Document:

EXHIBIT
10.33

 

EXECUTIVE
EMPLOYMENT AGREEMENT

(“Agreement”)

 

EXECUTIVE EMPLOYMENT AGREEMENT
signed September 23, 2009 by and between Jacobs Entertainment, Inc.,
a Delaware corporation (the “Company”) and Michael T. Shubic (the “Executive”).

 

WHEREAS, the Company
desires to employ the Executive on a full-time basis, and the Executive desires
to be so employed by the Company, from and after the date of this Agreement.

 

NOW, THEREFORE, in
consideration of the mutual covenants contained herein, the parties agree as
follows:

 

ARTICLE
I

EMPLOYMENT
DUTIES AND BENEFITS

 

Section 1.1            Employment.  The Company hereby employs the
Executive as Chief Operating Officer of the Company.  The Executive
accepts such employment and agrees to perform the duties and responsibilities
assigned to him under this Agreement.

 

Section 1.2            Duties and
Responsibilities.  During the period of employment, Executive
agrees to serve as the Chief Operating Officer of the Company and in such other
offices and directorships of the Company and of its subsidiaries and related
companies (collectively, “affiliates”) to which he may be elected or appointed,
and to perform the duties commensurate with such positions and such other
reasonable and appropriate duties as may be requested of him by the Chief Executive
Officer of the Company, in accordance with this Agreement and in compliance
with all applicable laws and regulations.  Excluding periods of vacation
and sick leave to which Executive is entitled, Executive shall devote such
time, energy, and skill to the business and affairs of the Company and its
affiliates and to the promotion of their interests as is necessary to perform
the duties required of him by this Agreement. The foregoing shall not be
construed as preventing Executive from serving on the board of philanthropic
organizations, or providing oversight with respect to his personal investments,
so long as such service does not materially interfere with Executive’s duties
hereunder. The Executive also may serve as a member of the board of directors
of other corporations, subject to the approval of the Chief Executive Officer
of the Company, which approval shall not be unreasonably withheld or delayed.

 

Section 1.3            Working Facilities;
Location. 
The Executive shall be furnished with facilities and services suitable to his
position and adequate for the performance of his duties under this
Agreement.  The principal place of performance by Executive of his duties
hereunder shall be at the offices of the Company in Golden, Colorado or at such
other location as may reasonably be required to travel outside that area in the
performance of Executive’s responsibilities.

 

Section 1.4            Vacations.  The Executive shall be entitled
each year during the Term, as defined below, to a vacation with full salary and
benefits, for the number of weeks set forth in the Company’s Employee Handbook.

 

Section 1.5            Vehicle Allowance.  The Executive
shall be paid a vehicle allowance of approximately $1,000 per month, or at his
election, the Company shall lease for not more than $750 per month a vehicle
suitable for travel from Denver to Black Hawk, Colorado in all weather
conditions.

 

Section 1.6            Expenses.  The Executive is authorized to
incur reasonable expenses for promoting the business of the Company in all
respects, including expenses for entertainment, travel and similar items. 
The Company will promptly reimburse the Executive for all such expenses upon
the presentation by the Executive, from time-to-time, of an itemized account of
such expenditures.  The Company shall pay
or promptly reimburse the Executive for all licensing (both gaming and
professional) costs and expenses including continuing professional education
and professional liability insurance.

 

 

Section 1.7            Benefit Plans.  From the effective date of this
Agreement, the Executive shall be entitled to participate in benefit plans
provided to employees of the Company.  Such participation shall be based
upon the policies established in the Company’s Employee Handbook as applicable
to the Executive.

 

ARTICLE
II

COMPENSATION

 

Section 2.1            Base Salary.  Beginning in the first year of
this agreement, the Company shall pay to the Executive a Base Salary of $350,000
through the final year of this Agreement with annual pay increases of at least 3%
each year based upon the prior year’s base salary payable in accordance with
the Company’s payroll and withholding policies.

 

Section 2.2            Bonus and Bonus Plan
Participation. 
The Executive is entitled to participate in a bonus plan or incentive plan as
formulated by the Company’s Board of Directors, Compensation Committee or Chief
Executive Officer and/or President.  Within 60 days after the date of this
Agreement, and at the beginning of each calendar year thereafter during the
Term hereof, the Chief Executive Officer of the Company shall establish written
goals and performance criteria for the Executive.   If such goals and performance criteria for
the Executive are met for a particular year, the Executive shall be entitled to
a bonus of up to 35% of his Base Salary. Subject to Sections 3.3 and 3.4,
the bonus shall be payable only if the Executive is employed by the Company at December 31
of each year for which the bonus is determined.

 

ARTICLE
III

TERM
OF EMPLOYMENT AND TERMINATION

 

Section 3.1            Term.  This Agreement shall be for a period
of three years commencing on July 1, 2009 and ending three years
thereafter, subject, however, to earlier termination during such period as
provided in this Article (the “Term”).

 

Section 3.2            Termination by the
Company With Cause.  The Company may terminate the Executive’s
employment, at any time, for cause upon ten days’ written notice and
opportunity for the Executive to remedy any non-compliance with the terms of
this Agreement (if such non-compliance can be remedied).  Grounds for
termination “for cause” shall be one or more of the following:  (i) intentional
and material breach of his duty of loyalty or care to the Company, (ii) gross
negligence or willful misconduct in performance of his duties during the course
of his employment, (iii) failure to abide by the corporate policies and
procedures set forth in the Company’s Employee Handbook; (iv) failure to
execute the reasonable and lawful instructions of the Company’s Chief Executive
Officer and/or President relating to the operation of the Company’s business; (v) failure
to obtain within a reasonable time any required gaming licenses in Colorado,
Nevada or any jurisdiction in which the Company conducts business; (vi) conviction
of any felony crime or loss or material impairment of his gaming license in
Colorado, Nevada, or any jurisdiction in which the Company conducts its
business; and (vii) Executive’s inability to perform his duties hereunder
for a period of more than 30 days because of a restraining order, injunction or
other legal prohibition.  Upon the date of termination of the Executive’s
employment pursuant to this Section 3.2, the Company’s obligation to pay
any compensation including bonuses shall terminate, at which time the Company
shall be responsible for compensating the Executive for any unpaid salary,
vacation time not taken and unreimbursed expenses.  Subject to this
exception and the obligation of the Company to compensate the Executive through
the notice period, no other compensation shall be payable to the Executive
should this Agreement be terminated pursuant to this Section 3.2. 
The one-year noncompetition covenant in Section 4.1(c) below shall
begin to run on the date of termination under this Section 3.2.

