-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, TshSI9+7Nws6Of9VPT2PvwM49YL1ayyIcOBIZD6Cz+YRmr9XEoCCW2cVcUy5pWzq mL9sk93CFXAB0ywf7xsmjw== 0000899647-03-000010.txt : 20030430 0000899647-03-000010.hdr.sgml : 20030430 20030429174144 ACCESSION NUMBER: 0000899647-03-000010 CONFORMED SUBMISSION TYPE: 10-K/A PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 20021231 FILED AS OF DATE: 20030430 FILER: COMPANY DATA: COMPANY CONFORMED NAME: RIVIERA HOLDINGS CORP CENTRAL INDEX KEY: 0000899647 STANDARD INDUSTRIAL CLASSIFICATION: HOTELS & MOTELS [7011] IRS NUMBER: 880296885 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-21430 FILM NUMBER: 03670440 BUSINESS ADDRESS: STREET 1: 2901 LAS VEGAS BLVD SOUTH CITY: LAS VEGAS STATE: NV ZIP: 89109 BUSINESS PHONE: 7027345110 MAIL ADDRESS: STREET 1: 2901 LAS VEGAS BLVD S CITY: LAS VEGAS STATE: NV ZIP: 89109 10-K/A 1 rhc10ka_042903.txt RHC10KAFIRSTAMEND_123102 ==================================================================== SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K/A (Amendment No. 1) FOR ANNUAL AND TRANSITION REPORTS PURSUANT TO SECTIONS 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (Mark One) [X] Annual report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934 [No Fee Required] For the fiscal year ended December 31, 2002 [ ] Transition report pursuant to sections 13 or 15(d) of the Securities Exchange Act of 1934 [Fee Required] For the transition period from to ----- ----- Commission file number 000-21430 RIVIERA HOLDINGS CORPORATION (Exact name of Registrant as specified in its charter) Nevada 88-0296885 - ------------------------------- ---------------- (State of Incorporation) (IRS Employer Identification No.) 2901 Las Vegas Boulevard South Las Vegas, Nevada 89109 - ------------------------------------------------- ----------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (702) 734-5110 -------------- Securities registered pursuant to Section 12(b) of the Act:Common Stock, $.001 par value ------------------- - --------- Securities registered pursuant to Section 12(g) of the Act: Common Stock, $.001 par value (Title of class) Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES X NO _____ ----- Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or amendment to this Form 10-K.[X} Based on the reported closing price for the Registrant's common stock on the American Stock Exchange as of June 28, 2002 the aggregate market value of the voting stock held by non-affiliates of the Registrant was approximately $14,476,293. As of April 25, 2003, the number of outstanding shares of the Registrant's common stock was 3,606,155. Documents incorporated by reference:None ==================================================================== EXPLANATORY NOTE The purpose of this amendment is to amend Part III, Items 10, 11, 12 and 13 in their entirety pursuant to General Instruction G.(3) to Form 10-K, file additional exhibits under item 15 and change the reporting date and valuation of the voting stock held by non-affiliates on the cover page of this Form 10-K. PART III Item 10. Directors and Executive Officers of the Registrant The following table sets forth certain information as of April 25, 2003 regarding our directors and the directors of Riviera Operating Corporation ("ROC"), our wholly-owned subsidiary.
