EXHIBIT 10.8
ELDORADO HOTEL CASINO
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DEFERRED COMPENSATION PLAN
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This Plan is hereby adopted as of the date last below written by the
ELDORADO HOTEL ASSOCIATES LIMITED PARTNERSHIP, a Nevada limited partnership,
with its principal offices in Reno, Nevada (the "Employer") for the benefit of
certain of its employees.
WITNESSETH:
WHEREAS, the Employer operates a hotel and casino in Reno, Nevada; and
WHEREAS, the Employer desires to provide certain benefits for a select
group of its management or highly compensated employees from this date forward
until such employees' retirement or prior termination of employment; and
WHEREAS, the employees have rendered meritorious and faithful service to
the Employer and it is anticipated that the employees will perform further
services for the Employer.
NOW, THEREFORE, the Employer hereby adopts a Deferred Compensation Plan
for the benefit of certain of its employees on the terms and conditions set
forth herein:
Definition of Terms
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Certain words and phrases are defined when first used in later paragraphs
of this Deferred Compensation Plan. In addition, the following words and phrases
when used herein, unless the context clearly requires otherwise, shall have the
following respective meanings:
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(a) CEO. "CEO" means Donald L. Carano, President of Recreational
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Enterprises, Inc., the 55% majority general partner of the Employer.
(b) Employee. "Employee" means an employee who is highly compensated or is
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a management employee of the Employer and who is designated by the CEO for
participation in the benefits of the Plan. "Employees" shall mean all
employees covered by the Plan.
(c) Employer. "Employer" means Eldorado Hotel Associates Limited
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Partnership, a Nevada limited partnership.
(d) Fiscal Year or Year. "Fiscal Year" or "Year" (unless otherwise
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specified) means the Employer's fiscal year as now constituted or as it may
be changed hereafter from time to time.
(e) Plan. "Plan" means this Deferred Compensation Plan as it may be
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amended from time to time.
(f) Retirement. "Retirement" means retirement at or after attaining age
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60.
Designation of Employees
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Prior to the end of each Fiscal Year, the CEO shall specify the name of
each Employee, if any, who shall be entitled to participate in the Plan for each
such Year.
Duties
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The Employees shall continue to be employed by the Employer in such
positions, for such terms, and at such rate of compensation as may be determined
from time to time by the Employer. The Employees shall at all times during their
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respective terms of employment, devote their full time, energy, skill and best
efforts to the affairs of the Employer. Neither the Employer nor any Employee
shall be limited in any way in terminating the employment relationship between
Employee and the Employer as a result of the adoption of this Plan, provided
that neither the termination of such employment relationship or of this Plan
shall terminate the Employer's obligations to the Employees hereunder with
respect to the payment of benefits provided for herein.
Plan Contributions
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The Employer shall make a contribution to the Plan each Fiscal Year. The
amount so contributed shall be deposited in a trust established simultaneously
herewith (the "Trust") for the benefit of the Employees. The Trustee of the
Trust shall establish and maintain separate accounts for each Employee
participating in the Plan.
The annual contribution made by the Employer to the Trust on behalf of
each Employee participating hereunder for any given Fiscal Year shall be
determined by the CEO in his sole discretion. After the CEO has determined the
contribution to be made for any given Fiscal Year, he shall deliver a schedule
to the Trustee of Trust which sets forth the name of each Employee participating
hereunder for such Fiscal Year and the corresponding contribution to be
allocated to the account maintained for such Employee under the Trust ("Deferred
Compensation Account") for such Fiscal Year. Such schedule shall also include
any additional information requested by the Trustee of the Trust or required by
the Trust Agreement.
Vesting
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Each Employee covered by the plan shall vest 20 percent per Year in the
amount contributed to his Deferred Compensation
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Account each Year so that he becomes 100 percent vested in the amount credited
to his Deferred Compensation Account in any given year after the expiration of
five years from the date such amount was so contributed. For example, an
Employee will be 100 percent vested in 1990 contributions in 1994 and will be
100 percent vested in 1991 contributions in 1995. Employees shall vest in
earnings on any given Year's contribution allocation in a like manner.
The foregoing notwithstanding, an Employee shall become 100 percent
vested in all amounts credited to his Deferred Compensation Account upon
Retirement, death, permanent disability, or termination of employment with the
Employer for any reason other than fraud. In addition, an Employee shall become
100 percent vested in all amounts credited to his Deferred Compensation Account
upon a sale of all or substantially all of the assets of the Employer or if the
Carano family ceases to have majority ownership or control of the Employer.
Disability
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In the event an Employee is certified as being "permanently disabled,"
the employment relationship between the Employer and such Employee shall
thereupon be deemed to have terminated due to disability for purposes of this
Plan, and the Employer shall have no further obligation hereunder other than the
payment of benefits in the manner provided herein.