 

 

Section 3.3            Termination by the
Company Without Cause.  If the Executive’s employment is terminated by
the Company, without cause, all compensation shall cease, but the Company shall
be obligated to compensate the Executive with a lump sum severance payment
equal to a total of six months of salary compensation (i.e. one-half of the
Base Salary then being paid to the Executive).  In the event the Executive’s
employment is terminated pursuant to this Section 3.3, the Executive shall
be entitled to participate in the bonus payable pursuant to Section 2.2,
with respect to the year in which his employment is terminated, prorated for
the year based on the number of full months employed during such year compared
to 12.  The Company agrees to use its best efforts to provide the
Executive with at least six months notice of termination should the Company
choose to not renew this contract.  In
addition, the non-competition covenants in Sections 4.1 (a) and (c) below
shall be automatically terminated on the effective date of any termination of
Executive’s employment by the Company without cause.

 

Section 3.4            Termination upon Death
of the Executive.  In addition to any other provision relating to
termination, this Agreement shall terminate upon the Executive’s death. 
In such event, all unpaid compensation, compensation for vacation time not
taken by the Executive and all expense reimbursements due to the Executive
shall be paid to the Executive’s estate.  In the event Executive’s
employment is terminated pursuant to this Section 3.4, the Executive’s
estate shall be entitled to a death benefit equal to one year of salary
compensation, and to participate in the bonus pursuant to Section 2.2 with
respect to the year in which his employment is terminated pro rated for the
year based on the number of full months worked during such year compared to 12.

 

Section 3.5            Termination by the
Executive.  This Agreement may be terminated by the Executive upon
90 days prior written notice, in which event the Executive shall be entitled to
salary compensation only during the notice period (i.e. three months from the
date of notice at the Base Salary rate then in effect) and no pro rated bonus
shall be paid or payable.  In the event the Executive’s employment is
terminated pursuant to this Section 3.5 the one-year noncompetition
covenants in Sections 4.1 (a) and (c) below shall begin to run 60
days after such notice of termination.

 

Section 3.6            Termination upon Change
of Control.  (a) If during the Term there is a Change of
Control of the Company and the Executive is not offered, by the acquiring
company or person, an employment position, or not offered an employment
position satisfactory to him, he shall be deemed Terminated Without Cause and
shall be entitled to a severance payment in an amount equal to one and one-half
(1.5) of the Base Salary, which shall be in addition to amounts payable to the
Executive under Section 3.3 above.

 

For purposes of this Section 3.6,
“Change of Control” means the occurrence of any of the following:

 

(1)           any person or group of related persons for purposes of
Section 13(d) of the Exchange Act (a “Group”), other than Jeffrey P.
Jacobs and his related trusts becomes the beneficial owner of more than 331/3%
of the total voting power of the Company’s or its parent’s voting stock, and
Jeffrey P. Jacobs and his related trusts beneficially own, in the aggregate, a
lesser percentage of the total voting power of the voting stock of the Company
or its parent than such other person or group and do not have the right or
ability by voting power, contract or otherwise to elect or designate for election
a majority of the Board of Directors of the Company or its parent;

 

(2)           there is consummated any sale, lease, exchange or
other transfer (in one transaction or a series of related transactions) of all
or substantially all of the assets of the Company to any person or group,
together with any affiliates thereof and/or any of their affiliates; or

 

(3)           there is consummated any consolidation or merger of
the Company or its parent in which the Company or its parent is not the
continuing or surviving person or pursuant to which the common stock of the
Company or its parent would be converted into cash, securities or other
property, other than a merger or consolidation of the Company or its parent in
which the holders of the capital stock of the Company or its parent outstanding
immediately prior to the consolidation or merger hold, directly or indirectly,
at least a majority of the voting power of the surviving corporation
immediately after such consolidation or merger.

 

 

ARTICLE
IV

CONFIDENTIALITY
AND COMPETITION

 

Section 4.1            Further Obligations of
the Executive During and After Employment.

 

(a)           The Executive agrees that during the term of his
employment under this Agreement and for an additional period of one year, he
will engage in no business activities which are or may be competitive with, or
which might place him in a competing position to that of, the Company or any
Affiliate except as authorized by the Company’s Board of Directors in its
reasonable discretion.

 

(b)           The Executive realizes that during the course of his
employment, the Executive will have produced and/or have access to confidential
business plans, information, business opportunity records, notebooks, data,
marketing strategies, trade secrets, customer lists and account lists of the
Company and its affiliates (“Confidential Information”).  Therefore,
during or subsequent to his employment by the Company, or by an affiliate, the
Executive agrees to hold in confidence and not to directly or indirectly
disclose or use or copy or make lists of any such Confidential Information,
except to the extent authorized by the Company in writing.  All records,
files, business plans, documents, equipment and the like, or copies thereof,
relating to Company’s business, or the business of an affiliated company, which
the Executive shall prepare, or use, or come into contact with, shall remain
the sole property of the Company, or of an affiliated company, and shall not be
removed from the Company’s or the affiliated company’s premises without its
written consent, and shall be promptly returned to the Company upon termination
or resignation of employment with the Company or its affiliated companies.

