Exhibit 10.3


 


EMPLOYMENT AGREEMENT


 


THIS
EMPLOYMENT AGREEMENT (“Agreement”) is made and entered into as of July 1,
2009 (the “Effective Date”) by and between Tropicana Las Vegas, Inc.
(the “Company”) and Alex Yemenidjian (“Executive”).


 


WHEREAS,
Executive and the Company desire to enter into an employment relationship;


 


WHEREAS,
the Company and Executive (the “Parties”) wish to specify in writing the
terms under which Executive is employed.


 


THEREFORE,
the Parties agree as follows:


 


1.                                 EMPLOYMENT PERIOD.


 


1.1          Employment
Period. This Agreement shall commence on the Effective Date
and shall continue on an at-will basis on the terms and conditions set forth
below until Executive’s employment is terminated as provided in Section 5.
The period during which Executive’s employment continues in effect shall be
referred to as the “Employment Period.” In the event that Executive
ceases to be employed by the Company, any Affiliated Company (as defined below)
and/or any Operating Company (as defined in the limited partnership agreement
of Onex Armenco Gaming, LP) (together, with the Company and each Affiliated
Company, the “Subject Companies”) for any reason specified in Section 5,
Executive’s employment in respect of all positions he holds with each such
Subject Company shall also be terminated immediately thereafter.


 


2.                                 DUTIES AND RESPONSIBILITIES.


 


2.1          Position
and Duties. Executive shall serve as the Chief Executive
Officer and Chairman of the Board of Directors of the Company, and shall report
directly to the Company’s Board of Directors (the “Board”). Executive
shall have such authority, duties and responsibilities as ordinarily assigned
to an employee holding such position. Executive shall also have such additional
authority, duties and responsibilities as assigned to Executive by the Board
from time to time with Executive’s consent.


 


2.2          Devotion
of Time and Effort. Executive shall use Executive’s good faith
best efforts and judgment in performing Executive’s duties as required
hereunder and shall act in the best interests of the Company. Executive shall
devote substantially all of Executive’s business time, attention and energies
to the business of the Company and any other entity that is an affiliate of the
Company (each, an “Affiliated Company”) and for which Executive agrees
to perform services, except as otherwise permitted in accordance with Section 2.3.


 


2.3          Other
Activities. Executive may engage in other activities for
Executive’s own account while employed hereunder, including without limitation,
charitable, community and other business activities, provided that such other
activities do not materially interfere with the performance of Executive’s
duties hereunder.


 

















 


3.                                      COMPENSATION.


 


3.1          Base
Compensation. Executive shall be paid a salary of $800,000
annually (the “Base Compensation”) from the date hereof until the
Renovation Completion Date (as defined below), provided that, in the
event Executive concurrently acts as Chairman of the Board and chief executive
officer of any Affiliated Company, the Company shall be required to pay only a
proportionate share of such Base Compensation. The Base Compensation shall be
paid at periodic intervals in accordance with the Company’s payroll practices
for salaried employees. The Base Compensation shall be reviewed at least
annually, and shall (a) be increased by not less than a relative increase
commensurate with the rise in the cost-of-living index (or such greater amount
as may be determined), but in no event shall it be decreased and (b) as
soon as practicable following the Renovation Completion Date, be increased to
an amount commensurate with the base compensation payable to individuals
serving as Chief Executive Officer and Chairman of the Board of similar casino
and gaming companies taking into account Executive’s stature in the casino and
gaming industry. If the Executive and the Board cannot agree to the amount to
be paid pursuant to clause (b) of the prior sentence or the bonus target
in Section 3.3, the Board shall retain a nationally-recognized
compensation consulting firm to determine the base salary and performance bonus
target. In the event that the Base Compensation is increased according to this Section 3.1,
the new rate of compensation shall be the Base Compensation for purposes of
this Agreement thereafter.


 


3.2          “Renovation
Completion Date” shall mean the date that renovation of the Tropicana
Casino in Las Vegas is substantially complete, as such date is determined by
the Board acting in good faith.


 


3.3          Bonus
Compensation. For the period beginning on the Renovation
Completion Date until December 31, 2010 and for each calendar year
thereafter during the Employment Period, Executive shall be eligible to receive
a cash bonus (the “Performance Bonus”) with a target award commensurate
with Executive’s stature in the gaming industry, but such target award shall
not be less than one hundred percent (100%) of Executive’s Base Compensation
payable with respect to the year for which the Performance Bonus relates and,
in the case of the period from the Renovation Completion Date until December 31,
2010, such target award shall be $800,000 multiplied by a fraction equal to the
number of days in such period divided by 365 (or, if Executive’s annualized
Base Compensation is greater than $800,000, Executive’s annualized Base
Compensation payable with respect to the 2010 calendar year multiplied by such
fraction). The actual amount of the Performance Bonus awarded for any year may
differ from the targeted amount as reasonably determined by the Compensation
Committee (the “Committee”) of the Board based on Executive’s
achievement of certain individual performance goals and the Company’s
achievement of certain operating, financial or other corporate goals
established by the Committee. The Performance Bonus shall be paid no later than
March 15 of the year following the year for which the Performance Bonus
was awarded; provided that, Executive remains employed by the Company
through the end of the year for which the Performance Bonus is awarded and
through such payment date.


 


3.4          Benefits. During the
Employment Period, Executive shall be entitled to participate in all pension,
401(k) and other employee benefit plans, including without limitation,
medical, dental, vision, disability and life insurance plans, in accordance
with the terms of such


 


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plans
or policies as they may be in effect from time to time, on the same basis as
other top executive-level employees of the Company. If not available through
the Company’s employee benefit plans, the Company shall also provide, at no
cost to Executive, term life insurance in a minimum amount of up to $10,000,000
(with the beneficiary thereof to be designated by Executive), and shall provide
long-term disability insurance with an annual benefit equal to Executive’s Base
Compensation and target Performance Bonus, payable in the event of a
termination under Section 5.3.


