Employment and Consulting Agreement
ALADDIN GAMING, LLC
EMPLOYMENT & CONSULTING AGREEMENT
This Agreement is made between and among Aladdin Gaming, LLC (the
"Company"), Aladdin Holdings, LLC ("Aladdin Holdings") and Xxxxxxx X. Xxxxxxxx
("Executive").
1. Term. Executive's employment with the Company pursuant to this
Agreement shall commence on January 1, 1997 (the "Effective Date") and shall
continue for five years and six months thereafter subject to the terms and
conditions herein set forth (the Employment Term"). For a period of five years
following the termination of the Employment Term, Executive shall be retained as
a consultant and as a member of the Board of Directors of the Company (the
"Consulting Term") with an annual retainer of $100,000 (paid no less frequently
than monthly); provided, however, that the Company, in its sole discretion, may
terminate the Consulting Term at any time by notifying Executive thereof and
along with such notification making a lump-sum payment to Executive equal to
$500,000 less the amount of any retainers previously paid to Executive by the
Company during the Consulting Term.
2. Duties and Scope of Employment.
(a) Position; Employment Commencement Date. From the Effective Date
until the first date that the Company operates the newly renovated and expanded
Aladdin Hotel and Casino (the "Operational Date"), the Company shall employ the
Executive as the President of the Company reporting to the Chief Executive
Officer of the Company and the Board of Directors of the Company (the "Board").
On and after the Operational Date, the Company shall employ the Executive as the
sole Chief Executive Officer and President of the Company, reporting only to the
Board. Additionally, Executive shall serve as a member of the Board during the
Employment Term and the Consulting Term. As President and Chief Executive
Officer of the Company, Executive shall have the duties and responsibilities
customarily associated with such positions, including senior management powers
and responsibilities for the Company's business and affairs.
(b) Obligations. Except in connection with his employment as
President of Gaming Associates, Inc., his provision of services to GAI, LLC and
his provision of services as a member of the Gaming Oversight Committee of the
Marriott Corporation, Executive agrees, during the Employment Term, not to
actively engage in any other employment, occupation or consulting activity for
any direct or indirect remuneration without the prior approval of the Board;
provided, however, that Executive may serve in any capacity with any civic,
educational or charitable organization, or as a member of corporate Boards of
Directors or committees thereof, including those upon which Executive currently
serves, all of which are listed on Exhibit A hereto, without the approval of the
Board, so long as such activities do not substantially interfere with
Executive's ability to discharge his duties to the Company hereunder. If the
Board reasonably and in good faith determines that the time Executive is
devoting to such activities materially interferes with or impairs his ability to
properly discharge his duties to the Company and so notifies Executive, then the
Executive will promptly take such action as is necessary to eliminate such
interference or impairment, including curtailing or ceasing such activities. If
the Board reasonably and in good faith determines that Executive's activities
for other entities or organizations give rise to a conflict of interest with the
business of the Company, then the parties agree to address such conflict issues
on a mutually approved and a reasonable basis to eliminate the conflict;
provided, however, Executive will comply with reasonable Board directives in
this respect. Specifically, if the Board reasonably determines that a company
upon which Executive serves as a member of the board of directors or in another
capacity, is a competing company as such term is defined in Section 23(b) hereof
with the Company, the Board may ask Executive to resign from such membership or
cease services to such a company, and Executive shall promptly comply with such
request.
3. Employee Benefits. Except as specified in the next sentence, during the
Employment Term, Executive shall be eligible to participate in (i) all employee
benefit plans currently and hereafter maintained by the Company for senior
management, including, without limitation, life, group health and disability
insurance, incentive, profit-sharing, savings, deferred compensation and
retirement plans, practices, policies and programs according to their terms, and
(ii) such other employee benefits as are set forth in this Agreement. During the
Employment Term and while Executive, his spouse and dependent child receive
comparable health care benefits at no cost from an entity other than the
Company, the Company shall not be required to provide group health insurance
benefits to Executive, his spouse and dependent child; provided, however, that
should Executive, his spouse or dependent child lose such health care coverage
(or in the event that it is provided on other than a no cost basis), then the
Company shall provide replacement coverage under the Company's group health
plans according to their terms.