 

(c)           Because of his employment by the Company, the
Executive will have access to secrets and confidential information about the
Company, its business plans, its customers, its business opportunities, its
expansion plans into other geographic areas and its methods of doing
business.  The Executive agrees that for the Term of this Agreement and an
additional period of one year he will not take any actions which are calculated
to persuade any employee, customer, vendor or supplier of the Company to
terminate or modify in any adverse manner his or its association with the
Company.

 

(d)           In the event a court of competent jurisdiction finds
any provision of this Section 4.1 to be so overbroad as to be
unenforceable, then such provision shall be reduced in scope by the court, to
the extent deemed necessary by the court to render the provision reasonable and
enforceable.  Executive acknowledges and agrees that any breach of this
Agreement by Executive would cause immediate irreparable harm to the
Company.  Executive agrees that should he violate any of the terms and
conditions of this Agreement, the Company, at its sole discretion, shall be
entitled to seek to obtain immediate injunctive relief and enjoin further and
future violations of this Agreement.

 

ARTICLE
V

DISABILITY
AND ILLNESS

 

Section 5.1            Disability and Salary
Continuation.

 

(a)           Definition of Total Disability.  For purposes of this Agreement,
the terms “totally disabled” and “total disability” shall mean disability as
defined in any total disability insurance policy or policies, if any, in effect
with respect to the Executive.  If no insurance policy is in effect, “total
disability” shall mean a medically determinable physical or mental condition,
which, in the opinion of two physicians chosen by the mutual consent of the
parties, renders the Executive unable to perform substantially all of the
duties required pursuant to this Agreement.  Total disability shall be
deemed to have occurred on the date of the disabling injury or onset of the
disabling illness, as determined by the two independent physicians.  In
the event that the two independent physicians are unable to agree as to the
date of the disabling injury or onset of the disabling illness, such date shall
be deemed to be the later of the two dates determined by the physicians chosen
pursuant to this Section 5.1(a).

 

 

(b)           Salary Continuation.  If the Executive becomes totally disabled
during the term of this Agreement, his full salary shall be continued for six
months from the date of the disabling injury or onset of the disabling illness
as determined in accordance with the provisions of Section 5.1(a) above
and thereafter the Executive’s employment may be terminated in accordance with
the provisions of Section 3.3.

 

Section 5.2            Illness.  If the Executive is unable to
perform the services required under this Agreement by reason of illness or
physical injury not amounting to total disability, also as determined in this
Article, the compensation otherwise payable to the Executive under this
Agreement shall be continued for a period of one year he shall be entitled to
participate in the bonus payable in Section 2.4 with respect to the year
in which the illness occurred prorated for the year based on the number of
months worked during such year compared to 12 after which the Company shall
have no further obligation to the Executive.

 

ARTICLE
VI

INDEMNIFICATION

 

Section 6.1            General. The Company agrees that if the Executive is made a
party or is threatened to be made a party to any action, suit or proceeding,
whether civil, criminal, administrative or investigative (an “Indemnifiable
Action ”), by reason of the fact that he is or was a director or officer of the
Company or is or was serving at the request of the Company as a director,
officer, member, employee or agent of another corporation or of a partnership,
joint venture, trust or other enterprise, including service with respect to
employee benefit plans, whether or not the basis of such Indemnifiable Action
is alleged action in an official capacity as a director, officer, member,
employee or agent, he shall be indemnified and held harmless by the Company to
the fullest extent authorized by Delaware law and the Company’s bylaws, as the
same exist or may hereafter be amended (but, in the case of any such amendment
to the Company’s bylaws, only to the extent such amendment permits the Company
to provide broader indemnification rights than the Company’s bylaws permitted
the Company to provide before such amendment), against all expense, liability
and loss (including, without limitation, attorneys’ fees, judgments, fines,
ERISA excise taxes or penalties and amounts paid or to be paid in settlement)
reasonably incurred or suffered by the Executive in connection therewith;
provided however that the Executive shall be entitled to indemnification with
respect to any Indemnifiable Action hereunder only if he acted in good faith
and in a manner he reasonably believed to be in or not opposed to the best
interests of the Company and, with respect to any criminal action or
proceeding, he had no reasonable cause to believe his conduct was unlawful.

 

Section 6.2            Procedure. The indemnification provided pursuant to this Article VI
shall be subject to the following conditions:

 

(a)           The Executive must promptly give the Company written
notice of any actual or threatened Indemnifiable Action and, upon providing
such notice, the Executive shall be presumed to be entitled to indemnification
under this Agreement and the Company shall have the burden of proof to overcome
that presumption in reaching any contrary determination; provided , however ,
that the Executive’s failure to give such notice shall not affect the Company’s
obligations hereunder;

 

(b)           The Company will be permitted, at its option, to
participate in, or to assume, the defense of any Indemnifiable Action, with
counsel reasonably approved by the Executive; provided , however , that (i) the
Executive shall  have the right to employ
his own counsel in such Indemnifiable Action at the Executive’s expense, and (ii) if
(A) the retention of counsel by the Executive has been previously
authorized in writing by the Company, (B) the Company shall have
reasonably concluded, based on the advice of independent legal counsel mutually
selected by the Company and the Executive, that there may be a conflict of
interest between the Company and the Executive in the conduct of any such
defense, or (C) the Company shall not, in fact, have retained counsel to
assume the defense of such Indemnifiable Action, the fees and expenses of the
Executive’s counsel shall be at the expense of the Company; and provided,
further, that the Company shall not settle any action or claim that would
impose any limitation or penalty on the Executive without obtaining the
Executive’s prior written consent, which consent shall not be unreasonably
withheld;

 

(c)           The Executive must provide reasonable cooperation to
the Company in the defense of any Indemnifiable Action; and

 

 

(d)           The Executive must refrain from settling any
Indemnifiable Action without obtaining the Company’s prior written consent,
which consent shall not be unreasonably withheld.

