EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is made and entered into this 25th
day of February, 2000, by and between Aladdin Gaming, LLC ("Company"), Aladdin
Gaming Holdings, LLC ("Gaming Holdings") and William Timmins ("Executive").
WHEREAS, the Company considers it important and in its best interest and
the best interest of its owners to foster the employment of key management
personnel and desires to retain the services of Executive on the terms and
subject to the conditions of this Agreement;
WHEREAS, the Executive desires to accept employment with the Company to
render services to the Company on the terms and subject to the conditions of
this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the following mutual
covenants and agreements, the parties agree as follows:
1. EMPLOYMENT. The Company hereby employs Executive as Executive Vice
President of Gaming Holdings and the Company, and Executive shall serve on the
Board of Managers for Gaming Holdings and the Company and Executive shall serve
as a member on the Company's Executive Committee. Further, Executive shall be
the President and Chief Operating Officer of the Aladdin Resort & Casino.
Executive hereby accepts such employment and positions for the compensation and
subject to the terms and conditions in this Agreement.
2. TERM.
(a) The term of the Executive's employment under this Agreement ("Term")
shall commence on January 26, 2000 ("Commencement Date") and shall
continue to and including January 25, 2003, unless earlier
terminated as provided in this Agreement. (The date of any
termination of this Agreement as provided herein is the "Termination
Date").
(b) Notwithstanding Section 2(a), Executive shall have the right, but
not the obligation, to terminate this Agreement on January 26, 2002,
and thirty (30) days after such date his right to terminate the
Agreement pursuant to this section shall expire. Upon termination of
this Agreement as provided in this Section 2(b), this Agreement
shall terminate and be of no further force and effect, except as
provided in Sections 6(a), 6(c), 6(d), 6(e), 6(f) and 7.
3. DUTIES AND RESPONSIBILITIES. During the Term, Executive will serve as
Executive Vice President of Gaming Holdings and the Company, and Executive shall
serve on the Board of Managers for Gaming Holdings and the Company, and
Executive shall serve as a member on the Company's Executive Committee and
Executive shall serve as President and Chief Operating Officer of the Aladdin
Resort & Casino. Executive will have such authority, responsibilities and duties
as are customarily associated with this position. At all times Executive shall
faithfully and to the best of his abilities perform his duties and
responsibilities hereunder to the reasonable
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satisfaction of the Board of Directors. In addition, Executive shall devote his
full time, efforts and attention to the business and affairs of the Company, use
his best efforts to further the interest of the Company and at all times conduct
himself in a manner which reflects credit upon the Company.
4. COMPENSATION.
a. SALARY. For his services hereunder, the Company shall pay Executive
a base salary of Two Hundred Fifty-two Thousand Dollars ($252,000)
prior to the opening for operation of the Aladdin Resort & Casino
and upon the opening for operation of the Aladdin Resort & Casino,
the Company will pay the Executive a base salary equal to the 75th
percentile of the industry rate (as applicable, "Base Salary") for
each consecutive 12-month period during the Term beginning with the
Commencement Date. (Each such consecutive 12 month period is an
"Employment Year"). Executive's Base Salary will be prorated for any
partial Employment Year. On January 26, 2001 and each year
thereafter, the Board of Directors will consider an increase in the
Base Salary based upon criteria determined by the Board of Directors
and applicable to other members of the executive management group.
Any such increases, however, shall be in the sole discretion of the
Board of Directors. There shall be no reduction in Base Salary
during the Term. The Base Salary shall be payable in equal periodic
installments subject to customary deductions for social security,
other taxes and amounts customarily withheld from salaries of
employees of the Company, all in accordance with the Company's usual
and customary payroll practices.
b. ANNUAL BONUS. From and after the date the Company opens and begins
operating the Aladdin Resort & Casino ("Operational Date"),
Executive is eligible to receive from the Company an annual cash
bonus, provided Executive is employed by the Company on the date the
Board of Directors grants the bonus. The Board of Directors will
determine such criteria and standards in a bonus plan, which will be
competitive with industry standards and applicable to other members
of the executive management group. Executive's bonus will be
prorated accordingly if the Aladdin Resort & Casino is only
partially open and operating during the bonus year.