4. Compensation.
(a) Base Salary. During the Employment Term, the Company shall pay
the Executive as compensation for his services a base salary at the minimum
annualized rate of $500,000, which shall increase to the minimum annualized rate
of $600,000 as of the Operational Date (as in effect from time to time, the
"Base Salary"). The Base Salary shall be paid periodically in accordance with
normal Company payroll practices and subject to the usual, required withholding.
Executive's salary shall be reviewed annually for possible raises in light of
Executive's performance of his duties, as determined by the Board or its
Compensation Committee. Such Base Salary shall not be reduced after any increase
thereto pursuant to this Section 4(a).
(b) Bonus. As of the Operational Date and during the Employment
Term, Executive shall be eligible to receive an annual bonus with "on target"
performance resulting in a payment equal to 50% of one year's Base Salary and
with a potential payout equal to 75% of one years' Base Salary (the "Annual
Bonus"); provided, however, that if the payment of the Annual Bonus would result
in the loss of a Company corporate income tax deduction by virtue of the
provisions of Internal Revenue Code Section 162(m) (a "162(m) Deduction Loss"),
then the otherwise non-deductible portion of such Annual Bonus shall have its
payment deferred until the
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earlier of (i) the end of any calendar year in which Executive's compensation
for such calendar year would not result in a 162(m) Deduction Loss (but only to
the extent that such deferred payment would not result in a 162(m) Deduction
Loss), or (ii) the date upon which Executive ceases to be a "covered employee"
as defined in Internal Revenue Code Section 162(m)(3). Any such deferred amount
shall earn interest from the Company at the mid-term applicable federal rate
under Internal Revenue Code Section 1274(d) as in effect upon the date of
deferral, compounded monthly from the date of deferral until the date of
payment. The performance milestones for earning the Annual Bonus shall be
established in good faith by the Board or its Compensation Committee in
conjunction with Executive so as to have a probability of attainment comparable
to that of the annual target bonuses of the chief executive officers of
corporations or entities similar to the Company. The Annual Bonus shall be
prorated for the first year and for any subsequent partial fiscal years of
employment hereunder.
(c) LLC Membership Interest Purchase.
(i) Initial Purchase. On the date of signing of this Agreement
by the parties hereto, Executive shall purchase a membership interest equal to
two percent of the total membership interest of the Company, for a purchase
price of $1200, which amount equals 100% of the fair market value of Executive's
membership interest on the date of purchase (the "Restricted Membership
Interest"). Subject to acceleration as set forth elsewhere in this Agreement,
the Restricted Membership Interest shall become 100% vested on the earlier of
(i) July 1, 2002, (ii) the date upon which securities that have been exchanged
for the Restricted Membership Interest become publicly traded on an established
securities market, conditioned upon Executive's continued employment, consulting
or director relationship with the Company as of such vesting date. Any unvested
portion of the Restricted Membership Interest shall be subject to repurchase by
the Company for the purchase price originally paid by Executive if Executive
terminates his employment, consulting or director relationship with the Company.
(ii) Anti-Dilution Purchases. Upon the Company's closing of a
financing transaction or transactions involving the sale of membership
interests, equity (or securities convertible into membership interests or
equity) of the Company (a "Financing Transaction"), and if Executive is employed
by the Company upon such closing date or dates, Executive shall have the right
to purchase that number of such instruments that would result in Executive being
able to purchase, in the aggregate, (including pursuant to his initial purchase
under the preceding paragraph) two percent of the fully-diluted membership
interest or equity of the Company, as measured on the date of such closing or
closings; provided, however, that such right to purchase shall only be effective
with respect to non-compensatory Financing Transactions (i.e., Executive shall
not have the right to make anti-dilutive purchases with respect to ordinary
course of business compensatory sales of stock or membership interests to
Company employees). Any such right of Executive to make an anti-dilutive
purchase of stock hereunder shall be at the most favorable price and on the most
favorable terms and conditions as are provided to any party in the Financing
Transaction. For purposes of this Agreement, "fully diluted equity of the
Company" shall mean
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the aggregate amount of membership interests (or the aggregate number of shares
of all outstanding common and preferred stock) plus the aggregate amount of
membership interests (or the number of shares of common and preferred stock)
that could be obtained through the exercise or conversion of rights, options,
warrants and convertible securities (other than employee equity compensation).
