EMPLOYMENT AGREEMENT
This Employment Agreement, dated as of September 1, 2006 (the
"Agreement"), by and between RIVIERA HOLDINGS CORPORATION ("RHC") and its
wholly-owned subsidiary RIVIERA OPERATING CORPORATION ("ROC") (collectively the
"Company"), and ROBERT A. VANNUCCI ("Executive").
In consideration of the mutual agreements hereinafter set forth, the
parties hereto agree as follows:
1. Employment:
During the "Term" (hereinafter defined), the Company agrees to
employ Executive in the capacity of President and Chief
Operating Officer of ROC upon the terms and conditions and for
the compensation herein provided, and Executive agrees to be
so employed and to render the services herein specified.
2. Term of Employment:
The initial term of employment of Executive hereunder will be
for a one (1) year period commencing on September 1, 2006 and
ending on August 31, 2007, subject to earlier termination as
provided in Section 10 and shall automatically renew for
one (1) year periods ("Renewal Terms") except that either
party may terminate this Agreement at any time by providing
the other party thirty (30) days written notice.
3. Duties:
During the Term Executive agrees to:
(a) devote his full and exclusive business time and
attention to the business of ROC (vacation and sick
leave in accordance with ROC's policy and personal
time consistent with his position excluded); and
(b) perform such reasonable duties as the Company's chief
executive officer shall from time to time assign to
Executive.
4. Salary:
During the Term Executive shall receive a salary of $400,000
per annum, payable bi-weekly in arrears ("Base Salary").
5. Incentive Bonus:
Executive is eligible for a bonus in an amount equal to
$200,000 at 100% (or portion thereof if less than 100%) under
the Company's Senior Management Compensation Plan (the
"Plan"). The Plan provides for an annual target that is
established by the Company's Compensation Committee and
approved by the Company's full Board of Directors on or around
each November of the year preceding the applicable year.
Incentive Bonuses are paid on or before March 15 of the year
following the year in which the Incentive Bonus is earned.
6. Termination By Company Without CAUSE:
In the event the Company exercises its right to terminate this
Agreement pursuant to Paragraph 2, above, for any reason
except CAUSE as hereinafter defined, Executive shall receive
the following commencing with the effective date ("Effective
Date") of such Termination (collectively "Severance").
(a) Base salary paid in equal bi-weekly
installments for One (1) year as measured
from the Effective Date;
(b) Executive shall receive, on or about March
15th of the year immediately following the
year of the Effective Date, a pro-rata share
of the Incentive Bonus Executive would have
been entitled to receive had Executive not
been terminated. The proration shall be
based on the number of weeks up to the
Effective Date in the year of Executive's
termination;
(c) Full health care benefits for Two (2) years
as measured from the Effective Date; and
(d) Automobile allowance for One (1) year as
delineated in Paragraph 9(c) of this
Agreement as measured from the Effective
Date.
7. Death and Disability:
(a) If during the Term of this Agreement and any
extension thereof, Executive's employment is
terminated due to death or disability of
Executive, Executive or his estate, as the
case may be, shall receive the following:
(i) Executive's Base Salary payable in
twenty-six (26) bi-weekly equal installments
commencing on such termination; and
(ii) On or before March 15th of the calendar year
immediately following such termination, a
prorated share of the Severance Incentive
Bonus to which Executive would have been
entitled had the Company exercised its right
to terminate this Agreement. For example, if
such termination occurs on June 30th and the
Executive level bonus is at one-hundred
percent (100%), the cash incentive due on
the following March 15th is 181/365 of what
Executive would have received had Executive
not been terminated.
(b) The following terms shall have the following
meanings:
(i) "Pro-Rata" - a fraction the numerator of
which is the number of days to the date of
death, disability or discharge without Cause
and the denominator of which is
three-hundred sixty-five (365);
(ii) "Designated Beneficiary" - shall be the
person designated in writing by the
Executive prior to the Executive's death and
if the Executive fails to designate a
beneficiary or if a designated beneficiary
does not survive the Executive, all amounts
payable hereunder shall be paid to the
Executive's personal representative or
pursuant to the terms of the Executive's
will or the laws of descent and
distribution; and
(iii) "Disability" - the Company shall find on the
basis of medical evidence satisfactory to it
that Executive is so totally mentally or
physically disabled as to be unable to
engage in further employment by Company and
that such disability shall be determined to
be such that it will cause, or actually does
cause or has caused, Executive to be absent
from work for a period, or aggregate of
periods, in excess of three (3) months in
any one (1) twelve (12) month period.