Name Age Position William L. Westerman 71 Our and ROC's Chairman of the Board and Chief Executive Officer, and our President Robert R. Barengo 61 Our and ROC's Director, and Director of Government and Public Affairs of ROC Jeffrey A. Silver 57 Our and ROC's Director Paul A. Harvey 65 Our and ROC's Director Vincent L. DiVito 43 Our and ROC's Director
William L. Westerman has been our Chairman of the Board and Chief Executive Officer since February, 1993. Mr. Westerman was a consultant to Riviera, Inc. (our predecessor company) from July 1, 1991 until he was appointed Chairman of the Board and Chief Executive Officer of Riviera, Inc. on January 1, 1992. From 1973 to June 30, 1991, Mr. Westerman was President and Chief Executive Officer of Cellu-Craft Inc., a manufacturer of flexible packaging primarily for food products, and then later had several positions with Alusuisse, a multi-national aluminum and chemical company, following its acquisition of Cellu-Craft in 1989. Mr. Westerman was on the Board of Managers of Peninsula Gaming Partners, LLC from June, 1999 to December, 2000. Robert R. Barengo has been one of our and ROC's Directors since February 1993. Mr. Barengo was a consultant to Riviera, Inc. from January 1993 until June 30, 1993. Since 1972, Mr. Barengo has been engaged in the private practice of law in Reno, Nevada. Mr. Barengo was elected to the Nevada Assembly in 1972 and served until 1982. In 1979, Mr. Barengo was elected Speaker Pro Tempore and in 1981 Mr. Barengo was elected Speaker of the Assembly. From October 1992 to May 1996, Mr. Barengo was a director and 10% shareholder of Leroy's Horse & Sports Place, Inc. ("Leroy's"). In May 1996, Leroy's became a wholly owned subsidiary of American Wagering, Inc. ("AWI"), a publicly held corporation listed on NASDAQ. From May 1996 to March, 2000 Mr. Barengo was a director and is currently a 7% shareholder of AWI. Since 1993, Mr. Barengo has been the President and the sole stockholder of Silver State Disseminators Company, a company licensed by Nevada gaming authorities to disseminate racing information in the State of Nevada. In October 1992, the Governor appointed Mr. Barengo as a member of the State of Nevada Dairy Commission and in July 1993, the Governor appointed Mr. Barengo as Chairman of the State of Nevada Dairy Commission, a position he still holds. Mr. Barengo was also a director of Saxton, Inc., until he resigned from that position on April 12, 2000. Mr Barengo currently is the Chairman of the Board and a Director of Western Thrift and Loan, a Thrift Company licensed and regulated by the Commissioner of Financial Institutions, Department of business and Industry, State of Nevada. Mr. Barengo accepted the position of Director of Government and Public Affairs with ROC effective January 1, 2001, in addition to his duties as one of our and ROC's directors. Jeffrey A. Silver has been one of our and ROC's Directors since February 26, 2001. Mr. Silver is currently a shareholder with Gordon & Silver, Ltd., a law firm located in Las Vegas, Nevada. Mr. Silver served as the Chief Deputy District Attorney, Clark County, Nevada from 1972 to 1975 and was a Board Member with the Nevada Gaming Control Board from 1975 to 1978 before engaging in the private practice of law from 1979 to 1981 and 1984 to the present. Mr. Silver was the Chief Operating Officer and General Counsel of the Landmark Hotel & Casino from 1981 to 1983, CEO of the Riviera Hotel & Casino from 1983 to 1984 and Senior Vice President at Caesars Palace in 1984. Mr. Silver served on the Board of the Las Vegas Convention and Visitors Authority from 1989 to 1992 as Secretary/Treasurer where he also served as trustee. He was a member of the Board of Directors of the Greater Las Vegas Chamber of Commerce from 1988 to 1995 and in 1988 was its Chairman. Mr. Silver served for four years as a member of the United States Travel and Tourism Advisory Board. He was President of the International Association of Gaming Attorneys from 1992 to 1994 and Chairman of the ABA Section of Gaming Law from 1994 to 1996. Major General Paul A. Harvey USAF (Ret) has been one our and ROC's Directors since May 18, 2001. Mr. Harvey is currently a consultant to the gaming, hotel and resort industry and serves as Chairman of the Board of the National Center for Responsible Gaming. Mr. Harvey spent 32 years on active duty in the United States Air Force where he held numerous command positions throughout the United States, Europe, Africa and the Middle East. He flew 160 combat missions in Vietnam and Southeast Asia before retiring at the rank of Major General in 1991. Mr. Harvey was the Executive Director of the Mississippi Gaming Commission from 1993 through 1998 before becoming President and CEO of Signature Works, Inc., which is the largest employer of blind and visually impaired people in the world. The