**Exhibit10.61**

 

**EMPLOYMENT AGREEMENT**

 

THIS EMPLOYMENT AGREEMENT is entered into as of the 1st  day of January, 2002, by and between FullHouse Resorts, Inc., a Delaware corporation (the “Company”), and Michael P.Shaunnessy (the “Executive”).

 

**R E C I T A L S**

 

The Company desires to maintain the employment of the Executive, andthe Executive desires to be employed by the Company, in accordance with theprovisions contained in this Employment Agreement (the “Agreement”).

 

NOW, THEREFORE, in consideration of the premises and the respectivecovenants and agreements of each of the Company and the Executive contained inthis Agreement, each of the Company and the Executive agrees as follows:

 

**ARTICLE 1**

 

**EMPLOYMENT**

 

The Company employs the Executive and the Executive accepts suchemployment.  The Executive shall serveas Executive Vice President and Chief Financial Officer for the Company. TheExecutive shall have such responsibilities, perform such duties and exercisesuch power and authority as are inherent in, or incident to, thatposition.  The Executive shall devotehis best efforts and full time to the performance of his duties as an executiveof the Company.

 

**ARTICLE 2**

 

**EMPLOYMENT****TERM**

 

Subject to the provisions of Article 5 below, the initial term of thisAgreement shall be for a two year period commencing on January 1, 2002, andterminating on January 1, 2004 (the “Term”), unless extended.

 

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At any time prior to its expiration, the term of this Agreement may beextended, in writing, by a document executed by each of the Company and theExecutive.

 

**ARTICLE 3**

 

**COMPENSATION**

 

3.1           **Salary**.  In payment for the obligations to beperformed by the Executive during the Term, the Company shall pay to theExecutive (subject to any applicable payroll and/or other taxes required to bewithheld) an annual salary of Two Hundred Fifty Thousand Dollars ($250,000) peryear.

 

**3.2          Payment of Salary**.  Payments of salary shall be made to theExecutive in installments from time to time on the same dates that payments ofsalary are generally made to all executives of the Company. 

 

**ARTICLE 4**

 

**CERTAIN FRINGE BENEFITS**

 

4.1           **Generally**.  The Executive shall be entitled toreimbursement for reasonable business expenses incurred in connection with hisemployment, including customer entertainment. The Executive shall further be entitled to receive such benefits and toparticipate in such benefit plans as are generally provided from time to timeby the Company to its executives; provided, however, that nothing contained inthis Section 4.1 shall be construed to obligate the Company to provide anyspecific benefits to its executives generally. The Company currently provides health insurance, including vision anddental benefits, as its benefit plan. In the event that, during the Term, the Company discontinues theprovision of such insurance as part of its benefit plan, then the Executive’ssalary shall be adjusted upward to the extent required to compensate him forthe loss of such insurance.

 

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4.2           **Vacations**.  The Executive shall be entitled to suchvacation time as is provided in accordance with the policies as are from timeto time adopted by the Company’s Board of Directors with respect to itsexecutives.  The Executive shall beentitled to no less than two weeks of paid vacation per year, commencing afterone year of employment, and no less than three weeks of paid vacation per year,commencing after five years of employment.

 

4.3           **Executive Bonus**.   The Executive shall participate in any executivebonus plan provided by the Company, at a level commensurate with otherexecutives.

 

4.4             **Compensation.**  The Salary, together with Fringe Benefitsand any Bonus, shall constitute the “Compensation”.

 

**ARTICLE 5**

 

**TERMINATION OF EMPLOYMENT**

 

5.1           **Certain Definitions**.  The following terms shall have the followingrespective meanings when utilized in this Article 5:

 

(a)                                “Acquisitionof Control” shall mean:

 

(i)                                   anyPerson (including a Group) becoming the Beneficial Owner of, or acquiring thepower to direct the exercise of voting power with respect to, directly orindirectly, securities which represent thirty percent (30%) or more of thecombined voting power of the Company’s outstanding securities thereafter,whether or not some portion of such securities was owned by such Person (or byany member of such Group) prior thereto, *provided*, that any acquisition of votingpower by William P. McComas, the Estate of Allen E. Paulson, and/or LeeIacocca  or any trust created by them,shall be excluded from any determination as to whether an “Acquisition ofControl” has occurred; or