8. Profit-Sharing, 401(k) Plan and ESOP:
In addition to the Base Salary and Incentive Bonus,
Executive shall be eligible for participation in all
Defined Contribution Plans adopted by Company.
9. Additional Benefits and Compensation:
During the Term, Executive shall be entitled to:
(a) life insurance, group health insurance, including
major medical and hospitalization, comparable to such
benefits offered to other key executives of the
Company;
(b) reimbursement for all reasonable expenses incurred by
Executive in connection with the performance of his
duties and in accordance with any applicable policy
of the Company (including one-hundred percent (100%)
of reasonable travel and entertainment expenses),
subject to submission of appropriate documentation
therefor;
(c) automobile allowance in the amount of five-hundred
dollars ($500.00) per month, plus reimbursement of
all reasonable automobile expenses (excluding lease
or loan payments) incurred regarding the principal
automobile driven by Executive; and
(d) all benefits and perquisites that Executive enjoyed
by way of his employment with the Company prior to
the execution of this Agreement.
10. Termination By Company For "CAUSE" or Termination By Executive:
(a) If the Company shall discharge Executive for "CAUSE"
as hereinafter defined, Executive shall not be
entitled to receive any further compensation or
benefits from the Company effective the date of such
for Cause termination.
(b) If Executive exercises his right to terminate this
Agreement ("Resignation"), he shall not be entitled
to any compensation or benefits from the Company upon
the effective date of the Resignation.
(c) "CAUSE" shall have the following meanings:
(i) felony conviction of Executive;
(ii) a final civil judgment shall be entered after all
appeals have been exhausted in which a material
aspect involved Executive's fraud or dishonesty
whether or not involving the Company;
(iii) 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 thirty
(30) days after written notice ("Cure Period"); or
(iv) the Gaming Authorities of the State of Nevada 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 fifty percent
(50%) of his business time at least twenty-five
(25) miles outside of Las Vegas (or be required to
change his residence), (y) to expose himself to a
risk of his physical safety or jeopardize his
ability to be licensed by any state gaming
authority, or (z) perform duties which are
inconsistent with his role specified in Section 1
hereof.
11. Confidential Information; Non-Solicitation:
(a) During the Term and for a Two (2) year period
commencing on the effective date of the termination
of this Agreement for any reason:
(i) Executive shall hold in a fiduciary capacity for the
benefit of the Company all secret or confidential
information, knowledge or data relating to the
Company or its affiliates, and their respective
businesses which shall not be public knowledge (other
than information which becomes public as a result of
acts of Executive or his representatives in violation
of this Agreement), including, without limitation,
and technological or financial information of the
Company or its subsidiaries; and
(ii) Executive shall not, without the prior written
consent of the Company, communicate or divulge any
such information, knowledge or data to anyone other
than the Company and those designated by it in
writing.
(b) While actively employed by the Company, the Executive
will not, directly or indirectly, own, manage,
operate, control or participate in the ownership,
management or control of, or be connected as an
officer, employee, partner, director, or consultant
or otherwise with, or have any financial interest
other than stock holdings in a public corporation, in
any hotel or casino.
(c) During the Term and for a one (1) year period as
measured from the effective date of the termination
of this Agreement for any reason, Executive will not
solicit or contact any employee of the Company or its
affiliates with a view to inducing or encouraging
such employee to leave the employ of the Company or
its affiliates for the purpose of being employed by
Executive, an employer affiliated with Executive, or
any competitor of the Company or any affiliate
thereof.