 

Section 6.3            Advancement of Costs and
Expenses. The
Company agrees to advance all costs and expenses referred to in Sections 6.1
and 6.6 ; provided , however , that the Executive agrees to repay to the
Company any amounts so advanced only if, and to the extent that, it shall
ultimately be determined by a court of competent jurisdiction that the
Executive is not entitled to be indemnified by the Company as authorized by
this Agreement. The advances to be made hereunder shall be paid by the Company
to or on behalf of the Executive within twenty (20) days following delivery of
a written request therefore by the Executive to the Company. The Executive’s
entitlement to advancement of costs and expenses hereunder shall include those
incurred in connection with any action, suit or proceeding by the Executive
seeking a determination, adjudication or arbitration award with respect to his
rights and/or obligations under this Article VI.

 

Section 6.4            Non-Exclusivity of Rights. The right to indemnification and the payment of
expenses incurred in defending an Indemnifiable Action in advance of its final
disposition conferred in this Article VI shall not be exclusive of any
other right which the Executive may have or hereafter may acquire under any
statute, provision of the certificate of incorporation or by-laws of the
Company, agreement, vote of stockholders or disinterested directors or
otherwise.

 

Section 6.5            D&O Insurance. The Company will maintain a directors’ and officers’
liability insurance policy covering the Executive that provides coverage that
is reasonable in relation to the Executive’s position during his employment.

 

Section 6.6            Witness Expenses. Notwithstanding any other provision of this
Agreement, the Company shall indemnify the Executive if and whenever he is a
witness or threatened to be made a witness to any action, suit or proceeding to
which the Executive is not a party, by reason of the fact that the Executive is
or was a director or officer of the Company or its Affiliates or by reason of
anything done or not done by him in such capacity, against all expense,
liability and loss incurred or suffered by the Executive in connection
therewith; provided , however , that if the Executive is no longer employed by
the Company, the Company will compensate him, on an hourly basis, for all time
spent, at either his then current compensation rate or his Base Salary at the
rate in effect as of the termination of his employment, whichever is higher.

 

Section 6.7            Survival. The
provisions of this Article VI shall survive the expiration or earlier
termination of this Agreement, regardless of the reason for such termination.

 

ARTICLE VII

GENERAL
MATTERS

 

Section 7.1            Governing Law.  This Agreement shall be governed
by the laws of the State of Colorado and shall be construed in accordance
therewith.

 

Section 7.2            No Waiver.  No provision of this Agreement may
be waived except by an agreement in writing signed by the waiving party. 
A waiver of any term or provision shall not be construed as a waiver of any
other term or provision.

 

Section 7.3            Amendment.  This Agreement may be amended,
altered or revoked at any time, in whole or in part, by filing with this
Agreement a written instrument setting forth such changes, signed by each of
the parties.

 

Section 7.4            Benefit.  This Agreement shall be binding
upon the Executive and the Company, and shall not be assignable by either party
without the other parties’ written consent.

 

 

Section 7.5            Severability.  If any provision of this Agreement
is declared by any court of competent jurisdiction to be invalid for any
reason, such invalidity shall not affect the remaining provisions.  On the
contrary, such remaining provisions shall be fully severable, and this
Agreement shall be construed and enforced as if such invalid provisions had not
been included in the Agreement.

 

Section 7.6            Effective Date.  The effective date of this
Agreement shall be July 1, 2009.

 

Section 7.7            Arbitration.  The Company and the Executive
expressly agree that all disputes arising out of this Agreement shall be
resolved by arbitration in accordance with the following provisions. 
Either party must demand in writing such arbitration within 10 days after the
controversy arises by sending a notice to arbitrate to both the other party and
to any recognized and reputable alternative dispute resolution firm, such as
the Judicial Arbitrators Group located in Denver, Colorado.  The
controversy shall then be arbitrated pursuant to the rules promulgated by
any such firm at the firm’s offices located in Denver, Colorado.  The
parties will select by mutual agreement the arbitrator or arbitrators
(hereinafter collectively referred to as “arbitrator”) to hear and resolve the
controversy.  The express terms of this Agreement and the laws of the
State of Colorado shall govern the arbitrator.  The arbitrator’s decision
shall be final and binding on the parties and shall bar any suit, action, or
proceeding instituted in any federal, state, or local court or administrative
tribunal.  Notwithstanding the preceding sentence, the arbitrator’s
judgment may be entered in any court of competent jurisdiction.  These
arbitration provisions shall survive the termination of this Agreement.

 

Section 7.8            Section 409A.  This Agreement is intended to
comply with the requirements of Section 409A and shall be construed
accordingly.  Any payments or distributions to be made to the Executive
under this Agreement upon a separation from service (as defined in Section 409A)
of amounts classified as “nonqualified deferred compensation” for purposes of
Code Section 409A, shall in no event be made or commence until 6 months
after such separation from service.  Each payment of nonqualified deferred
compensation under this Agreement shall be treated as a separate payment for
purposes of Code Section 409A.  Any reimbursements made pursuant to
this Agreement shall be paid as soon as practicable but no later than 90 days
after the Executive submits evidence of such expenses to Corporation (which
payment date shall in no event be later than the last day of the calendar year
following the calendar year in which the expense was incurred).  The
amount of such reimbursements during any calendar year shall not affect the
benefits provided in any other calendar year, and the right to any such
benefits shall not be subject to liquidation or exchange for another benefit.

 

Section 7.9            Executive’s Representation.  The Executive represents that he
has engaged legal counsel to review this Agreement and advise him with respect
to each Section hereof.

 

 

	
   

  	
  JACOBS
  ENTERTAINMENT, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Stephen R. Roark

  
	
   

  	
   

  	
  Stephen R. Roark

  
	
   

  	
   

  	
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  EXECUTIVE:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ Michael T. Shubic

  
	
   

  	
   

  	
  Michael T. ShubicEXHIBIT
10.34

 

EXECUTIVE
EMPLOYMENT AGREEMENT

(“Agreement”)

 

EXECUTIVE EMPLOYMENT
AGREEMENT signed September 23, 2009 by and between Jacobs Entertainment, Inc.,
a Delaware corporation (the “Company”) and Ian M. Stewart (the “Executive”).

