Document:

Exhibit 10.50

MAXWELL TECHNOLOGIES, INC.

EMPLOYMENT AGREEMENT

This Employment Agreement (the “Agreement”) is made as
of this 1st day of August, 2003, by and between MAXWELL TECHNOLOGIES, INC. a
Delaware corporation, (“Company”) and RICHARD BALANSON (“Executive”).  The parties agree with each other as
follows:

1.             Term
of Employment.  Subject to the terms
and conditions set forth in this Agreement, the Company hereby agrees to employ
Executive, and Executive agrees to be employed by the Company, for the period
commencing on the date of this Agreement and ending on the first to occur of
(i) the date on which Executive first qualifies for or elects to receive
retirement benefits in accordance with the Company’s normal retirement policies
and (ii) the date on which this Agreement is terminated by either the
Company or Executive pursuant to any subsection of Section 4 hereof.

2.             Duties
of Executive.

(a)           Executive shall
serve as the President and Chief Executive Officer of the Company.  In such capacities, Executive shall report
to the Board of Directors of the Company (the “Board”) and Executive shall
perform the duties and render the services for and on behalf of the Company
associated with the positions he shall hold and as may be set forth from time
to time in resolutions of, or other directives issued by, the Board.

(b)           Executive agrees to
perform such duties and render such services to the best of his ability,
devoting thereto his entire professional time, attention and energy exclusively
to the business and affairs of the Company and its affiliates, as its business
and affairs now exist and as they hereafter may be changed, and shall not
during the term of his employment hereunder be engaged in any other business
activity, whether or not such business activity is pursued for gain or profit;
provided, however, that Executive may serve (i) on civic or charitable
boards or committees and (ii) with the prior written approval of the
Board, boards of corporations or business enterprises, in each case so long as
such activities do not interfere with the performance of Executive’s
obligations under this Agreement.

(c)           The Company agrees
that Executive shall be included in the slate of nominees proposed by the Board
in the Company’s proxy statements delivered to its shareholders for election to
the Board for as long as this Agreement is in effect.

3.             Compensation
of Executive.  As compensation for
the services to be performed under this Agreement:

(a)           Base Salary.  Effective as of the date of this Agreement,
Executive shall be paid a base salary at the initial annual rate of $325,000,
payable in installments consistent with the Company’s payroll practices, and
subject to normal withholding. 
Executive’s base salary shall be reviewed annually prior to each
anniversary of this

 

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Agreement
by the Board or its Compensation Committee and if the Board or Committee
determines, in its discretion, that Executive’s base salary is to be increased,
such increase shall be effective as of such anniversary date;

(b)           Annual Bonus.  Executive shall be entitled to an annual
bonus which shall be determined as provided in this subsection (b):

(i)            Commencing with the
Company’s current fiscal year ending December 31, 2003 and for each
subsequent fiscal year of the Company, the Board will set specific financial
performance targets and the amount of Executive’s bonus will range $0 to a
maximum amount equal to 50% of Executive’s annual base salary as in effect for
such fiscal year (with a target bonus of 50% of the then effective base salary)
depending on the Board’s determination of Executive’s success in achieving the
specified targets. The financial performance targets for fiscal year 2003 were
established in January 2003 as part of the Company’s annual financial plan.

(ii)           The bonus payable
to Executive for each fiscal year, if any is due, shall be paid to Executive,
subject to normal withholding, promptly after the completion of the audit of
the Company’s financial statements for such fiscal year.

(c)           Options.  Executive is eligible for, and has received,
the grant of stock options under the Company’s stock option programs. The Board
or its Stock Option Committee will from time to time consider making additional
grants to Executive, but the Company shall not be obligated to make any
particular grant or grants thereof.

(d)           Benefits.  Executive shall be entitled to participate
in the Company’s insurance, health, life insurance, long term disability,
dental and medical, and automobile programs as the same may exist from time to
time on the terms and conditions applicable to other senior officers of the
Company.  Nothing in this Agreement
shall preclude the Company from terminating or amending any employee benefit plan
or program from time to time.  The Company
will reimburse Executive for the reasonable cost of an annual physical
examination, if Executive elects to have the same.  If Executive elects not to participate in the Company’s medical
benefits program, then Executive may elect to have the Company maintain a life
insurance policy for the Executive and naming as designee as beneficiary with
an annual premium paid by the company equal or less than the annual premium the
Company would have paid for the Executive to be covered under the Company’s
medical benefits, which currently is approximately $ 8,400 per annum.

 (e)          Vacation. 
Executive shall be entitled to four weeks vacation per year.  Such vacation shall be taken at such times
as the Company and Executive shall mutually agree, acting reasonably, having
regard to the performance of Executive’s essential duties to the Company
pursuant to the terms of this Agreement. 
Executive may accumulate unused vacation time from year to year to the
extent permitted under the Company’s vacation policy for executives as in
effect from time to time.

 

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(f)            Expenses.  Executive shall be reimbursed for all travel
and other reasonable out-of-pocket expenses actually incurred by him in
connection with the performance of his duties hereunder, subject the Company’s
expense reimbursement policies as in effect from time to time and to the
receipt by the Company of receipts and statements in a form reasonably
satisfactory to it.

