SECOND AMENDMENT
TO EMPLOYMENT AGREEMENT
BETWEEN
XXXXXXX X. XXXXXXXXX
AND
RIVIERA HOLDINGS CORPORATION AND
RIVIERA OPERATING CORPORATION
This SECOND AMENDMENT dated as of July 15, 2003, to the Employment
Agreement by and among RIVIERA HOLDINGS CORPORATION ("RHC"), and its
wholly-owned subsidiary, RIVIERA OPERATING CORPORATION ("ROC") (collectively the
"COMPANY"), and XXXXXXX X. XXXXXXXXX ("EXECUTIVE").
WHEREAS, the Parties entered into an Employment Agreement dated as of
November 21, 1996 (the "Agreement"), and said Agreement is currently in effect;
WHEREAS, on December 6, 2000, the Parties amended the Agreement by way
of a First Amendment to Employment Agreement ("First Amendment");
WHEREAS, at the request of the RHC Compensation Committee at its March
3, 2003 meeting, in order to reduce the Company's liability to Executive, it was
decided that commencing April 1, 2003, and continuing the first day of each
quarter thereafter, Executive is to be paid the following in cash:
o the quarterly interest credited to his Retirement Account one (1)
quarter in arrears; and
o a distribution of $250,000 from the principal balance of his Retirement
Account;
WHEREAS, in addition to his $600,000 Base Salary and in accordance with
the First Amendment, Executive has received a net incentive bonus of $400,000 in
each of the preceding two (2) years based upon targets previously established;
WHEREAS, the Company desires that its compensation arrangement with
Executive more accurately reflect the expectation of the parties; and
WHEREAS, this Second Amendment to Employment Agreement ("Second
Amendment"), has been approved by the COMPANY's Board of Directors and the
Compensation Committee.
NOW, THEREFORE, in consideration of the mutual agreements hereinafter
set forth, the parties hereto agree as follows:
1. The following shall replace Paragraph 4 of the Agreement in its entirety:
4(a) Executive shall receive a salary at the rate of
$600,000 per annum, payable bi-weekly in arrears
("Base Salary") through December 31, 2002. Effective
January 1, 2003, and for the remainder of the Term,
Executive shall receive a salary at the rate of
$1,000,000 per annum, bi-weekly in arrears ("Total
Salary").
4(b) For a period of twenty-four (24) months following
the termination of this Agreement for any reason
except cause ("Termination Date") ("Non-Competition
Term"), Executive hereby covenants and agrees that
Executive shall not, directly or indirectly (as a
director, officer, partner, member, manager, employee
or agent of any other person), engage in any business
activity which is in competition with the Company
within a radius of seventy-five miles from the
location of any hotel and/or casino business then
currently operated by Company ("Non-Competition
Covenant"). As consideration for the Non-Competition
Covenant, Executive shall be entitled to receive,
and the Company shall pay, a total fee of Five
Hundred Thousand Dollars ($500,000.00)
("Non-Competition Fee"), in accordance with the next
sentence. The Non-Competition Fee shall be paid in
two (2) equal annual installments of Two Hundred
Fifty Thousand Dollars ($250,000.00). The first
installment shall be paid within five (5) business
days of the Termination Date and the second
installment shall be paid on the first anniversary
of the Termination Date. The Company hereby agrees
that, irrespective of the duration of the
Non-Competition Covenant, the Company's obligation
to pay the Non-Competition Fee shall survive the
Executive's death and shall thereafter be paid to
Executive's estate (or designated beneficiary) until
the entire Non-Competition Fee has been paid in full
. Executive shall be entitled to the entire
Non-Competition Fee as delineated above
notwithstanding whether Executive might be engaged
as a consultant for the Company and/or remains a
Substantial Stockholder of the Company, as defined
in the Company's Articles of Incorporation,
subsequent to the Termination Date.
2. Paragraph 5 of the Agreement shall be changed as follows:
(i) The first sentence of Paragraph 5 shall be changed to read as follows:
Through December 31, 2002, Executive shall be
entitled to participate in the Company's Senior
Management Compensation Plan or such other Executive
bonus plan as shall be established by the Company's
Board of Directors (collectively the "Plan").
(ii) The following sentence shall be added to the end of Paragraph 5:
Effective January 1, 2003, Executive shall not be
eligible to participate in the Plan.
3. Except as amended by this Second Amendment, the terms and
conditions of the Agreement and First Amendment to Agreement
shall remain in full force and effect.
IN WITNESS WHEREOF, the parties have duly executed this AGREEMENT as of
the day and year first written above.
RIVIERA HOLDINGS CORPORATION RIVIERA OPERATING CORPORATION
By:_____________________________ By:_____________________________
XXXXX XXXXX, Treasurer XXXXX XXXXX, Treasurer
EXECUTIVE
-------------------------------
XXXXXXX X. XXXXXXXXX