Notwithstanding the foregoing, Executive shall not have the right to make
anti-dilutive purchases (i) in any Financing Transaction in which his equity
ownership interest in the Company is diluted to the same extent as the equity
interest in the Company held by The Trust Under Article Sixth u/w/o Xxxxxxx
Xxxxxx or its affiliates (the "Trust"),or (ii) as a result of any sales or
transfers arising as a result of the death of Xxx. Xxxxx Xxxxxx or for the
purpose of satisfying attendant estate tax liabilities. If, in the event of a
public offering, underwriters take issue with Executive's rights under this
paragraph, the underwriters, Company and Executive will address such issues on a
mutually approved and reasonable basis, taking into account the interests of all
involved.
(iii) Put Right. In the event that (i) the IPO has not
occurred by the end of the Employment Term, or (ii) during the Employment Term,
Executive is terminated other than for "Cause" or voluntarily terminates for
"Good Reason" (both as defined in Section 9 hereof) on or after the date upon
which substantially complete project financing sufficient for substantially full
renovation and construction has been secured for the Aladdin Hotel and Casino
Redevelopment and Expansion project set forth in the presentation to GW Vegas
prepared by Westwood Capital LLC and dated July 1996 (or as subsequently
modified) and as finally approved by the Xxxxx County Commission (the
"Funding"), then Executive shall have the right (but not the obligation) to sell
any membership interest (or shares exchanged for such interest) purchased
hereunder back to the Company on the date that is the one year anniversary of
the date of such termination of employment or end of the Employment Term (the
"Anniversary Date") (so long as the IPO has not occurred by such date) at a
price equal to the fair market value of such membership interest or shares on
the Anniversary Date, as determined by an independent appraisal firm mutually
agreed to by and between the Company and Executive, with the costs of such
appraisal being paid by the Company (the "Put Right"). The Put Right must be
exercised in writing by Executive by the Anniversary Date or it shall become
void and without further effect. If the Put Right is exercised, the Company must
purchase the membership interest or shares subject to the Put Right within
ninety days following the Anniversary Date.
(iv) LLC Distributions. While the Company remains an LLC, the
Company will distribute sufficient cash for Executive to satisfy the tax
obligations arising from his membership interest.
(d) Stock Option. On the date, if any, upon which the Company (or an
affiliate of the Company) effects an initial public offering for its securities
(the "IPO"), Executive shall be granted a stock option covering such securities
(the "Stock Option"). The number of shares subject to such option shall be equal
to the number derived by dividing the 125% of the Base Salary by the "Price to
Public" share price in such offering. The Stock Option per share exercise
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price shall be equal to the "Price to Public" share price. The Stock Option,
shall qualify, to the maximum extent permitted by Internal Revenue Code Section
422(d) or its successor provision, as an "incentive stock option." Subject to
accelerated vesting as set forth elsewhere herein, the Stock Option shall vest
as to one third of the shares subject to the Stock Option as of the date of
grant, and as to an additional one third of such shares on each anniversary of
the date of grant, so as to be 100% vested on the second anniversary of the date
of grant, conditioned upon Executive's continued employment, consulting or
director relationship with the Company as of each vesting date. The Company
agrees to register the Stock Option and the stock issuable thereunder on a Form
S-8 (or its successor form) with the Securities and Exchange Commission
following the date of grant. In good faith and giving consideration to
Executive's interests, the Company and Executive will agree upon the
registration date(s).
(e) Retainer. The Company has previously paid Executive a one-time
retainer in the amount of $50,000.
