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AMENDED
AND RESTATED
EMPLOYMENT
AGREEMENT
AMENDED
AND RESTATED EMPLOYMENT AGREEMENT dated as of April 1, 2007
(this “Agreement”), between American Casino &
Entertainment Properties LLC (the “Company”),
having an address at 2000 Las Vegas Boulevard South, Las
Vegas, Nevada 89104, and Ms. Denise Barton
(“Employee”), having an address at 3149
Sterlingshire Drive, Las Vegas, NV 89146. THIS AGREEMENT
AMENDS AND RESTATES IN ITS ENTIRETY THE EMPLOYMENT AGREEMENT
BETWEEN THE PARTIES DATED AS OF APRIL 1, 2007 =
1.
Employment
Upon
the terms and conditions hereinafter set forth, the Company
hereby agrees to employ Employee and Employee hereby agrees to
become employed by the Company. During the Term of Employment
(as hereinafter defined), Employee shall be employed in the
position of Chief Financial Officer of the Company and shall
also serve in other positions of affiliates of the Company as
may be designated (the “Designated Affiliates”)
from time to time by the board of directors of the Company
(the “Board”), provided that such Designated
Affiliates are engaged in businesses relating to gaming,
casino or resort operation or development (collectively, the
“Gaming Business”). Employee shall perform such
duties as are specified from time to time by the Company, the
Board and the Designated Affiliates. Employee shall serve in
such capacities at the pleasure of the Board. Employee shall
report to and be under the supervision of the Company’s
Board. Employee will also meet and work with executives of
American Property Investors, Inc. (“API”) and
members of the board of directors of API.
During
the Term of Employment, Employee shall devote all of her
professional attention, on a full time basis, to the business
and affairs of the Company and the Designated Affiliates,
shall use her best efforts to advance the best interest of the
Company and the Designated Affiliates and shall comply with
all of the policies of the Company and the Designated
Affiliates, including, without limitation, such policies with
respect to legal compliance, conflicts of interest,
confidentiality and business ethics as are from time to time
in effect.
Except
as specifically provided herein, during the Term of
Employment, Employee shall not, without the prior written
consent of the Company, directly or indirectly render services
to, or otherwise act in a business or professional capacity on
behalf of or for the benefit of, any other Person (as
hereinafter defined) as an employee, advisor, independent
contractor, agent, consultant, representative or otherwise,
whether or not compensated (the “Exclusivity
Obligation”).
2.
Term
The
employment period shall commence as of April 1, 2007 and shall
continue through the period (the “Term of
Employment”) ending on March 31, 2009 (the
“Expiration Date”), unless earlier terminated as
set forth in this Agreement.
3.
Compensation
For
all services to be performed by Employee under this Agreement,
during the Term of Employment, Employee shall be compensated
in the following manner:
(a)
Base Compensation
The
Company will pay Employee a salary (the “Base
Salary”) at an annual rate of $380,000. The Base Salary
shall be payable in accordance with the normal payroll
practice of the Company (but no less frequently than
bi-weekly).
(b)
Bonus Compensation
During
the Term of Employment, Employee shall be eligible to receive
an annual bonus, as determined in the sole discretion of the
Board (the “Bonus Compensation”). The Bonus
Compensation, if any, shall be computed based upon the
following formula of performance targets
(“Targets”):
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(i)
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2007
bonus is conditioned on ACEP’s four current properties having
aggregate EBITDA of not less than $106.0 million, in each case for
the fiscal year ended December 31, 2007;
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2007
bonus amount will be calculated by: (x) determining the range
in column (1) of the table below (the “Table”)
which includes the percentage amount by which actual 2007
aggregate EBITDA exceeds $106.0 million; and (y) multiplying
the corresponding percentage set forth in column (2) of the
Table by the product of (aa) $380,000 and (bb) the Factor. Of
this total bonus amount, the applicable percentage set forth
in column (3) of the table will be paid in cash and the
applicable percentage set forth in column (4) will be
Deferred.
By
way of example (and assuming, for purposes of illustration
only, a Factor of 0.5), if aggregate 2007 EBITDA is 103% of
$106.0 million then: (x) the applicable range under column (1)
would be 100-104.99%; (y) total bonus amount would be .4125 x
$380,000 x 0.5 = $78,375; and (z) of this amount, 27.5% (or
$52,250) would be paid in cash and 13.75% (or $26,125) would
be Deferred.