4.             Termination.

(a)           Termination by
the Company for Cause. Notwithstanding anything to the contrary herein
contained, the Company may terminate immediately the employment of Executive
without notice and without pay in lieu of notice:

(i)            if Executive
commits an act of theft, fraud or material dishonesty or misconduct involving
the property or affairs of the Company or the carrying out of Executive’s
duties; or

(ii)           if Executive
commits a material breach or material non-observance of any of the terms or
conditions of this Agreement provided that Executive is given written notice of
any such breach or non-observance and fails to remedy the same within 15 days
of receipt of such notice; or

(iii)          if Executive is
convicted of a felony; or

(iv)          if Executive refuses
or fails to implement any reasonable directive issued by the Company’s Board of
Directors and Executive fails to remedy the refusal or failure within 15 days
of receipt of written notice thereof; or

(v)           if Executive or any
member of his family makes any personal profit arising out of or in connection
with a transaction to which the Company or any of its subsidiaries is a party
or with which it is associated without making disclosure to and obtaining prior
written consent of the Company.

Upon the termination of Executive’s employment
pursuant to this Subsection (a), this Agreement and the employment of Executive
hereunder shall be wholly terminated. 
Upon any such termination, Executive shall have no claim against the
Company in respect of his employment for damages or otherwise except in respect
of payment of base salary earned, due and owing and unused vacation time to the
date of termination.

(b)           Termination by
the Company Without Cause. 
Notwithstanding anything herein to the contrary, the Company may
terminate Executive’s employment hereunder at any time, for any reason or no
reason, on not less than 30  days’ prior
written notice.  In the event of
termination pursuant to this Subsection (b), Executive will be paid an amount
equal to Executive’s annual base salary in effect on the date of such termination
of employment. Such amount will be paid in equal monthly installments following
the date of termination of employment.

In
addition, notwithstanding anything to the contrary contained herein or in the
applicable stock option agreements, all of the stock options then held by
Executive shall

 

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continue to vest in
accordance with their terms until the first anniversary of the date the Company
terminates Executive’s employment under this subsection (b) and shall be
exercisable to the extent so vested by Executive on or prior to the 60th
day following such first anniversary date of termination

(c)           Termination by
Executive.  Executive may terminate
his employment hereunder at any time, for any reason, upon the giving of not
less than 30 days’ prior written notice to the Board.  In the event of termination by Executive under this clause (c),
Executive shall be entitled to receive only his base salary and unused vacation
time due him through the effective date of termination.  Upon the termination of Executive’s
employment pursuant to this Subsection (a), this Agreement and the employment
of Executive hereunder shall be wholly terminated.  Upon any such termination, Executive shall have no claim against
the Company in respect of his employment for damages or otherwise except in
respect of payment of base salary earned, due and owing and unused vacation
time to the date of termination.

(d)           Termination by
the Company Due to Death or Disability. 
The employment of Executive shall, at the option of the Company,
terminate immediately in the event of his death or permanent disability, in
which case notice in writing from the Company shall be sent to Executive or his
legal representative.  In the event of
termination under this clause (d), in addition to any disability benefit
coverage to which he may be entitled under any disability insurance programs
maintained by the Company in which he is a participant, Executive will be paid
an amount equal to six months salary at Executive’s annual base salary rate as
in effect on the date of the termination under this clause (d). Except as
provided in the preceding sentence, Executive shall be entitled to no
additional compensation under this Agreement following the date of termination
under this clause (d), other than base salary earned but not paid, and
unused vacation time accrued, through the date of termination.  For purposes of this Agreement “permanent
disability” shall mean an illness, disease, mental or physical disability or other
causes beyond Executive’s control which makes Executive incapable of
discharging his duties or obligations hereunder, or causes Executive to fail in
the performance of his duties hereunder, for six consecutive months, as
determined in good faith by the Board based on a report of a physician selected
in good faith by the Board.

(e)           Termination by
Executive Upon a Change of Control. 
In the event that (x) a Change of Control (as hereinafter defined)
occurs and (y) at any time prior to the third anniversary of such Change
of Control a Triggering Event (as hereinafter defined) shall occur, then unless
the Executive shall have given his express written consent to the contrary,
Executive may, upon 30 days written notice to the Company, terminate his
employment hereunder (subject, within the first six (6) months immediately
following a change of control, to Executive offering to provide up to six (6)
months of transition services for compensation equal to the same salary and
benefits in effect at the time of the change of control).  In such event Executive shall be entitled to
the following:

(i)            Following the date
of the Triggering Event, Executive shall be paid  two cash payments, each to be equal to Executive’s annual base
salary in effect on the date of the Triggering Event, with the first of such
payment to be paid within 30 days of

 

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the
Triggering Event and the second of such payments to be paid on the first
anniversary of the date of the Triggering Event, in each case subject to normal
withholding.

(ii)           As of the date of
the Triggering Event, notwithstanding the vesting schedule of any stock options
then held by Executive, all stock options then held by Executive shall
thereupon become fully vested; and

(iii)          For a one year
period following the date of the Triggering Event, Executive shall be provided
with employee benefits substantially identical to those to which Executive was
entitled immediately prior to the Triggering Event, subject to any changes or
modifications (including reductions or terminations) to the Company’s employee
benefit and welfare plans that are made generally for all of the Company’s
senior executives.