 

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(ii)                                theelection of three or more directors of the Company within any twelve-monthperiod without the approval of a majority of the then Incumbent Directors; or

 

(iii)                             after any cash tenderoffer or exchange offer, merger, consolidation or other business combination,of the Company, or any sale, liquidation or dissolution (or adoption of a planfor liquidation or dissolution) , or any combination of any or all of theforegoing transactions, including but not limited to a series of suchtransactions, by a successor to the Company, excepting where fifty-one percent(51%) or more of the ownership interest of or voting power in such successor isheld by William P. McComas, the Estate of Allen E. Paulson, and/or LeeIacocca  or any trust created by them,

 

(b)                               “BeneficialOwner” shall have the meaning adopted by the United States Securities andExchange Commission.

 

(c)           “Cause” shall meanany action by the Executive or any inaction by the Executive which isreasonably believed by the Company to constitute:

 

(i)                                   fraud,embezzlement, misappropriation, dishonesty, breach of trust or activity  which would result in loss of any gaminglicense(s) by the Executive or by the Company.

 

(ii)                                a felony or lack of moral turpitude;

 

(iii)                             material breach orviolation of any or all of the covenants, agreements and obligations of theExecutive set forth in this Agreement, other than as the result of the Executive’sdeath or Disability (as hereinafter defined);

 

(iv)                              awillful or knowing failure or refusal by the Executive to perform any or all ofhis material duties and responsibilities as an officer of the Company, otherthan as the result of the Executive’s death or Disability; or

 

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(v)                               grossnegligence by the Executive in the performance of any or all of his materialduties and responsibilities as an officer of the Company, other than as theresult of the Executive’s death or Disability.

 

(d)          “Compensation” shallmean the payment of salary to which Executive is entitled under the provisionsof this Agreement.

 

(e)           “Disability” shallmean any mental or physical illness, condition, disability or incapacity whichprevents the Executive from reasonably discharging his duties andresponsibilities as an officer of the Company. In the event that any disagreement or dispute shall arise between theCompany and the Executive as to whether the Executive suffers from anyDisability, then, in any such event, the Executive shall submit to the physicalor mental examination of a physician licensed under the laws of the State ofNevada, who shall be mutually selected by the Company and the Executive, andsuch physician shall make the determination of whether the Executive suffersfrom any Disability.  In the absence offraud or bad faith, the determination of such physician shall be final andbinding upon each of the Company and the Executive.  The entire cost of any such examination shall be borne solely bythe Executive.

 

(f)           “Good Reason” shallmean:

 

(i)                                   theassignment by the Board of Directors, or the Chief Executive Officer, of theCompany to the Executive, without his express written consent, of duties andresponsibilities which results in the Executive having less significant dutiesand responsibilities or exercising less significant power and authority than hehad, or duties and responsibilities or power and authority not comparable tothat of the level and nature which he had immediately prior to any suchassignment;

 

(ii)                                theremoval of the Executive from, or a failure to reappoint the Executive to, his

 

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then current positionwith the Company or its successor, except (A) with the Executive’s expresswritten consent or (B) in connection with any termination of the Executive’semployment by the Company as the result of the Executive’s ProtractedDisability (as hereinafter defined) or for Cause; or

 

(iii)                             theCompany’s failure to perform in a timely manner its material obligations underthis Agreement (including without limitation its obligations to make paymentsto the Executive pursuant to the provisions of Article 3); or

 

(iv)                            anAcquisition of Control.

 

(g)          “Group” shall meanany combination of persons knowingly participating in a joint activity orinterdependent consciously parallel action toward a common goal, whether or notpursuant to an express contract; provided, however, that actions taken by adirector of the Company acting as such shall not alone constitute membership ina Group.

 

(h)          “Incumbent Director”shall mean any director of the Company serving at January 1, 2002, or electedthereafter if nominated or approved by at least two-thirds of the thenIncumbent Directors.

