exv10w1



 






Exhibit 10.1




EMPLOYMENT AGREEMENT



This Employment Agreement (“Agreement”) is made and effective this 17th day of July, 2007 (the “
Effective Date”) by and between Full House Resorts, Inc. a Delaware corporation the “Company”, and
Andre Hilliou (“Executive”).



In consideration of the premises and of the covenants and agreements herein contained, the
parties agree as follows:




1. Employment Services.



Employer hereby employs Executive, and Executive hereby accepts employment as Chief Executive
Officer of the Company, reporting to the Board of Directors of the Company, all upon and subject to
the terms and conditions herein set forth. For purposes of this Agreement, the term “Company” will
be deemed to mean the Company and its subsidiaries or affiliates.




2. Duties.



During the term of his employment, Executive will devote his full-time best efforts and loyalty to
this employment and lawfully perform duties as described in Appendix A and such other duties as are
reasonably assigned or delegated to him by the Board of Directors consistent with his best
abilities and position hereunder. In construing the provisions of this Agreement, “Employer” will
include all of Employer’s subsidiary, parent and affiliated corporations and entities. While it is
understood and agreed that Executive’s job duties may change at the Board of Directors’ discretion
during the Term defined below of this Agreement, his general level of responsibility will not be
materially reduced.




3. Term.



The term of this Agreement the “Term”) will begin on the Effective Date stated above and will
continue for a two (2) year term. The Term will automatically renew for successive periods of two
years each, an “Extended Term”, unless the Company or the Executive gives written notice to the
other at least ninety 90 days prior to the end of the then current Term that this Agreement will
not be further extended. For purposes of this agreement, “Term” will hereafter include any Extended
Term. Otherwise, this Agreement may be terminated as provided in Paragraphs 8 and 9 below.




4. Compensation.




     A. In consideration of the services to be rendered by Executive hereunder, the Company agrees
to pay to Executive the sum described in Appendix A annually (the “Base Salary”), pro-rated for the
period beginning June 1, 2007 and ending on December 31, 2008 thereafter, the Base Salary will be
increased at the discretion of the Board of Directors beginning each January1st of the Term. All
Base Salary will be paid in accordance with the regular payroll practices of the Company.



     B. The Executive will also be entitled to receive annual cash bonuses of up to 200% of Base
Salary (the “Annual Bonus”), provided the Compensation Committee of the Board of



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Directors in its discretion determines that the Executive has met the pre-defined annual
Performance Objectives and assigned management duties The Annual Bonus will be paid in accordance
with plan documents. Each year’s annual Performance Objectives will be set and approved by the
Board of Directors within 90 days of fiscal year beginning.



     C. Pursuant to the terms of Resolution of the Company dated December 15, 2005, and upon
shareholder approval of the Company’s “2006 Long-Term Incentive Compensation Plan (“L-T Incentive
Plan”), which Incentive Plan was approved by a majority of Company shareholders no later than June
1, 2006, Executive will receive a restricted stock grant of a number of shares described in
Appendix A, or as approved by the Board of Directors. The Shares will vest in four equal
installments of twenty-five percent (25%) each of which will vest on May 31, 2006 and thereafter on
January 6, of 2007, 2008 and 2009 respectively.




1. Forfeiture of Shares. To the extent not inconsistent with any mandatory provisions of the
Incentive Plan, any unvested Shares will be forfeited if Company terminates Executive during
the Term For Cause (Paragraph 9(A)) or if Executive terminates his employment during the
Term Without Good Reason (Paragraph 9(D)).




2. Additional Shares. Executive will be considered by the Company for additional awards of
stock- based incentive compensation, which determination will be by the Compensation
Committee’s subject to Board of Directors approval and pursuant to the Incentive Plan.



5. Benefits.




     A. Executive will receive paid vacation annually, all of which will be in accordance with the
Full House Resorts Inc. Vacation Policy.



     B. Executive will be entitled to participate in all other employment benefits, including but
not limited to death and retirement plans, group insurance programs for medical, hospitalization,
life, and long term disability, afforded in general to all employees, or to senior executives of
the Company of comparable status and tenure.



     C. Throughout the Term, or any extensions thereof, the Company will maintain in full force and
effect a policy of term insurance on the life of Executive in an amount determined by the Company,
but no less than equal to 2 year’s base compensation, subject to insurability. Executive will
promptly advise the Company of his designated beneficiaries of such policy. Upon termination of
Executive’s employment, and to the extent permitted under the policy, Executive will have the right
to transfer such policy to his own name as provided in Paragraph 9(G).