 


3.5          Vacation. Executive
shall be entitled to four weeks of paid vacation annually during the Employment
Period. Executive’s vacation pay shall not be subject to the Company’s policies
applicable to non-executive employees concerning accrual, use and scheduling of
vacation, as such policies may be in effect from time to time. Executive’s
vacation pay shall vest in equal increments each pay period during each year
and any accrued, unused vacation shall be paid to Executive at the Base
Compensation rate in effect at the time of termination, and shall not be
subject to any cap or forfeiture at any time.


 


3.6          Business
Expenses. (a) Executive shall be entitled to
reimbursement of reasonable business expenses actually incurred by Executive in
accordance with Company policies, as they may be in effect from time to time.
With respect to airline tickets, the Company shall reimburse executive for
first class airfare. It is understood and agreed by the Parties that Executive
may, upon his reasonable business determination that use of a private aircraft
is reasonably necessary for the efficient management of the business, cause the
Company to charter an aircraft suitable, in Executive’s reasonable
determination, for Executive’s business travel, and, subject to the approval of
the Board, acquire or lease such an aircraft. All expense reimbursements shall
be made not later than thirty (30) days after submission of a request for
reimbursement by Executive with appropriate supporting evidence of the expense.


 


(b)           From the date hereof until the
determination of the Executive’s increased Base Compensation as contemplated by
clause (b) of the third sentence of Section 3.1, Executive shall also
be paid an additional amount each calendar month as a stipend for living
expenses in Las Vegas, Nevada in an amount equal to $10,000 divided by 1.0 less
the highest marginal federal income tax rate for individuals then in effect
under Section 1 of the Internal Revenue Code of 1986, as amended (or any
successor provision at law).


 


4.                                      CONFIDENTIAL INFORMATION.


 


During
the Employment Period, Executive will have access to and become acquainted with
various information relating to the Company’s business operations, including
customer and supply lists, customer files, marketing data, business plans,
strategies, employee lists, contracts, financial records and accounts, products
in development, product plans, projections and budgets, and similar
information. Executive agrees that to the extent such information is not
generally known to or available to the public and/or the industry, such
information and documents constitute “Confidential Information” of the
Company. Confidential Information shall not include information which is
generally known to the public or in the industry or which becomes known other
than through a breach of this Agreement by Executive. Executive further agrees
that any documents relating to the business of the Company, whether they are
prepared by Executive or come into Executive’s possession in any other way, are
owned by the Company,


 


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shall
remain the exclusive property of the Company, and must be returned to the
Company upon termination of employment. Executive shall not use any
Confidential Information of the Company, directly or indirectly, for Executive’s
own benefit, or the benefit of any person or entity other than the Company, nor
shall Executive disclose Confidential Information to any person or entity other
than the Company and its employees or other persons authorized by the Company
to receive the information, either during the Employment Period or at any time
thereafter, except as may be appropriate for Executive to perform Executive’s
duties as an employee, officer and/or director, directly or indirectly, of the
Company.


 


5.                                      TERMINATION OF EMPLOYMENT


 


5.1          In
General. Executive’s employment hereunder may be terminated
by the Company or Executive, as applicable, without any breach of this
Agreement only as described below in Sections 5.2-5.7.


 


5.2          Death.
Executive’s employment shall terminate on the date of Executive’s
death.


 


5.3          Disability. Unless
prohibited by law, the Company may terminate Executive’s employment if
Executive becomes Disabled, as defined below, at any time upon a vote in favor
of termination because Executive is Disabled by the Board of Directors and
written notice to Executive specifying a date of termination not less than thirty
(30) days nor more than forty-five (45) days following the date of the written
notice. For purposes of this Section 5.3, the term “Disabled” shall mean a
physical or mental incapacity as a result of which Executive becomes unable to
continue to perform the essential functions of Executive’s job with or without
accommodation hereunder for six (6) consecutive calendar months or for
shorter periods aggregating one hundred twenty-five (125) business days in any
twelve (12) month period.


 


5.4          By the
Company For Cause. The Company may terminate Executive’s employment
for Cause, as defined below in this Section 5.4, as follows: if
the action(s) or inaction(s) that the Company is relying upon Cause
is/are curable, subject to remedy or correctable, the Board shall provide
Executive with a written notice of its intention to terminate for Cause and
permit Executive not less than thirty (30) days opportunity to cure. The notice
shall specify the subpart(s) of this Section 5.4 and the facts
the Board contends give rise to Cause to terminate. If Executive has not timely
cured or such action(s) or inaction(s) is/are not capable of being
cured, the Board may terminate Executive’s employment for Cause upon a vote in
favor of termination for Cause by the members of the Board immediately upon
written notice to Executive. The notice shall specify the subpart(s) of
this Section 5.4 and the facts relied upon by the Board to
determine that Cause exists.


 


For
purposes of this Agreement, “Cause” shall mean:


 


(a)           Executive’s conviction
or indictment of, or entering a plea of guilty or nolo contendere to, a crime
that constitutes a felony or misdemeanor involving moral turpitude;


 


(b)           any willful act or
willful omission on Executive’s part which is materially injurious to the
financial condition or business reputation of the Company or any of its
subsidiaries or affiliates;


 


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(c)             a material breach
by the Executive, Armenco or the Trust (each as defined in the Holdings
Agreement) of any restrictive covenants contained in Section 9.1 of the
Agreement of Limited Partnership of Onex Armenco Gaming, LP (the “Partnership”), as amended or
restated from time to time (as so amended or restated, the “Holdings
Agreement”) or material breach by the Executive, Armenco, the
Trust or their respective Affiliates of any other obligation for the benefit of
the Company, the Partnership, Onex GP, Onex LP or their respective Affiliates
under a partnership, limited liability company or shareholder agreement;


 


(d)             the failure of the
Executive to obtain any requisite license, permit or approval based on
suitability from any government authority (the “Authorities”), including any
gaming or liquor license, permit or approval, in each case that would preclude
the Executive from carrying out his essential duties under in this Agreement;


 


(e)             if, after the
initial receipt by the Executive of any requisite license, permit or approval
from the Authorities, the employment of the Executive materially precludes,
materially adversely affects or unduly delays the issuance of, or result in the
imposition of unduly burdensome terms and conditions on, or revocation of, any
liquor, gaming or other license, permit or approval, necessary or appropriate
to the proposed, contemplated or actual operations of the Company;


 


(f)              any of the
Authorities commences or notifies the Company in writing that it will commence
any suit or proceeding against the Company or any affiliate of the Company, or
to terminate or deny, any requisite license, permit, finding of suitability, or
any other approval of the Company or any affiliate of the Company, by or from
any of the Authorities, as a result of the Company’s association with the
Executive; or


 


(g)             if Landlord (as
defined below) terminates the Lease Agreement (the “Gaming Lease”) entered into
as of the 1st day of July, 2009, by and between Tropicana Las Vegas, Inc.,
a Nevada corporation (“Landlord”) and Armenco Holdings, LLC,
a California limited liability company (“Tenant”) by reason of
event of default under section 14 of the Gaming Lease.


