Exhibit 10.2
March 20, 2003
Kevin Kelley
4455 Paradise Road
Las Vegas, Nevada 89109
Re: Performance Awards Plan/Award
Agreement
Dear Kevin:
Pursuant to the Hard Rock Hotel,
Inc. Performance Awards Plan (as presently in effect, and as it may
be amended from time to time hereafter, the “ Plan
”) and this Award Agreement (this “ Agreement
”), Hard Rock Hotel, Inc., a Nevada corporation (the “
Corporation ”), hereby awards to Kevin Kelley (“
Participant ”) the number of Plan performance units
(“ Units ”) specified in Section 1 below. Units
are granted to Participant subject to the restrictions, terms,
conditions and vesting schedule set forth herein and in the Plan
and are in all respects qualified, limited and conditioned by the
Plan. In the event of any conflict or inconsistency between this
Agreement and the Plan, the terms of the Plan shall govern.
Capitalized terms which are not defined herein have the meaning
specified in the Plan. A copy of the Plan will be provided to
Participant upon request or may be reviewed by Participant at the
Corporation’s executive offices during regular business
hours. All references herein to “ Sections ”
shall mean the numbered Sections of this Agreement, unless
otherwise specified.
1.
Grant of Units; Types of
Awards . The Corporation
hereby grants to you 2,000 Units, each of which has an index value
of $1,000 (“ Index Value ”) for purposes of this
Agreement. All Awards under this Agreement, whether they are
payable as Cash-Based Awards or as Share-Based Awards, are
designated as Performance-Based Awards and shall be subject to the
provisions of the Plan relating to Performance-Based Awards. All
Awards payable hereunder are Cash-Based Awards, except (i) Awards
payable under Section 11(b) which are Share-Based Awards to the
extent provided therein and (ii) Awards which, in connection with a
Change in Control, the Committee decides to designate as
Share-Based Awards (as authorized under Section 10).
2.
Award Payment Date; Payment
Deferrals . Except as
provided in Sections 5(a), 6, 9, 10 or 11, all Awards payable
pursuant to this Agreement shall be paid 90 days after the end of
the four-year Vesting Period (as defined in Section 3).
Participant, however, may request deferral of the payment of Awards
by submitting to the Committee, not later than 30 days prior to the
end of the Vesting Period, a written request stating the
1
requested deferred payment date and
the amount of the requested deferral. The Committee shall have
absolute discretion to approve or deny such request. An Award
payment deferral, if approved by the Committee, shall be for a term
of one year (a “ Deferral Year ”) from the date
on which the Award payment would otherwise have been due. A
Participant, however, may request subsequent Deferral Years in
accordance with the above provisions of this Section. Each such
request for a subsequent deferral must be submitted to the
Committee not later than 120 days prior to the then-scheduled Award
payment date.
3.
Vesting; Contingent
Units .
(a)
Except as provided in Sections 5(a),
10 or 11, Units awarded under this Agreement shall become vested at
the rate of 25% per year during the four-year period (the “
Vesting Period ”) commencing on April 1, 2003. Vesting
shall occur on March 31 of each year of the Vesting Period,
provided that Participant is still employed by the Corporation or
any of its Subsidiaries on each date fixed for vesting.
(b)
Each of the four years commencing on
April 1 which comprise the Vesting Period, as provided in paragraph
(a) of this Section, is referred to herein as a “ Vesting
Year .” Units which have not yet become vested as of a
specified date are sometimes referred to herein as “
Contingent Units .”
4.
Calculations of Awards
.
(a)
The value assigned to an Award (the
“ Assigned Value ”) shall be calculated annually
prior to the earlier of (i) the 90 th day after the end
of each Vesting Year or (ii) any such earlier date after the end of
a Vesting Year by which payment of an Award based on that
calculation is due under this Agreement. If payment of an Award is
deferred pursuant to Section 2, then the Assigned Value also shall
be calculated not earlier than 90 days and not later than one day
prior to the end of each Deferral Year. The Assigned Value shall
equal the sum of (x) the Initial EBITDA Award Value, which shall be
calculated in accordance with paragraph (b) of this Section 4, only
for Units that became vested either in the most recently completed
Vesting Year prior to the calculation date or subsequent to such
most recently completed Vesting Year as a result of accelerated
vesting (collectively, “ Newly Vested Units ”),
plus (y) the most recent Carryover EBITDA Award Value, which shall
be calculated in accordance with paragraph (c) of this Section 4,
for Units that became vested in any Vesting Year prior to either
the most recently completed Vesting Year or the most recently
completed Deferral Year (collectively, “ Previously Vested
Units ”). The Committee shall certify all such
calculations prior to payment of the Award. If, as a result of
accelerated vesting, Units become vested prior to completion of the
first Vesting Year, then for purposes of the above calculations
specified in this paragraph (a) such Units shall be deemed to have
become vested in the first Vesting Year.
(b)
Initial EBITDA Award Value shall be
calculated as follows:
|
Index
Value
|
x
|
number of Newly Vested
Units
|
=
|
Initial EBITDA Award
Value
|
2
(c)
For each completed Vesting Year
after the first one and for each Deferral Year (if any), Carryover
EBITDA Award Value shall be calculated as follows:
|
EBITDA Performance Factor
(calculated pursuant to paragraph (d) of this Section
4)
|
x
|
the sum of Initial EBITDA Award
Value calculated during the immediately preceding Vesting Year
plus Carryover EBITDA Award Value calculated during
the immediately preceding Vesting Year (if any)
|
=
|
Carryover EBITDA Award
Value
|
(d)
“ EBITDA Performance
Factor ” shall be calculated as a ratio, the numerator of
which is EBITDA for the most recently completed Vesting Year or
Deferral Year, as the case may be (or $1 if such EBITDA was a
negative amount), and the denominator of which is EBITDA for the
Vesting Year or Deferral Year immediately preceding the most
recently completed Vesting Year or Deferral Year, as the case may
be (or $1 if such EBITDA was a negative amount).
(e)
If an Award is paid without deferral
under Section 2, then the amount of the Award payment shall be the
greater of (i) the most recently calculated Assigned Value as of
the Award payment date or (ii) the product of the Index Value
multiplied by the number of Units in respect of which the Award is
payable. If an Award payment is deferred pursuant to Section 2,
then the amount of the Award payment shall be the most recently
calculated Assigned Value as of the Award payment date.
5.
Death, Disability or Retirement
of Participant .
(a)
If Participant dies or ceases to be
an employee of the Corporation or any of its Subsidiaries by reason
of Disability (as defined in paragraph (b) of this Section) or
Retirement (as defined in paragraph (c) of this Section) while any
Units awarded hereunder are still Contingent Units, then the
Committee shall have the authority, in its absolute discretion, to
approve and implement any or all of the following:
(i)
accelerated vesting of some or all
Contingent Units;
(ii)
cancellation of some or all
Contingent Units (with no payment or replacement Units in respect
thereof); or
(iii)
payment of Awards to Participant (or
to Participant’s estate in the event of death) prior to the
payment
