Covenants”) upon the courts
of any jurisdiction within the geographical scope of such Restrictive
Covenants.  If the courts of any one or
more of such jurisdictions hold any Restrictive Covenant unenforceable by
reason of the breadth of such scope or otherwise, it is the intention of the
Company and the Executive that such determination not bar or in any affect the
right of the Company to the relief provided for in this Section in the
Courts of any other jurisdiction within the geographical scope of such
Restrictive Covenant as to breaches of such Restrictive Covenant in such other
respective jurisdictions (such Restrictive Covenant as it relates to each
jurisdiction being, for this purpose, severable into diverse and independent
covenants).


 


17.           Survival


 


The respective rights and
obligations of the Parties shall survive any termination of this Agreement to
the extent necessary to the intended preservation of such rights and
obligations.


 


18.           Governing Law


 


This Agreement shall be
governed by and construed under the law of the State of Nevada, disregarding
any principles of conflicts of law that would otherwise provide for the
application of the substantive law of another jurisdiction.  Each Party hereby irrevocably consents to the
jurisdiction and venue of the state courts of Clark County, Nevada and the
United States district courts with jurisdiction in Nevada with respect to any
matter arising out of or relating to this Agreement other than matters that are
subject to the arbitrations provisions of Section 19.


 


19.           Settlement of Disputes


 


Except for equitable actions
seeking to enforce the provisions of Sections 8 and 9 which may be
brought by a court in any competent jurisdiction, in the event a dispute, claim
or controversy arises between the Parties relating to the validity,
interpretation, performance, termination or breach of this Agreement
(collectively, a “Dispute”), the Parties agree to
hold a meeting regarding the Dispute, attended by individuals with
decision-making authority, to attempt in good faith to negotiate a resolution
of the Dispute prior to pursuing other available remedies.  If, within thirty (30) days after such
meeting or after good faith attempts to schedule such a meeting have failed,
the Parties have not succeeded in negotiating a resolution of the Dispute, the
Dispute shall be resolved through final and binding arbitration to be held in
Nevada in accordance with the rules and procedures for employment disputes
of the American Arbitration Association. 
The prevailing party in such proceeding shall be entitled to recover the
costs of the arbitration from the other party, including, without limitation,
reasonable attorneys’ fees.


 


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20.           Notices


 


Any notice given to either
Party shall being writing and shall be deemed to have been given when delivered
personally or sent by certified or registered mail, postage prepaid, return
receipt requested, duly addressed to the Party concerned at the address
indicated below or to such changed address as such Party may subsequently give
notice of:


 


	
  If
  to the Company or the Board

  	
   

  
	
   

  	
   

  
	
   

  	
  Herbst
  Gaming, Inc.

  
	
   

  	
  3440
  West Russell Road

  
	
   

  	
  Las
  Vegas, Nevada 89118

  
	
   

  	
  Attention:
  Chief Executive Officer

  
	
   

  	
   

  
	
  If
  to the Executive:

  	
   

  
	
   

  	
   

  
	
   

  	
  Mary
  E. Higgins

  
	
   

  	
  3211
  Ashby Avenue

  
	
   

  	
  Las
  Vegas, Nevada 89102

  
			



 


21.           Headings


 


The headings of the Sections
contained in this Agreement are for convenience only and shall not be deemed to
control or affect the meaning or construction of any provision of this
Agreement.


 


22.           Counterparts


 


This Agreement may be
executed in one or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.


 


23.           Taxes


 


The
Salary payable is stated in gross amount and shall be subject to such
withholding taxes and other taxes as may be required by law.


 


24.           Acknowledgment


 


The Executive acknowledges that
she has been given a reasonable period of time to study this Agreement before
signing it and has had an opportunity to secure counsel of her own.  By the execution of this Agreement, the
Executive certifies that she has fully read and completely understands the
terms, nature and effect of this Agreement. 
The Executive further acknowledges that she is executing this Agreement
freely, knowingly and voluntarily and that the Executive’s execution of this
Agreement is not the result of any fraud, duress, mistake, or undue influence
whatsoever.  In executing this Agreement,
the Executive does not rely on any inducements, promises, or representations by
the Company other than that which is stated in this Agreement.


 


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25.           Waiver of Jury Trial


 


Each Party waives, to the
fullest extent permitted by law, any right it may have to a trial by jury in
respect of any litigation arising out of or relating to this Agreement and
Executive’s employment by the Company. 
Each Party (i) certifies that no representative, agent or attorney
of the other Party has represented, expressly or otherwise, that such other
Party would not, in the event of litigation, seek to enforce the foregoing
waiver and (ii) acknowledges that she or it has been induced to enter into
this Agreement by, among other things, the mutual waivers and certifications
set forth in this Section.


 


IN WITNESS WHEREOF, the
undersigned have executed this Agreement to be effective as of Effective Date.


 


 


	
  THE “COMPANY”

  Herbst Gaming, Inc.

  	
   

  	
  THE
  “EXECUTIVE”

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Its:

  	
   

  	
   

  	
  Mary
  E. Higgins

  



 


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