c. BENEFITS. During the Term, Executive shall be entitled to receive
from the Company such health, pension, retirement and other employee
benefits as the Company provides to other members of the executive
management group. During the Term, the Company, at its expense, will
provide Executive with term life insurance in the amount of
Executive's annual Base Salary. During the Term, the Company, at its
expense, will provide Executive with long-term disability coverage
under a group long-term disability plan the Company provides other
members of the executive management group.
d. VACATION. Executive shall be entitled to two (2) weeks paid vacation
for each Employment Year, prorated for any partial Employment Year.
The Board of Directors in its discretion may increase Executive's
vacation entitlement. The timing and duration of specific vacations
will take into account the business needs of the Company and will be
mutually agreed to by the parties. In the event any such vacation is
not used by
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Executive in any Employment Year, the Executive has a right to
accumulate and carry forward such number of unused vacation days
from year to year as may be consistent with the Company's policy for
other members of the executive management group. Upon termination of
employment, all unused vacation time shall be paid to Executive.
e. REIMBURSEMENT OF EXPENSES. The Company shall pay all reasonable
expenses incurred by Executive in the performance of his duties and
responsibilities for the Company. Executive shall submit to the
Company statements and documentation reflecting such expenses
incurred, with such detail, backup and confirmation as the Company
may reasonably require. Subject to any audit Company deems
necessary, the Company shall promptly reimburse Executive the full
amount of any such expenses incurred by Executive.
f. EQUITY INTEREST. Executive will receive a restricted membership
interest of one percent (1%), or the economic equivalent thereof, in
Gaming Holdings, which Gaming Holdings is currently evaluating which
may include, but not be limited to, a "profits only interest,"
"option," or "phantom stock" (collectively, "Equity"). Such Equity
arrangement shall include the right to receive one percent (1%) of
the distributions which are made to the holders of Gaming Holdings
Common Membership Interests. When Gaming Holdings finalizes the
Equity arrangement, the parties will amend this Agreement so that
the Executive shall participate in such program substantially in the
form previously presented to the Executive. Such Equity arrangement
shall vest 50% on the Operational Date and the remaining 50% shall
vest one (1) year thereafter; provided, however in the event of a
Change of Control, the Equity arrangement shall vest 100%
immediately. If Gaming Holdings does not create an Equity
arrangement by the Operational Date, the parties will negotiate in
good faith to establish a compensation arrangement in lieu of an
Equity arrangement, which would have the same economic benefit to
the Executive.
g. AUTO ALLOWANCE. During the Term, the Company shall pay Executive an
auto allowance of Six Hundred Dollars ($600) per month.
5. TERMINATION. This Agreement shall terminate in accordance with the
following provisions:
a. EXPIRATION OF THE TERM. Unless earlier terminated in accordance with
the provisions hereof, this Agreement shall terminate on expiration
of the term as provided in Section 2.
b. DEATH. If the Executive dies during the Term, this Agreement shall
terminate, with the Termination Date being the date of the
Executive's Death.
c. DISABILITY. If the Executive has been absent from service to the
Company as required in this Agreement for a period of ninety (90)
days or more during any one hundred eighty (180) day period during
the Term as a result of any physical or mental disability, the
Company has the right to terminate this Agreement, the Termination
Date being ten (10) days after notice thereof is given to Executive.
