SENIOR EXECUTIVE SEVERANCE AGREEMENT
THIS AGREEMENT, by and between STRATOSPHERE CORPORATION, a
Delaware corporation (the "Corporation'), and XXXXXX X. XXXXXX (the
"Executive"),
WITNESSETH:
WHEREAS, the Board of Directors of the Corporation (the
"Board") has determined that the Executive is a key executive of the Corporation
and/or one or more of its Subsidiaries and it is the desire of the Board to
assure itself of the availability of the services of the Executive and to
provide assurances to the Executive of employment in the event of a financial
restructuring or reorganization or in the event of a change in control of the
Board (collectively an "Event");
WHEREAS, in the event that there occurs an Event, the Board
believes it imperative that the Corporation and the Board be able to rely upon
the Executive to continue in his position and, if required, to assess any
proposal or transaction which would cause an Event and advise management and the
Board as to whether such proposal or transaction would be in the best interest
of the Corporation and its stockholders, free from concern that his
recommendations may adversely affect his continued employment:
NOW, THEREFORE, to assure the Corporation that it will have
the continued dedication of the Executive and the availability of his advice and
counsel notwithstanding the possibility, threat or occurrence of an Event and to
induce the Executive to remain in the employ of the Corporation and/or one or
more of its Subsidiaries, and for other good and valuable consideration, the
receipt, adequacy and sufficiency of which are hereby acknowledged, the
Corporation and the Executive agree as follows:
1. Services During Certain Events. In the event that any steps
are taken which may constitute the possibility, threat or occurrence of an
Event, the Executive agrees that he will not voluntarily leave the employ of the
Corporation or any of its Subsidiaries and will continue to render services to
the Corporation and its Subsidiaries until, in the opinion of the Board, either
efforts to effect an Event have been abandoned or terminated or until one (1)
year after an Event has occurred. Any decision by the Board that efforts to
effect an Event have been abandoned or terminated shall be conclusive and
binding on the Executive.
2. Severance Payments. In the event that the Corporation
terminates the Executive's employment or materially either diminishes or reduces
his title, compensation, authority, responsibility, functions or duties with the
Corporation and its Subsidiaries within one (1) year after an Event for any
reason other than "for cause" (as defined herein) or as a consequence of his
death or disability, then, within thirty (30) days after such termination of
employment, the Corporation shall pay to the Executive as compensation for
services rendered to the Corporation and its Subsidiaries cash in an amount
equal to six (6) months of his aggregate base salary (excluding bonus or
options) for the six (6) month period immediately preceding the date of
termination plus any and all accrued salary and accrued vacation pay.
3. Definitions.
(a) "Change of control of Board" means Grand Casino Inc. for
whatever reason not being able to elect a majority of the members of the Board
of the Corporation.
(b) "For cause" shall mean (1) the commission of fraud,
embezzlement or theft against the Corporation or any of its Subsidiaries or
against any employee, customer or business associate of the Corporation or any
of its Subsidiaries or (2) a conviction of, or guilty plea to, a felony.
(c) "Person" shall have the same meaning as such term has
under section 13(d) of the Act and the regulations promulgated thereunder.
(d) "Subsidiary" shall mean any domestic or foreign
corporation, partnership or entity, a majority of whose equity securities is
owned directly or indirectly by the Corporation or by other Subsidiaries.
4. Indemnification. If litigation shall be brought to enforce
or interpret any provision contained herein or to recover from the Executive any
moneys paid pursuant to this Agreement, the Corporation, to the extent permitted
by applicable law and the Corporation's Articles of Incorporation hereby agrees
to indemnify the Executive for his or her reasonable attorneys' fees and
disbursements incurred in such litigation, and hereby agrees to pay any money
judgment obtained from the Executive and prejudgment interest on any money
judgment obtained from the Executive.
5. Payment Obligations Absolute. The Corporation's obligation
to pay the Executive the compensation and to make the arrangements provided for
herein shall be absolute and unconditional and shall not be affected by any
circumstances, including, without limitation, any set-off, counterclaim,
recoupment, defense or other right which the Corporation may have against him or
anyone else. All amounts payable by the Corporation hereunder shall be paid
without notice or demand. Each and every payment made hereunder by the
Corporation shall be final, and the Corporation will not seek to recover all or
any part of such payment from the Executive or from whosoever may be entitled
thereto, for any reason whatsoever. The Executive shall not be obligated to seek
other employment in mitigation of the amounts payable or arrangements made under
any provision of this Agreement, and the obtaining of any such other employment
shall in no event effect any reduction of the Corporation's obligations to make
the payments and arrangements required to be made under this Agreement.
6. Continuing Obligations. The Executive shall retain in
confidence any confidential information known to him concerning the Corporation
and its Subsidiaries and their respective businesses so long as such information
is not publicly disclosed.
7. Successors. This Agreement shall be binding upon and inure
to the benefit of the Executive and his estate and the Corporation and any
successor of the Corporation, but neither this Agreement nor any rights arising
hereunder may be assigned or pledged by the Executive.
8. Severability. Any provision in this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective only to the extent of such prohibition or unenforceability
without invalidating or affecting the remaining provisions hereof, and any such
prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
9. Prior Agreements. This Agreement supersedes any prior
severance agreement between the Executive and the Corporation, which shall be of
no further force and effect whatsoever.
10. Controlling Law. This Agreement shall in all respects be
governed by and construed in accordance with the laws of the State of Nevada.
11. Termination. This Agreement shall terminate if the Board
determines that the Executive is no longer a key executive and so notifies the
Executive; except that such determination shall not be made, and if made shall
have no effect within one (1) year after the effectuation of an Event.
IN WITNESS WHEREOF, the parties have executed this Agreement
on the 27th day of September, 1996.
STRATOSPHERE CORPORATION
By /s/ Xxxxxxx Xxxxxxx
XXXXXXX XXXXXXX
Its: President
EXECUTIVE
By /s/ Xxxxxx X. Xxxxxx
XXXXXX X. XXXXXX
