EXHIBIT 10.02
AMENDMENT NO. 2
TO THE EMPLOYMENT AGREEMENT
OF
CORNELIUS T. KLERK
This Amendment No. 2 ("Amendment") to the Employment Agreement between
Aladdin Gaming, LLC ("Company"), Aladdin Gaming Holdings, LLC ("Gaming
Holdings") and Cornelius T. Klerk ("Executive") is made and entered into this
27th day of January, 1999.
WHEREAS, the Company, Gaming Holdings and Executive entered into an
Employment Agreement effective as of July 1, 1997.
WHEREAS, the Company, Gaming Holdings and Executive entered into the Klerk
Contribution and Amendment Agreement on February 28, 1998, which, in part,
amended the Employment Agreement, (the Employment Agreement, as amended by the
Klerk Contribution and Amendment Agreement, herein after collectively referred
to as "Employment Agreement").
WHEREAS, the Employment Agreement, based on then-current information,
would, subject to certain understandings and conditions, vest the Executive with
fifty percent (50%) of his/her Restricted Membership Interests (as defined in
the Employment Agreement) by the expiration of the term of the Employment
Agreement;
WHEREAS, the current development of the Aladdin Hotel and Casino will not
permit the vesting of fifty percent (50%) of the Executive's Restricted
Membership Interests by the expiration of the term of the Employment Agreement;
and
WHEREAS, the Board of Directors for the Company and Gaming Holdings have
approved amending the Employment Agreement to provide, subject to certain
conditions, that the Executive would be vested with fifty percent (50%) of the
Executive's Restricted Membership Interests by the expiration of the term of the
Employment Agreement.
Now, therefore, in consideration of the foregoing, and the following mutual
covenants and agreements, the parties agree as follows:
1. AMENDMENT. Pursuant to Section 9(d) of the Employment Agreement,
Section 4(f) of the Employment Agreement is deleted in its entirety and replaced
with the following:
f. RIGHT TO PURCHASE LLC MEMBERSHIP INTEREST. On the Execution
Date, Executive has the right to purchase a restricted membership
interest in the capital of Gaming Holdings equal to Three
Quarters of One Percent (.75%) of the total membership interests
of Gaming Holdings for a total purchase price of Four Hundred
Fifty Dollars ($450), which amount equals One Hundred
1
Percent (100%) of the fair market value of Executive's membership
interest on the date of purchase (the "Holdings Restricted
Membership Interest").
(1) During the Term, the Holdings Restricted Membership
Interest vests as follows:
(i) Twenty-five Percent (25%) of the Holdings Restricted
Membership Interest on the date that the Company opens
and begins operating the Aladdin Hotel & Casino (the
"Operational Date") and Executive executes and agrees
to be bound by the Company's Operating Agreement; and
(ii) Twenty-five Percent (25%) of the Holdings Restricted
Membership Interest upon the expiration of the four-year
term of this Agreement (provided Executive was employed
by the Company at such expiration);
(iii) Twenty-five Percent (25%) of the Holdings Restricted
Membership Interest on each succeeding annual
anniversary of the Operational Date to the Termination
Date;
(2) In addition to the vesting of Holdings Restricted
Membership Interest pursuant to Section 4(f)(1)(ii), further
upon expiration of the four-year term of this Agreement
(provided Executive was employed by the Company at such
expiration), any unvested Holdings Restricted Membership
Interest vests only as follows:
(i) If the Company does not continue to employ Executive
for reason(s) not constituting Cause as defined in
Section 5(d)(1-4) hereof or if the Executive does not
continue his employment at the request of the Company
for reason(s) constituting Good Reason as defined in
Section 5(d)(5), then an additional twenty-five
percent (25%) of the Holdings Restricted Membership
Interest vests; or
(ii) If the Executive's employment with the Company
continues, the twenty-five percent (25%) of the
Holdings Restricted Membership Interest continues to
vest in accordance with Section 4(f)(1)(iii) above as
though there had been no Termination Date.
2
(3) If Executive's employment terminates, the Company has
the right to repurchase any unvested portion of the Holdings
Restricted Membership Interest for the purchase price
originally paid by Executive.
(4) While Gaming Holdings remains a pass-through entity
for federal income tax purposes, Gaming Holdings will
periodically distribute cash, to the extent available, to
Executive in an amount equal to the increase in his
cumulative tax liability with respect to his interest in
Gaming Holdings and Gaming Holdings may, at the discretion
of the Gaming Holdings Board, periodically distribute
additional cash, to the extent available, to Executive to
satisfy any additional tax liability arising from his
interest in Gaming Holdings in excess of distributions
otherwise receivable.
2. GAMING LAW. Anything to the contrary herein or in the Employment
Agreement 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 (or any
successor statute) the rules and regulations promulgated by the Nevada Gaming
Commission and the State Gaming Control Board. To the extent anything in this
Amendment or the Employment Agreement is inconsistent with any gaming laws or
regulations, the gaming laws and regulations shall control.
3. ASSIGNMENT. This Agreement shall be binding upon and inure to the
benefit of any successor of the Company or Gaming Holdings. 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 of the assets or
business of the Company or Gaming Holdings and supercede any prior understanding
or agreements between the parties hereto and Aladdin Holdings, LLC.
4. ENTIRE AGREEMENT. This Amendment and the Employment Agreement
represent the entire agreement and understanding between the Company, Gaming
Holdings, Aladdin Holdings, LLC and Executive concerning the matters herein and
supercede any prior understandings or agreements between the parties hereto and
Aladdin Holdings, LLC.
5. REMAINING AGREEMENT EFFECTIVE. Any provision of the Employment
Agreement not amended by this Amendment shall remain in full force and effect.
3
6. NO ORAL MODIFICATION, CANCELLATION OR DISCHARGE. This Amendment may
only be amended, canceled or discharged in writing singed by the Executive,
Gaming Holdings and the Company.
7. GOVERNING LAW. This Amendment shall be governed by the laws of the
state of Nevada.
8. CAPITALIZED TERMS. Capitalized terms not defined herein shall have
the meanings described thereto in the Employment Agreement.
9. COUNTERPARTS. This Amendment may be executed in any number of
counterparts, each of which shall be considered an original, but all such shall
together constitute but one and the same contract.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date first above-written.
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/ CORNELIUS T. KLERK
---------------------------
Name: Cornelius T. Klerk
Title: Senior Vice President and
Chief Financial Officer
4