company merged with LCI, Inc. and he is currently on the Board of Directors of LC Industries. Vincent L. DiVito was appointed as one of our and ROC's Directors effective June 14, 2002. Mr. DiVito is currently Vice President, Chief Financial Officer and Treasurer of Lonza, Inc., a global specialities chemical business headquartered in Fair Lawn, New Jersey. Lonza, Inc. is part of Lonza Group, which is traded on the Swiss Stock Exchange. Prior to September 2000, Mr. DiVito was the Vice President and Chief Financial Officer of Algroup Wheaton, a global pharmaceutical and cosmetics packaging company, after having served as the Director of Business Development. From 1984 to 1990 Mr. DiVito was the Vice President of Miracle Adhesives Corp. (a division of Pratt & Lambert, an American Stock Exchange-listed manufacturer of paints, coatings and adhesives). Prior to 1984, Mr. DiVito spent two years on the audit team at Ernst & Whinney (now Ernst & Young). Mr. DiVito is a certified public accountant and certified management accountant. Executive Officers The following table sets forth certain information as of April 25, 2003 regarding our and ROC's executive officers: Name Age Position William L. Westerman 71 Our and ROC's Chairman of the Board and Chief Executive Officer, and our President Duane R. Krohn 57 Our and ROC's Treasurer and CFO, and Executive Vice President of Finance of ROC Tullio J. Marchionne 48 Our and ROC's Secretary and General Counsel, and Vice President of ROC Robert A. Vannucci 55 President and Chief Operating Officer of ROC Ronald P. Johnson 54 Executive Vice President of Gaming Operations of ROC Jerome P. Grippe 60 Executive Vice President of Operations of ROC For a description of the business experience of William L. Westerman, see "Directors." Duane R. Krohn, CPA, assumed the position of our and ROC's Treasurer on June 30, 1993 and was elected Vice President of Finance of ROC on April 26, 1994, and Executive Vice President of Finance of ROC on July 1, 1998 and served as Secretary from June 8, 1999 to February 17, 2000. Mr. Krohn was initially employed by Riviera, Inc. in April 1990, as Director of Corporate Finance and served as Vice President-Finance from March 1992 to June 30, 1993. Prior to 1990, Mr. Krohn was Chief Financial Officer of the Imperial Palace, the Mint and the Dunes in Las Vegas, Nevada, and Bally's Park Place in Atlantic City, New Jersey. Tullio J. Marchionne assumed the position of our and ROC's General Counsel on January 10, 2000, was appointed as our and ROC's Secretary on February 17, 2000 and elected Vice President of ROC on February 26, 2001. Mr. Marchionne was initially employed by Riviera, Inc., in June 1986 as a Casino Games Dealer and served in various capacities including Pit Manager, General Counsel and Director of Gaming Administration until September 1996, when we and ROC transferred Mr. Marchionne to the Four Queens Hotel and Casino as Director of Casino Operations pursuant to the management agreement we had with the Four Queens at that time through our wholly-owned subsidiary, Riviera Gaming Management-Elsinore. He served in that position until May 1997. Mr. Marchionne served as the General Manager of the Regency Casino Thessaloniki, located in Thessaloniki, Greece, from June 1997 until December 1997. Mr. Marchionne served as a Casino Supervisor with Bally's, Las Vegas, from February 1998 until June 1998, Director of Casino Operations at the Maxim Hotel and Casino in Las Vegas from June 1998 until November 1998 and Director of Table Games at the Resort At Summerlin (a casino/hotel operated in Las Vegas) from November 1998 until December 1999. Robert A. Vannucci was elected Vice President of Marketing and Entertainment of ROC on April 26, 1994, Executive Vice President of Marketing and Entertainment on July 1, 1998 and President of ROC on October 1, 2000. Mr. Vannucci had been Director of Marketing of ROC since July 19, 1993. Mr. Vannucci was Senior Vice President of Marketing and Operations at the Sands Casino Hotel in Las Vegas from April 1991 to February 1993. Mr. Vannucci was Vice President and General Manager of Fitzgerald's Las Vegas (a casino/hotel operator) from 1988 to January 1991. Ronald P. Johnson became Vice President of Gaming Operations of ROC in September 1994, Executive Vice President of Gaming Operations of ROC on July 1, 1998, and on February 10, 1999, President of Riviera Black Hawk, Inc., our wholly-owned subsidiary which owns and operates the Riviera Black Hawk Casino. He holds that position concurrently with his Executive Vice President of ROC position. Mr. Johnson became Director of Slots on June 30, 1993 and was elected Vice President of Slot Operations and Marketing on April 26, 1994. Mr. Johnson was Vice President-Slot Operations and Marketing of Riviera, Inc. from April 1991 until June 30, 1993. Mr. Johnson was Vice