5. Expenses. During the Employment Term, the Company will pay or reimburse
Executive for reasonable travel, entertainment or other expenses incurred by
Executive in the furtherance of or in connection with the performance of
Executive's duties hereunder in accordance with the Company's established
policies.
6. Life Insurance. During the Employment Term, the Company will obtain
term life insurance for Executive in the amount of Executive's annual Base
Salary, payable to the beneficiary designated by Executive.
7. Disability Insurance. During the Employment Term, the Company will
obtain the greatest amount of disability insurance reasonably available to
Executive, provided that the Company shall not be required to provide long-term
disability insurance coverage in excess of 66 and 2/3% of Executive's annual
Base Salary.
8. Special Right of Company to Terminate Agreement. In exchange for a
lump-sum payment to Executive of $650,000, the Company shall have the right to
terminate the Agreement without payment of severance benefits under Section 9
hereof if, as of January 1, 1999, the Funding has not been secured (the "Special
Right"). The Special Right must be exercised in writing by the Company by
February 1, 1999 or it shall become void and without further effect. The
exercise of the Special Right shall not affect compensation previously earned by
Executive hereunder, including all vested Equity Compensation.
9. Severance Benefits. If, prior to the end of the Employment Term,
Executive's employment with the Company terminates involuntarily other than for
death, disability, exercise of the Special Right or "Cause," or if Executive
terminates his employment with the Company voluntarily for "Good Reason" (both
as defined herein), then (i) Executive shall be entitled to a lump-sum payment
equal to the Base Salary that he would have been paid had he remained
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employed by the Company through the end of the Employment Term, with such amount
paid to Executive within thirty (30) days of such termination, (ii) to make
Executive whole for any foregone Annual Bonus, Executive shall be entitled to an
additional lump-sum payment equal to 50% of the Base Salary he would have been
paid had he remained employed by the Company after the Operational Date and
through the end of the Employment Term, with such amount paid to Executive
within thirty (30) days of such termination (or, if Executive's termination is
prior to the Operational Date, the amount shall be paid within thirty (30) days
following the Operational Date), (iii) Executive's Stock Option, Restricted
Membership Interest and any equity compensation granted to Executive by the
Company or exchanged for the Restricted Membership Interest or Stock Option
("Equity Compensation") shall have their vesting accelerated in full so as to
become 100% vested as of the date of termination, (iv) if such termination
occurs prior to the IPO and the IPO occurs within twelve months following such
termination, Executive shall be granted a 100% vested Stock Option on the date
of the IPO, and (v) for the duration of the Employment Term, the Company shall
provide to Executive and his spouse and daughter one hundred percent (100%)
Company-paid health and life insurance coverage at the same level of coverage as
was provided to Executive immediately prior to the date of termination (the
"Company-Paid Coverage").
For this purpose, "Good Reason" is defined as (i) the assignment to
Executive of duties incommensurate with his status as President and Chief
Executive Officer, or any material reduc tion of the Executive's duties,
authority or responsibilities or any reduction, whether material or not, in
Executive's title or reporting responsibilities, relative to the Executive's
duties, authority, responsibilities, title or reporting responsibilities as in
effect immediately prior to such reduction, except if agreed to in writing by
the Executive; (ii) a reduction by the Company in the Base Salary, or Annual
Bonus as in effect immediately prior to such reduction; (iii) the relocation of
the Executive to a facility or a location more than thirty-five (35) miles from
the Executive's then present location, without the Executive's written consent;
or (iv)any material breach of this Agreement by the Company (if such breach is
not cured within 60 days following receipt by the Company of written notice from
the Executive specifying the facts relating to the breach).
For this purpose, "Cause" is defined as Executive's (i) gross negligence
in connection with the performance of his duties hereunder which materially
adversely affects the Company and is not cured within a reasonable period of
time after receipt by Executive of written notice from the Board, (ii) loss of
Executive's key license issued by the Nevada Gaming Commission, (iii) any
material breach of this Agreement by the Executive (if such breach is not cured
within 60 days following receipt by the Company of written notice from the
Company specifying the facts relating to the breach), (iv) misappropriation of
funds or embezzlement by the Executive of the Company, or (v) conviction of
Executive of a felony.
