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.
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”).
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.
For all
services to be performed by Employee under this Agreement, during
the Term of
Page 1 of 14
Employment,
Employee shall be compensated in the following manner:
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).
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 Net Revenues
of not less than $451.0 million and aggregate EBITDA of not
less than $106.0 million, in each case for the fiscal year
ended December 31, 2007; 1
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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 amounts by which both (aa) actual 2007 aggregate
Net Revenues exceed $451.0 million and (bb) actual 2007
aggregate EBITDA exceeds $106.0 million (it being understood
and agreed that, if the actual 2007 aggregate Net Revenues and
actual 2007 aggregate EBITDA amounts fall within different ranges,
then the lower range shall prevail); 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.
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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 and aggregate 2007 Net Revenue is 107% of
$451.0 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.
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1
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Employee and
the Company acknowledge and agree that these Targets are based upon
the Net Revenues and EBITDA forecasted in the 2007 budget submitted
by the Company’s management to API.
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(1) EBITDA
and
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Net
revenue
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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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41.25
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%
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27.5
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%
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13.75
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%
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48.0
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%
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32.0
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%
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16.0
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%
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55.5
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%
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37.0
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%
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18.5
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%
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60.0
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%
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40.0
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%
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20.0
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%
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64.5
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%
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43.0
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%
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21.5
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%
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69.0
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%
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46.0
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%
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23.0
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%
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73.5
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%
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49.0
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%
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24.5
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%
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79.5
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%
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53.0
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%
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26.5
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%
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85.5
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%
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57.0
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%
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28.5
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%
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91.5
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%
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61.0
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%
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30.5
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%
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99.0
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%
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66.0
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%
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33.0
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%
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(ii)
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Targets for 2008 Net Revenues
and 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 Net Revenues 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.
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.
(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
Page 3 of 14
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.
This Agreement
shall terminate (subject to Section 10(f) below) and the Term of
Employment shall end, on the first to occur of (each a
“Termination Event”):
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(a)
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The
Expiration Date;
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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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Page 4 of 14
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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 clauses (i) and (vii) above,
the Company will give Employee a written notice of the alleged
“Cause” and a 10-day period to cure prior to
termination, to the extent that the Company, in its sole
discretion, determines such conduct is curable.
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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Page 5 of 14
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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), 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 date on which the
Termination Event in question occurred (the “Clause
(b) Termination Date”), any amounts of (1) Base
Salary due and unpaid to Employee from the Company as of the Clause
(b) Termination Date and (2) Bonus Compensation earned,
vested, due and unpaid to Employee from the Company as of the
Clause (b) Termination Date (as determined below, and not on a
pro rata basis); and (B) sixty (60) days following the Closing
Date (if Employee has complied with the requirements of clause
(ii) of Section 3(d) above), 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 Change of Control Payment shall not be
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