     D. Nothing in this Agreement shall prevent or limit the Executive’s continuing or future
participation in any plan, program, policy or practice provided by the Company or any of its
affiliated companies for which the Executive may qualify.



     E. Existing benefit plans are included in Appendix A.



6. Reimbursable Expenses.



The Company will pay all reasonable expenses incurred by Executive in the performance of his
responsibilities and duties for the Company. Executive will submit to the Company periodic


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statements- but no less than every 60 days, of all expenses so incurred in accordance with the
Company’s accounting policies. Subject to such audits as the Company may deem appropriate the
Company will, promptly and in the ordinary course, reimburse Executive the full amount of any such
business expenses advanced by Executive. Company will pay directly all costs of Executive’s
regulatory licensings as required by any jurisdiction in which the Company conducts business.




7. Limitation on Outside Business Activities. During the Term of the employment hereunder,
without the prior consent of the board of directors, Executive will not:




     A. Render services of a business, professional or commercial nature to any other person or
entity, directly or indirectly, whether for compensation or otherwise, except that this prohibition
will not be construed to prevent Executive from engaging in charitable activities or investing his
assets in such form or manner as will not require his services in the operation of the affairs of
the companies in which such investments are made and which are not in violation of Paragraph 7(B)
below.



     B. Engage in any activity competitive with or adverse to the welfare of business or related
interests of the Company or any of its subsidiaries or affiliates, whether alone, as a partner,
officer, director, employee or shareholder of any other corporation or other entity, or otherwise,
directly or indirectly, except that the ownership of not more than one percent of the stock of any
one or more publicly traded corporations will not be deemed a violation of this Paragraph 7(B)



     C. Be engaged by any person or entity which conducts business with or acts as a consultant or
advisor to the Company or any of its subsidiaries or affiliates, whether alone, as a partner,
officer, director, employee or shareholder of any other corporation or entity, or otherwise,
directly or indirectly, except that ownership of not more than one percent of the stock of any one
or more publicly traded corporations will not be deemed a violation of this Paragraph 7(C).



8. Illness, Incapacity or Death During Employment.




     A. Illness or Incapacity If Executive is incapacitated by reason of physical or
mental illness or incapacity that results in a material inability to perform his duties under this
Agreement, and if such incapacitation continues for a period of ninety 90 consecutive days, then
upon 30 days written notice to Executive, or designated legal representative, the Company may
terminate the employment of Executive under this Agreement, and upon such termination, Company will
pay Executive the following:




(1) His Base Salary to the date of termination, which shall be no less than two years.




(2) An amount equal to his prior year’s Annual Bonus on a pro-rata basis to the date of
termination, subject to limitations and terms of Paragraph 4(B).




(3) Reimbursement of all expenses reasonably incurred by Executive in performing his
responsibilities and duties for the Company prior to the date of termination




(4) Applicable insurance and other group benefits proceeds



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(5) Value of any salary continuation received whether in lump sum or periodically under any
Company Long Term Disability Plan or any other applicable insurance or other group benefits
provided by the Company.



     B. Death. In the event of Executive’s death, this Agreement will automatically
terminate and Company will pay to the Executive’s estate the following:




(1) His Base Salary to the date of death, which shall be no less than two years.




(2) An amount equal to his prior year’s Annual Bonus on a pro-rata basis to the date of
death, subject to limitations and terms of Paragraph 4(B)




(3) Reimbursement of all expenses reasonably incurred by Executive in performing his
responsibilities and duties for the Company prior to his death



9. Termination by Company or by Executive.




     A. For Cause by the Company. Subject to Paragraph 14, the employment of Executive
under this Agreement may be terminated by the Company For Cause upon thirty 30 days written notice
to Executive from the Chief Executive Officer, or in the case of the Chief Executive Officer from
the Chairman of the Board of Directors. If the Company properly terminates Executive’s employment
hereunder for Cause, it will be without further liability to Executive except for payment of all
Base Salary and benefits accrued but unpaid to the date of such termination. For purposes of this
Agreement, the term “For Cause” means:




(1) Executive’s material fraud, dishonesty, willful misconduct, or willful and continuing
failure in the performance of his duties under this Agreement




(2) Executive’s breach of any material provision of this Agreement which has not been cured
within 30 days following the notice thereof




(3) The commission by Executive of any felony criminal act or the commission of any crime
involving fraud, dishonesty or moral corruptness, including denial or removal of Executive’s
licensing from any governmental gaming agency or licensing authority.