In
the event that the benefits provided for in this Subsection 4(e) to
be paid Executive constitute “parachute payments” within the meaning of section
280G of the Internal Revenue Code of 1986, as amended (the “Code”), and will be
subject to the excise tax imposed by Section 4999 of the Code, then
Executive shall receive (a) a payment from the Company sufficient to pay
such excise tax and (b) an additional payment from the Company sufficient
to pay the Federal and California income tax arising from the payment made
under clause (a) of this sentence. 
Unless the Company and Executive otherwise agree, the determination of
Executive’s excise tax liability and the Federal and California income tax
resulting from the payment under clause (a) above shall be made by the
Company’s independent accountants (the “Accountants”), whose determination shall
be conclusive and binding upon the Company and Executive for all purposes.   For purposes of making the calculations
required by this Subsection 4(e), the Accountants may make reasonable
assumptions and approximations concerning applicable taxes and may rely on
interpretations of the Code for which there is a “substantial authority” tax
reporting position.  The Company and
Executive shall furnish to the Accountants such information and documents as
the Accountants may reasonably request in order to make the determinations
required by this Subsection 4(e). 
The Company shall bear the expenses of the Accountants under this
Subsection 4(e).

For
purposes of this Subsection 4(e):

(a)           Change of Control”
means the occurrence of any one of the following:    (i) any transaction or series of transactions (as a result
of a tender offer, merger, consolidation or otherwise) that results in any
person, entity or group acting in concert, acquiring “beneficial ownership” (as
defined in rule 13d-3 under the Securities Exchange Act of 1934), directly or
indirectly, of such percentage of the aggregate voting power of all classes of
common equity stock of the Company as shall exceed 50% of such aggregate voting
power; or (ii) a merger or consolidation of the Company, other than a
merger or consolidation which would result in the voting securities of the
Company outstanding immediately prior thereto continuing to represent (either
by remaining outstanding or by being converted into voting securities of the
surviving entity) at least 50% of the voting power represented by the voting
securities of the Company or such entity outstanding immediately after such
merger or consolidation; or (iii) the

 

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shareholders
approve a plan of complete liquidation of the Company or an agreement for the
sale or disposition by the Company of all, or substantially all, of the
Company’s assets (other than in connection with a sale or disposition to
subsidiaries of the Company or in connection with a reorganization or
restructuring of the Company); or (iv) there occurs a change in the
composition of the Board as a result of which fewer than a majority of the
directors are Incumbent Directors (as hereinafter defined).  “Incumbent Directors” shall mean directors
who either (A) are directors of the Company as of the Commencement Date or
(B) are elected, or nominated for election, to the Board with the
affirmative votes of at least a majority of the Incumbent Directors casting
votes at the time of such election or nomination.

(b)           “Triggering Event”
means any of the following: (i) the termination by the Company without
Cause of Executive’s employment pursuant to Subsection 4(a) hereof;
(2) the reduction of Executive’s annual base salary or annual incentive
bonus formula from that in effect on the date of the Change of Control;
(3) the removal of Executive as the Company’s President and Chief
Executive Officer or a reduction in his duties and responsibilities; or
(4) the relocation of Executive’s principal place of employment to a
location outside San Diego County, California.

(f)            Payments.  Any amounts payable to Executive under this
Section 4 shall be paid, unless otherwise specified hereunder, within 30
days of the date the payment obligation accrues and shall be subject to normal
withholding.

(g)           Exclusive Rights.  In connection with any termination under
Subsection 4(b) or 4(e), Executive shall have no claim against the Company in
respect of his employment for damages or otherwise except in respect of the
payments and other provisions specified in such Subsections.

(h)           Cooperation.  Upon any termination of employment by the
Company or by Executive hereunder, Executive shall cooperate with the Company,
as reasonably requested by the Company, to effect a transition of Executive’s
responsibilities and to ensure that the Company is aware of all matters being
handled by Executive.

5.             Resolution
of Disputes.  The parties recognize
that claims, controversies and disputes may arise out of this Agreement with
respect to Executive’s employment, termination of employment, or other terms of
this Agreement or based on common law or statute, either during the existence
of the employment relationship or afterwards. 
The parties agree that should any such claim, controversy or dispute
arise, the parties will use their best efforts to resolve such dispute
informally, between them.  In the event
that any such claim, controversy or dispute between Company and Executive
cannot be resolved within thirty (30) days after either party first gives
notice in writing that any such claim, controversy or dispute exists, either
party may then refer the matter to arbitration before JAMS/ENDISPUTE pursuant
to its rules for resolution of employment disputes.

