EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is made and entered into by and
between Aladdin Gaming, LLC ("Company"), Aladdin Gaming Holdings, LLC ("Gaming
Holdings") and Xxxxx Xxxxxxx ("Executive").
WHEREAS, the Company considers it important and in its best interest and
the best interest of its owners to xxxxxx the employment of key management
personnel and desires to retain the services of Executive on the terms and
subject to the conditions of this Agreement;
WHEREAS, the Executive desires to accept employment by the Company to
render services to the Company on the terms and subject to the conditions of
this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the following mutual
covenants and agreements, the parties agree as follows:
1. EMPLOYMENT. The Company hereby employs Executive as President and Chief
Operating Officer of the Aladdin Music Hotel & Casino Project ("Aladdin Music
Project") and Senior Vice President of the Company responsible for sales,
marketing and entertainment for the Aladdin Resort & Casino. Executive hereby
accepts such employment with the Company for the compensation and subject to the
terms and conditions in this Agreement.
2. TERM. The term of the Executive's employment under this Agreement ("Term")
shall commence on April 15, 1999 ("Commencement Date") and shall continue to and
including April 14, 2002, unless earlier terminated as provided in this
Agreement. (The date of any termination of this Agreement as provided herein is
the "Termination Date").
3. DUTIES AND RESPONSIBILITIES. During the Term, Executive will serve as
President and Chief Operating Officer of Aladdin Music Project and Senior Vice
President of the Company. Executive will have such authority, responsibilities
and duties as are customarily associated with this position. At all times
Executive shall faithfully and to the best of his abilities perform his duties
and responsibilities hereunder to the reasonable satisfaction of the Board of
Directors. In addition, Executive shall devote his full time, efforts and
attention to the business and affairs of the Company, use his best efforts to
further the interest of the Company and at all times conduct himself in a manner
which reflects credit upon the Company.
4. COMPENSATION.
a. SALARY. For his services hereunder, the Company shall pay Executive
a base salary of Three Hundred Twelve Thousand Dollars ($312,000)
("Base Salary") for each consecutive 12-month period during the Term
beginning with the Commencement Date. (Each such consecutive 12
month period is an "Employment Year"). Executive's Base Salary will
be prorated for any partial Employment Year. On April 15, 2000, the
Board of Directors will consider an increase in the Base Salary
based upon criteria determined by the Board of Directors and
applicable to other members of the executive management
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group. Any such increases, however, shall be in the sole discretion
of the Board of Directors. There shall be no reduction in Base
Salary during the Term. The Base Salary shall be payable in equal
periodic installments subject to customary deductions for social
security, other taxes and amounts customarily withheld from salaries
of employees of the Company, all in accordance with the Company's
usual and customary payroll practices.
b. ANNUAL BONUS. From and after the date the Company opens and begins
operating the Aladdin Hotel & Casino ("Operational Date"). Executive
is eligible to receive from the Company an annual cash bonus,
provided Executive is employed by the Company on the date the Board
of Directors grants the bonus. Upon the opening of the Aladdin Music
Project, seventy percent (70%) of the Executive's bonus will be
based on relevant criteria or performance standards related to
Aladdin Music Project and thirty percent (30%) will be based on
relevant criteria or performance standards related to the Company.
The Board of Directors will determine such criteria and standards in
a bonus plan, which will be competitive with industry standards and
applicable to other members of the executive management group.
Executive's bonus will be prorated accordingly if either the Aladdin
Hotel and Casino or Aladdin Music Project is only partially open and
operating during the bonus year.
If the Aladdin Music Project is not open by the first anniversary of
the date the Aladdin Hotel and Casino is open to the public, 100% of
the Executive's bonus shall be based on the performance of the
Company with relevant criteria established by the Board of Directors
consistent with Executive's peers.