1 Employee
and the Company acknowledge and agree that these Targets are based
upon the EBITDA forecasted in the 2007 budget submitted by the
Company’s management to API.
(1)
EBITDA
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(2)
Total
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(3)
Cash
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(4)
Deferred
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equals or exceeds
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Bonus
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Amount
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Amount
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100-104.99%
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41.25%
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27.5%
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13.75%
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105-109.99
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48.0%
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32.0%
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16.0%
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110-114.99
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55.5%
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37.0%
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18.5%
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115-119.99
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60.0%
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40.0%
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20.0%
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120-124.99
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64.5%
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43.0%
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21.5%
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125-129.99
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69.0%
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46.0%
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23.0%
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130-134.99
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73.5%
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49.0%
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24.5%
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135-139.99
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79.5%
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53.0%
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26.5%
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140-144.99
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85.5%
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57.0%
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28.5%
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145-149.99
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91.5%
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61.0%
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30.5%
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150%
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99.0%
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66.0%
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33.0%
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(ii)
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Targets
for 2008 EBITDA
and amount
of 2008 bonus shall be determined by the Company in January
2008.
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All
calculations and determinations of any of the foregoing
matters (including the amount of Bonus Compensation, or any
component thereof, including but not limited to EBITDA or the
achievement of any Target) will be made by the Company in its
sole discretion and will be final and binding on Employee, and
provided further will be adjusted by the Company to exclude
the impact, as it may determine, of items of gain, loss or
expenses of an extraordinary or unusual nature or infrequent
in occurrence.
The
allocation of the Bonus Compensation shall be deemed earned
and to become due on (i) February 28, 2008, with respect to
2007 Targets, provided that Employee is employed in good
standing as of such date, and (ii) December 31, 2008, with
respect to 2008 Targets, provided that Employee is employed in
good standing as of such date, and provided further that the
Bonus Compensation with respect to the 2008 Targets shall not
be payable by the Company until February 28,
2009.
(c)
Taxes
All
amounts paid by the Company to Employee under or pursuant to
this Agreement, including, without limitation, the Base Salary
and any Bonus Compensation, or any other compensation or
benefits, whether in cash or in kind, shall be subject to
normal withholding and deductions imposed by any one or more
local, state or federal governments.
(d)
Change of Control
(i)
In
the event that the Company enters into a binding contract for
a Change of Control transaction during the Term of Employment
and Employee is employed in good standing as of such date,
then, if Employee has complied with the requirements of clause
(ii) below
and Employee:
(x) has not been terminated for Cause or resigned prior to the
Closing Date; or (y) if the Election (as defined in clause (ii)
below) has occurred, Employee has not been terminated for Cause or
resigned prior to the expiration of the Transition Period, then
Employee shall be paid a lump-sum bonus of $505,000 (the
“Change of Control Payment”), subject to and in
accordance with Section 5(b) below.
(ii)
Employee
acknowledges and agrees that, in the event of a Change of
Control as a result of: (x) an acquisition of the equity of
the Company or its direct or indirect parent (whether by sale
of equity interests, merger or otherwise), then this Agreement
will remain the obligation of the Company (or its successor)
and Employee ’s
obligations hereunder will
remain in full force and effect; or (y) a transfer of assets
of the Company or its subsidiaries and in connection therewith
this Agreement is assigned by the Company, then this Agreement
will become the obligation of the assignee and
Employee’s obligations hereunder will (as such) remain
in full force and effect. If, prior to the Closing Date, the
Company so elects (the “Election”) by giving
written notice thereof to Employee, then Employee shall
provide, on a full time basis and in a professional manner,
during the Transition Period, such services to the Company,
the acquiring Person in such Change of Control transaction
(the “Acquiring Person”) and their respective
designees as are necessary in all respects to permit a smooth,
professional transition of management (which may include,
without limitation, continuing to provide the services
specified in this Agreement or such other executive services
as may be specified from time to time by the Company, the
Acquiring Person or their respective designees).