 

WHEREAS, the Company
desires to employ the Executive on a full-time basis, and the Executive desires
to be so employed by the Company, from and after the date of this Agreement.

 

NOW, THEREFORE, in
consideration of the mutual covenants contained herein, the parties agree as
follows:

 

ARTICLE
I

EMPLOYMENT
DUTIES AND BENEFITS

 

Section 1.1            Employment.  The Company hereby employs the
Executive as President of Pari-mutuel Wagering Operations of the Company. 
The Executive accepts such employment and agrees to perform the duties and
responsibilities assigned to him under this Agreement.

 

Section 1.2            Duties and
Responsibilities.  During the period of employment, Executive
agrees to serve as the President of Pari-mutuel Wagering Operations of the
Company and in such other offices and directorships of the Company and of its
subsidiaries and related companies (collectively, “affiliates”) to which he may
be elected or appointed, and to perform the duties commensurate with such
positions and such other reasonable and appropriate duties as may be requested
of him by the Chief Executive Officer of the Company, in accordance with this
Agreement and in compliance with all applicable laws and regulations. 
Excluding periods of vacation and sick leave to which Executive is entitled,
Executive shall devote such time, energy, and skill to the business and affairs
of the Company and its affiliates and to the promotion of their interests as is
necessary to perform the duties required of him by this Agreement. The
foregoing shall not be construed as preventing Executive from serving on the
board of philanthropic organizations, or providing oversight with respect to
his personal investments, so long as such service does not materially interfere
with Executive’s duties hereunder. The Executive also may serve as a member of
the board of directors of other corporations, subject to the approval of the
Chief Executive Officer of the Company, which approval shall not be
unreasonably withheld or delayed.

 

Section 1.3            Working Facilities;
Location. 
The Executive shall be furnished with facilities and services suitable to his
position and adequate for the performance of his duties under this
Agreement.  The principal place of performance by Executive of his duties
hereunder shall be at the offices of the Company in New Kent, VA or at such
other location as may reasonably be required to travel outside that area in the
performance of Executive’s responsibilities.

 

Section 1.4            Vacations.  The Executive shall be entitled
each year during the Term, as defined below, to a vacation with full salary and
benefits, for the number of weeks set forth in the Company’s Employee Handbook.

 

Section 1.5            Vehicle Allowance.  The Executive
shall be paid a vehicle allowance of approximately $1,000 per month, or at his
election, the Company shall lease for not more than $600 per month a vehicle
suitable for travel in Virginia in all weather conditions.

 

Section 1.6            Expenses.  The Executive is authorized to
incur reasonable expenses for promoting the business of the Company in all
respects, including expenses for entertainment, travel and similar items. 
The Company will promptly reimburse the Executive for all such expenses upon
the presentation by the Executive, from time-to-time, of an itemized account of
such expenditures.  The Company shall pay
or promptly reimburse the Executive for all licensing (both gaming and
professional) costs and expenses including continuing professional education
and professional liability insurance.

 

 

Section 1.7            Benefit Plans.  From the effective date of this
Agreement, the Executive shall be entitled to participate in benefit plans
provided to employees of the Company.  Such participation shall be based
upon the policies established in the Company’s Employee Handbook as applicable
to the Executive.

 

ARTICLE
II

COMPENSATION

 

Section 2.1            Base Salary.  Beginning in the first year of
this agreement, the Company shall pay to the Executive a Base Salary of $300,000
through the final year of this Agreement with annual pay increases of at least 3%
each year based upon the prior year’s base salary payable in accordance with
the Company’s payroll and withholding policies.

 

Section 2.2            Bonus and Bonus Plan
Participation. 
The Executive is entitled to participate in a bonus plan or incentive plan as
formulated by the Company’s Board of Directors, Compensation Committee or Chief
Executive Officer and/or President.  Within 60 days after the date of this
Agreement, and at the beginning of each calendar year thereafter during the
Term hereof, the Chief Executive Officer of the Company shall establish written
goals and performance criteria for the Executive.   If such goals and performance criteria for
the Executive are met for a particular year, the Executive shall be entitled to
a bonus of up to 35% of his Base Salary. Subject to Sections 3.3 and 3.4,
the bonus shall be payable only if the Executive is employed by the Company at December 31
of each year for which the bonus is determined. 
In addition, the Executive is entitled to a bonus of 5% of the Colonial
Downs EBITDA in excess of $2,000,000 for the years ended December 31,
2010, 2011 and 2012.

 

ARTICLE
III

TERM
OF EMPLOYMENT AND TERMINATION

 

Section 3.1            Term.  This Agreement shall be for a
period commencing on August 1, 2009 and ending December 31, 2012,
subject, however, to earlier termination during such period as provided in this
Article (the “Term”).

 

Section 3.2            Termination by the
Company With Cause.  The Company may terminate the Executive’s
employment, at any time, for cause upon ten days’ written notice and opportunity
for the Executive to remedy any non-compliance with the terms of this Agreement
(if such non-compliance can be remedied).  Grounds for termination “for
cause” shall be one or more of the following:  (i) intentional and
material breach of his duty of loyalty or care to the Company, (ii) gross
negligence or willful misconduct in performance of his duties during the course
of his employment, (iii) failure to abide by the corporate policies and
procedures set forth in the Company’s Employee Handbook; (iv) failure to
execute the reasonable and lawful instructions of the Company’s Chief Executive
Officer and/or President relating to the operation of the Company’s business; (v) failure
to obtain within a reasonable time any required gaming licenses in Colorado,
Nevada or any jurisdiction in which the Company conducts business; (vi) conviction
of any felony crime or loss or material impairment of his gaming license in
Colorado, Nevada, or any jurisdiction in which the Company conducts its
business; and (vii) Executive’s inability to perform his duties hereunder
for a period of more than 30 days because of a restraining order, injunction or
other legal prohibition.  Upon the date of termination of the Executive’s
employment pursuant to this Section 3.2, the Company’s obligation to pay
any compensation including bonuses shall terminate, at which time the Company
shall be responsible for compensating the Executive for any unpaid salary,
vacation time not taken and unreimbursed expenses.  Subject to this
exception and the obligation of the Company to compensate the Executive through
the notice period, no other compensation shall be payable to the Executive
should this Agreement be terminated pursuant to this Section 3.2. 
The one-year noncompetition covenant in Section 4.1(c) below shall
begin to run on the date of termination under this Section 3.2.