Executive is eligible to participate in the opening bonus for the
Aladdin Hotel and Casino established by the Board of Directors
provided Executive meets all the criteria for such bonus.
c. BENEFITS. During the Term, Executive shall be entitled to receive
from the Company such health, pension, retirement and other employee
benefits as the Company provides to other members of the executive
management group. During the Term, the Company, at its expense, will
provide Executive with term life insurance in the amount of
Executive's annual Base Salary. During the Term, the Company, at its
expense, will provide Executive with long-term disability coverage
under a group long-term disability plan the Company provides other
members of the executive management group.
d. VACATION. Executive shall be entitled to two (2) weeks paid vacation
for each Employment Year, prorated for any partial Employment Year.
The Board of Directors in its discretion may increase Executive's
vacation entitlement. The timing and duration of specific vacations
will take into account the business needs of the Company and will be
mutually agreed to by the parties. In the event any such vacation is
not used by Executive in any Employment Year, the Executive has a
right to accumulate and carry forward such number of unused vacation
days from year to year as may be consistent with the Company's
policy for other members of the executive management group. Upon
termination of employment, all unused vacation time shall be paid to
Executive.
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e. REIMBURSEMENT OF EXPENSES. The Company shall pay all reasonable
expenses incurred by Executive in the performance of his duties and
responsibilities for the Company. Executive shall submit to the
Company statements and documentation reflecting such expenses
incurred, with such detail, backup and confirmation as the Company
may reasonably require. Subject to any audit Company deems
necessary, the Company shall promptly reimburse Executive the full
amount of any such expenses incurred by Executive.
f. LLC PROFIT INTEREST. Gaming Holdings is currently evaluating and
developing a "Profits Only Interest" in Gaming Holdings. If Gaming
Holdings creates a "Profits Only Interest," the parties will amend
this Agreement so that the Executive shall participate in such
program substantially in the form previously presented to the
Executive, provided, however, any such program shall not provide the
Executive with any preferential treatment as compared to similarly
situated executives. If Gaming Holdings does not create a "Profits
Only Interest," the parties will negotiate to establish a
compensation arrangement in lieu of a "Profits Only Interest."
g. AUTO ALLOWANCE. During the Term, the Company shall pay Executive an
auto allowance of Five Hundred Dollars ($500) per month.
5. TERMINATION. This Agreement shall terminate in accordance with the
following provisions:
a. EXPIRATION OF THE TERM. Unless earlier terminated in accordance with
the provisions hereof, this Agreement shall terminate on expiration
of the term as provided in Section 2.
b. DEATH. If the Executive dies during the Term, this Agreement shall
terminate, with the Termination Date being the date of the
Executive's Death.
c. DISABILITY. If the Executive has been absent from service to the
Company as required in this Agreement for a period of ninety (90)
days or more during any one hundred eighty (180) day period during
the Term as a result of any physical or mental disability, the
Company has the right to terminate this Agreement, the Termination
Date being ten (10) days after notice thereof is given to Executive.
d. TERMINATION BY COMPANY FOR CAUSE. The Company has the right to
terminate this Agreement for Cause as defined herein, such
termination to be effective immediately upon notice thereof from the
Company to Executive. For purposes of this Agreement, Cause shall
mean Executive's: (1) conviction of any felony; (2) embezzlement or
misappropriation of money or property of the Company; (3) denial,
rejection, suspension or revocation of any gaming license or permit;
(4) Executive's material breach of section 6 hereof which material
breach has an adverse impact on the Company; and (5) Executive quits
his employment with the Company without Good Reason. Good Reason is
defined as: (i) the assignment to Executive of duties materially
inconsistent with his position and title without his consent; or
(ii) a material reduction in Executive's duties, authorities and
responsibilities without his consent; or (iii) a reduction by the
Company in Executive's Base Salary, in effect immediately prior to
such reduction, without his consent, provided
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Executive gives the Company written notice specifying such
assignment or reduction and the Company has not cured or abated such
assignment or reduction within twenty (20) days thereafter.