 

(i)            “ProtractedDisability” shall mean any Disability which prevents the Executive fromreasonably discharging his duties and responsibilities as an officer of theCompany for a period of three (3) consecutive months.

 

(j)            “Termination Date”shall mean a specific date not less than ten (10) nor more than thirty (30)days from and after the date of any Termination Notice upon which theExecutive’s employment by the Company shall be terminated in accordance withthe provisions of this Agreement.

 

(k)           “Termination Notice”shall mean a written notice which (I) sets forth the specific provision of thisAgreement relied upon to terminate the Executive’s employment by the Company,(ii) sets forth in

 

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reasonable detail the facts and circumstances claimed to provide thebasis for the termination of the Executive’s employment by the Company pursuantto the specific provision of this Agreement relied upon therein and (iii) setsforth a Termination Date.

 

5.2           **Termination of Employment**.

 

(a)           Notwithstanding theprovisions of Article 2 above, this Agreement (i) shall be automaticallyterminated upon the death of the Executive pursuant to the provisions ofSection 5.3 below, (ii) may be terminated at any time by the Company pursuantto the provisions of Section 5.4 or 5.5 below, and (iii) may be terminated bythe Executive pursuant to the provisions of Section 5.6 or 5.7 below.

 

(b)           In the event thateither the Company or the Executive shall desire to terminate the Executive’semployment by the Company pursuant to any of the provisions of Sections 5.4,5.5, 5.6 or 5.7 below, then the party causing any such termination shall giveto the other party a Termination Notice.

 

(c)           In the event thatthis Agreement shall be terminated pursuant to any of the provisions of thisArticle 5, the Company shall be discharged from all of its obligations to theExecutive hereunder upon its payment to the Executive of the required amountset forth in the section of this Article 5 pursuant to which such terminationshall occur.  The Executive’s sole andexclusive remedy for the termination of this Agreement prior to its expiration,regardless of whether such termination shall be initiated by the Company or bythe Executive, and regardless of whether such termination shall be with orwithout cause, shall be the payment by the Company to him of the amount setforth in the section of this Article 5 pursuant to which such termination shalloccur.

 

5.3           **Death of Executive**.  In the event that at any time during theTerm the Executive shall die, then the employment of the Executive by theCompany shall automatically terminate on the date of the Executive’sdeath.  In such event, not more thanninety (90) days from and after the date of the Executive’s death, the

 

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Company shall pay to the Executive’s estate or heirs, as the case maybe, an amount in cash equal to the Executive’s salary (subject to anyapplicable payroll and/or other taxes required by law to be withheld)determined as of the date of the Executive’s death.

 

5.4           **Disability of Executive**.

 

(a)           In the event that atany time during the term of this Agreement the Executive shall suffer anyDisability, then the Company shall be obligated to continue to pay in theordinary and normal course of its business to the Executive or his legalrepresentatives, as the case may be, the Executive’s Compensation (subject toany applicable payroll and/or other taxes required by law to be withheld) fromthe date that the Executive shall first suffer any such Disability, to the datethat the Executive’s employment by the Company shall be terminated pursuant toany of the provisions of this Agreement, or to the date that this Agreementshall expire.

 

(b)          In the event that theExecutive shall suffer any Protracted Disability during the term of thisAgreement, then the Company may terminate this Agreement.  In such event, in addition to any otherbenefits which may have been provided by the Company to the Executive or hislegal representatives, as the case may be, pursuant to the provisions ofSection 5.4(a) above, not later than ninety (90) days after the TerminationDate specified in the Termination Notice, the Company shall pay to theExecutive or his legal representatives, as the case may be, an amount in cashequal to the Executive’s Compensation (subject to any applicable payroll and/orother taxes required by law to be withheld) determined as of the TerminationDate.  Subsequent to such TerminationDate, the Executive or his legal representatives, as the case may be, shallalso be entitled to receive any benefits which may be payable under anydisability insurance policy or disability plan which may be provided by theCompany.

 

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5.5           **Termination of Employment by Company**.

 

(a)           TheCompany may terminate this Agreement at any time with Cause.  In such event, the Company shall continue topay the Compensation to the Executive (subject to any applicable payroll and/orother taxes required by law to be withheld) until the Termination Date.