 

 

Section 3.3            Termination by the
Company Without Cause.  If the Executive’s employment is terminated by
the Company, without cause, all compensation shall cease, but the Company shall
be obligated to compensate the Executive with a lump sum severance payment
equal to a total of six months of salary compensation (i.e. 50% of the Base
Salary then being paid to the Executive).  In the event the Executive’s
employment is terminated pursuant to this Section 3.3, the Executive shall
be entitled to participate in the bonus payable pursuant to Section 2.2,
with respect to the year in which his employment is terminated, prorated for
the year based on the number of full months employed during such year compared
to 12.  The Company agrees to use its best efforts to provide the
Executive with at least six months notice of termination should the Company
choose to not renew this contract.  In
addition, the non-competition covenants in Sections 4.1 (a) and (c) below
shall be automatically terminated on the effective date of any termination of
Executive’s employment by the Company without cause.

 

Section 3.4            Termination upon Death
of the Executive.  In addition to any other provision relating to
termination, this Agreement shall terminate upon the Executive’s death. 
In such event, all unpaid compensation, compensation for vacation time not
taken by the Executive and all expense reimbursements due to the Executive
shall be paid to the Executive’s estate.  In the event Executive’s
employment is terminated pursuant to this Section 3.4, the Executive’s
estate shall be entitled to a death benefit equal to one year of salary
compensation, and to participate in the bonus pursuant to Section 2.2 with
respect to the year in which his employment is terminated pro rated for the
year based on the number of full months worked during such year compared to 12.

 

Section 3.5            Termination by the
Executive.  This Agreement may be terminated by the Executive upon
90 days prior written notice, in which event the Executive shall be entitled to
salary compensation only during the notice period (i.e. three months from the
date of notice at the Base Salary rate then in effect) and no pro rated bonus
shall be paid or payable.  In the event the Executive’s employment is
terminated pursuant to this Section 3.5 the one-year noncompetition
covenants in Sections 4.1 (a) and (c) below shall begin to run 60
days after such notice of termination.

 

Section 3.6            Termination upon Change
of Control.  (a) If during the Term there is a Change of
Control of the Company or Colonial Holdings, Inc. or its subsidiaries (“Colonial”)
and the Executive is not offered, by the acquiring company or person, an
employment position, or not offered an employment position satisfactory to him,
he shall be deemed Terminated Without Cause and shall be entitled to a
severance payment in an amount equal to 150% of the Base Salary, which shall be
in addition to amounts payable to the Executive under Section 3.3 above.

 

For purposes of this Section 3.6,
“Change of Control” means the occurrence of any of the following:

 

(1)           any person or group of related persons for purposes of
Section 13(d) of the Exchange Act (a “Group”), other than Jeffrey P.
Jacobs and his related trusts becomes the beneficial owner of more than 331/3% of the total voting power of the
Company’s, Colonial’s or its parent’s voting stock, and Jeffrey P. Jacobs and
his related trusts beneficially own, in the aggregate, a lesser percentage of
the total voting power of the voting stock of the Company, Colonial or its
parent than such other person or group and do not have the right or ability by
voting power, contract or otherwise to elect or designate for election a
majority of the Board of Directors of the Company or its parent;

 

(2)           there is consummated any sale, lease, exchange or
other transfer (in one transaction or a series of related transactions) of all
or substantially all of the assets of the Company or Colonial to any person or
group, together with any affiliates thereof and/or any of their affiliates; or

 

(3)           there is consummated any consolidation or merger of
the Company, Colonial or its parent in which the Company, Colonial or its
parent is not the continuing or surviving person or pursuant to which the
common stock of the Company, Colonial or its parent would be converted into
cash, securities or other property, other than a merger or consolidation of the
Company, Colonial or its parent in which the holders of the capital stock of
the Company, Colonial or its parent outstanding immediately prior to the
consolidation or merger hold, directly or indirectly, at least a majority of
the voting power of the surviving corporation immediately after such
consolidation or merger.

 

 

ARTICLE
IV

CONFIDENTIALITY
AND COMPETITION

 

Section 4.1            Further Obligations of
the Executive During and After Employment.

 

(a)           The Executive agrees that during the term of his
employment under this Agreement and for an additional period of one year, he
will engage in no business activities which are or may be competitive with, or
which might place him in a competing position to that of, the Company or any
Affiliate except as authorized by the Company’s Board of Directors in its
reasonable discretion.

 

(b)           The Executive realizes that during the course of his
employment, the Executive will have produced and/or have access to confidential
business plans, information, business opportunity records, notebooks, data,
marketing strategies, trade secrets, customer lists and account lists of the
Company and its affiliates (“Confidential Information”).  Therefore,
during or subsequent to his employment by the Company, or by an affiliate, the
Executive agrees to hold in confidence and not to directly or indirectly
disclose or use or copy or make lists of any such Confidential Information,
except to the extent authorized by the Company in writing.  All records,
files, business plans, documents, equipment and the like, or copies thereof,
relating to Company’s business, or the business of an affiliated company, which
the Executive shall prepare, or use, or come into contact with, shall remain
the sole property of the Company, or of an affiliated company, and shall not be
removed from the Company’s or the affiliated company’s premises without its
written consent, and shall be promptly returned to the Company upon termination
or resignation of employment with the Company or its affiliated companies.