e. TERMINATION BY COMPANY WITHOUT CAUSE OR TERMINATION BY EXECUTIVE
WITH GOOD REASON OR UPON A CHANGE OF CONTROL. Subject to Section
5(f), (i) the Company has the right to terminate this Agreement
without Cause, (ii) the Executive has the right to terminate this
Agreement for Good Reason and (iii) the Executive has the right to
terminate this Agreement upon a Change of Control by giving the
other party written notice thereof. In any of this instances, the
Company shall provide Executive with all the benefits set forth in
Section 8(e). For purposes of this Agreement, a Change of Control
shall be deemed to occur only if collectively the Xxxxxx Family
Trust and London Clubs International, plc, through their affiliates,
own less than fifty percent (50%) of the membership interests of
either Gaming Holdings or the Company.
f. SPECIAL RIGHT OF EXECUTIVE TO TERMINATE THIS AGREEMENT. If upon the
Operational Date, the Aladdin Music Project has not received
sufficient project funding for substantial completion, the Executive
shall have the right, but not the obligation, to terminate this
Agreement within 120 days of the Operational Date and after such
period this Special Right to Terminate shall expire. Under this
Special Right to Terminate, the Executive shall be entitled to the
benefits in Section 8(f) hereof.
6. EXECUTIVE'S COVENANTS. The Executive acknowledges that the Company and
Gaming Holdings have a substantial, legitimate and continuing interest in the
protection of their business relationships with others including, without
limitation, current and prospective employees, consultants, advisors, customers,
vendors, suppliers, partners or joint venturers and financing sources, and in
the protection of their Confidential Information and have invested substantial
sums, time and effort and will continue to invest substantial sums, time and
effort to develop, maintain and protect such relationships and Confidential
Information. Accordingly, Executive covenants and agrees as follows:
a. CONFIDENTIALLY. During the Term and thereafter, Executive shall keep
secret and retain in strictest confidence and shall not, without the
prior written consent of the Company or Gaming Holdings, furnish,
make available or disclose to any third party or use for the benefit
of himself or any third party any Confidential Information.
Confidential Information is information related to or concerning
Gaming Holdings, the Company and their businesses which is
confidential, proprietary or not generally known to and cannot be
readily ascertained through proper means by persons or entities
(including Gaming Holdings' and the Company's present or future
competitors), who can obtain any type of value from its disclosure
or use. Confidential Information includes all secret, confidential
or proprietary information, knowledge or data specifically relating
to Gaming Holdings and the Company, such as, without limitation,
finances and financing methods, sources, proposals or plans;
operational methods; marketing or development proposals, plans or
strategies; pricing strategies; business or property acquisition or
development proposals or plans; new personnel acquisition proposals
or plans; customer lists and any descriptions or data concerning
current or prospective customers. While employed by the
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Company and in furtherance of the business and for the benefit of
Gaming Holdings and the Company, Executive may provide Confidential
Information as appropriate to attorneys, accountants, financial
institutions, and other persons or entities engaged in business with
the Company.
b. NON-COMPETITION.
1) Executive covenants and agrees that he will not compete with
the Company, its affiliates or subsidiaries at any time during
the Term, or for one (1) year from the Termination Date upon a
Termination by the Company for Cause under Section 5(d)
(including Executive quitting without Good Reason under
Section 5(d)(5)). Under this paragraph, Executive agrees that
he will not, directly or indirectly, whether as employee,
owner, partner, agent, director, officer, consultant,
independent consultant or stockholder (except as the
beneficial owner of not more than 2% of the outstanding shares
of a corporation, any of the capital stock of which is listed
on any national or regional securities exchange or quoted in
the daily listing of over-the-counter market securities and,
in each case, in which the Executive does not undertake any
management or operational or advisory role) or in any other
capacity, for his own account or for the benefit of any other
person or entity, establish, engage, work for or be connected
in any manner with any person or entity which is, at the time,
engaged in a business which is in competition with the
business of the Company (or any of its subsidiaries or
affiliates); it being understood that for purposes of this
Section 6(b), the business of owning, managing, operating or
financing a casino or similar gaming activities in Xxxxx
County, Nevada, shall be deemed to be business in which the
Company is engaged; provided, however, nothing herein
prohibits Executive from a working for a competing business
outside Xxxxx County, Nevada.