 

(b)           TheCompany may terminate this Agreement at any time without Cause.  In the event that the Company shallterminate the employment of the Executive by the Company without Cause, and notpursuant to any other provision of this Agreement, the Company shall pay theCompensation to the Executive (subject to any applicable payroll and/or othertaxes required by law to be withheld) until the expiration of this Agreement.

 

5.6           **Termination of Employment byExecutive**.

 

(a)           The Executive mayterminate this Agreement at any time for Good Reason.  In such event, the Company shall continue to pay to the Executivethe Executive’s Compensation (subject to any applicable payroll and/or other taxesrequired by law to be withheld) until January 1, 2004.

 

5.7           **Payment Upon Change in Control**.   Notwithstanding any other provisions ofthis Agreement, in the event there is an Acquisition of Control, then theExecutive shall be paid in cash an amount equal to one year’s annual salary.

 

**ARTICLE 6**

 

**ATTORNEYS’ FEES**

 

In the event that any dispute shall arise between the Company and theExecutive based, in whole or in part, upon this Agreement or any or all of theprovisions contained herein, and/or upon the Executive’s employment by theCompany, such dispute shall be resolved by binding arbitration  in accordance with the rules and regulationsof the American Arbitration Association, and the prevailing party in any such

 

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arbitration shall be entitled to recover from the nonprevailing party,and shall be awarded by a court of competent jurisdiction, any and allreasonable fees and disbursements paid, incurred or suffered by such prevailingparty as the result of, arising from, or in connection with, any sucharbitration.

 

**ARTICLE 7**

 

**MISCELLANEOUS**

 

7.1           **Governing Law**.  This Agreement shall  be governed by and construed in accordance with the laws of the State ofNevada, without application of any conflicts of laws principles.

 

7.2           **Entire Agreement**.  This Agreement constitutes the entireagreement between the Company and the Executive with respect to the subjectmatter hereof and supersedes all prior negotiations, agreements, understandingsand arrangements, both oral and written, between the Company and the Executivewith respect to such subject matter. This Agreement may not be modified in any way, except by a writteninstrument executed by each of the Company and the Executive.

 

7.4           **Benefits; Binding  Effect**.  This Agreement  shall  be for the  benefit  of, and  shall  be binding  upon,  each of  the Company and the Executiveand their respective heirs, personal representatives, legal representatives,successors and assigns.

 

7.5           **Severability**. Theinvalidity of any one or more of the words, phrases, sentences, clauses orsections contained in this Agreement shall not affect the enforceability of theremaining portions of this Agreement or any part hereof, all of which areinserted conditionally on their being valid in law.  In the event that any one or more of the words, phrases,sentences, clauses or sections contained in this Agreement shall be declaredinvalid by a court of competent jurisdiction, then, in any such event, thisAgreement shall be construed as if such invalid word or words, phrase orphrases, sentence or sentences, clause or clauses, or section or sections hadnot been inserted.

 

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7.6           **Waivers**. The waiver byeither party of a breach or violation of any term or provision of thisAgreement by the other party shall not operate nor be construed as a waiver ofany subsequent breach or violation of any provision of this Agreement nor ofany other right or remedy.

 

7.7           **Section Headings**.  The section headings contained in thisAgreement are for reference purposes only and shall not affect in any way themeaning or interpretation of any or all of the provisions of this Agreement.

 

7.8           **Counterparts**. ThisAgreement may be executed in any number of counterparts and by the separateparties hereto in separate counterparts, each of which shall be deemed toconstitute an original and all of which shall be deemed to be the one and thesame instrument.

 

IN WITNESS WHEREOF, each of the parties has executedand delivered this Agreement on January 1, 2002.

 

 

 

**Full House Resorts, Inc.**

 

 
| By:    |                    |                  |   |   |
|--------|-------------------------|-----------------------|--------|--------|
|   | William P. McComas      | Michael P. Shaunnessy |   |
|   | Chief Executive Officer | (Executive)           |   |
|        |                         |                       |        |        |  |

 

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