 

(c)           Because of his employment by the Company, the
Executive will have access to secrets and confidential information about the
Company, its business plans, its customers, its business opportunities, its
expansion plans into other geographic areas and its methods of doing
business.  The Executive agrees that for the Term of this Agreement and an
additional period of one year he will not take any actions which are calculated
to persuade any employee, customer, vendor or supplier of the Company to
terminate or modify in any adverse manner his or its association with the
Company.

 

(d)           In the event a court of competent jurisdiction finds
any provision of this Section 4.1 to be so overbroad as to be
unenforceable, then such provision shall be reduced in scope by the court, to
the extent deemed necessary by the court to render the provision reasonable and
enforceable.  Executive acknowledges and agrees that any breach of this
Agreement by Executive would cause immediate irreparable harm to the
Company.  Executive agrees that should he violate any of the terms and
conditions of this Agreement, the Company, at its sole discretion, shall be
entitled to seek to obtain immediate injunctive relief and enjoin further and
future violations of this Agreement.

 

ARTICLE
V

DISABILITY
AND ILLNESS

 

Section 5.1            Disability and Salary
Continuation.

 

(a)           Definition of Total Disability.  For purposes of this Agreement,
the terms “totally disabled” and “total disability” shall mean disability as
defined in any total disability insurance policy or policies, if any, in effect
with respect to the Executive.  If no insurance policy is in effect, “total
disability” shall mean a medically determinable physical or mental condition,
which, in the opinion of two physicians chosen by the mutual consent of the
parties, renders the Executive unable to perform substantially all of the
duties required pursuant to this Agreement.  Total disability shall be
deemed to have occurred on the date of the disabling injury or onset of the
disabling illness, as determined by the two independent physicians.  In
the event that the two independent physicians are unable to agree as to the
date of the disabling injury or onset of the disabling illness, such date shall
be deemed to be the later of the two dates determined by the physicians chosen
pursuant to this Section 5.1(a).

 

 

(b)           Salary Continuation.  If the Executive becomes totally disabled
during the term of this Agreement, his full salary shall be continued for six
months from the date of the disabling injury or onset of the disabling illness
as determined in accordance with the provisions of Section 5.1(a) above
and thereafter the Executive’s employment may be terminated in accordance with
the provisions of Section 3.3.

 

Section 5.2            Illness.  If the Executive is unable to
perform the services required under this Agreement by reason of illness or
physical injury not amounting to total disability, also as determined in this
Article, the compensation otherwise payable to the Executive under this
Agreement shall be continued for a period of one year he shall be entitled to
participate in the bonus payable in Section 2.4 with respect to the year
in which the illness occurred prorated for the year based on the number of
months worked during such year compared to 12 after which the Company shall
have no further obligation to the Executive.

 

ARTICLE
VI

INDEMNIFICATION

 

Section 6.1            General. The Company agrees that if the Executive is made a
party or is threatened to be made a party to any action, suit or proceeding,
whether civil, criminal, administrative or investigative (an “Indemnifiable
Action ”), by reason of the fact that he is or was a director or officer of the
Company or is or was serving at the request of the Company as a director,
officer, member, employee or agent of another corporation or of a partnership,
joint venture, trust or other enterprise, including service with respect to
employee benefit plans, whether or not the basis of such Indemnifiable Action
is alleged action in an official capacity as a director, officer, member,
employee or agent, he shall be indemnified and held harmless by the Company to
the fullest extent authorized by Delaware law and the Company’s bylaws, as the
same exist or may hereafter be amended (but, in the case of any such amendment
to the Company’s bylaws, only to the extent such amendment permits the Company
to provide broader indemnification rights than the Company’s bylaws permitted
the Company to provide before such amendment), against all expense, liability
and loss (including, without limitation, attorneys’ fees, judgments, fines,
ERISA excise taxes or penalties and amounts paid or to be paid in settlement)
reasonably incurred or suffered by the Executive in connection therewith;
provided however that the Executive shall be entitled to indemnification with
respect to any Indemnifiable Action hereunder only if he acted in good faith
and in a manner he reasonably believed to be in or not opposed to the best
interests of the Company and, with respect to any criminal action or
proceeding, he had no reasonable cause to believe his conduct was unlawful.

 

Section 6.2            Procedure. The indemnification provided pursuant to this Article VI
shall be subject to the following conditions:

 

(a)           The Executive must promptly give the Company written
notice of any actual or threatened Indemnifiable Action and, upon providing
such notice, the Executive shall be presumed to be entitled to indemnification
under this Agreement and the Company shall have the burden of proof to overcome
that presumption in reaching any contrary determination; provided, however,
that the Executive’s failure to give such notice shall not affect the Company’s
obligations hereunder;

 

(b)           The Company will be permitted, at its option, to
participate in, or to assume, the defense of any Indemnifiable Action, with
counsel reasonably approved by the Executive; provided , however , that (i) the
Executive shall  have the right to employ
his own counsel in such Indemnifiable Action at the Executive’s expense, and (ii) if
(A) the retention of counsel by the Executive has been previously
authorized in writing by the Company, (B) the Company shall have
reasonably concluded, based on the advice of independent legal counsel mutually
selected by the Company and the Executive, that there may be a conflict of
interest between the Company and the Executive in the conduct of any such defense,
or (C) the Company shall not, in fact, have retained counsel to assume the
defense of such Indemnifiable Action, the fees and expenses of the Executive’s
counsel shall be at the expense of the Company; and provided, further, that the
Company shall not settle any action or claim that would impose any limitation
or penalty on the Executive without obtaining the Executive’s prior written
consent, which consent shall not be unreasonably withheld;

 

(c)           The Executive must provide reasonable cooperation to
the Company in the defense of any Indemnifiable Action; and

 

 

(d)           The Executive must refrain from settling any
Indemnifiable Action without obtaining the Company’s prior written consent,
which consent shall not be unreasonably withheld.