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d. TERMINATION BY COMPANY FOR CAUSE. The Company has the right to
terminate this Agreement for Cause as defined herein, such
termination to be effective immediately upon notice thereof from the
Company to Executive. For purposes of this Agreement, Cause shall
mean Executive's: (1) conviction of any felony; (2) conviction for
embezzlement or misappropriation of money or property of the
Company; (3) denial, rejection, suspension or revocation of any
gaming license or permit; (4) Executive's material breach of section
6 hereof which material breach has an adverse impact on the Company;
and (5) Executive quits his employment with the Company without Good
Reason. Good Reason is defined as: (i) the assignment to Executive
of duties materially inconsistent with his position and title
without his consent; or (ii) a material reduction in Executive's
duties, authorities and responsibilities without his consent; or
(iii) a reduction by the Company in Executive's Base Salary, in
effect immediately prior to such reduction, without his consent,
provided Executive gives the Company written notice specifying such
assignment or reduction and the Company has not cured or abated such
assignment or reduction within twenty (20) days thereafter.
e. TERMINATION BY COMPANY WITHOUT CAUSE OR TERMINATION BY EXECUTIVE
WITH GOOD REASON OR UPON A CHANGE OF CONTROL. Subject to Section
5(f), (i) the Company has the right to terminate this Agreement
without Cause, (ii) the Executive has the right to terminate this
Agreement for Good Reason and (iii) the Executive has the right to
terminate this Agreement upon a Change of Control by giving the
other party written notice thereof. In any of these instances, the
Company shall provide Executive with all the benefits set forth in
Section 8(e). For purposes of this Agreement, a Change of Control
shall be deemed to occur only if collectively the Sommer Family
Trust and London Clubs International, plc, through their affiliates,
own less than fifty percent (50%) of the membership interests of
either Gaming Holdings or the Company.
6. EXECUTIVE'S COVENANTS. The Executive acknowledges that the Company and
Gaming Holdings have substantial, legitimate and continuing interests in the
protection of their business relationships with others including, without
limitation, current and prospective employees, consultants, advisors, customers,
vendors, suppliers, partners or joint venturers and financing sources, and in
the protection of their Confidential Information and have invested substantial
sums, time and effort and will continue to invest substantial sums, time and
effort to develop, maintain and protect such relationships and Confidential
Information. Accordingly, Executive covenants and agrees as follows:
a. CONFIDENTIALITY. During the Term and thereafter, Executive shall
keep secret and retain in strictest confidence and shall not,
without the prior written consent of the Company or Gaming Holdings,
furnish, make available or disclose to any third party or use for
the benefit of himself or any third party any Confidential
Information. Confidential Information is information related to or
concerning Gaming Holdings, the Company and their businesses which
is confidential, proprietary or not generally known to and cannot be
readily ascertained through proper means by persons or entities
(including Gaming Holdings' and the Company's present or future
competitors), who can obtain any type of value from its disclosure
or use. Confidential Information includes all secret, confidential
or proprietary information, knowledge or data specifically relating
to Gaming Holdings
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and the Company, such as, without limitation, finances and financing
methods, sources, proposals or plans; operational methods; marketing
or development proposals, plans or strategies; pricing strategies;
business or property acquisition or development proposals or plans;
new personnel acquisition proposals or plans; customer lists and any
descriptions or data concerning current or prospective customers.
While employed by the Company and in furtherance of the business and
for the benefit of Gaming Holdings and the Company, Executive may
provide Confidential Information as appropriate to attorneys,
accountants, financial institutions, and other persons or entities
engaged in business with the Company and to Executive's personal
attorney and/or accountant to the extent necessary for such
individuals to advise Executive; provided, however, such individuals
will be similarly bound to maintain the confidentiality of the
information disclosed. Notwithstanding the foregoing, the provisions
of this section shall not apply to any communication between the
Executive and London Clubs International, plc, or any of its
affiliates, officers, directors, employees or agents (collectively,
"London Clubs").
b. NON-COMPETITION.