For purposes of this Plan, the term "permanently disabled" or "permanent
disability" shall mean an Employee's inability to adequately perform his
assigned duties on behalf of the Employer by reason of accident, physical or
mental illness, infirmity or other similar causes for a continuous period of six
months. Such disability shall be certified by a duly licensed physician. In the
event that the Employer and the Employee disagree, each shall select a duly
licensed physician to examine the Employee, and the
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two so selected physicians shall appoint a third duly licensed physician to
examine the Employee, in which case the findings of the majority shall control.
The costs involved in such examinations shall be borne equally by the Employer
and the Employee. It is understood that an Employee's occasional sickness or
other incapacity of short duration may not result in the Employee's becoming
"permanently disabled"; however, any such illness or incapacity may constitute
"permanent disability" if such illness or incapacity is prolonged, considering
the time requirement set forth above.
Distribution of Benefits
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An Employee shall commence receiving a distribution of his vested
Deferred Compensation Account on the first business day of the second month
after the Employee's death, permanent disability, Retirement, or, if the
Employee terminates employment with the Employer for reasons other than death or
disability prior to the Employee's attainment of age 60, attainment of age 60,
whichever first occurs (the "Distribution Commencement Date"). The foregoing
notwithstanding, the CEO, in his sole discretion, may decide to make a
distribution to an Employee who terminates employment with the Employer prior to
the attainment of age 60 for reasons other than death or disability, at a date
earlier than the Employee's attainment of age 60.
All nonvested amounts allocated to an Employee's Deferred Compensation
Account shall be forfeited as of the Distribution Commencement Date. All such
forfeited amounts shall revert to the Employer as of the Distribution
Commencement Date.
An Employee's Deferred Compensation Account shall be distributed in
annual installments commencing on the Distribution Commencement Date. The
installment period shall equal a number of years equal to the Employee's life
expectancy as of the Distribution Commencement Date. In the event a distribution
of
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benefits is to be made as a result of the death of an Employee, the installment
period shall be determined based upon the life expectancy of the Employee as if
the Employee was still alive at the Distribution Commencement Date.
In the event an Employee dies prior to commencing to receive a distribution
of benefits under this Plan, the Employee's Deferred Compensation Account shall
be distributed to the Employee's beneficiary (as described below) in the manner
in which benefits would have been distributed to the Employee had the Employee
survived. In the event an Employee dies after commencing to receive benefits
hereunder, the Employer shall pay to the Employee's beneficiary the remaining
sums due and owing to the Employee in the same manner in which payments would
have been made to the Employee had he survived.
Notwithstanding anything contained herein to the contrary, the CEO, in his
sole discretion, may decide to make a distribution to an Employee in
installments over a shorter period of time than that otherwise provided for
hereunder or in the form of a lump sum distribution.
Beneficiary
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To designate a beneficially or beneficiaries to receive any amounts due
under this Plan, an Employee shall file with the Employer a dated written notice
specifying the name, address, and relationship to the Employee of such
beneficiary. Any such designation may be changed by the Employee by his filing
of a new, later dated written notice with the Employer.
If no named beneficiary shall survive the Employee, or if the Employee
fails to designate a beneficiary, any payments due under the Plan shall be made
in the following order of priority to:
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* The Employee's surviving spouse;
* The Employee's surviving children, including adopted children, in
equal shares; or
* The legal representative of the Employee's estate.
In the event a person receiving benefits under this Plan after the
Employee's death dies while receiving such payments, the remaining payments due
such person shall be paid to the legal representative of such person's estate.
Withholding
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All payments made pursuant to the Plan shall be less such amounts as are
required to be withheld by law.
Offset for Obligations to the Employer
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If, at such time as an Employee becomes entitled to benefits under the
Plan, such Employee has any debt, obligation or other liability representing an
amount owing to the Employer, and if such debt, obligation, or other liability
is due and owing at the time distribution is due hereunder, the Employer may
offset the amount owing against the amount of benefits otherwise distributable
hereunder.
Determination of Benefits
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Except as otherwise specifically provided in this Plan or the Trust, the
Employer shall make all determinations as to rights to benefits under the Plan.
Subject to and in compliance with the specific procedures contained in the
applicable regulations under the Employee Retirement Income Security Act of
1974, as amended: (i) any decision by the Employer denying a claim by the
Employee or the Employee's beneficiary for benefits under this Plan shall
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be stated in writing and delivered or mailed to the Employee or such
beneficiary; (ii) each such notice shall set forth the specific reasons for the
denial, written to the best of the Employer's ability in a manner that may be
understood without legal or actuarial counsel; and (iii) the Employer shall
afford a reasonable opportunity to the Employee or such beneficiary for a full
and fair review of the decision denying such claim.