President-Slot Operations for Sands Hotel and Casino Inc. from September 1989 until he joined Riviera, Inc. Jerome P. Grippe was elected Vice President of Operations of ROC on April 26, 1994, Senior Vice President of Operations of ROC on July 1, 1998 and Executive Vice President of ROC on September 1, 2000. Mr. Grippe served as General Manager of the Four Queens Hotel and Casino from June, 1998 to September, 1999 pursuant to the management agreement we had with the Four Queens at that time through our wholly-owned subsidiary, Riviera Gaming Management-Elsinore. He served as General Manager of the Diamond Jo riverboat casino located in Dubuque, Iowa from September, 1999 to July, 2000, pursuant to a management agreement we had with Peninsula Gaming Company, LLC, which owns and operates the Diamond Jo riverboat casino, and Riviera Gaming Management, one of our wholly-owned subsidiaries. Mr. Grippe performed in the capacity as general manager at these properties concurrently with his duties with us. Mr. Grippe became Director of Operations of ROC on June 30, 1993. Mr. Grippe was Assistant to the Chairman of the Board of Riviera, Inc. from July 1990 until May 1993. Mr. Grippe had served in the United States Army from 1964 until his retirement as a Colonel in July 1990. Our and ROC's officers serve at the discretion of our and ROC's respective Boards of Directors, and they are also subject to the licensing requirements of the Nevada Gaming Commission. Section 16(a) Beneficial Ownership Reporting Compliance Section 16(a) of the Exchange Act requires our directors and executive officers and any persons who own more than 10% of our Common Stock to file with the Securities and Exchange Commission various reports as to ownership of such Common Stock. Such persons are also required to furnish us with copies of all Section 16(a) forms they file. To our knowledge, the Section 16(a) filing requirements of all other officers and directors and owners of more than 10% of our common stock were met on a timely basis during 2002. ITEM 11.EXECUTIVE COMPENSATION Compensation of Executive Officers The following table sets forth a summary of the compensation we paid in the years ended December 31, 2000, 2001 and 2002, to our and ROC's Chief Executive Officer, and to our four other most highly compensated executive officers who received over $100,000 in compensation during 2002 from us (collectively, the "Named Executive Officers").
Summary Compensation Table Other Securities Annual Underly- All Other Name and Compen- ing options Compen- Principal Position Year Salary($) Bonus($) sation($)(1) (# of shares) sation($)(2) William L. Westerman 2002 $600,000 $0 (3) $542,899 (4) 0 $1,438 Our and ROC's Chairman of and 2001 $600,000 $400,000 (3) $293,211 (4) 50,000 $2,566 the Board and Chief Executive 2000 $600,000 $900,000 (3) $841,403 (4) 0 $2,566 Officer Robert A. Vannucci 2002 $300,000 $0 (5) $103,000 (6) 20,000 $1,720 President and Chief Operating 2001 $300,000 $69,491 $157,425 (6) 20,000 $2,566 Officer of ROC 2000 $250,000 $236,166 $7,425 10,000 $1,438 Duane R. Krohn 2002 $250,000 $0 (5) $3,000 10,000 $1,438 Our Treasurer, 2001 $250,000 $69,491 $7,425 10,000 $1,438 and Executive Vice President 2000 $237,500 $236,166 $7,425 10,000 $1,438 of Finance and Treasurer of ROC Ronald P. Johnson 2002 $250,000 $0 (5) $10,500 (7) 10,000 $1,438 Executive Vice President of 2001 $250,000 $69,491 $7,425 10,000 $1,438 Gaming Operations of ROC 2000 $237,500 $236,166 $7,425 10,000 $1,438 Jerome P. Grippe 2002 $250,000 $0 (5) $3,000 10,000 $1,438 Executive Vice President of 2001 $250,000 $69,491 $7,425 10,000 $1,438 Operations of ROC 2000 $183,333 $211,166 $7,425 7,000 $1,062
(1) Includes amounts that we contributed under our Profit Sharing and 401(k) Plans. We contributed for the account of each executive $3,000 in 2002, $7,425 in 2001 and $7,425 in 2000. (2) Includes premiums paid us for excess life insurance. (3) See "Employment Agreements" below for a summary of certain of the provisions of Mr. Westerman's employment agreement. (4) Includes contributions to Mr. Westerman's retirement account of zero in 2002, zero in 2001 and $600,000 in 2000. Also includes interest computed at the Company's average borrowing rate less the rate pursuant to Internal Revenue Code 1274(d), of $539,899 in 2002, $285,786 in 2001 and $233,978 in 2000. Does not include interest earned on retirement account of $300,251 in 2002, $493,024 in 2001 and $413,440 in 2000. (See "Employment Agreements" below) (5) There was no incentive bonus award in 2002. (6) Includes $100,000 award of Restricted Stock, $25,000 award per quarter, pursuant to Mr. Vannucci's employment agreement. See"Restricted Stock Plan" below for a summary of our Restricted Stock Plan. (7) Includes $7,500 additional income to Mr. Johnson as compensation for a planned vacation that we asked Mr. Johnson