1) Executive covenants and agrees that he will not compete with
the Company, its affiliates or subsidiaries at any time during
the Term, or for one (1) year from the Termination Date upon a
Termination by the Company for Cause under Section 5(d)
(including Executive quitting without Good Reason under
Section 5(d)(5)). Under this paragraph, Executive agrees that
he will not, directly or indirectly, whether as employee,
owner, partner, agent, director, officer, consultant,
independent consultant or stockholder (except as the
beneficial owner of not more than 2% of the outstanding shares
of a corporation, any of the capital stock of which is listed
on any national or regional securities exchange or quoted in
the daily listing of over-the-counter market securities and,
in each case, in which the Executive does not undertake any
management or operational or advisory role) or in any other
capacity, for his own account or for the benefit of any other
person or entity, establish, engage, work for or be connected
in any manner with any person or entity which is, at the time,
engaged in a business which is in competition with the
business of the Company (or any of its subsidiaries or
affiliates); it being understood that for purposes of this
Section 6(b), the business of owning, managing, operating or
financing a casino or similar gaming activities in Clark
County, Nevada, shall be deemed to be business in which the
Company is engaged; provided, however, nothing herein
prohibits Executive from a working for a competing business
outside Clark County, Nevada. The restrictions and constraints
contained in this section shall not apply to any appointment
of Executive made by London Clubs.
2) Notwithstanding anything to the contrary contained herein,
Executive shall not be subject to the non-competition
provisions of this Agreement, if this Agreement is terminated
other than pursuant to the provisions of Section 5(d).
c. EMPLOYEES OF THE COMPANY. For one (1) year following the Termination
Date, Executive shall not, directly or indirectly, solicit, or cause
others to solicit, for employment by any person or entity other than
the Company, any employee of the Company or encourage any such
employee to leave the employment of the Company.
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d. PROPERTY OF THE COMPANY. Executive acknowledges and agrees that all
memoranda, notes, lists, records and other documents or papers,
including copies thereof, containing or reflecting Confidential
Information (whether or not such items are kept or stored in
computer memories, microfiche, hard copy or any other manner) made
or compiled by Executive or made available to Executive are and
remain the property of the Company ("Company Property") and shall be
delivered to the Company promptly upon any termination of this
Agreement. Under Section 5 hereof, Executive shall retain no copies
of Company Property following the Termination Date.
e. REASONABLENESS AND SEVERABILITY OF COVENANTS. The Executive
acknowledges and agrees that the Executive's covenants herein are
necessary for the protection of the Company's legitimate interests,
are reasonable and valid in duration and geographical scope, and in
all other respects. If any court determines any of the Executive
covenants or any part thereof, invalid or unenforceable, the
remainder of the restrictive covenants shall not thereby be affected
and shall be given full effect without regard to the invalid
portions.
f. BLUE-PENCILLING. If any court determines that any of the Executive's
covenants, or any part thereof, is unenforceable because of the
duration or geographical scope of such provision, such court shall
have the power to reduce the duration or scope of such provision, as
the case may be, and, in its reduced form, such provision shall then
be enforceable.
7. NON-DISPARAGEMENT. Each of the parties agrees that after the Termination
Date, neither shall, publicly or privately, disparage or make any statements
(written or oral) that impugn the integrity, acumen (business or otherwise),
ethics or business practices of the other, except in each case, to the extent
(but solely to the extent) necessary: (i) in any judicial or arbitral action to
enforce the provisions of this Agreement; or (ii) in connection with any
judicial or administrative proceeding to the extent required by applicable law.