 


The
Company must give written notice of its intention to terminate within thirty
(30) days of the occurrence of the facts it cites as grounds to terminate for
Cause, or it may not terminate Executive’s employment for Cause based upon
those facts. For the avoidance of doubt, any termination of Executive’s
employment with the Company pursuant to Section 1.1 following the
termination of Executive’s employment with any other Subject Company for Cause
shall constitute a termination by the Company for Cause.


 


5.5          By the
Company with Valid Basis. The Company may terminate
Executive’s employment with Valid Basis, as defined below in this Section 5.5, as follows: if
action(s) or inaction(s) that the Company is relying upon as a Valid
Basis is/are curable, subject to remedy or correctable, the Board shall provide
Executive with a written notice of its intention to terminate with Valid Basis
and permit Executive not less than thirty (30) days opportunity to cure. The
notice shall specify the subpart(s) of this Section 5.5 and the facts
the Board contends give rise to a Valid Basis to terminate. If Executive has
not timely cured or such action(s) or inaction(s) is/are not capable
of being cured, the Board may terminate Executive’s employment with Valid


 


5

















 


Basis
upon a vote in favor of termination with Valid Basis by the members of the
Board immediately upon written notice to Executive. The notice shall specify
the subpart(s) of this Section 5.5 and the facts relied upon
by the Board to determine that Valid Basis exists.


 


For
purposes of this Agreement, “Valid Basis” shall mean:


 


(a)           the Company’s
failure to achieve at least 85% of planned/budgeted EBITDA for any two
consecutive full fiscal years starting with the first full fiscal year
beginning not less than six months following the Effective Date, unless the
shortfall is primarily attributable to external factors that could not
reasonably have been anticipated or mitigated; or


 


(b)           Executive’s material
and continuing failure to perform effectively the duties of his position (other
than as a result of a Disability), which failure continues following written
notice from the Board describing the deficiency.


 


The
Company must give written notice of its intention to terminate within thirty
(30) days of the occurrence of the facts it cites as grounds to terminate with
Valid Basis, or it may not terminate Executive’s employment with Valid Basis
based upon those facts.


 


Any
purported termination of Executive’s employment that does not satisfy the
requirements of Section 5.4 or Section 5.5 shall be
ineffective, and Executive’s employment, and the Company’s obligations under
this Agreement, shall continue in full force and effect; provided, however,
that the Company may not rely upon any failure to perform by Executive during
any period following the Company’s notice of termination and the determination
that such termination is ineffective as a basis to terminate Executive’s
employment on a “Valid Basis”.


 


For
the avoidance of doubt, any termination of Executive’s employment with the
Company pursuant to Section 1.1 following the termination of Executive’s
employment with any other Subject Company with Valid Basis shall constitute a
termination by the Company with Valid Basis.


 


5.6          By Executive For Good Reason. Executive may
terminate Executive’s employment for Good Reason, as defined below in this Section 5.6,
at any time upon written notice to the Company specifying a date of termination
not less than thirty (30) days nor more than forty-five (45) days following the
date of the written notice. Such notice shall specify the subpart(s) of
this Section 5.6 and the facts relied upon by Executive to
determine that Good Reason exists. If the Company cures the breach or violation
cited in the notice prior to the date of termination specified in the notice,
Executive may not terminate Executive’s employment for Good Reason. Between the
date notice is given and the date of termination, Executive shall not be
employed by any other person or entity, and shall continue to perform Executive’s
duties for the Company to the extent Executive is requested by the Company to
do so. The Company may relieve Executive of some or all of Executive’s duties
between the date notice is given and the date of termination, and such action
shall not constitute Good Reason for Executive to terminate Executive’s
employment under this Section 5.6.


 


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For
purposes of this Agreement, “Good Reason” shall mean:


 


(a)           The Company’s
material breach of this Agreement, or its obligations to Executive under a
partnership, limited liability company or shareholder agreement; a material
breach by the Onex GP or Onex LP (each as defined in the Holdings Agreement) of
any restrictive covenants contained in Section 9.1 of the Holdings
Agreement or material breach by Onex GP, Onex LP or their respective Affiliates
of any other obligation for the benefit of the Company, the Partnership,
Executive, Armenco, the Trust or their respective Affiliates under a
partnership, limited liability company or shareholder agreement;


 


(b)           a material,
substantial, and permanent reduction in Executive’s duties, responsibilities or
authority at the Company without Executive’s prior written consent;


 


(c)           the conviction,
indictment, or entering a plea of guilty or nolo contendere to a crime that
constitutes a felony or misdemeanor involving moral turpitude of Gerald W.
Schwartz or Timothy A.R. Duncanson (the “Onex GP Designees”);


 


(d)           the failure of any
of the Onex GP Designees to obtain any requisite license, permit or approval
based on suitability from any government authority (the “Authorities”), including any
gaming or liquor license, permit or approval, in each case that would preclude
Executive from carrying out his essential duties under in this Agreement;


 


(e)           if, after the
initial receipt by any of the Onex GP Designees of any requisite license,
permit or approval from the Authorities, the participation as a partner, member,
shareholder or other ownership interest or the membership on the Board of
Directors of any of the Onex GP Designees materially precludes, materially
adversely affects or unduly delays the issuance of, or result in the imposition
of unduly burdensome terms and conditions on, or revocation of, any liquor,
gaming or other license, permit or approval, necessary or appropriate to the
proposed, contemplated or actual operations of the Company;


 


(f)            any of the
Authorities commences or notifies the Company in writing that it will commence
any suit or proceeding against the Company or any affiliate of the Company, or
to terminate or deny, any requisite license, permit, finding of suitability, or
any other approval of the Company or any affiliate of the Company, by or from
any of the Authorities, as a result of the Company’s association with any of
the Onex GP Designees; or


 


(g)           if Tenant terminates
the Gaming Lease by reason of an event of default under section 14 of the
Gaming Lease.