to forgo so he could participate in the nationwide presentations to sell the our new senior secured notes. Option Surrenders On November 26, 1996, we granted 410,000 stock options to eighteen executives at an option price of $13.625 per share, 320,000 of which were granted to Mr. Westerman. Two of these executives' options totaling 11,000 shares were cancelled due to those executives leaving our employment, resulting in a balance of 399,000 options at $13.625 per share held by sixteen of our executives. The options of these sixteen executives were vested in their entirety. On January 16, 2001, We approved a Stock Option Surrender Plan under which each executive could surrender all or any portion of his/her $13.625 options. Further, we could, but were not obligated to, grant new options in an amount no less than the shares surrendered. The new options would be issued no sooner than six months and a day after the surrender of the $13.625 options. Any new options granted would be at the price of our common stock on the date of grant and subject to the vesting requirements of our Employee Stock Option Plan. All sixteen of our executives surrendered the entire balance of 399,000 of the $13.625 options effective January 31, 2001. In August 2001, we granted 107,500 stock options to 15 of our 16 executives who surrendered options on January 31, 2001. The August option grant was not premised on the January 31 option surrender but made pursuant to our Board of Directors' customary annual grant of stock options. Option Grants The number of shares available for purchase under our 1993 Employee Stock Option Plan, as amended (the "Stock Option Plan") is 1,000,000. Excluding the options surrendered pursuant to the Stock Surrender Plan discussed above, options for an aggregate of 901,000 shares have been granted under our Stock Option Plan as of December 31, 2002. During our 2002 fiscal year 130,500 options were granted under our Stock Option Plan. The number of options available under each of our stock option plans, as specified above, is subject to antidilution adjustments. Option Exercises, Year-End Options Values and Option Grants in 2002 The following table presents at December 31, 2002 the value of unexercised in-the-money options held by the Named Executive Officers. There were no options exercised in 2002.
Number of Value of Unexercised, Unexercised Options In-The-Money Options Name Vested Not Vested Vested Not Vested William L. Westerman 25,000 25,000 $0 $0 Robert A. Vannucci 50,000 20,000 0 0 Duane R. Krohn 40,000 10,000 0 0 Ronald P. Johnson 40,000 10,000 0 0 Jerome P. Grippe 31,000 10,000 0 0
The following table presents options granted during 2002.
Individual Grants ------------------ Potential Realizable Percent of Value at Assumed Total Annual Rates of Number of Options Exercise Stock Price Underlying Granted to or Base Appreciation for Options Employees Price Expiration Option Term Name Granted in 2002 Per Share Date -------------- - ---- 5% 10% ------- ---------- ---------- ----------- ---- ----- William L. Westerman 0 0% N/A N/A N/A N/A Robert A. Vannucci 20,000 15.3% $7.35 5/14/12 $239,448 $381,280 Duane R. Krohn 10,000 7.7% 7.35 5/14/12 119,724 190,640 Ronald P. Johnson 10,000 7.7% 7.35 5/14/12 119,724 190,640 Jerome P. Grippe 10,000 7.7% 7.35 5/14/12 119,724 190,640
Employment Agreements William L. Westerman serves as our Chairman of the Board, President and Chief Executive Officer, and as Chairman of the Board and Chief Executive Officer of ROC. Mr. Westerman's existing employment agreement, which was last amended on December 6, 2000, automatically renews each year on December 31st subject to termination by us upon three months notice or by Mr. Westerman upon six months notice. Mr. Westerman's base compensation is $600,000. Under his employment agreement, Mr. Westerman is entitled to participate in our Senior Management Compensation Plan or such other executive bonus plan as shall be established by our Board of Directors (collectively the "Plan"). If at least 80% of net targeted operating results, as defined by the Plan, is met, Mr. Westerman is entitled to receive a bonus under the Plan expressed as a percentage of his $600,000 base salary. Mr. Westerman's bonus depends on the percentage of targeted results of operations realized by us in a particular year, with a maximum bonus of $900,000. According to a December 6, 2000 amendment, to the extent Mr. Westerman's bonus exceeds $400,000 in 2001 and each succeeding year, the excess amount will be deducted from the principal balance of his retirement account at the time the bonus is paid. Mr. Westerman received an incentive bonus of $900,000 for 2001, $500,000 of which was deducted from the principal balance of his retirement account resulting in a net bonus of $400,000. Mr. Westerman was entitled to an incentive bonus of $900,000 for 