2) Notwithstanding anything to the contrary contained herein,
Executive shall not be subject to the non-competition
provisions of this Agreement, if this Agreement is terminated
other than pursuant to the provisions of Section 5(d).
c. EMPLOYEES OF THE COMPANY. For one (1) year following the Termination
Date, Executive shall not, directly or indirectly, solicit, or cause
others to solicit, for employment by any person or entity other than
the Company, any employee of the Company.
d. PROPERTY OF THE COMPANY. Executive acknowledges and agrees that all
memoranda, notes, lists, records and other documents or papers,
including copies thereof, containing or reflecting Confidential
Information (whether or not such items are kept or stored in
computer memories, microfiche, hard copy or any other manner) make
or compiled by Executive or made available to Executive are and
remain the property of the Company ("Company Property") and shall be
delivered to the Company promptly upon any termination of this
Agreement. Under Section 5 hereof, Executive shall retain no copies
of Company Property following the Termination Date.
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e. REASONABLENESS AND SEVERABILITY OF COVENANTS. The Executive
acknowledges and agrees that the Executive's covenants herein are
necessary for the protection of the Company's legitimate interests,
are reasonable and valid in duration and geographical scope, and in
all other respects. If any court determines that any of the
Executive covenants or any part thereof, is invalid or
unenforceable, the remainder of the restrictive covenants shall not
thereby be affected and shall be given full effect without regard to
the invalid portions.
f. BLUE-PENCILLING. If any court determines that any of the Executive's
covenants, or any part thereof, is unenforceable because of the
duration or geographical scope of such provision, such court shall
have the power to reduce the duration or scope of such provision, as
the case may be, and, in its reduced form, such provision shall then
be enforceable.
7. NON-DISPARAGEMENT. Each of the parties agrees that after the Termination
Date, neither shall, publicly or privately, disparage or make any
statements (written or oral) that could impugn the integrity, acumen
(business or otherwise), ethics or business practices of the other, except
in each case, to the extent (but solely to the extent) necessary: (i) in
any judicial or arbitral action to enforce the provisions of this
Agreement; or (ii) in connection with any judicial or administrative
proceeding to the extent required by applicable law.
8. EFFECT OF TERMINATION. The following provisions shall apply in the event of
the termination of this Agreement as provided in Section 5 above, and
neither party shall have any further liability or obligation to the other,
except as provided herein:
a. EXPIRATION OF TERM. Upon expiration of the term under Section 5(a)
hereof, this agreement shall terminate and be of no further force
and effect, except as provided in Sections 6(a), 6(c), 6(d), 6(e),
6(f) and 7; provided that Executive shall be entitled to such
salary, bonus and benefits then accrued or vested to the Termination
Date, and any expense reimbursement amounts accrued to the
Termination Date;
b. DEATH. Upon termination of this Agreement as provided in Section
5(b) hereof, this Agreement shall terminate and be of no further
force and effect; provided, further, that the Company shall pay to
Executive's estate any salary, bonus and benefits then accrued or
vested to the Termination Date, and any expense reimbursement
amounts accrued to the Termination Date;
c. DISABILITY. Upon termination of this Agreement as provided in
Section 5(c) hereof, this Agreement shall terminate and be of no
further force and effect, except as provided in Sections 6(a), 6(c),
6(d), 6(e), 6(f) and 7; provided that Executive shall be entitled to
such salary, bonus and benefits then accrued or vested to the
Termination Date, and any expense reimbursement amounts accred to
the Termination Date;
d. TERMINATION PURSUANT TO SECTION 5(d). Upon termination of this
Agreement as provided in Section 5(d) hereof, this Agreement shall
terminate and be of no further force and effect, except as provided
in Sections 6 and 7; provided that Executive shall be
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entitled to such salary, bonus and benefits then accrued or vested
to the Termination Date, and any expense reimbursement amounts
accred to the Termination Date;
e. TERMINATION PURSUANT TO SECTION 5(e). Upon termination of this
Agreement as provided in Section 5(e) hereof, this Agreement shall
terminate and be of no further force and effect, except as provided
in Sections 6(a), 6(c), 6(d), 6(e), 6(f) and 7; provided, further,
that Executive shall be entitled to such salary, bonus and benefits
including but not limited to health benefits and expense
reimbursements to which Executive would have been entitled for the
remainder of the three -year term or twelve (12) months, whichever
is longer, as if there had been no earlier termination.