 


Executive
shall be deemed to have waived Executive’s right to terminate for Good Reason
with respect to any such breach or action if Executive does not notify the
Company in writing of such breach or action within thirty (30) days from when
Executive has actual knowledge of the event that gives rise to such breach or
action.


 


In
the event that Executive delivers notice of termination of his employment
hereunder for Good Reason and based upon an Onex Designee meeting any of the
criteria of clauses (c) through (f) as the cause of such Good Reason,
then such Good Reason may be cured by removing such Onex Designee from the
affairs of the Company within 30 days of receipt of such notice if, and only if
(for purposes of clauses (d) through (f)) such removal also causes the
criteria described therein no longer to be satisfied.


 


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For
the avoidance of doubt, any termination of Executive’s employment with the
Company pursuant to Section 1.1 following the Executive’s termination of
employment with any other Subject Company for Good Reason shall constitute a
termination by Executive for Good Reason.


 


5.7          By
Executive Without Good Reason. Executive may terminate
Executive’s employment without Good Reason, as defined in Section 5.6 upon written
notice to the Company specifying a date of termination not less than thirty
(30) days nor more than forty-five (45) days following the date of the written
notice. Between the date notice is given and the date of termination, Executive
shall not be employed by any other person or entity, and shall continue to
perform Executive’s duties for the Company to the extent Executive is requested
by the Company to do so. For the avoidance of doubt, any termination of
Executive’s employment with the Company pursuant to Section 1.1 following
the Executive’s termination of employment with any other Subject Company
without Good Reason shall constitute a termination by Executive without Good
Reason.


 


5.8          Return
of Property. Upon termination of Executive’s employment,
Executive shall return to the Company any and all Company property, materials,
or equipment in Executive’s possession.


 


5.9          Severance.


 


(a)             Termination by Company for Cause or
by Executive Without Good Reason. In the event that Executive’s
employment terminates pursuant to Section 5.4 (For Cause) or
Section 5.7 (Without Good Reason) at any time: (i) Executive,
if requested and able to do so, shall continue to render services to the
Company pursuant to this Agreement until the Effective Date of Termination, as
defined in this Section 5.9; (ii) Executive shall
continue to receive Executive’s Base Compensation earned and benefits accrued
as provided under this Agreement through the Effective Date of Termination; and
(iii) after the Effective Date of Termination, Executive shall have no
further right to receive compensation, benefits or other consideration from the
Company, and Executive shall not be entitled to any severance payments or
benefits, or as required by applicable law or the Company’s pension or welfare
benefit plans. The “Effective Date of Termination” shall be the
date specified in the written notice of termination for a termination under Sections 5.4,  5.5, 5.6
or 5.7.


 


(b)             Termination by Company with Valid
Basis or by Executive for Good Reason. In the event that Executive
is terminated pursuant to Section 5.5 (with Valid
Basis) or pursuant to Section 5.6 (For Good
Reason) at any time: (i) Executive, if requested and able to do so, shall
continue to render services to the Company pursuant to this Agreement until the
Effective Date of Termination; and (ii) Executive shall continue to
receive Executive’s Base Compensation earned and benefits accrued as provided
in this Agreement only through the Effective Date of Termination. Subject to Section 5.9(c) below, in the
event that Executive incurs a “separation from service” from the Company
(within the meaning of Section 409A(a)(2)(A)(i) of the Internal
Revenue Code of 1986, as amended (the “Code”), and Treasury Regulation Section 1.409A-1(h))
(a “Separation from Service”) by reason of (1) a
termination of Executive’s employment by the Company pursuant to Section 5.5 (with Valid
Basis) or (2) a termination of Executive’s employment by Executive
pursuant to clause (a) of Section 5.6 (For


 


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Good
Reason), Executive shall be paid a lump sum severance payment of an amount
equal to five times the Base Compensation within 60 days after the date of
Executive’s Separation from Service (the “Severance Payment”);
provided  however, that Executive shall be
entitled to the Severance Payment if and only if Executive has executed and
delivered to the Company a general release in the form attached hereto as Exhibit A
(the “General Release”).


 


(c)           Six-Month
Delay. Notwithstanding anything to the contrary in this Agreement,
no compensation or benefits, including without limitation any severance
payments or benefits payable under this Section 5.9, shall be paid
to Executive during the 6-month period following Executive’s Separation from
Service if the Company determines that paying such amounts at the time or times
indicated in this Agreement would be a prohibited distribution under Section 409A(a)(2)(B)(i)
of the Code. If the payment of any such amounts is delayed as a result of the
previous sentence, then on the first business day following the end of such
6-month period (or such earlier date upon which such amount can be paid under Section 409A
of the Code without resulting in a prohibited distribution, including as a
result of Executive’s death), the Company shall pay Executive a lump-sum amount
equal to the cumulative amount that would have otherwise been payable to
Executive during such period, plus interest credited from the date of Executive’s
Separation from Service to the date of payment at the “applicable federal rate”
provided for in Section 7872(f)(2)(A) of the Code in effect as of the
date of such Separation from Service.