Provided however, that any action or inaction that results from Executive’s corporate conduct taken
in furtherance of the direction of the Board of Directors or his superiors in the Company will not
constitute “Cause” hereunder.




     B. Without Cause by the Company. The employment of Executive under this Agreement may
be terminated by the Company without cause at any time upon thirty 30 days’ written notice to
Executive. In such event, and in addition to any other entitlements under this Agreement, the
Company will pay the Executive the following:




(1) His Base Salary in accordance with the regular payroll practices of the Company for a
period of six months, with an additional month for every year of full employment up to a
maximum of twelve months




(2) An Annual Bonus for the year of termination equal to the average Annual Bonus of
previous 2 years in accordance with plan documents, prorated on an annual basis from the
last Annual Bonus received by Executive, subject to a minimum of 100%



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(3) Company will continue, at its expense, Executive’s health, dental and other insurance
benefits for the remaining portion of the otherwise applicable Term or until Executive is
subsequently employed, whichever is less and



     C. Termination by Executive For Good Reason. Subject to Paragraph 14, the Executive
may terminate his employment under this Agreement For Good Reason and the Company’s liability to
Executive will be to pay the Executive in accordance with Paragraph 9(B)(1—3), as though Executive
had been terminated Without Cause. “For Good Reason” means:




(1) A failure by the Company to comply with any material provision of this Agreement which
has not been cured within 30 days following the notice thereof




(2) Company’s direction to Executive to do, perform, or omit to perform any act, or
Executive’s knowledge of such acts or omissions performed by other Company employees without
appropriate redress, which acts or omissions are known to be fraudulent, illegal or could
otherwise materially impact negatively upon Executive’s personal and professional
reputation.



     D. Termination by Executive Without Good Reason. If the Executive terminates his
employment hereunder Without Good Reason, with a minimum notice of 30 days, Executive will receive
from the Company only his Base Salary, benefits and reimbursable expenses that have accrued but
remain unpaid to the date of such termination, and any earned , but unpaid, Annual Bonus declared
by the Board.



     E. Non-Renewal. A non-renewal of the Term under Paragraph 2 is not a “termination”
under Paragraph 9 (A)—9(D).



     F. Group Insurance Policies In the event of termination of this Agreement for any
reason, Executive will have the right to convert any or all of the Company’s group insurance
policies or plans to individual policies to the extent that such policies or plans permit
assignment from the group to the individual Executive, and provided Executive thereafter assumes
the payment of all related financial obligations from the date of such termination.



10. Confidential Information.



Executive agrees that he will not, during the Term or thereafter: disclose, divulge, discuss, copy
or otherwise use or suffer to be used in any manner, the proprietary and confidential plans,
inventions, ideas, discoveries, marketing methods, marketing research, customer lists, product
research or other data of the Company not otherwise available to the public or to Executive
independent of his employment collectively, “Confidential Information”. It is acknowledged by
Executive that all such Confidential Information compiled, obtained by, or furnished to Executive
while he is employed by the Company is confidential and proprietary information which is the
exclusive property of the Company provided, however, that if at any time following the termination
of this Agreement, any Confidential Information will become part of the public domain through no
fault of Executive, then the restrictions and limitations of this Paragraph will not apply to such
particular information.




11. Non-Competition.




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     A. Executive agrees that, for the time periods specified in 11 B below, he will not, directly
or indirectly, do any of the following:




(1) Own, manage, control, or participate in the ownership, management or control of, or be
employed or engaged by, or otherwise affiliated or associated with, as a consultant,
independent contractor or otherwise, any other corporation, partnership, proprietorship,
firm, association or other business entity, or otherwise engage in any business that is
competitive with any business or enterprise in which the Company is engaged at the time
Executive’s employment ceases including, without limitation, any gaming venture, Indian
gaming or river boat gaming facility located within 100 miles of any metropolitan area in
which there is located any gaming facility owned, managed or under development to be owned
or managed by the Company, including such gaming facilities not under development which the
Company is pursuing, as determined by the date Executive ceases to be employed hereunder or




(2) Solicit or induce any person who is an employee, officer, consultant or agent of the
Company or of any subsidiary or affiliate of the Company, to terminate such relationship.