(iii)
It
is understood and agreed that: (aa) if Employee becomes,
directly or indirectly, an employee of the Acquiring Person,
then all of Employee’s salary, benefits and other
compensation shall be paid by the Acquiring Person; and (bb)
if Employee has entered into a new employment agreement with
the Acquiring Person then the term “Cause” shall
be deemed for purposes of the foregoing provision to have the
meaning given such term in such new employment
agreement.
(iv)
Notwithstanding
any provision of this Agreement to the contrary, (x) following
a Change of Control Employee shall not accrue any additional
Bonus Compensation under Section 3(b) for the calendar year
2007, (y) any Bonus Compensation or other benefits for the
year commencing January 1, 2008 shall be established in the
sole and absolute discretion of the Board of Directors of the
Company and (z) in connection with and effective at the time
of the Change of Control, the Board of Directors of the
Company shall, as provided for in Section 409A-3(j)(4)(ix) of
the regulations
promulgated by the Internal Revenue Service with respect to
Section 409A of the Internal Revenue Code ,
terminate and liquidate the Bonus Compensation and the
Incentive Plan in which Employee had been a participant during
the 2005 and 2006 calendar years.
4.
Termination
This
Agreement shall terminate (subject to Section 10(g) below) and
the Term of Employment shall end, on the first to occur of
(each a “Termination Event”):
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(b)
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The
death of Employee or the total or partial disability that, in the
judgment of the Company, renders Employee, with or without
reasonable accommodation, unable to perform her essential job
functions for the Company for a period of at least 90 consecutive
business days;
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(c)
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The
discharge of Employee by the Company with or without Cause (as
hereinafter defined);
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(d)
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The
resignation of Employee (and without limiting the effect of such
resignation, Employee agrees to provide the Company with not less
than 30 days prior written notice of her resignation);
or
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(e)
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Upon
the later of: (x) a Change of Control; or (y) if the Election has
been delivered to Employee, then upon the expiration of the
Transition Period.
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The
Company may discharge Employee at any time, for any reason or
no reason, with or without Cause, in which event Employee
shall be entitled only to such payments as are set forth in
Section 5 below. As used herein, “Cause” is
defined as Employee’s: (i) failure to (x) perform the
duties assigned to her or (y) comply with the instructions
given to her; (ii) personal misconduct or insubordination;
(iii) impairment due to alcohol or substance abuse; (iv)
conviction of a crime or being charged with a felony; (v)
violation of a federal or state securities law or regulation;
(vi) commission of an act of moral turpitude or dishonesty
relating to the performance of her duties hereunder; (vii)
failure to comply with any of the terms of this Agreement;
(viii) breach of the Exclusivity Obligation or any of her
obligations set forth in Section 6 or Section 7 below; (ix)
any revocation or suspension by any state or local authority
of Employee’s required license(s) to serve in her
position(s) with the Company; or (x) any act or failure to act
by Employee which causes any gaming or other regulatory
authority having jurisdiction over the Company, the Designated
Affiliates or any of their affiliates to seek any redress or
remedy against Employee, the Company, any Designated Affiliate
or any of their affiliates. In the case of subsections (i) and
(vii) above, the Company shall give Employee written notice
and a 30-day period to cure the alleged Cause prior to
termination. The Company shall act reasonably in determining
the existence of Cause for termination of
Employee.
5.
Effect of Termination
In
the event of termination of Employee’s employment
hereunder, all rights of Employee under this Agreement,
including all rights to compensation, shall end and Employee
shall only be entitled to be paid the amounts set forth in
this Section 5 below.
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(a)
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In
the event that the Term of Employment ends (i) for the reason set
forth in Section 4(a) above (i.e., Expiration Date), or (ii) for
any of the reasons set forth in Section 4(b) above (i.e. death or
disability), or (iii) for the reason set forth in Section 4(d)
above (i.e. resignation), or (iv) due to the discharge of Employee
by the Company for Cause, then, in lieu of any other payments of
any kind (including, without limitation, any Severance Payment or
Change of Control Payment), Employee shall be entitled to receive,
within fifteen (15) days following the date on which the
Termination Event in question occurred (the “Clause (a)
Termination Date”) any amounts of: (A) Base Salary due and
unpaid to Employee from the Company as of the Clause (a)
Termination Date; and (B) Bonus Compensation earned, vested, due
and unpaid to Employee from the Company as of the Clause (a)
Termination Date (as determined below, and not on a pro rata
basis).