The parties hereby agree that referral to arbitration
shall be the sole recourse of either party under this Agreement with respect to
any such claim, controversy or dispute and that the decision of the arbitrator
shall be binding on the parties in accordance with applicable law; 

 

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provided, however, that
nothing in this Section 5 shall be construed as precluding either party
from bringing an action for injunctive relief or other equitable relief.  The parties shall keep confidential the existence
of each such the claim, controversy or dispute from third parties (other than
arbitrator), and the determination thereof, unless otherwise required by
law.  Except as provided in the
following sentence, such decision rendered by the arbitrator shall be final and
conclusive and may be entered in any court having jurisdiction thereof as a
basis of judgment and of the issuance of execution for its collection.  In rendering his or her decision, the
arbitrator shall be bound to follow California or Federal law, as applicable,
in the same manner as would a court of law. 
Any claim that the arbitrator made a mistake or error in determining or
applying the appropriate law shall be subject to judicial review.

The parties further agree that the party prevailing in
the arbitration shall be entitled to its reasonable attorney’s fees and that
the arbitration itself shall take place within the County of San Diego,
California, and that the internal laws of the State of California shall apply.

6.             General
Obligations of Executive.

(a)           Executive agrees and
acknowledges that he owes a duty of loyalty, fidelity and allegiance to act at
all times in the best interests of the Company, to not knowingly become
involved in a conflict of interest and to not knowingly do any act or knowingly
make any statement, oral or written, which would injure the Company’s business,
its interest or its reputation unless required to do so in any legal proceeding
by a competent court with proper jurisdiction.

(b)           Executive agrees to
comply at all times with all applicable policies, rules and regulations of the
Company, including, without limitation, the Company’s policy regarding trading
in the Common Stock, as is in effect from time to time.

7.             No
Solicitation.  Executive agrees that
in the event he is no longer employed by the Company, for any reason, he shall
not hire, solicit or otherwise cause to be solicited for employment elsewhere,
either directly or indirectly, for a period of one year from his termination of
employment, any employee, officer or director of the Company or any individual
who chooses not to join the Company, provided that Executive participated
actively in the recruiting of such individual.

8.             Noncompetition.  Executive agrees that for a period of one
year following termination of his employment with the Company for any reason,
he will not, nor will he permit any entity or other person under his control
to, directly or indirectly, own, manage, operate or control, or participate in
the ownership, management, operation or control of, or be connected with or
have any interest in, as a shareholder, director, officer, employee, agent,
consultant, partner, creditor or otherwise, any business or activity which is
competitive with any business or activity engaged in by the Company or any of
its subsidiaries or affiliates anywhere within (i) the State of
California, or (ii) any other state of the United States and the District
of Columbia in which the Company engages in or has engaged in business during
the past five years.

9.             Entire
Agreement.  This Agreement
constitutes the entire Agreement between the parties and contains all
agreements between them with the exception of the 1995 Stock Option 

 

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Plan (and any stock
option agreements issued thereunder) the other employee benefit and welfare
programs maintained by the Company, and the Invention and Secrecy Agreement
dated the date of this Agreement signed by Executive, which are supplementary
to this Agreement and are each deemed to be incorporated herein by
reference.  Each party to this Agreement
acknowledges that no representations, inducements, promises or agreements,
orally or otherwise, have been made by any party, or anyone acting on behalf of
any party, which are not embodied in this Agreement, and that no agreement,
statement or promise not contained in this Agreement shall be valid or
binding.  Except for the other
agreements, plans and programs referred to in this Section 9, this
Agreement also supersedes any and all other agreements and contracts whether
verbal or in writing relating to the subject matter hereof.

10.           Amendment.  Except as otherwise specifically provided
herein, the terms and conditions of this Agreement may be amended at any time
by mutual agreement of the parties; provided that before any amendment shall be
valid or effective, it shall have been reduced to writing and signed by the
Chairman of the Board on behalf of the Company and by Executive.

11.           Invalidity.  The invalidity or unenforceability of any
particular provision of this Agreement shall not affect its other provisions,
and this contract shall be construed in all respects as if such invalid or
unenforceable provision has been omitted.

12.           Binding
Nature.  Executive’s rights and
obligations under this Agreement shall not be assignable, transferable or
delegable by assignment or otherwise, and any purported assignment, transfer or
delegation thereof shall be void.  This
Agreement shall inure to the benefit of, and be enforceable by, any purchaser
of substantially all of the Company’s assets, any corporate successor to the
Company or any assignee thereof.

13.           Assistance
in Litigation.  Executive shall,
during and after termination of employment, upon reasonable notice, furnish
such information and proper assistance to the Company as may reasonably be
required by the Company in connection with any litigation in which it or any of
its subsidiaries or affiliates is, or may become a party. Except where
Executive is a named defendant, Executive shall be paid a reasonable hourly fee
to be mutually agreed upon.

14.           Indemnification.  The Company shall indemnify Executive in
accordance with its standard indemnification policy for offices and directors
of the Company and as required by applicable law.

15.           No
Duty to Mitigate.  Executive shall
not be required to mitigate the amount of any payment contemplated by this
Agreement (whether by seeking new employment or in any other manner), nor shall
any such payment be reduced by any earnings that Executive may receive from any
other source not paid for by the Company.

16.           Choice
of Law.  The validity,
interpretation, construction and performance of this Agreement shall be
governed by the laws of the State of California except for Sections 7 and 8
hereof which shall be governed by, and interpreted and construed in accordance
with, the internal laws (without giving effect to choice of law principles) of
the jurisdiction in which either of said Sections is being sought to be
enforced.