8. EFFECT OF TERMINATION. The following provisions shall apply in the event
of the termination of this Agreement as provided in Section 5 above, and neither
party shall have any further liability or obligation to the other, except as
provided herein:
a. EXPIRATION OF TERM. Upon expiration of the term under Section 5(a)
hereof, this agreement shall terminate and be of no further force
and effect, except as provided in Sections 6(a), 6(c), 6(d), 6(e),
6(f) and 7; provided that Executive shall be entitled to such
salary, bonus and benefits then accrued or vested to the Termination
Date, and any expense reimbursement amounts accrued to the
Termination Date;
b. DEATH. Upon termination of this Agreement as provided in Section
5(b) hereof, this Agreement shall terminate and be of no further
force and effect; provided, further, that the Company shall pay to
Executive's estate any salary, bonus and benefits then accrued or
vested to the Termination Date, and any expense reimbursement
amounts accrued to the Termination Date;
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c. DISABILITY. Upon termination of this Agreement as provided in
Section 5(c) hereof, this Agreement shall terminate and be of no
further force and effect, except as provided in Sections 6(a), 6(c),
6(d), 6(e), 6(f) and 7; provided that Executive shall be entitled to
such salary, bonus and benefits then accrued or vested to the
Termination Date, and any expense reimbursement amounts accrued to
the Termination Date;
d. TERMINATION PURSUANT TO SECTION 5(d). Upon termination of this
Agreement as provided in Section 5(d) hereof, this Agreement shall
terminate and be of no further force and effect, except as provided
in Sections 6 and 7; provided that Executive shall be entitled to
such salary, bonus and benefits then accrued or vested to the
Termination Date, and any expense reimbursement amounts accrued to
the Termination Date;
e. TERMINATION PURSUANT TO SECTION 5(e). Upon termination of this
Agreement as provided in Section 5(e) hereof, this Agreement shall
terminate and be of no further force and effect, except as provided
in Sections 6(a), 6(c), 6(d), 6(e), 6(f) and 7; provided, further,
that Executive shall be entitled to such salary, bonus and benefits
including but not limited to health benefits and expense
reimbursements to which Executive would have been entitled for the
remainder of the Term or twelve (12) months, whichever is longer, as
if there had been no earlier termination.
9. GENERAL PROVISIONS.
a. ASSIGNMENT. Neither this Agreement nor any right or interest
hereunder shall be assignable by the Executive, or the Company or
Gaming Holdings without prior written consent of the other;
provided, that (1) in the event of the Executive's Death during the
Term, the Executive's estate and his heirs, executors,
administrators, legatees and distributees shall have the rights and
obligations set forth herein, as provided herein, and (2) nothing
contained in this Agreement shall limit or restrict the Company's
ability (A) to merge or consolidate or effect any similar
transaction with any other entity, irrespective or whether the
Company is the surviving entity (including a split up, spin off or
similar type transaction), provided, that one or more of such
surviving entities shall continue to be bound by the provisions
hereof binding upon the Company, (B) to assign this Agreement in
conjunction with a sale of all or substantially all of the Company's
assets, or (C) an assignment of this Agreement to an affiliate
controlled by or under common control with the Company. Gaming
Holdings has the same rights and obligations under this Section as
the Company.
b. BINDING AGREEMENT. Except as otherwise provided in this Agreement,
this Agreement shall be binding upon, and inure to the benefit of,
the Executive, Gaming Holdings and the Company and their respective
heirs, executors, administrators, legatees and distributees,
successors and permitted assigns. Any such successor of the Company
or Gaming Holdings shall be deemed substituted for the Company or
Gaming Holdings under the terms of this Agreement for all purposes.
As used herein, "successor" shall include any person, firm,
corporation or other business entity which at any time, whether by
purchase, merger or otherwise, directly or indirectly acquires all
or substantially all or
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the assets or business or the Company or Gaming Holdings and
supercedes any prior understandings or agreements between the
parties hereto.
c. AMENDMENT OF AGREEMENT. This Agreement may not be modified or
amended except by an instrument in writing signed by the parties
hereto.
d. SEVERABILITY. If, for any reason, any provision of this Agreement is
determined to be invalid or unenforceable, such invalidity or lack
of enforceability shall not affect any other provision of this
Agreement not so determined to be invalid or unenforceable, and each
such other provision shall, to the full extent consistent with
applicable law, continue in full force and effect, irrespective of
such invalid or unenforceable provision. Gaming Holdings has the
same rights and obligations under this Section as the Company.
e. ENTIRE AGREEMENT. Except for those matters detailed in Section 4(f),
this Agreement represents the entire agreement and understanding
between the Company, Gaming Holdings, and the Executive concerning
the matters herein and supercede any prior understandings or
agreements between the parties.