 


5.10        Certain
Additional Payments. If any payment or benefit received or to be
received by Executive in connection with a change in control or termination of
Executive’s employment (whether payable pursuant to the terms of this
Agreement, a stock option plan or any other plan or arrangement with the
Company) (the “Total Payments”) will be subject to the
excise tax imposed by Section 4999 of the Code, as amended, the Company
will pay to Executive, within thirty (30) days of any payments giving rise to
excise tax, an additional amount (the “gross-up payment”) such that the
net amount retained by Executive, after deduction of any excise tax on the
Total Payments and any federal, state and local income and employment tax and
excise tax on the gross-up payment provided for by this Section 5.10, will equal the
Total Payments. For purposes of determining the amount of the gross-up payment,
Executive will be deemed to pay federal, state and local income taxes at
Executive’s actual marginal rate of federal, state and local income taxation in
the calendar year that the payment or benefit to which the excise tax relates
is to be made or provided, net of the maximum reduction in federal income taxes
that could be obtained at that time by Executive by deducting such state and
local taxes. For purposes of determining whether any of the Total Payments
would not be deductible by the Company and would be subject to the excise tax,
and the amount of such excise tax, (1) Total Payments will be treated as “parachute
payments” within the meaning of Section 280G(b)(2) of the Code, and all
parachute payments in excess of the base amount within the meaning of Section 280G(b)(3)
will be treated as subject to the excise tax unless, in the opinion of tax
counsel selected by the Company’s independent auditors prior to the change in
control and acceptable to Executive, such Total Payments (in whole or in part)
are not parachute payments, or such parachute payments in excess of the base
amount (in whole or in part) are otherwise not subject to the excise tax, and (2) the
value of any non-cash benefits or any deferred payment will be determined by
the Company’s independent auditors in accordance with Sections 280G(d)(3) and
(4) of the Code. If the excise tax is subsequently determined to be less
than the amount originally taken into account hereunder, Executive will repay
to the Company, when such


 


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reduction
in excise tax is finally determined, the portion of the gross-up payment
attributable to such reduction. If the excise tax is determined to exceed the
amount originally taken into account hereunder (including by reason of any
payment, the existence or amount of which cannot be determined at the time of
the gross-up payment), the Company will make an additional gross-up payment in
respect of such excess (plus any interest payable with respect to such excess)
when such excess if finally determined. The gross-up payment and any payment of
any income or other taxes to be paid by the Company under this Section 5.10
shall be made not later than the end of Executive’s taxable year next following
Executive’s taxable year in which Executive remits the related taxes.


 


5.11        No Duty to Mitigate. Executive
shall be entitled to the full severance benefits provided under this Section 5,
without regard to Executive’s efforts or lack of efforts to obtain alternative
employment, and the severance benefits provided to Executive shall not be
reduced by any amounts received by Executive from any other source.


 


6.                                      ARBITRATION AGREEMENT.


 


6.1          Claims Subject to Arbitration.


 


(a)             Any dispute,
controversy or claim, of any and every kind or type, whether based on contract,
tort, statute, regulations, or otherwise, arising out of, connected with, or
relating in any way to this Agreement or the obligations of the parties
hereunder including without limitation any dispute as to the existence,
validity, construction, interpretation, negotiation, performance,
non-performance, breach, termination or enforceability of this Agreement (in
each case, a “Dispute”), shall be resolved solely and exclusively in
accordance with the procedures specified in this Section 6.1. The
Parties shall attempt in good faith to settle any Dispute by mutual discussions
within thirty (30) days after the date that one Party gives notice to the other
Parties of such a Dispute. If such Dispute is not resolved within such thirty
(30) day period, the dispute shall be finally settled by arbitration
administered by the American Arbitration Association under its Commercial
Arbitration Rules, and judgment on the award rendered by the arbitrator(s) may
be entered in any court having jurisdiction thereof. The arbitration shall be
presided over by a single arbitrator appointed in accordance with such Rules and
held in Las Vegas, Nevada or at such other location as the Parties involved in
the applicable Dispute may agree. The arbitrator may, in the award, allocate
all or part of the costs of the arbitration, including the fees of the
arbitrator and the reasonable attorneys’ and other professional fees and costs
of the prevailing party.


 


(b)             To the extent that
any Party (including assignees of any Party’s rights or obligations under this
Agreement) may be entitled, in any jurisdiction, to claim for itself or its
revenues, assets or properties, immunity from service of process, from suit,
from the jurisdiction of any court, from an interlocutory order or injunction
or the enforcement of the same against its property in such court, from
attachment prior to judgment, from attachment in aid of execution of an
arbitral award or judgment (interlocutory or final), or from any other legal process,
and to the extent that, in any such jurisdiction there may be attributed such
immunity (whether claimed or not), each Party hereby irrevocably agrees not to
claim, and hereby irrevocably waives, such immunity.


 


10














 


(c)           This agreement to arbitrate shall be
binding upon the successors, assignees and any trustee or receiver of any
Party.


 


6.2          Waiver
of Right to Jury. Both the Company and Executive understand
that by using arbitration to resolve disputes they are giving up any right that
they may have to a judge or jury trial with regard to all issues concerning
employment or otherwise covered by this Section 7.


 


7.                                      GENERAL PROVISIONS.


 


7.1          Withholding. The Company
shall deduct and withhold from any payments to Executive, including but not
limited to payments of Executive’s Base Compensation and Bonus Compensation,
any and all applicable Federal, State and local income and employment
withholding taxes and any other amounts required to be deducted or withheld by
the Company under applicable statutes, regulations, ordinances or orders. The
Company shall also deduct such amounts as may be authorized by Executive from
time to time.


 


7.2          Assignment
and Successors. The Company may assign its rights and obligations under
this Agreement to any entity which is a successor to all or substantially all
the assets of the Company, by merger or otherwise, and may assign or encumber
this Agreement and its rights hereunder as security for indebtedness of the
Company and its affiliates. Executive may not assign his rights or obligations
under this Agreement to any individual or entity. This Agreement shall be
binding upon and inure to the benefit of the Company, Executive and their
respective successors, assigns, personnel and legal representatives, executors,
administrators, heirs, distributees, devisees, and legatees, as applicable.


 


7.3          Notices. All notices,
requests, demands and other communications that are required or may be given
under this Agreement shall be in writing and shall be deemed to have been duly
given when received if: (i) personally delivered, when transmitted if
transmitted by telecopy, electronic or digital transmission method with
electronic confirmation of receipt; (ii) the day after it is sent, if sent
for next-day delivery to a domestic address by recognized overnight delivery
service (e.g., FedEx); and (iii) upon
receipt, if sent by certified or registered mail, return receipt requested. In
each case notice shall be sent to:


 


If
to the Company:


 


Tropicana
Las Vegas, Inc.