2002, including $500,000 which was to be paid from the principal balance of his retirement account and $400,000, which was to be paid by the Company. Mr. Westerman waived the $400,000 Company bonus payment and elected to have that amount paid from the principal balance of his retirement account. On April 1, 2003, $1,373,329 was distributed to Mr. Westerman from his retirement account; $900,000 representing his 2002 bonus; $250,000 representing a quarterly distribution from principal; and $223,329 representing a quarterly distribution of interest in arrears for the first quarter of 2003. The employment agreement provides that we fund a retirement account for Mr. Westerman. Pursuant to the employment agreement, an aggregate net amount of $6,812,123 had been credited to the retirement account from its inception through December 31, 2001. Under the employment agreement, each year that Mr. Westerman continues to be employed, an amount equal to Mr. Westerman's base salary for that year was credited to the account on January 1 of that year. According to a December 6, 2000 amendment to Mr. Westerman's employment agreement, the January 1, 2001 contribution was the final principal contribution to the retirement account. As of December 31, 2002, no portion of this account had been funded. We retain beneficial ownership of the retirement account, which is earmarked to pay Mr. Westerman's retirement benefits. However, upon (1) the vote of a majority of the outstanding shares of Common Stock approving a "Change of Control" (as defined below), (2) the occurrence of a Change of Control without Mr. Westerman's consent, (3) a breach by us of a material term of the employment agreement or (4) the expiration or earlier termination of the term of the employment agreement for any reason other than cause, Mr. Westerman has the right to require us to establish a "Rabbi Trust" for his benefit. He also has the right to require us to fund such trust with an amount of cash equal to the amount then credited to the retirement account, including any amount to be credited to the retirement account upon a Change of Control. On February 5, 1998, our stockholders by a majority vote approved the Agreement and the Plan of Merger with R&E Gaming Corp. and its wholly-owned subsidiary Riviera Acquisition Sub, Inc. Such stockholder approval constituted a Change of Control. On March 5, 1998, subsequent to this Change of Control, Mr. Westerman exercised his right to require us to establish and fund a Rabbi Trust for his benefit. On March 20, 1998, Mr. Westerman entered into an agreement with us whereby Mr. Westerman waived his right to have us fund the Rabbi Trust in exchange for us agreeing to fund such Rabbi Trust within five business days after notice from Mr. Westerman. In the event that Mr. Westerman is no longer employed by us (except for termination for cause, in which case Mr. Westerman would forfeit all rights to monies in the retirement account), Mr. Westerman will be entitled to receive the amount in the retirement account (principal and current interest) in 20 equal quarterly installments as of the date he ceases to be employed by us. In the event that Mr. Westerman's Rabbi Trust has not yet been funded, the balance of principal and interest of the retirement account shall be paid directly to Mr. Westerman upon his retirement, termination (except for cause) or upon a change in control. Pursuant to the employment agreement, the retirement account was credited quarterly with interest and will be credited with additional amounts on the first day of each succeeding calendar quarter equal to the product of: o our average borrowing cost for the immediately preceding fiscal year, as determined by our chief financial officer and o the average outstanding balance in the retirement account during the preceding calendar quarter. This interest continues to accrue pursuant to the December 6, 2000 amendment. Interest computed at our average borrowing rate less the rate pursuant to Internal Revenue Code 1274d was $539,899 in 2002 $285,786 in 2001, and $233,978 in 2000. Interest computed at the rate pursuant to Internal Revenue Code 1274d was $300,251 in 2002, $493,024 in 2001 and $413,440 in 2000. In the event the Rabbi Trust has been funded, upon Mr. Westerman's death, an amount equal to the applicable federal estate tax on the retirement account will be pre-paid prior to the date or dates such taxes are due. Mr. Westerman's employment agreement provides (a) that the sum of Mr. Westerman's base salary, bonus, and credits to his Retirement Account in any one year must not exceed that which would have been payable under his previous employment agreement with us, and (b) that Mr. Westerman shall instruct us of any reductions in base salary, bonus, and credits to his retirement account necessary to comply with this limitation. We determined