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(b)
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In
the event that the Term of Employment ends for the reason set forth
in Section 4(e) above (i.e., Change of Control, Election), then, in
lieu of any other payments of any kind (including, without
limitation, any Severance Payment), Employee shall be entitled to
receive: (A) within fifteen (15) days following the Closing Date
any amounts of Base Salary due and unpaid to Employee from the
Company as of the Clause (b) Termination Date;; and (B) sixty (60)
days following the Closing Date (if Employee has complied with the
requirements of clause (ii) of Section 3(d) above), (1) Bonus
Compensation earned, vested, due and unpaid to Employee from the
Company as of the Clause (b) Termination Date (as determined below)
and (2) the Change of Control Payment, payment of which shall be
conditioned upon Employee’s execution of an Employee
Severance and Release Agreement in a form similar to that shown in
Exhibit A of this Agreement; provided that the Bonus Compensation
and the Change of Control Payment shall
not be
payable to Employee if either of the following events has occurred:
(1) if the Company has delivered the Election to Employee, but
Employee has been terminated for Cause or resigns prior to the
expiration of the Transition Period; or (2) if Employee has been
terminated for Cause or resigns prior to the Closing
Date.
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For
purposes of this Section 5(b), Bonus Compensation shall be
determined by revising the final paragraph of Section 3(b) to
provide as follows:
(i)
a 20% increase in the potential Bonus Compensation (i.e. if
Employee is entitled to full calendar year 2007 Bonus
Compensation of $156,750, after applying the 20% increase,
Employee would be entitled to $188,100)
(ii)
if the Change of Control occurs in 2007, a pro rata
determination of the Bonus Compensation for such year, based
on the period between January 1, 2007 and the closing date
calculated as shown in the examples on Schedule 1
hereto
(iii)
all of the Bonus Compensation for 2007 shall be treated as a
Cash Amount and there shall not be any Deferred component to
the Bonus Compensation for such year; and
(iv)
all previous Deferred Bonus Compensation earned under the
Incentive Plan shall be paid to Employee in full at the same
time as the payment of the Bonus Compensation for 2007,
conditioned on the Employees’s continued employment
through the payment date or as otherwise provided for
hereunder.
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(c)
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In
the event that the Term of Employment ends prior to the Closing
Date due to the discharge of Employee by the Company without Cause
(which the Company is free to do at any time in its sole and
absolute discretion) then, in lieu of any other payments of any
kind (including, without limitation, any Change of Control
Payment), Employee shall be entitled to receive, within fifteen
(15) days following the date on which the Termination Event in
question occurred (the “Clause (c) Termination Date”):
(A) any amounts of Base Salary due and unpaid to Employee from the
Company as of the Clause (c) Termination Date; (B) any amounts of
Bonus Compensation earned, vested, due and unpaid to Employee from
the Company as of the Clause (c) Termination Date (as determined
below, and not on a pro rata basis); and (C) a lump-sum payment in
the amount equal to one year’s then current Base Salary (the
“Severance Payment”), payment of which shall be
conditioned upon Employee’s execution of an Employee
Severance and Release Agreement in a form similar to that shown in
Exhibit A of this Agreement. Notwithstanding the foregoing, if all
of the following occur, then Employee shall be entitled to receive,
within fifteen (15) days following the Closing Date, an additional
payment equal to the difference between $505,000 and the Severance
Payment that was previously paid to Employee: (i) Employee is
employed in good standing with the Company through and including
the date that the Company enters into a binding contract for a
Change of Control transaction (the “Execution Date”);
and (ii) Employee is terminated without Cause either (1) after the
Execution Date but prior to the Closing Date, or (2) after the
Election is made but prior to the end of the Transition Period; and
(iii) Employee has complied with clause (ii) of Section 3(d) from
the beginning of a sale or auction process that is reasonably
likely to lead to a Change of Control (the “Sale
Process”) through the date of termination of Employee’s
employment; and (iv) the Closing Date occurs on or prior to
December 31, 2008; and (v) the party with whom the Company engages
in a Change of Control transaction is a party with respect to which
the Employee was actively invo
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