3801
Las Vegas Blvd South


Las
Vegas, Nevada 89109


Attention:
Joanne M. Beckett, Esq.


Telephone:
(702) 739-3530


Telecopy:
(702) 739-5107


 


with
mandatory copies to (which copies shall not constitute notice hereunder):


 


11

















 


Latham &
Watkins LLP


885
Third Avenue


New
York, NY 10022


Attention:
Jennifer Perkins, Esq.


Telephone:
212-906-1200


Telecopy:
212-751-4864


Email:
jennifer.perkins@lw.com


 


and


 


Onex
Corporation


Canada
Trust Tower


161
Bay Street - 49th Floor


P.O. Box
700


Toronto,
Ontario M5J 251


Canada


Attention:
Andrea Daly, Esq.


Telephone:
416-874-1209


Telecopy:
416-362-5765


Email:
ADaly@onex.com


 


If
to Executive:


 


Alex
Yemenidjian


Tropicana
Las Vegas, Inc.


3801
Las Vegas Blvd. South


Los
Vegas, NV


Telephone:
(702) 739-3530


Telecopy:
(702) 739-5107


Email:
alexy@armencoholdings.com


 


and


 


Latham &
Watkins LLP


885
Third Avenue


New
York, NY 10022


Attention:
Charles M. Nathan, Esq.


Telephone:
212-906-1730


Telecopy:
212-751-4864


E-mail:
charles.nathan@lw.com


 


Any
party may change its address for the purpose of this Section 7.3 by giving the
other party written notice of its new address in the manner set forth above.


 


12

















 


7.4          Entire
Agreement. This Agreement constitutes the entire agreement of
the parties with respect to the subject matter hereof, and supersedes all prior
representations, warranties, agreements and understandings, both written and
oral, made by the Company or any of its affiliates, representatives or agents
with respect to the terms and conditions of Executive’s employment; provided,
however, that this Agreement shall: (a) supplement, not supersede, any
prior agreements concerning the Confidential Information or other intellectual
property of the Company, and any conflicts or inconsistencies between such
agreements shall be resolved so that the provision providing greater rights to
the Company shall prevail; and (b) not supersede, limit or amend Executive’s
rights under any equity-based compensation arrangement, including without
limitation any options or restricted stock granted to Executive, except as
expressly set forth in this Agreement.


 


7.5          Amendments;
Waivers. This Agreement may be amended or modified, and any of
the terms and covenants may be waived, only by a written instrument executed by
the parties hereto, or, in the case of a waiver, by the party waiving
compliance. Any waiver by any party in any one or more instances of any term or
covenant contained in this Agreement shall neither be deemed to be nor
construed as a further or continuing waiver of any such term or covenant of
this Agreement.


 


7.6          Provisions
Severable. In case any one or more provisions of this
Agreement shall be invalid, illegal or unenforceable, in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein shall not, in any way, be affected or impaired thereby. If any provision
hereof is determined by any court of competent jurisdiction to be invalid or
unenforceable by reason of such provision extending the covenants and
agreements contained herein for too great a period of time or over too great a
geographical area, or being too extensive in any other respect, such provision
shall be interpreted to extend only over the maximum period of time and
geographical area, and to the maximum extent in all other respects, as to which
it is valid and enforceable, all as determined by such court in such action.


 


7.7          Attorneys’
Fees. If any legal action, arbitration or other
proceeding, is brought for the enforcement of this Agreement, or because of an
alleged dispute, breach or default in connection with any of the provisions of
this Agreement, each of the parties hereto shall be responsible for payment of
their own attorneys’ fees and other costs incurred by them in that action or
proceeding, without regard to whomever is the prevailing party in such action
or proceeding with respect to such claims, except as otherwise provided in Section 6.


 


7.8          Governing
Law. This Agreement shall be construed, performed and
enforced in accordance with, and governed by the laws of the State of
California without giving effect to the principles of conflict of laws thereof.


 


7.9          Cooperation. During
Executive’s employment with the Company and thereafter, Executive agrees to
cooperate with the Company and its agents, accountants and attorneys concerning
any matter with which Executive was involved during Executive’s employment.
Such cooperation shall include, but not be limited to, providing information,
meeting with and reviewing documents provided by the Company and its agents,
accountants and attorneys during normal business hours or other mutually
agreeable hours upon reasonable notice and making himself available for
depositions and hearings, if requested and upon reasonable notice. If


 


13

















 


Executive’s
cooperation is required after the termination of Executive’s employment, the
Company shall reimburse Executive for any reasonable out of pocket expenses
incurred and any wages lost by Executive in the course of performing his
obligations hereunder.


 


7.10        Headings. The headings
contained in this Agreement are provided solely for the Parties’ convenience
and shall not be deemed to alter the meaning of the text of the Agreement.


 


7.11        Construction. This Agreement
shall be deemed drafted equally by both the parties. Its language shall be
construed as a whole and according to its fair meaning. Any presumption or
principle that the language is to be construed against any party shall not
apply. The headings in this Agreement are only for convenience and are not
intended to affect construction or interpretation. Any references to
paragraphs, subparagraphs, sections or subsections are to those parts of this
Agreement, unless the context clearly indicates to the contrary. Also, unless
the context clearly indicates to the contrary, (a) the plural includes the
singular and the singular includes the plural; (b) “or” is used both
conjunctively and disjunctively; (c) “any,” “all,” “each,” or “every”
means “any and all,” and “each and every”; (d) “includes” and “including”
are each “without limitation”; (e) “herein,” “hereof,” “hereunder” and
other similar compounds of the word “here” refer to the entire Agreement and
not to any particular paragraph, subparagraph, section or subsection; and (f) all
pronouns and any variations thereof shall be deemed to refer to the masculine,
feminine, neuter, singular or plural as the identity of the entities or persons
referred to may require.


 


7.12        Survival. The expiration
or termination of the Employment Period shall not impair: (i) the rights
or obligations of any party hereto under Sections 4, 6
and 7, or (ii) the Company’s obligation to make and Executive’s
right to receive any payment pursuant to Section 5.9 through 5.11
if such right accrued prior to or as a result of the expiration or termination.