that for the year 1999, a reduction of $467,000 would be necessary to comply with this provision. Prior to December 31, 1999, and December 31, 1998, Mr. Westerman instructed us that this be applied to reduce the amount to be credited to his retirement account from $600,000 to $133,000. In addition to Mr. Westerman, one other executive, Robert Vannucci, has an employment agreement with us. Mr. Vannucci was appointed President of ROC effective October 1, 2000. Mr. Vannucci's employment agreement was amended at that time to reflect this appointment. Mr. Vannucci's base compensation is $300,000. Mr. Vannucci's employment agreement contains a Salary Continuation Agreement. See "Salary Continuation Agreements." It also provides for a "Normal Incentive Bonus" entitling Mr. Vannucci to participate in our Incentive Compensation Plan whereby he may share a portion of such plan's pool which provides for a target of $25 million EBITDA before deductions of incentives, as defined, for the years 2000 and 2001. Such amounts will be credited to the Incentive Compensation Plan's pool up to a maximum of $1.2 million. Mr. Vannucci did not receive an incentive bonus for the year 2002. Mr. Vannucci also receives compensation in the form of restricted stock pursuant to our Restricted Stock Plan. (See "Restricted Stock Plan") Mr. Vannucci's agreement provides that he is to receive $25,000 in our restricted common stock at market from treasury on the first business day of each quarter, plus our restricted common stock at market value from treasury in the same amount he receives pursuant to our Incentive Compensation Plan. Mr. Vannucci received restricted stock valued at $100,000 in 2002. Pursuant to the Restricted Stock Plan, Mr. Vannucci is presently entitled to all rights of stock ownership with respect to the restricted shares, including the right to vote and receive dividends. Mr. Vannucci may not, however sell, assign, pledge, encumber or otherwise transfer any of the restricted shares so long as he is employed by us, without our written consent. The restricted shares fully vest to Mr. Vannucci upon his separation of employment from us, so long as such separation is not a termination for cause. Mr. Vannucci's agreement was amended March 4, 2003 and again March 24, 2003. Pursuant to the amendments, commencing with the restricted stock award of April 1, 2003, and continuing for each quarter thereafter, Mr. Vannucci, can choose between receiving $25,000 in cash or $25,000 in restricted stock. Mr. Vannucci, also has the choice between cash and restricted stock to match his annual incentive bonus award. Mr. Vannucci's agreement is effective until December 31, 2003, and automatically renews annually subject to 120 days prior written notice by either party. Profit Sharing and 401(k) Plans On June 30, 1993, we and ROC assumed the combined profit sharing and 401(k) plans of Riviera, Inc. (the "Profit Sharing and 401(k) Plans") and we and ROC continued the Profit Sharing and 401(k) Plans after June 30, 1993. We also provided that all current employees of Riviera Las Vegas who were employed on April 1, 1992, who were at least 21 years of age and who are not covered by a collective bargaining agreement are immediately eligible to participate in the Profit Sharing and 401(k) Plans. We further provided that all current employees who were employed by Riviera Las Vegas after April 1, 1992, who are at least 21 years of age and who are not covered by a collective bargaining agreement are eligible to participate after one year of service at the Riviera Las Vegas. We have identical plans for our 100% indirectly owned subsidiary, Riviera Black Hawk, Inc., which operates its casino in Black Hawk, Colorado. Employees hired prior to June 30, 2000, who were at least 21 years of age and who were not covered by a collective bargaining agreement were immediately eligible to participate in the Profit Sharing and 401(k) Plans. After June 30, 2000, all new employees who are at least 21 years of age and who are not covered by a collective bargaining agreement are eligible to participate after one year of service at Riviera Black Hawk. We may make a matching contribution to the 401(k) component of the abpve plan in an amount not to exceed 25% of the first 8% of each participant's compensation, which is contributed as a salary deferral. Our common stock is not an investment option to participants of the 401(k) component of the plan and any of our contributions to the 401(k) component are made in the form of cash to be invested in the participant's selected investment options. The profit sharing component of the Profit Sharing and 401(k) Plans provides that we will make a contribution equal to 1% of each eligible employee's annual compensation if a prescribed annual operating earnings target is attained and an additional 1% thereof for each $2 