     B. The provisions of this Paragraph 11 will be operative throughout the Term. Upon termination
under Paragraphs 8 and 9 or upon a Change of Control under Paragraph 12, the provisions of this
Paragraph 11 will be operative for the period during which Executive continues to receive
compensation or benefits, or for a period of twelve months, whichever is later



12. Change of Control.




     A. Defined. For the purpose of this Agreement, a “Change of Control” will mean:




(1) The acquisition by any person, entity or “group”, within the meaning of Section 13(d)
(3) or 14(d) (2) of the Securities Exchange Act of 1934 (the “Exchange Act”) excluding, for
this purpose: (a) the Company or its subsidiaries or (b) any employee benefit plan of the
Company or its subsidiaries which acquires beneficial ownership of voting securities of the
Company, of beneficial ownership, within the meaning of Rule 13d-3 promulgated under the
Exchange Act of 50% or more of either the then outstanding shares of common stock or the
combined voting power of the Company’s then outstanding voting securities or




(2) Individuals who, as of the date of this Agreement, constitute the Board (the “Incumbent
Board”) cease for any reason to constitute at least a majority of the Board, provided that
any person becoming a director subsequent to the date of this Agreement whose election or
nomination for election by the Company’s shareholders was approved by a vote of at least a
majority of the directors then comprising the Incumbent Board other than an election or
nomination of an individual whose initial assumption of office is in connection with an
actual or threatened election contest relating to the election of the Directors of the
Company, as such terms are used in Rule 14 a-11of Regulation 14A promulgated under the
Exchange Act will be, for purposes of this Agreement, considered as though such person were
a member of the Incumbent Board or




(3) Approval by the stockholders of the Company of:




(a) A reorganization, merger, consolidation or acquisition a “Business



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Combination”, with respect to which: (i) those persons who were the stockholders of
the Company immediately prior to such Business Combination do not, immediately
thereafter, beneficially own more than 50% of the combined voting power of the then
outstanding voting securities of the combined business’ then outstanding voting
securities in substantially the same proportions as their ownership immediately
prior to such Business Combination and (ii) at least a majority of the Incumbent
Board comprises a majority of the new Board of Directors of the combined business or




(b) A liquidation or dissolution of the Company or




(c) The sale of all or substantially all of the assets of the Company.



     B. Right of Executive to Terminate . Upon a Change of Control, Executive may terminate
this Agreement only if it materially affects Executive’s position and compensation herein.



     C. Compensation Upon a Change of Control, and whereby the Executive elects to
terminate his employment as provided in Paragraph 12(B) above, or is not retained under contract by
the surviving entity, the Company will pay the Executive as follows:




(1) A lump sum cash payment of the remaining Base Salary due under this Agreement, however
no less than two year’s Base Salary at time of termination




(2) A lump sum cash payment equal the average of the Annual Bonuses, if any, paid to the
Executive for the three prior years computed by adding the three prior year bonuses and
dividing by three or average based on term of employment if less than three years of service




(3) All unvested Shares or other stock-based grants awarded pursuant to the Incentive Plan
or other Company benefit plan will accelerate and vest upon the date of Change of Control.



13. Arbitration.



The Company and the Executive mutually consent to the resolution of all claims, controversies or
disputes under this Agreement, other than a claim which is primarily for injunctive or other
equitable relief, by binding arbitration, in accordance with the Nevada Uniform Arbitration Act.
The determination of the arbitrator will be binding. The Company will pay the fees and costs of the
arbitrator and all other reasonable direct costs in connection with any arbitration, excluding any
legal representation retained by Executive.




14. Right to Cure.



Each party agrees to give the other written notice identifying with specificity any action taken
which the notifying party believes to be a material violation of this Agreement, and to give the
breaching party a minimum of thirty 30 days thereafter to cure such breach prior to the notifying
party commencing adverse action, terminating this Agreement, or initiating equitable relief or
arbitration.




15. Miscellaneous.




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     A. Laws. This Agreement will be governed by, and construed in accordance with, the
laws of the State of Nevada, without reference to principles of conflict of laws, and the parties
agree that the courts of appropriate jurisdiction located in Clark County, Nevada will be the forum
for disputes brought hereunder.



     B. Interpretation. The invalidity or unenforceability of any provision of this
Agreement will not affect the validity or enforceability of any other provision of this Agreement.
If any provision of this Agreement will be held invalid or unenforceable in part, the remaining
portion of such provision, together with all other provisions of this Agreement, will remain valid
and enforceable and continue in full force and effect to the fullest extent consistent with law.



     C. Taxes. Notwithstanding any other provision of this Agreement, the Company may
withhold from amounts payable under this Agreement all federal, state, local and foreign taxes that
are required to be withheld by applicable laws or regulations.