10. Change of Control. In the event of a "Change of Control" of the
Company (as defined herein) occurring while Executive is employed by the
Company, Executive's Equity Compensation shall have its vesting accelerated in
full so as to become 100% vested as of the date
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of the Change of Control; provided, however, that if such potential vesting
acceleration would cause a contemplated Change of Control transaction that was
intended to be accounted for as a "pooling-of-interests" transaction to become
ineligible for such accounting treatment under generally accepted accounting
principles, as determined by the Company's independent public accountants (the
"Accountants") prior to the Change of Control, Executive's Equity Compensation
shall not have its vesting so accelerated. For this purpose, "Change of Control"
of the Company is defined as:
(a) Any "person," as such term is used in Sections 13(d) and 14(d)
of the Securities Exchange Act of 1934, as amended (other than a group
consisting of the members of the Board as of the Effective Date and their
affiliated investment funds and the partners thereof) becomes the "beneficial
owner" (as defined in Rule 13d-3 under said Act), directly or indirectly, of
securities of the Company representing 50% or more of the total voting power
represented by the Company's then outstanding voting securities; provided,
however, that a "Change of Control" will not be deemed to occur under this
paragraph with respect to (i) intra-family transfers among the Xxxxxx family, or
(ii) sales or transfers arising as a result of the death of Xxx. Xxxxx Xxxxxx or
for the purpose of satisfying attendant estate tax liabilities; or
(b) The consummation of a merger or consolidation of the Company
with any other corporation 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 fifty percent
(50%) of the total voting power represented by the voting securities of the
Company or such surviving entity outstanding immediately after such merger or
consolidation; or
(c) A change in the composition of the Board of Directors of the
Company occurring within a two-year period, as a result of which fewer than a
majority of the directors are Incumbent Directors. "Incumbent Directors" shall
mean directors who either (A) are directors of the Company as of the date
hereof, or (B) are elected, or nominated for election, to the Board of Directors
of the Company with the affirmative votes of at least a majority of the
Incumbent Directors at the time of such election or nomination (but shall not
include an individual whose election or nomination is in connection with an
actual or threatened proxy contest relating to the election of directors to the
Company); or
(d) The approval by the Board of a plan of complete liquidation of
the Company or of an agreement for the sale or disposition by the Company of all
or substantially all of the Company's assets.
11. Golden Parachute Excise Tax Gross-Up. In the event that the benefits
provided for in this Agreement or otherwise payable to the 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 the Executive shall
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receive (i) a payment from the Company sufficient to pay such excise tax, and
(ii) an additional payment from the Company sufficient to pay the excise tax and
federal and state income taxes arising from the payments made by the Company to
Executive pursuant to this sentence; provided, however, that in the aggregate
such payments shall not exceed $1,000,000. Unless the Company and the Executive
otherwise agree in writing, the determination of Executive's excise tax
liability and the amount required to be paid under this Section 11 shall be made
in writing by the Accountants. For purposes of making the calculations required
by this Section 11, the Accountants may make reasonable assumptions and
approximations concerning applicable taxes and may rely on reasonable, good
faith interpretations concerning the application of Sections 280G and 4999 of
the Code. The Company and the Executive shall furnish to the Accountants such
information and documents as the Accountants may reasonably request in order to
make a determination under this Section. The Company shall bear all costs the
Accountants may reasonably incur in connection with any calculations
contemplated by this Section 11.
12. Automobile. During the Employment Term, the Company shall, in its
discretion, either make available to Executive a 1997 or newer model Lexus LS
400 or pay Executive a monthly auto allowance sufficient to lease such
automobile and reimburse Executive for the maintenance and insurance costs of
such automobile.