f. INDEMNIFICATION. The Company shall indemnify and hold Executive
harmless to the full extent permitted by Chapter 86 of the Nevada
Revised Statutes against costs, expenses, liabilities and losses,
including reasonable attorney's fees and disbursements of counsel,
incurred or suffered by him in connection with his service as an
employee of the company during the Term of this Agreement.
g. NOTICES. For the purpose of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing
and shall be deemed to have been duly given (1) when delivered, if
sent by telecopy or by hand, (2) one business day after sending, if
sent by reputable overnight courier service, such as Federal
Express, or (3) three business days after being mailed, if sent by
United States certified or registered mail, return receipt
requested, postage prepaid. Notices shall be sent by one of the
methods described above; provided, that any notice sent by telecopy
shall also be sent by any other method permitted above. Notices
shall be sent:
If to the Executive: William Timmins
2013 Eagle Trace Way
Las Vegas, NV 89117
If to the Company Aladdin Gaming Holdings, LLC
and/or Gaming Aladdin Gaming, LLC
Holdings: 831 Pilot Road
Las Vegas, NV 89119
Attn: Richard Goeglein
With a copy to: Aladdin Gaming Holdings, LLC
Aladdin Gaming, LLC
831 Pilot Road
Las Vegas, Nevada 89119
Attn: General Counsel
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or to such other address as either party may have furnished to the
other in writing in accordance herewith, except that notice of
change of address shall be effective only upon receipt.
h. INDULGENCES, ETC. Except for Executive's failure to exercise his
right to terminate this Agreement pursuant to Section 2(b), neither
the failure nor any delay on the part of either party to exercise
any right, remedy, power or privilege under this Agreement shall
operate as a waiver thereof, nor shall any single or partial
exercise of any right, remedy, power or privilege preclude any other
or further exercise of the same or of any other right, remedy, power
or privilege, nor shall any waiver of any right, remedy, power or
privilege with respect to any occurrence be construed as a waiver of
such right, remedy, power or privilege with respect to any other
occurrence.
i. BINDING ARBITRATION. Except for an action by the company for
injunctive or other equitable relief, any dispute or controversy
arising under or in connection to this Employment Agreement shall be
resolved through binding arbitration, conducted in Las Vegas,
Nevada, in accordance with the rules of the American Arbitration
Association. Judgment may be entered on the arbitration award in any
court of competent jurisdiction.
j. HEADINGS. The headings of sections and paragraphs herein are
included solely for convenience of reference and shall not control
the meaning or interpretation of any of the provisions of this
Agreement. Gaming Holdings has the same rights and obligations under
this Section as the Company.
k. NEUTRAL CONSTRUCTION. Each party to this Agreement has had the
opportunity to retain counsel, and to review and participate in the
drafting of this Agreement, and, accordingly, the normal rule of
construction to the effect that any ambiguities are to be resolved
against the drafting parties will not be employed or used in any
interpretation of enforcement of this Agreement.
l. GAMING LAW. Anything to the contrary herein notwithstanding, the
parties hereto agree and acknowledge that they are subject to and
that they shall comply in all respects with the gaming laws of the
state of Nevada including the Nevada Gaming Control Act and the
rules and regulations promulgated by the Nevada Gaming Commission
and the Gaming Control Board. To the extent anything in this
Agreement is inconsistent with any gaming laws or regulations, the
gaming laws and regulations shall control.
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m. GOVERNING LAW. This Agreement has been executed and delivered in the
state of Nevada, and its validity, interpretation, performance, and
enforcement shall be governed by the laws of such state, without
regard to principles of conflicts of laws.
ALADDIN GAMING, LLC
By: /s/ Richard J. Goeglein
-------------------------------------
Richard J. Goeglein
President and Chief Executive Officer
ALADDIN GAMING HOLDINGS, LLC
By: /s/ Richard J. Goeglein
-------------------------------------
Richard J. Goeglein
President and Chief Executive Officer
EXECUTIVE
/s/ William Timmins
-------------------------------------
William Timmins
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