 


7.13        Counterparts. This Agreement
may be executed in one or more counterparts, each of which shall be deemed an
original, but all of which shall constitute the same instrument.


 


7.14        Code Section 409A.


 


(a)           The payments and benefits under this
Agreement are intended to comply with or be exempt from the application of Section 409A
of the Code. To the extent applicable, this Agreement shall be interpreted in
accordance with Section 409A of the Code and Department of Treasury
regulations and other interpretive guidance issued thereunder. Notwithstanding
any provision of this Agreement to the contrary, if Executive determines that
any compensation or benefits payable under this Agreement may be subject to Section 409A
of the Code and related Department of Treasury guidance, the Company agrees to
adopt such amendments to this Agreement or take such other actions as necessary
or appropriate to (i) exempt the compensation and benefits payable under this
Agreement from Section 409A of the Code and/or preserve the intended tax
treatment of such compensation and benefits, or (ii) comply with the
requirements of Section 409A of the Code and related Department of
Treasury guidance.


 


14

















 


(b)           To the extent that any reimbursements
or corresponding in-kind benefits provided to Executive under this Agreement,
including without limitation under Sections 3.5 and 7.9
hereof, are deemed to constitute compensation to Executive, such amounts shall
be paid or reimbursed reasonably promptly, but not later than December 31
of the year following the year in which the expense was incurred. The amount of
any payments or expense reimbursements that constitute compensation in one year
shall not affect the amount of payments or expense reimbursements constituting
compensation that are eligible for payment or reimbursement in any subsequent
year, and Executive’s right to such payments or reimbursement of any such
expenses shall not be subject to liquidation or exchange for any other benefit.


 


[remainder of page intentionally left blank]


 


15

















 


IN
WITNESS WHEREOF, the parties have executed this Agreement on the date and year
first above written.


 


	
   

  	
  TROPICANA
  LAS VEGAS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/
  Timothy A.R. Duncanson

  
	
   

  	
  By:
  Timothy A.R. Duncanson

  
	
   

  	
  Its:
   Director

  
	
   

  	
   

  
	
   

  	
  EXECUTIVE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Alex
  Yemenidjian

  
	
   

  	
  Alex
  Yemenidjian

  



 

















 


Exhibit A


 


GENERAL RELEASE AGREEMENT


 


This General Release of Claims (this “Release”) is made by Alex
Yemenidjian (“Executive”) in favor of [      ]
(the “Company”) and the “Company Releasees” (as defined below), as of
the date of Executive’s execution of this Release.


 


1.                                      RELEASE


 


1.1          General
Release


 


In
exchange for the Severance Payment as defined in the Employment Agreement
entered into by and between the Company and Executive, dated as of July 1,
2009 to which this Release is an exhibit (the “Employment Agreement”),
Executive does hereby release and forever discharge the “Company Releasees”
herein, consisting of the Company, its parent, subsidiary and affiliate
corporations, and each of their respective past and present parents,
subsidiaries, affiliates, associates, owners, members, stockholders,
predecessors, successors, assigns, employees, agents, directors, officers,
partners, representatives, lawyers, and all persons acting by, through, under,
or in concert with them, or any of them, of and from any and all Claims, as
defined in Section 1.2.


 


1.2          Claims
Released


 


The
“Claims” released herein are any and all claims or causes of action, in law or
in equity, of any nature whatsoever, known or unknown, fixed or contingent
(hereinafter called “Claims”), that Executive now has or may hereafter
have against the Company Releasees by reason of any and all acts, omissions,
events or facts occurring or existing prior to Executive’s execution of this
Release, excluding the “Unreleased Claims,” as defined in Section 1.3.
The Claims released hereunder include, without limitation, any alleged breach
of any express or implied agreement (including without limitation the
Employment Agreement); any alleged torts or other alleged legal restrictions
relating to the Executive’s service to the Company and the termination thereof;
and any alleged violation of any federal, state or local statute or ordinance
including, without limitation, Claims arising under: the Age Discrimination in
Employment Act as amended, 29 U.S.C. § 621 et seq.; Title VII of the
Civil Rights Act of 1964, as amended by the Civil Rights Act of 1991, 42 U.S.C.
§ 2000 et seq.; Equal Pay Act, as amended, 29 U.S.C. § 206(d); the Civil
Rights Act of 1866, 42 U.S.C. § 1981; the Family and Medical Leave Act of 1993,
29 U.S.C. § 2601 et seq.; the Americans with Disabilities Act of 1990,
42 U.S.C. § 12101 et seq.; the False Claims Act , 31 U.S.C. § 3729 et
seq.; the Employee Retirement Income Security Act, as amended, 29 U.S.C. §
1001 et seq.; the Worker Adjustment and Retraining Notification Act, as
amended, 29 U.S.C. § 2101 et seq. the Fair Labor Standards Act, 29
U.S.C. § 215 et seq., the Sarbanes-Oxley Act of 2002; the California
Fair Employment and Housing Act, as amended, Cal. Lab. Code § 12940 et seq.;
the California Equal Pay Law, as amended, Cal. Lab. Code §§ 1197.5(a),1199.5;
the Moore-Brown-Roberti Family Rights Act of 1991, as amended, Cal. Gov’t Code
§§12945.2, 19702.3; California Labor Code §§ 1101, 1102, 69 Ops. Cal. Atty.
Gen. 80 (1986); California Labor Code §§ 1102.5(a), (b); the California WARN
Act, Cal. Lab. Code § 1400 et seq.; the California False Claims Act,
Cal. Gov’t Code § 12650 et seq.;


 

















 


the
California Corporate Criminal Liability Act, Cal. Penal Code § 387; or under
the California Labor Code); and any federal, state or local laws of similar
effect. Executive further acknowledges that he is aware that statutes exist
that render null and void releases and discharges of any claims, rights,
demands, liabilities, action and causes of action that are unknown to the
releasing or discharging party at the time of execution of the release and
discharge. Executive hereby expressly waives, surrenders and agrees to forego
any protection to which he would otherwise be entitled by virtue of the
existence of any such statute in any jurisdiction including, but not limited
to, the State of California. IT IS EXPRESSLY UNDERSTOOD AND AGREED THAT ALL
RIGHTS UNDER SECTION 1542 OF THE CIVIL CODE OF THE STATE OF CALIFORNIA ARE
EXPRESSLY WAIVED BY EXECUTIVE. Section 1542 reads as follows:


 


SECTION 1542.
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE,
WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER
SETTLEMENT WITH THE DEBTOR.