 

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17.           Notices.  All notices and other communications
required or permitted hereunder or necessary or convenient in connection
herewith shall be in writing and, if given by telegram, telecopy or telex,
shall be deemed to have been validly served, given or delivered when sent, if
given by personal delivery, shall be deemed to have been validly served, given
or delivered upon actual delivery and, if mailed, shall be deemed to have been
validly served, given or delivered three business days after deposit in the
United States mail, as registered or certified mail, with proper postage
prepaid and addressed to the party or parties to be notified, at the following
addresses:

If to Executive to:

Richard
Balanson

 

If to the Company to:

Maxwell
Technologies Inc.

9244
Balboa Avenue

San
Diego, California  92123

Attn:  Chairman of the Board

Telephone:  (858) 503-3300

Fax:  (858)
503-3301

18.           Injunctive
Relief.  The Company and Executive
agree that a breach of any term of this Agreement by Executive would cause
irreparable damage to the Company and that, in the event of such breach, the
Company shall have, in addition to any and all remedies of law, the right to
any injunction, specific performance and other equitable relief to prevent or
to redress the violation of Executive’s duties or responsibilities hereunder.

19.           Release.  If Executive’s employment hereunder shall
terminate under Subsection 4 (b) or 4(e), Executive agrees, as a condition to
his entitlement to receive the amounts specified in such Subsections to be due
to him, to execute and deliver to the Company a release in the form attached
hereto as Exhibit A.  Such
release shall be delivered by Executive at the time of termination, but shall
become effective only after Executive has received all payments specified in
this Agreement to be due to him from the Company in respect of his termination.

 

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20.           Counterparts.  This Agreement may be executed in any number
of counterparts, all of which taken together shall constitute one and the same
instrument and either of the parties to this Agreement may execute this
Agreement by signing any such counterpart.

IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the 1st day of August, 2003.

	
   

  	
  “Company”

  
	
   

  	
   

  
	
   

  	
  MAXWELL
  TECHNOLOGIES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:
  /s/ Mark Rossi

  
	
   

  	
   

  
	
   

  	
  “Executive”

  
	
   

  	
   

  
	
   

  	
  /s/
  Richard Balanson

  
	
   

  	
  Richard
  Balanson

  

 

 

 

10Exhibit 10.17

 

EMPLOYMENT AGREEMENT

 

This Employment Agreement

(this “Agreement”) is entered into as of June 19, 2003, between Hard Rock

Hotel, Inc., a Nevada corporation (the “Company”), and Kevin Kelley, an

individual (“Executive”).

 

Preliminary Statements

 

A.                                   The Company currently operates that certain

hotel/casino resort known as the “Hard Rock Hotel” located at 4455 Paradise

Road, Las Vegas, Nevada.

 

B.                                     The Company desires to employ Executive, and

Executive desires to be so employed, on the terms and conditions herein

contained.

 

Agreement

 

NOW, THEREFORE, in consideration of the various covenants and

agreements hereinafter set forth, the parties hereto agree as follows:

 

1.                                       Term of Employment.  The

Company hereby employs Executive and Executive accepts such employment

commencing on the date of this Agreement (the “Commencement Date”) and

terminating on the  third anniversary of

the Commencement Date, unless sooner terminated as hereinafter provided; provided, however, that this Agreement may

be extended for successive one (1) year terms upon the mutual agreement of the

parties hereto.

 

2.                                       Services to be Rendered.

 

2.1.                              Duties of Executive. 

Executive shall be employed to serve in the capacity of President ,

Chief Operating Officer, and General Manager of the Company.  Executive shall be responsible for the

overall supervision, direction, and control of the operations of the Hard Rock

Hotel facility and shall direct the operating departments with a view to the

successful implementation of the business policies and plans for the Hard Rock.

Executive shall provide support in the conceptual, strategic, and policy

formulation functions of the Company and shall direct and coordinate the

activities of the Hard Rock to attempt to obtain optimum efficiency and economy

of operations in order to maximize profits. Executive shall devote his full

business time, attention and ability to the affairs of the Company during the

term of this Agreement; provided, however,

that Employee shall not be precluded from involvement in charitable or civic

activities or his personal financial investments or to provide consulting

services, except that such consulting services may not relate to the gaming

industry, provided that the same do not interfere with his time and attention

to the affairs of the Company. 

Executive will report directly to the Chairman of the Board of Directors

(“Chairman”) or such other person designated by the Chairman or Board of

Directors of the Company (the “Board”).

 

3.                                       Compensation and Benefits. The Company shall pay the following

compensation and benefits to Executive during the term hereof; and Executive

shall accept the same as payment in full for all services rendered by Executive

to or for the benefit of the Company:

 

3.1.                              Base Salary. Commencing on the Commencement Date, a base

salary (the “Base Salary”) of $375,000 per annum. The Base Salary shall accrue

in equal bi-weekly installments in arrears and shall be payable in accordance

with the payroll practices of the Company in effect from time to time.

 

3.2.                              Annual Bonus. 

Executive shall be eligible to receive an annual bonus (the “Annual

Bonus”) to be determined by the Chairman based upon the achievement of the

financial performance and other objectives of the Company and Executive’s

contribution to such performance.  Such

bonus will be equal to sixty (60) percent of Executive’s base salary provided

the Company meets its annual budgeted EBITDA. It shall be increased or

decreased by the percentage that actual annual EBITDA varies from the annual

budgeted EBITDA.