f. TERMINATION BY SPECIAL RIGHT OF THE EXECUTIVE. Upon termination of
this Agreement as provided in Section 5(f), this Agreement shall
terminate and be of no further force and effect, except as provided
in Sections 6(a), 6(c), 6(d), 6(e), 6(f) and 7; provided further
that Executive shall be entitled to such salary, bonus and benefits
then accrued or vested to the Termination Date, and expense
reimbursement amounts accrued to the Termination Date, and
additional benefits as follows: Company paid COBRA premiums (on a
monthly basis) for twelve (12) months, and Base Salary for twelve
(12) months, (payable in lump sum less customary deductions).
9. GENERAL PROVISIONS.
a. ASSIGNMENT. Neither this Agreement nor any right or interest
hereunder shall be assignable by the Executive, or the Company or
Gaming Holdings without prior written consent of the other;
provided, that (1) in the event of the Executive's Death during the
Term, the Executive's estate and his heirs, executors,
administrators, legatees and distributees shall have the rights and
obligations set forth herein, as provided herein, and (2) nothing
contained in this Agreement shall limit or restrict the Company's
ability (A) to merge or consolidate or effect any similar
transaction with any other entity, irrespective or whether the
Company is the surviving entity (including a split up, spin off or
similar type transaction), provided, that one or more of such
surviving entities shall continue to be bound by the provisions
hereof binding upon the Company, (B) to assign this Agreement in
conjunction with a sale of all or substantially all of the Company's
assets, or (C) an assignment of this Agreement to an affiliate
controlled by or under common control with the Company. Gaming
Holdings has the same rights and obligations under this Section as
the Company.
b. BINDING AGREEMENT. Except as otherwise provided in this Agreement,
this Agreement shall be binding upon, and inure to the benefit of,
the Executive, Gaming Holdings and the Company and their respective
heirs, executors, administrators, legatees and distributees,
successors and permitted assigns. Any such successor of the Company
or Gaming Holdings shall be deemed substituted for the Company or
Gaming Holdings 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 or
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the assets or business or the Company or Gaming Holdings and
supercedes any prior understandings or agreements between the
parties hereto and Aladdin Holdings, LLC.
c. AMENDMENT OF AGREEMENT. This Agreement may not be modified or
amended except by an instrument in writing signed by the parties
hereto.
d. SEVERABILITY. If, for any reason, any provision of this Agreement is
determined to be invalid or unenforceable, such invalidity or lack
of enforceability shall not affect any other provision of this
Agreement not so determined to be invalid or unenforceable, and each
such other provision shall, to the full extent consistent with
applicable law, continue in full force and effect, irrespective of
such invalid or unenforceable provision. Gaming Holdings has the
same rights and obligations under this Section as the Company.
e. ENTIRE AGREEMENT. This Agreement represents the entire agreement and
understanding between the Company, Gaming Holdings LLC, and the
Executive concerning the matters herein and supercede any prior
understandings or agreements between the parties hereto and Aladdin
Holdings, LLC.
f. INDEMNIFICATION. The Company shall indemnify and hold Executive
harmless to the full extent permitted by Chapter 86 of the Nevada
Revised Statutes against costs, expenses, liabilities and losses,
including reasonable attorney's fees and disbursements of counsel,
incurred or suffered by him in connection with his service as an
employee of the company during the Term of this Agreement.