 

Section 6.3            Advancement of Costs and
Expenses. The
Company agrees to advance all costs and expenses referred to in Sections 6.1
and 6.6; provided, however, that the Executive agrees to repay to the Company
any amounts so advanced only if, and to the extent that, it shall ultimately be
determined by a court of competent jurisdiction that the Executive is not
entitled to be indemnified by the Company as authorized by this Agreement. The
advances to be made hereunder shall be paid by the Company to or on behalf of
the Executive within twenty (20) days following delivery of a written request
therefore by the Executive to the Company. The Executive’s entitlement to
advancement of costs and expenses hereunder shall include those incurred in
connection with any action, suit or proceeding by the Executive seeking a
determination, adjudication or arbitration award with respect to his rights
and/or obligations under this Article VI.

 

Section 6.4            Non-Exclusivity of Rights. The right to indemnification and the payment of
expenses incurred in defending an Indemnifiable Action in advance of its final
disposition conferred in this Article VI shall not be exclusive of any
other right which the Executive may have or hereafter may acquire under any
statute, provision of the certificate of incorporation or by-laws of the
Company, agreement, vote of stockholders or disinterested directors or
otherwise.

 

Section 6.5            D&O Insurance. The Company will maintain a directors’ and officers’
liability insurance policy covering the Executive that provides coverage that
is reasonable in relation to the Executive’s position during his employment.

 

Section 6.6            Witness Expenses. Notwithstanding any other provision of this
Agreement, the Company shall indemnify the Executive if and whenever he is a
witness or threatened to be made a witness to any action, suit or proceeding to
which the Executive is not a party, by reason of the fact that the Executive is
or was a director or officer of the Company or its Affiliates or by reason of
anything done or not done by him in such capacity, against all expense,
liability and loss incurred or suffered by the Executive in connection
therewith; provided , however , that if the Executive is no longer employed by
the Company, the Company will compensate him, on an hourly basis, for all time
spent, at either his then current compensation rate or his Base Salary at the
rate in effect as of the termination of his employment, whichever is higher.

 

Section 6.7            Survival. The
provisions of this Article VI shall survive the expiration or earlier
termination of this Agreement, regardless of the reason for such termination.

 

ARTICLE VII

GENERAL
MATTERS

 

Section 7.1            Governing Law.  This Agreement shall be governed
by the laws of the State of Colorado and shall be construed in accordance
therewith.

 

Section 7.2            No Waiver.  No provision of this Agreement may
be waived except by an agreement in writing signed by the waiving party. 
A waiver of any term or provision shall not be construed as a waiver of any
other term or provision.

 

Section 7.3            Amendment.  This Agreement may be amended,
altered or revoked at any time, in whole or in part, by filing with this
Agreement a written instrument setting forth such changes, signed by each of
the parties.

 

Section 7.4            Benefit.  This Agreement shall be binding upon
the Executive and the Company, and shall not be assignable by either party
without the other parties’ written consent.

 

 

Section 7.5            Severability.  If any provision of this Agreement
is declared by any court of competent jurisdiction to be invalid for any
reason, such invalidity shall not affect the remaining provisions.  On the
contrary, such remaining provisions shall be fully severable, and this
Agreement shall be construed and enforced as if such invalid provisions had not
been included in the Agreement.

 

Section 7.6            Effective Date.  The effective date of this
Agreement shall be August 1, 2009.

 

Section 7.7            Arbitration.  The Company and the Executive
expressly agree that all disputes arising out of this Agreement shall be
resolved by arbitration in accordance with the following provisions. 
Either party must demand in writing such arbitration within 10 days after the
controversy arises by sending a notice to arbitrate to both the other party and
to any recognized and reputable alternative dispute resolution firm, such as
the Judicial Arbitrators Group located in Denver, Colorado.  The
controversy shall then be arbitrated pursuant to the rules promulgated by
any such firm at the firm’s offices located in Denver, Colorado.  The
parties will select by mutual agreement the arbitrator or arbitrators
(hereinafter collectively referred to as “arbitrator”) to hear and resolve the
controversy.  The express terms of this Agreement and the laws of the
State of Colorado shall govern the arbitrator.  The arbitrator’s decision
shall be final and binding on the parties and shall bar any suit, action, or
proceeding instituted in any federal, state, or local court or administrative
tribunal.  Notwithstanding the preceding sentence, the arbitrator’s
judgment may be entered in any court of competent jurisdiction.  These
arbitration provisions shall survive the termination of this Agreement.

 

Section 7.8            Section 409A.  This Agreement is intended to
comply with the requirements of Section 409A and shall be construed accordingly. 
Any payments or distributions to be made to the Executive under this Agreement
upon a separation from service (as defined in Section 409A) of amounts
classified as “nonqualified deferred compensation” for purposes of Code Section 409A,
shall in no event be made or commence until 6 months after such separation from
service.  Each payment of nonqualified deferred compensation under this
Agreement shall be treated as a separate payment for purposes of Code Section 409A. 
Any reimbursements made pursuant to this Agreement shall be paid as soon as
practicable but no later than 90 days after the Executive submits evidence of
such expenses to Corporation (which payment date shall in no event be later
than the last day of the calendar year following the calendar year in which the
expense was incurred).  The amount of such reimbursements during any
calendar year shall not affect the benefits provided in any other calendar
year, and the right to any such benefits shall not be subject to liquidation or
exchange for another benefit.

 

Section 7.9            Executive’s Representation.  The Executive represents that he
has engaged legal counsel to review this Agreement and advise him with respect
to each Section hereof.

 

 

	
   

  	
  JACOBS
  ENTERTAINMENT, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Stephen R. Roark

  
	
   

  	
   

  	
  Stephen R. Roark

  
	
   

  	
   

  	
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  EXECUTIVE:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ Ian M. Stewart

  
	
   

  	
   

  	
  Ian M. Stewart

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