 


1.3          Claims Not Released


 


This
release shall not apply to the “Unreleased Claims.” The “Unreleased
Claims” shall refer to:


 


(a)              the Company’s
obligations to provide the Severance Payment under the Employment Agreement,


 


(b)              Executive’s
rights to indemnification under the insurance policies of the Company
Releasees, or any of them, the formation and governing documents (including
without limitation the articles and bylaws) of the Company Releasees, or any of
them, or applicable law;


 


(c)              Executive’s
rights under applicable workers’ compensation and/or unemployment compensation
laws;


 


(d)              Executive’s
vested rights under any retirement benefit plan, welfare benefit plan or equity
compensation plan (including without limitation, any stock option or restricted
stock plan) of the Company;


 


(e)              Executive’s right
to payment of any compensation earned prior to the Effective Date of
Termination, as defined in the Employment Agreement;


 


(f)               Executive’s
right to payment of any un-reimbursed business expenses;


 


(g)              Executive’s
rights under any agreement entered into between Executive and the Company
Releasees, or any of them, entered into after the Date of the Employment
Agreement;


 


(h)              Executive’s
rights as a shareholder, member, partner or investor in the Company Releasees
or any of them; and


 


2

















 


(i)            any other rights that may not be
waived by private agreement.


 


1.4          Rights
Under the Older Worker’s Benefit Protection Act


 


Executive
agrees and expressly acknowledges that this Release includes a waiver and
release of all claims which Executive has or may have under the Older Worker’s
Benefit Protection Act and the ADEA. The following terms and conditions apply
to and are part of the waiver and release of the Older Worker’s Benefit
Protection Act claims and ADEA claims under this Release:


 


(a)              This paragraph
and this Release are written in a manner calculated to be understood by
Executive.


 


(b)              The waiver and
release of claims under the ADEA contained in this Release does not cover rights
or claims that may arise after the date on which Executive signs this Release.


 


(c)              The Severance
Benefits (as defined in the Employment Agreement) provide for consideration in
exchange for this release in addition to anything of value to which Executive
is already entitled.


 


(d)              Executive has
been advised to consult an attorney before signing this Release and the
Employment Agreement.


 


(e)              Executive has
been granted not less than twenty-one (21) days after Executive is presented
with this Release and the Effective Date of Termination (as defined in the
Employment Agreement) to decide whether or not to sign this Release. If
Executive executes this Release prior to the expiration of such period,
Executive does so voluntarily and after having had the opportunity to consult
with an attorney, and hereby waives the remainder of the twenty-one (21) day
period.


 


(f)               Executive has
the right to revoke this Release within seven (7) days of signing this
Release. In the event this Release is revoked, Executive understands that this
Release will be null and void, and Executive will not be entitled to the
Severance Benefits, which are expressly conditioned upon the execution and
non-revocation of this Release. Executive further understands that he shall not
be entitled to receive the Severance Benefits until after the expiration of
such revocation period and, then, if and only if Executive has not exercised
his right of revocation.


 


If
Executive wishes to revoke this Release, Executive shall deliver written notice
stating Executive’s intent to revoke this Release to the General Counsel at the
offices of the Company, on or before 5:00 p.m. on the seventh (7th) day
after the date on which Executive signs this Release.


 


1.5          No
Assignment


 


Executive
represents and warrants to the Company Releasees that there has been no
assignment or other transfer of any interest in any Claim that the Executive
may have against


 


3

















 


the
Company Releasees, or any of them. Executive agrees to indemnify and hold
harmless the Company Releasees from any liability, claims, demands, damages,
costs, expenses and attorneys’ fees incurred as a result of any person
asserting such assignment or transfer of any right or claims under any such
assignment or transfer from Executive.


 


1.6          No
Actions


 


Executive
agrees that if Executive hereafter commences, joins in, or in any manner seeks
relief through any suit arising out of, based upon, or relating to any of the
Claims released hereunder or in any manner asserts against the Company
Releasees any of the Claims released hereunder, then Executive will pay to the
Company Releasees against whom such claim(s) is asserted, in addition to
any other damages caused thereby, all attorneys’ fees incurred by such Company
Releasees in defending or otherwise responding to said suit or Claim. Provided,
however, that Executive shall not be obligated to pay the Company Releasees’
attorneys’ fees to the extent such fees are attributable to claims under the
ADEA or a challenge to the validity of the release of claims under the ADEA.


 


2.                                      MISCELLANEOUS


 


2.1          No
Admission


 


Executive
understands and agrees that neither the payment of money nor the execution of
this Release shall constitute or be construed as an admission of any liability
whatsoever by the Company Releasees.


 


2.2          Severability


 


The
provisions of this Release are severable, and if any part of this Release is
found to be unenforceable, the other paragraphs (or portions thereof) shall
remain fully valid and enforceable.


 


2.3          No
Encouragement of Actions Against the Company


 


Executive
agrees that except to the extent required by law, Executive will not assist any
person in bringing or pursuing legal action against the Company, its agents,
successors, representatives, employees and related and/or affiliated companies,
based on events occurring prior to Executive’s execution of this Release.
Nothing contained in this Release shall be interpreted to discourage or
prohibit Executive with cooperating with any federal, state, local or foreign
law enforcement authority in an civil or criminal investigation or prosecution
by such authority.


 


2.4          Headings


 


The
headings in this Release are provided solely for convenience, and are not
intended to be part of, nor to affect or alter the interpretation or meaning
of, this Release.


 


4

















 


2.5          Construction of Release


 


Executive
has been represented by, or had the opportunity to be represented by, counsel
in connection with the negotiation and execution of this Release. Any rule of
construction to the effect that ambiguities are to be resolved against the
drafting party shall not be applied in the construction or interpretation of
this Release.


 


	
   

  	
   

  	
  Executive

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Alex
  Yemenidjian

  
				



 


5