13. Death and Disability. If Executive dies or becomes permanently
disabled while employed by the Company, then (i) then Executive shall cease to
be employed hereunder, and (ii) Executive's Equity Compensation shall have its
vesting accelerated in full so as to become 100% vested. Executive shall be
considered permanently disabled if Executive is absent from employment or unable
to render services hereunder on a full-time basis by reason of physical or
mental illness or disability for six (6) months or more in the aggregate in any
twelve (12) month period. Any question as to the existence or extent of
Executive's disability upon which Executive and the Company cannot agree shall
be determined by a qualified independent physician selected by the Board and
approved by Executive, which approval shall not be unreasonably withheld.
14. Relocation Expense Reimbursement. The Company will reimburse Executive
for the following reasonable costs:
(a) Reasonable hotel or housing costs for Executive and his
immediate family for up to two years; provided, however, that
the Company shall not reimburse Executive for any such costs
arising more than fifteen days following the Company's
provision of a loan to Executive as specified in Section 15.
(b) Reasonable transaction costs associated with buying or renting
Executive's new residence (closing costs, inspections, title
insurance, legal expenses, brokerage and related fees, etc.).
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(c) Reasonable transaction costs associated with selling
Executive's old residence (closing costs, inspections, title
insurance, legal expenses, brokerage and related fees, etc.).
(c) Reasonable costs associated with moving household furnishings,
automobiles and personal effects.
(d) Reasonable travel expenses incurred by Executive and family
traveling to and from Las Vegas during the first two years of
this Agreement.
15. Relocation Loan. In connection with the transfer of Executive's
principal place of employment to Las Vegas from California, the Company shall
provide Executive with a five (5) year interest-free mortgage loan in the amount
of up to $500,000 for purposes of Executive's acquisition of a new principal
residence (the "Loan"). The Loan shall not be for more than the purchase price
of the residence. The Loan shall be subject to, and governed by, the terms and
conditions of a loan agreement and mortgage between the Executive and the
Company. The Company shall retain a mortgage security interest in the residence
during the term of the Loan. The Loan is intended to satisfy the Requirements of
Proposed Treasury Regulation Section 1.7872-5T(c)(1) and the Executive and the
Company agree to execute such documents as are necessary to comply therewith.
The term of the Loan shall be shortened to two years in the event Executive is
terminated for Cause.
16. Legal Fee Reimbursement. The Company agrees to pay Executive's legal
fees associated with entering into this Agreement up to $15,000 upon receiving
an invoice for such legal services.
17. Withholding. The Company shall be entitled to withhold, or cause to be
withheld, from payment any amount of withholding taxes required by law with
respect to payments made to Executive in connection with his employment
hereunder.
18. D&O Insurance. During the Employment Term and the Consulting Term, the
Company agrees to maintain director and officer liability insurance in scope and
amounts reasonably satisfactory to Executive, to the extent available.
19. Indemnification. The Company shall indemnify Executive to the same
extent as other senior executives and directors of the Company are indemnified.
The foregoing indemnification shall not be inclusive of any other right which
Executive may have or hereafter acquire under any statute, provision of the
Certificate of Incorporation or Bylaws, agreement, vote of stockholders or
disinterested directors or otherwise. The foregoing indemnification shall not be
deemed to affect any rights to subrogation which may exist in any policy of
directors and officers liability.
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20. Vacation. Executive shall be entitled to paid vacation of four weeks
per year in accordance with the Company's vacation policy, with the timing and
duration of specific vacations mutually and reasonably agreed to by the parties
hereto.
21. Fringe Benefit Gross-Up. Executive will be fully "grossed-up"by the
Company for any imputed income required to be recognized under Sections 6, 7,
12, and 14 hereof so that the economic effect to Executive is the same as if
these benefits were provided to Executive on a non-taxable basis; provided,
however, that the total of such gross-up payments shall not exceed $100,000 in
the aggregate.
22. Full Settlement; No Mitigation. The Company's obligation to make
payments provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any set-off, counterclaim, recoupment,
defense, or other claim, right or action which the Company may have against the
Executive or others. In no event shall the Executive be obligated to seek other
employment or take any other action to mitigate the amounts payable to the
Executive hereunder. The Company agrees to pay for any legal fees and expenses
reasonably incurred by the Executive in connection with any breach of this
Agreement by the Company.