 

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3.3.                              Stock. 

Executive shall be entitled to participate in any stock option or

phantom equity plans that the Company provides to its comparable senior

executive officers to the extent such plans are established by the Company.

 

3.4.                              Expenses.  The

Company shall reimburse Executive for reasonable out-of-pocket expenses

incurred in connection with the performance of his duties hereunder, subject to

(i) such policies as the Board may from time to time establish and (ii)

Executive furnishing the Company with evidence in the form of receipts

satisfactory to the Company substantiating the claimed expenditures.

 

3.5.                              Vacation. 

Executive shall be entitled to four weeks of vacation  per year.. 

Executive shall also be entitled to all paid holidays given to the

Company’s comparable senior executive officers.

 

3.6.                              Benefits. 

Executive shall be entitled to participate in the Company’s group

insurance, hospitalization, and group health and benefit plans and all other

benefits and plans as the Company provides to its comparable senior executive

officers to the extent such plans are established by the Company and to the

extent that Executive is eligible to participate in such plans.

 

3.7.                              Withholding and other Deductions.  All

compensation payable to Executive hereunder shall be subject to such deductions

as the Company is from time to time required to make pursuant to law,

governmental regulation or order.

 

4.                                       Facilities. 

Executive shall be furnished with an office, supplies and personnel

which are necessary or appropriate for the adequate performance by Executive of

his duties as set forth in this Agreement.

 

5.                                       Representations and

Warranties of Executive.

Executive represents and warrants to the Company that (i) Executive is under no

contractual or other restriction or obligation which is inconsistent with the

execution of this Agreement, the performance of his duties hereunder, or the

other rights of the Company hereunder and (ii) Executive is under no physical or

mental disability that would hinder the performance of his duties under this

Agreement.

 

6.                                       Non-disclosure;

Non-solicitation.  During the term of this Agreement and

thereafter, Executive shall hold in a fiduciary capacity for the benefit of the

Company all secret or confidential information, knowledge or data relating to

the Company or its affiliates, and their respective businesses, which shall not

be public knowledge (other than information which becomes public as a result of

acts of Executive or his representatives in violation of this Agreement),

including, without limitation, customer/ client lists, matters subject to

litigation, and technology or financial information of the Company or its

subsidiaries, without the prior written consent of the Company.  In addition, during the term of this

Agreement and for a one (1)  year period

thereafter, Executive shall not, directly or indirectly, solicit or contact any

employee of the Company or any affiliate of the Company, with a view to

inducing or encouraging such employee to leave the employ of the Company or its

affiliates, for the purpose of being employed by Executive, an employer

affiliated with Executive or any competitor of the Company or any affiliate

thereof.  Executive acknowledges that

the provisions of this Article 6 are reasonable and necessary for the

protection of the Company and that the Company will be irrevocably damaged if

such provisions are not specifically enforced. 

Accordingly, Executive agrees that, in addition to any other relief to which

the Company may be entitled in the form of actual or punitive damages, the

Company shall be entitled to seek and obtain injunctive relief from a court of

competent jurisdiction (without posting a bond therefor) for the purpose of

restraining Executive from any actual or threatened breach of such provisions.

 

7.                                       Termination.

 

7.1.                              Death or Total Disability

of Executive. If Executive

dies or becomes totally disabled during the term of this Agreement, Executive’s

employment hereunder shall automatically terminate. For these purposes

Executive shall be deemed totally disabled if Executive shall become physically

or mentally incapacitated or disabled or otherwise unable fully to discharge

Executive’s essential duties hereunder for a period of ninety (90) consecutive

calendar days or for one hundred twenty (120) calendar days in any one hundred

eighty (180) calendar-day period.

 

2

 

7.2.                              Termination for Good Cause. Executive’s employment hereunder may be

terminated by the Company for “good cause.” The term “good cause is defined as

any one or more of the following occurrences:

 

(a)                                  Executive’s breach of any of the covenants

contained in Article 6 of this Agreement;

 

(b)                                 Executive’s conviction by, or entry of a plea

of guilty or nolo contendere in, a court of competent and final jurisdiction

for any crime involving moral turpitude or punishable by imprisonment in the

jurisdiction involved;

 

(c)                                  Executive’s commission of an act of criminal

fraud that affects the Company, whether prior to or subsequent to the date

hereof upon the Company;

 

(d)                                 Executive’s continuing repeated willful

failure or refusal to perform Executive’s duties as required by this Agreement

(including, without limitation, Executive’s inability to perform Executive’s

duties hereunder as a result of drug or alcohol related misconduct and/or as a

result of any failure to comply with any laws, rules or regulations of any

governmental entity with respect to Executive’s employment by the Company);

 

(e)                                  Executive’s gross negligence, insubordination

or material violation of any duty or loyalty to the Company, misappropriation

of Company assets, or any other material misconduct on the part of Executive;

 

(f)                                    Not used.