(d) Executive acknowledges that the provisions of this
Section 11 are reasonable and necessary for the
protection of Company and that the Company will be
irrevocably damaged if such provisions are not
specifically enforced. Accordingly, Executive agrees
that, in addition to any other relief to which the
Company may be entitled in the form of actual or
punitive damages, the Company shall be entitled to
seek and obtain injunctive relief from a court of
competent jurisdiction (without posting of a bond
therefor) for the purposes of restraining Executive
from any actual or threatened breach of such
provisions.
12. Miscellaneous:
(a) This Agreement shall be governed, construed and
interpreted in accordance with the internal laws of
the State of Nevada applicable to agreements executed
in that State. Any legal action brought to enforce
the terms of this Agreement shall be brought in Clark
County, Nevada.
(b) This Agreement supersedes all prior agreements and
under-standings among the parties, and contains the
full understanding of the parties hereto with
respect to the subject matter hereof. Any change,
modification or waiver of this Agreement must be in
writing, signed by both parties hereto or, in the
case of a waiver, by the party waiving compliance.
This Agreement may be executed in one (1) or more
counterparts, each of which shall be deemed an
original. The captions of each article and section
are intended for convenience only. All references
herein to days, weeks and months shall mean by
calendar unless specifically stated to the
contrary. All references herein to the singular
shall include the plural, and all references to
representations and warranties made hereunder shall
survive the execution and delivery and closing of
this Agreement.
(c) It is the intention of the parties hereto that this
Agreement shall not inure to the benefit of any third
parties not parties to this Agreement, and it is
specifically intended that no third party beneficiary
relationships, benefits or obligations shall arise or
be deemed to exist as a result of this Agreement.
(d) This Agreement shall insure to the benefit of and be
binding upon each of the parties hereto, their heirs,
assigns, successors, executors and personal
representatives, however, as a personal service
contract, it shall not be assignable by Executive.
(e) The failure or delay by either party in any one or
more instances to enforce one (1) or more of the
terms and conditions of this Agreement or to exercise
any right or privilege under this Agreement shall not
thereafter be construed as a waiver of any such term,
condition, right or privilege and the same and all
other terms, conditions, rights or privileges under
this Agreement shall continue to remain in full force
and effect as though no such failure or delay had
occurred.
(f) No voluntary or involuntary successor-in-interest of
the Company shall acquire any rights or powers under
this Agreement, except as specifically set forth
herein. Otherwise, the Company shall not assign all
or any part of this Agreement.
13. Notices:
All notices, requests, demands, directions and other
communications provided for hereunder shall be in writing and
delivered personally or mailed by certified or registered
mail, return receipt requested, to the following addresses for
each party during the Term or until such time as written
notice, as provided hereby, of a change of address to be used
thereafter is given to the other party, with copies to such
legal counsel as each party, from time-to-time, may designate.
If to: Company
Riviera Holdings Corporation
2901 Las Vegas Boulevard South
Las Vegas, NV 89109
Attn: Chief Executive Officer
If to: Executive
Robert A. Vannucci
2901 Las Vegas Boulevard South
Las Vegas, NV 89109
PERSONAL & CONFIDENTIAL
Notices delivered personally shall be deemed to have been
given, upon delivery; notices delivered by certified or
registered mail shall be deemed to have been given seventy-two
(72) hours after the date deposited in the mail, except as
otherwise provided herein.
14. Government Approvals:
Notwithstanding any other terms and provisions set forth in
this Agreement, it is understood and agreed that the
engagement of Executive hereunder, the obligation of the
parties hereto, and the effect of the Agreement, shall be
subject to the approval of each and all of the terms,
covenants and provisions of this Agreement by the Nevada
Gaming Authorities and other Governmental Authorities from
whom approval, if any, is required under the laws of the State
of Nevada, the County of Clark, or any and all other
governmental agencies having jurisdiction thereover. Each of
the parties hereby covenant and agree to exercise their best
good faith efforts to proceed to obtain any and all such
necessary approvals.
IN WITNESS WHEREOF, the parties herein have entered into this Agreement
the day and year first written above.
COMPANY: EXECUTIVE:
RIVIERA HOLDINGS CORPORATION ROBERT A. VANNUCCI
By: ___________________________ ________________________________
Mark Lefever Robert A. Vannucci
Treasurer Executive