23. Covenant Not to Compete.
(a) Covenant Not to Compete. For a period of one year following
Executive's termination of employment with the Company (i) by the Company for
Cause, or (ii) by Executive for other than Good Reason, Executive will not
render services as an employee, consultant, director, partner, owner to, or
participate as more than a 2% shareholder in, any Competing Company, as such
term is defined immediately below. This covenant shall not apply in the event of
any other termination of Executive's employment with the Company.
(b) Competing Company. "Competing Company" shall mean another
company, corporation, partnership, limited liability corporation or other entity
any portion of who is a business competitor of the Company in Xxxxx County,
Nevada.
24. Assignment. This Agreement shall be binding upon and inure to the
benefit of any successor of the Company. Any such successor of the Company shall
be deemed substituted for the Company under the terms of this Agreement for all
purposes. As used herein, "successor" shall include any person, firm,
corporation or other business entity which at any time, whether by purchase,
merger or otherwise, directly or indirectly acquires all or substantially all of
the assets or business of the Company.
25. Notices. All notices, requests, demands and other communications
called for hereunder shall be in writing and shall be deemed given if delivered
personally or three (3) days after being mailed by registered or certified mail,
or sent by Federal Express or a similar private
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delivery company, return receipt requested, prepaid and addressed to the parties
or their successors in interest at the following addresses, or at such other
addresses as the parties may designate by written notice in the manner
aforesaid:
If to the Company: Aladdin Holdings LLC
Xxxxxxx Xxxxxx Properties
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxx Xxxxxxx
If to Executive: Xxxxxxx X. Xxxxxxxx
at the last residential address known by the Company
26. Guarantee. Aladdin Holdings LLC hereby unconditionally and irrevocably
guarantees to Executive the performance of all payment obligations of the
Company, its successors and assigns with respect to the Agreement; provided,
however, that (i) such guarantee shall become void and without further effect,
and (ii) Aladdin Holdings LLC shall cease being a party to this Agreement, as of
the date, if any, of the Funding.
27. Severability. In the event that any provision hereof becomes or is
declared by a court of competent jurisdiction to be illegal, unenforceable or
void, this Agreement shall continue in full force and effect without said
provision.
28. Entire Agreement. This Agreement represent the entire agreement and
understanding between the Company and Executive concerning Executive's
employment and director relationship with the Company, and supersedes and
replace any and all prior agreements and understandings concerning Executive's
employment relationship with the Company.
29. No Oral Modification, Cancellation or Discharge. This Agreement may
only be amended, canceled or discharged in writing signed by Executive and the
Company.
30. Governing Law. This Agreement shall be governed by the laws of the
State of Nevada.
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IN WITNESS WHEREOF, the undersigned have executed this Agreement.
ALADDIN GAMING, LLC
By: Xxxx Xxxxxx /s/ Xxxx Xxxxxx
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Signature
Date: 7/1/97
XXXXXXX X. XXXXXXXX
Date: July, 1997 /s/ Xxxxxxx X. Goelein
------------------------
ALADDIN HOLDINGS, LLC
By: Xxxx Xxxxxx /s/ Xxxx Xxxxxx
------------------------ ------------------------
Signature
Date: 7/1/97
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EXHIBIT A
BOARD MEMBERSHIPS
Platinum Software Corporation
AST Research, Inc.
Hollywood Park
Diamond Seal
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ALADDIN GAMING, LLC
AMENDMENT TO
EMPLOYMENT & CONSULTING AGREEMENT
This Amendment (the "Amendment") is made this _____ day of January, 1998,
between and among Xxxxxxx X. Xxxxxxxx ("Executive"), Aladdin Gaming, LLC (the
"Company") and Aladdin Holdings, LLC ("Holdings").
