January 15, 1999
Mr. Tom Guth
1926 Spode Ave.
Henderson, NV 89014
Dear Tom,
We are very pleased to offer you the position of General Manager for
the Riviera Black Hawk Casino in Black Hawk, Colorado, reporting to the
Executive Vice President - Riviera Gaming Management, at a starting salary of
$5,769.23 per bi-weekly pay period. Prior to the anticipated opening date of
December, 1999, you will be in charge of coordinating all pre-opening functions
to make sure that the grand opening is successful.
The General Manager - Black Hawk will be the senior management at
Riviera - Black Hawk reporting to the Executive Vice President - Riviera Gaming
Management, and as such will be eligible to participate in the Bonus Pool, the
size and scope of which will be performance based. Since the Riviera Black Hawk
is not scheduled to open until December, 1999, your first year's bonus will be
based on performance related to pre-opening functions, and will be guaranteed to
be $50,000 payable on or before March 15, 2000. In the year 2000 your bonus will
be based on meeting the projected EBITDA base of $17.86 million (see attached).
If the Riviera-Black Hawk meets or exceeds the EBITDA, base your bonus will be a
minimum of $50,000 payable on or before March 15, 2001.
In addition while employed as the General Manager - Black Hawk you will
be eligible to receive stock options in the parent company, Riviera Operating
Corporation, any time options are granted to senior management. The amount of
options and vesting rights will be the same as other senior management of
Riviera Operating Corporation.
Insurance coverage that you will receive immediately as a Riviera Black
Hawk employee includes a $125,000 Executive Life Insurance policy, a $125,000
accidental death and dismemberment policy, and Riviera's medical plan for
surgery, accidental injury and other medical services, dental, and vision
coverage at a nominal cost to you. The Riviera will provide insurance coverage
starting on your first day of employment. You will receive two (2) weeks
vacation commencing the first year of employment, three (3) weeks vacation
commencing on your sixth year of employment and four (4) weeks vacation
commencing on your twelfth year of employment. Once you meet the eligibility
requirements, you may participate in the
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January 15, 1999
Mr. Tom Guth
company's 401(k) program and the company's Profit Sharing Program (See
attached).
Riviera will assume responsibility for the expenses involved in moving
you (and your dependents), and your household effects from Las Vegas, Nevada to
the Denver, Colorado area. We reserve the right to select from three (3) bids
submitted by national moving companies. The Riviera will reimburse you for the
sales commission (not to exceed 7%) on your current home in Las Vegas. If you
can not sell your home for fair market value i.e., $230,000 (fair market value
defined as the price at which the home is expected to sell within 90 days) the
Riviera will make up the difference not to exceed 10% of the fair market value
(i.e., Riviera will make up to $23,000 of any difference between fair market
value and selling price). In addition, if after 90 days of listing the home for
sale, your home has not sold, the Riviera will make the monthly mortgage payment
each additional month until it is sold. The Riviera will also pay for two house
hunting trips that include air fare, car rental, lodging and food cost (for both
you and your spouse) up to five days per trip (total for both trips not to
exceed $3,500).
TERMINATION. If you are terminated within 18 months of your employment
date for any reason other than "cause" (hereinafter defined), subject to
"Mitigation" (hereinafter defined), you shall be entitled to receive one year's
severance (including all paid benefits and immediate vesting of a options),
payable in 26 bi-weekly installments.
If you are terminated at any time, other than for "cause," you shall be
entitled to receive the pro rata share of any bonus payable with respect to the
year in which the termination occurred.
You will be required to sign an agreement to reimburse Riviera for all
relocation expenses incurred in your behalf if, for reasons within your control,
you should voluntarily terminate your employment within twelve (12) months from
your date of hire.
The prerequisite to employment is passing the requirements for a
Colorado Gaming License and passing the company prescribed drug test.
On behalf of Bill and myself, let me say we are looking forward to
having you join the Riviera Black Hawk team with a start date of March 1, 1999.
Should you have any questions regarding our offer of employment, please do not
hesitate to contact me.
- -------------------------- -------------------------
Ron Johnson Tom Guth
Executive Vice President
Riviera Gaming Management
RJ/cf
attachment
DEFINITIONS
Cause - (A) felony conviction of Executive, (B) a final civil judgment shall be
entered after all appeals shall have been exhausted in which there is findings
of Executive's fraud or dishonesty whether or not involving the Company, (C)
refusal by Executive to perform "Reasonable Duties" (hereinafter defined)
assigned to him by the Company's chief executive officer, provided Executive
shall fail to correct any such failure within 30 days after written notice
("Cure Period") or (D) the Gaming Authorities of the State of Colorado or any
other state in which the Company shall conduct gaming operations shall determine
that Executive is unsuitable to act as an executive of a gaming company in his
individual capacity. "Reasonable Duties" - Executive shall not be required (x)
on a permanent basis to spend more than 50% of his business time outside of
Colorado (or be required to change his residence), (y) to expose himself to a
risk to his physical safety or jeopardize his ability to be licensed by any
state gaming authority or (z) perform customary duties which are inconsistent
with his position.
Mitigation - Executive shall be required to use his best efforts to obtain
gainful employment as similar as possible to his duties with the company,
provided that (A) a finding by an arbitration tribunal that Executive has failed
to do so will result in the Company being relieved of any obligation to pay
Executive and (B) any amount received by Executive from such employment shall
reduce the amount payable by the company.
Riviera agrees that it will not file for arbitration sooner than 6 months after
your termination and that if Riviera files for such arbitration, Riviera will
continue to pay Executive until decision of arbitrator is made. If decision is
in favor of Riviera, Executive will not be required to pay back any payments
previously received whether they were made before or during the arbitration
process.