 

(g)                                 the failure of Executive to obtain any

requisite license, permit or approval based on suitability from any state,

county, or other governmental authority having jurisdiction over the gaming

operations of the Company (the “Gaming Authorities”) which would preclude

Executive from carrying out his duties as set forth in this Agreement;

 

(h)                                 if, after the initial receipt by Executive of

any requisite license, permit or approval from the Gaming Authorities, the

execution of Executive’s duties as set forth in this Agreement will, as

evidenced by communications from any senior official of any of the Gaming

Authorities, materially preclude or unduly delay the issuance of, or result in

the imposition of unduly burdensome terms and conditions on, or revocation of,

any liquor, gaming or other license, permit or approval, necessary or

appropriate to the proposed, contemplated or actual operations of the Company; provided, however, that this Section

7.2(h) shall not be applicable if Executive shall, within a reasonable period

of time after receipt of written notice from the Board specifying the nature of

the issues involved hereunder, remedy the situation to the satisfaction of the

applicable Gaming Authorities; or

 

(i)                                     Executive’s breach of any other provision of

this Agreement, provided that termination of Executive’s employment pursuant to

this subsection (i) shall not constitute valid termination for good cause

unless Executive shall have first received written notice from the Board

stating with specificity the nature of such breach and affording Executive at

least fifteen (15) days to correct the breach alleged.

 

7.3.                              Resignation of Executive.  The

Company shall have the right to terminate this Agreement and Executive’s

employment hereunder due to the voluntary resignation of Executive, provided

that Executive shall deliver no less than sixty (60) days prior written notice

of such resignation to the Board, which notice may be waived by the Company in

its sole discretion.

 

7.4.                              Severance Compensation. Notwithstanding anything contained in this

Agreement, upon a termination of this Agreement and Executive’s employment

hereunder due to the occurrence of any of the events referred to in Section

7.1, 7.2 or 7.3 of this Agreement, Executive (or Executive’s heirs or

representatives) shall be entitled to receive only such portion (if any) of the

Base Salary as may theretofore have accrued but be unpaid on the date on which

the termination shall take effect.

 

3

 

7.5.                              Termination for No Cause.  In

addition to the right to terminate this Agreement pursuant to Sections 7.1, 7.2

and 7.3 of this Agreement, the Company shall have the right to terminate this

Agreement and Executive’s employment hereunder for any other reason or for no

reason prior to the expiration of the term of this Agreement.  In the event that the Company terminates

this Agreement and Executive’s employment hereunder pursuant to this Section

7.5, the Company shall give ten (10) days prior written notice to Executive and

pay a termination fee to Executive in an amount equal to (i) one years Base

Salary or (ii) $ 250,000, in the event such termination occurs in the  last eight (8) months of the contract term ,

to be paid in the manner and at the rate Executive had received immediately

prior to such termination pursuant to Section 3.1 of this Agreement and the

Company shall have no further obligation to Executive under this Agreement.

 

7.6.                              Termination Obligations of

Executive.  In the event that this Agreement and

Executive’s employment hereunder is terminated, Executive, or his legal

representative in case of termination by death or Executive’s physical or

mental incapacity to serve, shall:

 

(a)                                  by the close of the effective date of

termination, resign from all corporate positions held in the Company and any of

its subsidiary and affiliated companies;

 

(b)                                 promptly return to a representative

designated by the Company all property, including but not limited to, keys,

identification cards and credit cards of the Company or any of its subsidiaries

or affiliated companies; and

 

(c)                                  incur no further expenses or obligations on

behalf of the Company, or any of its subsidiaries and affiliated companies.

 

8.                                       Change of Control. In the event of a “Change of Control” (as

defined below) the Executive shall be entitled to three years Base Salary if

within thirty (30) days after the Change in Control the Executive tenders his

resignation in conformity with Article 7.3 of the Agreement.  A Change in Control of the Company shall

mean a change in control of a nature that would be required to be reported in

response to Item 403(c) of Regulation S-K; provided that, without limitation,

such a change in control shall not be deemed to have occurred if Peter Morton

is the beneficial owner as defined in Rule 13d-3 under the Exchange Act, directly

or indirectly, of securities of the Company representing 51% or more of the

combined voting power of the Company’s then outstanding securities.

 

9.                                       Arbitration. Any claim or controversy arising out of or

relating to this Agreement shall be settled by arbitration in Las Vegas.

Nevada, in accordance with the Commercial Arbitration Rules of the American

Arbitration Association, and judgment on the award rendered by the arbitrators

may be entered in any court having jurisdiction. There shall be three arbitrators,

one to be chosen directly by each party at will, and the third arbitrator to be

selected by the two arbitrators so chosen. Each party shall pay the fees of the

arbitrator it selects and of its own attorneys, the expenses of its witnesses

and all other expenses connected with presenting its case. Other costs of the

arbitration, including the cost of any record or transcripts of the

arbitration, administrative fees, the fee of the third arbitrator, and all

other fees and costs, shall be borne equally by the parties hereto unless it is

determined that one or both parties were not acting in good faith in which case

the party determined to not have been acting in good faith shall bear all fees

and expenses described above which would otherwise have been paid by the

opposing party.