g. NOTICES. For the purpose of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing
and shall be deemed to have been duly given (1) when delivered, if
sent by telecopy or by hand, (2) one business day after sending, if
sent by reputable overnight courier service, such as Federal
Express, or (3) three business days after being mailed, if sent by
United States certified or registered mail, return receipt
requested, postage prepaid. Notices shall be sent by one of the
methods described above; provided, that any notice sent by telecopy
shall also be sent by any other method permitted above, Notices
shall be sent:
If to the Executive: Xxxxx Xxxxxxx
0000 Xxx Xxxxxx
Xxx Xxxxx, XX 00000
With a copy to: Xxxxxx Xxxxx
XX Xxx 000 Xxxxxx Xxxx
Xxxx Xxxxx, XX 00000
If to the Company: Aladdin Gaming Holdings, LLC
Aladdin Gaming, LLC
000 Xxxxx Xxxx
Xxx Xxxxx, XX 00000
Attn: Xxxxxxx Xxxxxxxx
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With a copy to: Aladdin Gaming Holdings, LLC
Aladdin Gaming, LLC
000 Xxxxx Xxxx
Xxx Xxxxx, Xxxxxx 00000
Attn: General Counsel
or to such other address as either party may have furnished to the
other in writing in accordance herewith, except that notice of
change of address shall be effective only upon receipt.
h. COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but
all of which together shall constitute one and the same instrument.
Gaming Holdings has the same rights and obligations under this
Section as the Company.
i. INDULGENCES, ETC. Neither the failure nor any delay on the part of
either party to exercise any right, remedy, power or privilege under
this Agreement shall operate as a waiver thereof, nor shall any
single or partial exercise of any right, remedy, power or privilege
preclude any other or further exercise of the same or of any other
right, remedy, power or privilege, nor shall any waiver of any
right, remedy, power or privilege with respect to any occurrence be
construed as a waiver of such right, remedy, power or privilege with
respect to any other occurrence.
j. BINDING ARBITRATION. Except for an action by the company for
injunctive or other equitable relief, any dispute or controversy
arising under or in connection to this Employment Agreement shall be
resolved through binding arbitration, conducted in Las Vegas,
Nevada, in accordance with the rules of the American Arbitration
Association. Judgment may be entered on the arbitration award in any
court of competent jurisdiction.
k. HEADINGS. The headings of sections and paragraphs herein are
included solely for convenience of reference and shall not control
the meaning or interpretation of any of the provisions of this
Agreement. Gaming Holdings has the same rights and obligations under
this Section as the Company.
l. NEUTRAL CONSTRUCTION. Each party to this Agreement has had the
opportunity to retain counsel, and to review and participate in the
drafting of this Agreement, and, accordingly, the normal rule of
construction to the effect that any ambiguities are to be resolved
against the drafting parties will not be employed or used in any
interpretation of enforcement of this Agreement.
m. GAMING LAW. Anything to the contrary herein notwithstanding, the
parties hereto agree and acknowledge that they are subject to and
that they shall comply in all respects with the gaming laws of the
state of Nevada including the Nevada Gaming Control Act and the
rules and regulations promulgated by the Nevada Gaming Commission
and the Gaming Control Board. To the extent anything in this
Agreement is inconsistent with any gaming laws or regulations, the
gaming laws and regulations shall control.
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n. GOVERNING LAW. This Agreement has been executed and delivered in the
state of Nevada, and its validity, interpretation, performance, and
enforcement shall be governed by the laws of such state, without
regard to principles of conflicts of laws.
EXECUTION DATE ALADDIN GAMING LLC
December 29, 1999
By: /s/ Xxxxxxx X. Xxxxxxxx
-------------------------------------
Xxxxxxx X. Xxxxxxxx
President and Chief Executive Officer
ALADDIN GAMING HOLDINGS, LLC
By: /s/ Xxxxxxx X. Xxxxxxxx
-------------------------------------
Xxxxxxx X. Xxxxxxxx
President and Chief Executive Officer
EXECUTIVE
/s/ Xxxxx Xxxxxxx
-------------------------------------
Xxxxx Xxxxxxx
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