WHEREAS, it was initially agreed that Executive would be given certain put
rights with respect to certain LLC membership interests purchased by Executive
pursuant to the Employment Agreement made between and among the Company,
Holdings and Executive as of January 1, 1997 (the "Employment Agreement") upon
the end of his "Employment Term" (as such term is defined in the Employment
Agreement) if, upon such date, the Company (or an affiliate of the Company) has
not effected an "IPO" (as such term is defined in the Employment Agreement); and
WHEREAS, the Employment Agreement did not properly reflect such initial
agreement;
NOW, THEREFORE, the Company, Holdings and Executive agree that the
Employment Agreement is hereby amended to properly reflect the initial
agreement.
1. Employment Agreement Amendment. Section 4(c)(iii) of the Employment
Agreement is hereby amended in its entirety to read as follows:
"(iii) Put Rights.
(A) Certain Terminations During Employment Term. In
the event that, during the Employment Term, Executive is terminated other than
for "Cause" or voluntarily terminates for "Good Reason" (both as defined in
Section 9 hereof) on or after the date upon which substantially complete project
financing sufficient for substantially full renovation and construction has been
secured for the Aladdin Hotel and Casino Redevelopment and Expansion project set
forth in the presentation to GW Vegas prepared by Westwood Capital LLC and dated
July 1996 (or as subsequently modified) and as finally approved by the Xxxxx
County Commission (the "Funding"), then Executive shall have the right (but not
the obligation) to sell any membership interest (or shares exchanged for such
interest) purchased hereunder back to the Company on the date that is the one
year anniversary of the date of such termination of employment (the "Anniversary
Date") (so long as the IPO has not occurred by such date) at a price equal to
the fair market value of such membership interest or shares on the Anniversary
Date, as determined by an independent appraisal firm mutually agreed to by and
between the Company and Executive, with the costs of such appraisal being paid
by the Company (the
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"Employment Term Put Right"). The Employment Term Put Right must be exercised in
writing by Executive by the Anniversary Date or it shall become void and without
further effect. If the Employment Term Put Right is exercised, the Company must
purchase the membership interest or shares subject to the Employment Term Put
Right within ninety (90) days following the Anniversary Date.
(B) Lapsing of Employment Term Prior to IPO. In the
event that the IPO has not occurred by the end of the Employment Term (the
"Employment Term Lapse Date"), then Executive shall have the right (but not the
obligation) to sell any membership interest (or shares exchanged for such
interest) purchased hereunder back to the Company at a price equal to the fair
market value of such membership interest or shares on the Employment Term Lapse
Date, as determined by an independent appraisal firm mutually agreed to by and
between the Company and Executive, with the costs of such appraisal being paid
by the Company (the "Employment Term Lapse Put Right"). The Employment Term
Lapse Put Right must be exercised in writing by Executive within thirty (30)
days following the Employment Term Lapse Date or it shall become void and
without further effect. If the Employment Term Lapse Put Right is exercised, the
Company must purchase the membership interest or shares subject to the
Employment Term Lapse Put Right within ninety (90) days following receipt of
Executive's exercise thereof."
2. Other Employment Agreement Provisions. To the extent not expressly
amended hereby, the Employment Agreement remains in full force and effect.
3. Entire Agreement. This Amendment, taken together with the Employment
Agreement (to the extent not expressly amended hereby), represents the entire
agreement of the parties and shall supersede any and all previous contracts,
arrangements or understandings between the parties with respect to the
Executive's employment (the "Agreement"). The Agreement may be amended at any
time only by mutual written agreement of the parties hereto.
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IN WITNESS WHEREOF, this Amendment has been entered into as of the date
and year first set forth above.
ALADDIN GAMING, LLC
By: Xxxx Xxxxxx /s/ Xxxx Xxxxxx
-------------------------- ---------------------------
Signature
Date: 7/1/97
XXXXXXX X. XXXXXXXX
Date: July, 1997 /s/ Xxxxxxx X. Goelein
---------------------------
ALADDIN HOLDINGS, LLC
By: Xxxx Xxxxxx /s/ Xxxx Xxxxxx
-------------------------- ---------------------------
Signature
Date: 7/1/97
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