 

10.                                 General Relationship. Executive shall be considered an employee

of the Company within the meaning of all federal, state and local laws and

regulations including, but not limited to, laws and regulations governing

unemployment insurance, workers’ compensation, industrial accident, labor and

taxes.

 

11.                                 General Provisions.

 

11.1.                        Binding Effect. 

This Agreement shall be binding upon and inure to the benefit of the

Company and its successors and assigns and Executive, his assignees, and his

estate.  Neither Executive, his

designees, nor his estate shall commute, pledge, encumber, sell or otherwise

dispose of the rights to receive the payments provided in this Agreement, which

payments and the rights thereto are expressly declared to be nontransferable

and nonassignable (except by death or otherwise by operation of law).

 

4

 

11.2.                        Governing Law. 

This Agreement shall be governed by the laws of the State of Nevada from

time to time in effect.

 

11.3.                        Counterparts. 

This Agreement may be executed in one or more counterparts, each of

which shall be deemed an original, but all of which taken together shall

constitute one and the same Agreement.

 

11.4.                        No Waiver. 

Except as otherwise expressly set forth herein, no failure on the part

of either party hereto to exercise and no delay in exercising any right, power

or remedy hereunder shall operate as a waiver hereof nor shall any single or

partial exercise of any right, power or remedy hereunder preclude any other or

further exercise thereof or the exercise of any other right, power or remedy.

 

11.5.                        Headings.  The

headings of the Articles and Sections of this Agreement have been inserted for

convenience of reference only and shall in no way restrict any of the terms or

provisions hereof.

 

11.6.                        Notices.  Any

notice under this Agreement shall be given in writing and delivered in person

or mailed by certified or registered mail, addressed to the respective party at

the address as set out below, or at such other address as either party may

elect to provide in advance in writing, to the other party:

 

EXECUTIVE:

 

Kevin Kelley

636 Canyon Greens Dr.

Las Vegas, NV 89144

 

COMPANY:

 

Hard Rock Hotel, Inc.

510 North Robertson Boulevard

Los Angeles, California 90048

Attn:  Peter Morton

 

WITH A COPY TO:

Gordon & Silver, Ltd.

3960 Howard Hughes Pkwy

Ninth Floor

Las Vegas, NV 89109

Attn:  Jeff Silver, Esq.

 

11.7.                        Severability.  If

any provision of this Agreement is held by a court of competent jurisdiction to

be invalid, illegal, or unenforceable by reason of any rule of law or public

policy, all other provisions of this Agreement shall nevertheless remain in

effect.  No provision of this Agreement

shall be deemed dependent on any other provision unless so expressed herein.

 

11.8.                        Compliance with Laws;

Gaming Authorities Approval.  Nothing contained in this Agreement shall be

construed to require the commencement of any act contrary to law, and when

there is any conflict between any provision of this Agreement and any statute,

law, ordinance, or regulation, contrary to which the parties have no legal

right to contract, then the latter shall prevail; but in such an event, the

provisions of this Agreement so affected shall be curtailed and limited only to

the extent necessary to bring it within the legal requirements.  Notwithstanding anything contained in this

Agreement to the contrary, this Agreement and the terms and conditions

contained herein shall be contingent upon receipt of all requisite approvals of

the applicable Gaming Authorities.

 

11.9.                        No Waiver.  The

several rights and remedies provided for in this Agreement shall be construed

as being cumulative, and no one of them shall be deemed to be exclusive of the

others or of any right or remedy allowed by law.  No waiver by the Company or Executive any failure of Executive or

the Company,

 

5

 

respectively, to keep or perform any

provision of this Agreement shall be deemed to be a waiver of any preceding or

succeeding breach of the same or other provision.

 

11.10.                  Merger. 

This Agreement supersedes any and all other agreements, either oral or

in writing, between the parties hereto with respect to the employment of

Executive by the Company.

 

11.11.                  No Representations. 

Each party to this Agreement acknowledges that no representations,

inducements, promises or other agreements, oral or otherwise, have been made by

any party, anyone acting on behalf of any party, which are not embodied herein

and that no other agreement, statement or promise not contained in this

Agreement shall be valid or binding. 

Any addendum to or modification of this Agreement shall be effective

only if it is in writing and signed by the parties to be charged.

 

11.12.                  Drafting Ambiguities. 

Each party to this Agreement has been afforded an opportunity to have

this Agreement reviewed by his or its respective counsel. The normal rule of

construction to the effect that any ambiguities are to be resolved against the

drafting party shall not be employed in the interpretation of this Agreement or

of any amendments or exhibits to this Agreement.

 

11.13.                  Survival.  The

terms and conditions of Article 6 and of this Agreement shall survive the

termination of this Agreement.

 

IN WITNESS WHEREOF, the

parties hereto have caused this Agreement to be duly executed as of the date

hereinabove set forth.

 

	

  COMPANY:

  	

   

  	

  EXECUTIVE:

  
	

   

  	

   

  	

   

  
	

  Hard

  Rock Hotel, Inc., a Nevada corporation

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

  By:

  	

  /s/

  Peter A. Morton

  	

   

  	

  /s/

  Kevin Kelley

  
	

   

  	

  Peter

  A. Morton, Chairman

  	

   

  	

  Kevin

  Kelley

  

 

6

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