Hardship Benefit
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In the event an Employee suffers a financial hardship (as hereinafter
defined) the Employer may, if the CEO deems advisable in his sole and absolute
discretion, distribute to or utilize on behalf of the Employee as a hardship
benefit (the "Hardship Benefit") any portion of the Employee's Deferred
Compensation Account up to, but not in excess of, the vested portion of such
Deferred Compensation Account to which the Employee would have been entitled as
of the date a Hardship Benefit is distributed or utilized. Any Hardship Benefit
shall be distributed or utilized at such times as the CEO shall determine, and
the Employee's Deferred compensation Account shall be reduced by the amount so
distributed and/or utilized. "Financial hardship" shall mean dire, unseen,
financial emergency of the Employee which cannot be reasonably relieved by
reimbursement by insurance or otherwise, liquidation of the Employee's assets to
the extent that such liquidation would not in itself cause a financial hardship,
and which is caused by temporary or permanent disability or incapacity, medical
or educational expenses, the purchase or maintenance of a residence, or a
material reduction in family income.
Administration
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The CEO shall have the full power and right to delegate authority to
interpret, construe and administer the Plan. The interpretation and
construction of the Plan by the CEO and any
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action taken hereunder shall be binding and conclusive upon all parties in
interest. The CEO shall not, in any event, be liable to any person for any
action taken or omitted to be taken in connection with the interpretation,
construction or administration of the Plan, so long as such action or omission
to act be made in good faith.
Exclusivity of Benefits
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Except as otherwise provided herein, benefits payable under the Plan shall
be independent of, and in addition to, any benefits payable under any other
agreement or arrangement for compensation or otherwise that may exist from time
to time between the Employer and the Employees, or any other compensation or
benefits by the Employer to an Employee. The Plan shall not be deemed to
constitute a contract of employment between the Employer and any Employee, nor
shall any provision hereof restrict the right of the Employer to terminate its
employment relationship with any Employee, or restrict the right of an Employee
to terminate such Employee's relationship with the Employer.
Unsecured Promise To Pay
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Employee and any other person who may receive benefits hereunder on behalf
of an Employee shall have no claim to the Employee's Deferred Compensation
Account until the occurrence of one of the events entitling the Employee to such
benefits. Payments to an Employee or an Employee's beneficiary hereunder shall
be made from the assets of the Trust. However, the assets of the Trust shall be
subject to the claims of the Employer's general creditors in the event of
insolvency or bankruptcy of the Employer and, to the extent any person acquires
the right to receive payment from the Employer under the terms of the Plan, such
right shall be no greater than the right of any unsecured general creditor of
the Employer.
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Non-Transferability
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It is expressly agreed that neither any Employee, any Employee's spouse, or
any other beneficiary of an Employee shall have any right to commute, sell,
assign, transfer, encumber or otherwise dispose of the right to receive payments
hereunder, which payments and the rights thereto are expressly made
nonassignable and nontransferable, and in the event of any attempted assignment
or transfer by an Employee, an Employee's spouse or any other beneficiary of an
Employee, the Employer shall have no further liability hereunder to such
Employee.
General Provisions
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This Plan may be terminated, amended, or modified in any manner by the
Employer, provided that no such termination, amendment, or modification shall
adversely affect the rights of any Employee covered by the Plan as such rights
exist at the time of such termination, amended, or modification.
The rights and obligations of the Employees under this Plan shall inure to
the benefit of and shall be binding upon the heirs and legal representatives of
the Employees.
This Plan shall be interpreted, construed, and governed according to the
laws of the state of Nevada.
If any one or more provisions of this Plan are found to be invalid,
illegal, or unenforceable in any respect, the validity, legality, and
enforceability of the remaining provisions hereof shall not in any way be
affected or impaired thereby. In addition, should any one or more of the
provisions of this Plan be found to be partially enforceable, then it shall be
enforced to that extent.
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Any notice, demand, or communication in connection with this Plan shall be
given in writing and shall be either personally delivered or shall, if given by
mail, be sent registered or certified mail, return receipt requested, postage
prepaid. Any notice transmitted by mail shall be sent to the last known
residence of the Employee of which the Employer has written notice or to the
Employer's principal office in Reno, Nevada. Notices personally given shall be
deemed to have been given when received, and notices sent by mail shall be
deemed to have been given on the day after they are received by the United
States Postal Service.
This Plan embodies the entire arrangement regarding the subject matter
hereof, and there are no other agreements, covenants, representations,
understandings, obligations, oral or written, with respect to the subject matter
of this Plan.
The section headings contained in this Plan are for convenience only and
shall in no manner by construed to limit or defined the terms of this Plan.
IN WITNESS WHEREOF, the Employer has executed this Plan as of the 1st day
of December, 1990.
EMPLOYER: ELDORADO HOTEL ASSOCIATES
LIMITED PARTNERSHIP, a Nevada
Limited Partnership
By: /s/ Donald L. Carano
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Donald L. Carano, CEO
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