     D. Strict Compliance. The Executive’s or the Company’s failure to insist upon strict
compliance with any provision of, or to assert any right under this Agreement including, without
limitation, the right of the Executive to terminate employment for Good Reason pursuant to
Paragraph 5 of this Agreement will not be deemed to be a waiver of such provision or right or of
any other provision of or right under this Agreement.



     E. Counterparts. This Agreement may be executed in several counterparts, each of which
will be deemed original, and said counterparts will constitute but one and the same instrument.
Facsimile signatures will be deemed original signatures.



     F. Survival . The respective rights and obligations of the parties hereunder will
survive any termination of the Executive’s employment or arrangements to the extent necessary to
the intended preservation of such rights and obligations.



     G. Beneficiaries The Executive will be entitled, to the extent permitted under any
applicable law, to select and change a beneficiary or beneficiaries to receive any compensation or
benefit payable hereunder following the Executive’s death by giving the Company written notice
thereof. In the event of the Executive’s death or a judicial determination of his incompetence,
references in this Agreement to the Executive will be deemed, where appropriate, to refer to his
beneficiary, estate or other legal representative.



     H. Notices. All notices and other communications under this Agreement will be in
writing and will be given by hand to the other party or by registered or certified mail, return
receipt requested, postage prepaid, addressed as follows, or to such other address as either party
furnishes to the other in writing in accordance with this Paragraph. Notices and communications
will be effective when actually received by the addressee:



To the Executive:

Trillium Hills Farm

185 Trillium Hills Way

Fincastle, VA 24090




To the Company:




Full House Resorts, Inc.




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4670 South Fort Apache Road Suite 
190 Las
Vegas, Nevada 89147

Attn: General Counsel




     I. Severability. The provisions of this Agreement are severable, and if any one or
more provisions is determined to be illegal or otherwise unenforceable, in whole or in part, the
remaining provisions, and any partially unenforceable provision to the extent enforceable, will
nevertheless be binding and enforceable.



     J. Binding Agreement. The rights and obligations of the Company and Executive under
this Agreement will be binding upon and inure to the benefit of, and be enforceable by and against,
the parties hereto and their respective heirs, personal representations, and successors and
assigns.



     K. Waiver. Either party’s failure to enforce any provisions of this Agreement will not
in any way be construed as a waiver of any such provisions as to any future violations thereof, nor
prevent that party thereafter from enforcing each and every other provision of this Agreement. The
rights granted the parties herein are cumulative, and the waiver by a party of any single remedy
will not constitute a waiver of such party’s right to assert all other legal remedies available to
his or it under the circumstances.



     L. Successors. This Agreement shall inure to the benefit of and be binding upon the
Company and its successors and assigns provided however, that this Agreement is for personal
services and is not assignable by Executive.



     M. Entire Agreement. This Agreement constitutes the entire agreement between the
Company and Executive with respect to the subject matter hereof, and may not be modified or
terminated orally. No modification, termination or attempted waiver of this Agreement will be valid
unless in writing and signed by the party against whom the same is sought to be enforced.


IN WITNESS WHEREOF, the Executive and the Company, pursuant to the authorization of its Board of
Directors, have caused this Agreement to be executed on the date first above written.




	 	 	 	 	 	 	 	 	 
	Company:	 	 	 	Executive:	 	 
	 
	Full House Resorts, Inc	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	By:
	 	/s/ Carl G. Braunlich	 	 	 	/s/ Andre M. Hilliou	 	 
	 
	 	 	 	 	 	 
	 	 	Chairman, Compensation Committee	 	 	 	Andre Hilliou	 	 






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EXECUTIVE EMPLOYMENT

APPENDIX “A”




	 	 	 
	Executive Name: Andre Hilliou

	 	Position: Chief Executive Officer
	 
	 	 
	BASE SALARY: $250,000 as of June 1, 2007

	 	Annually, paid in equal installments twice per month






ANNUAL INCENTIVE



COMPENSATION (BONUS): 200% of base compensation subject to annual objectives established by
the compensation committee as part of the business plan



STOCK COMPENSATION: 275,000 Shares of Restricted Stock which were granted May 31, 2006 and which
vest one-quarter on May 31, 2006 and one-quarter annually thereafter on January 6, 2007, 2008 and
2009 respectively.




BENEFITS:




     Medical insurance for employee in accordance with company plan as in affect from time to time




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