million by which operating earnings is exceeded, up to a maximum of 3% thereof. We may elect not to contribute to the Profit Sharing and 401(k) Plans if we notify our employees by January of the Profit Sharing and 401(k) Plans year. An employee becomes vested as to our contributions based on the employee's years of service. An employee receives a year of vesting service for each plan year in which the employee completed 1,000 hours of service. Vesting credit is allocated in 20% increments for each year of service commencing with the attainment of two years of service. An employee is fully vested following the completion of six years of service. Effective January 1, 2000, we suspended contributions to the profit sharing plan and substituted contributions to an Employee Stock Ownership Plan ("ESOP"), which is discussed directly below. Employee Stock Ownership Plan We have an Employee Stock Ownership Plan ("ESOP"), which became effective as of January 1, 2000 and replaced the profit sharing contribution component of the Profit Sharing and 401(k) Plans. The 401(k) component remains unchanged. This plan provides that all employees of Riviera Las Vegas and Riviera Black Hawk employed in a plan year who completed a minimum of one thousand hours of service in that year, were employed through December 31 of that year, were at least 21 years of age and were not covered by a collective bargaining agreement are eligible to participate in the plan. The ESOP provides that we will make a contribution to the participants of its Las Vegas and Black Hawk properties relative to the economic performance of each property. For Riviera Las Vegas, we will make a contribution equal to 1% of each eligible employee's annual compensation if a prescribed annual operating results target is attained and an additional 1% thereof for each $2 million by which operating results are exceeded, up to a maximum of 4% for 2000 and 5% thereafter. For Riviera Black Hawk, we will make a contribution equal to 1% of each eligible employee's annual compensation if a prescribed annual operating earnings target is attained and an additional 1% thereof for each $1 million by which operating results are exceeded, up to a maximum of 4% for 2000 and 5% thereafter. Under the ESOP, our contribution will be made in cash which will be used to buy primarily our common stock. Incentive Compensation Programs Approximately 70 executives and other significant employees at Riviera Las Vegas and 20 at Riviera Black Hawk participate in incentive compensation programs. Participants in each of the two programs receive an annual incentive bonus based on predetermined financial targets at each location being met. An aggregate of $0 and $260,440, respectively, was awarded to participants at Riviera Las Vegas and Black Hawk under these programs in the year ended December 31, 2002. Deferred Compensation Plan On October 2, 2000, we adopted a Deferred Compensation Plan. The purpose of this plan is to provide eligible employees the opportunity to defer the receipt of cash compensation. Participation in this non-qualified plan is limited to highly compensated employees who receive annual compensation of at least $100,000. The deferred funds are maintained on our books as liabilities. All elections to defer the receipt of compensation must be made no later than the December 1st preceding each plan year to which the election relates and are irrevocable for the duration of such year. Six of our executives are currently participating in this plan. Restricted Stock Plan On October 2, 2000, we adopted a Restricted Stock Plan to provide incentives to attract and retain highly competent persons as officers and key employees by providing them opportunities to receive restricted shares of our Common Stock. Participants will consist of such officers and key employees as our Compensation Committee determines to be significantly responsible for our success and future growth and profitability. Awards of restricted stock are subject to such terms and conditions as we determine to be appropriate at the time of the grant, including restrictions on the sale or other disposition of such shares and the provisions for the forfeiture of such shares for partial or no consideration upon termination of the participant's employment within specified periods or under certain conditions. Mr. Vannucci and Mr. Grippe, President and Executive Vice President, respectively, of our wholly-owned subsidiary, ROC, are currently the only participants in the Restricted Stock Plan. Salary Continuation Agreements Approximately 75 executive officers and significant employees (excluding Mr. Westerman) of ROC have salary continuation agreements effective through December 31, 2003, pursuant to which each of such employees will be entitled to receive (1) either six months' or one year's base salary if their employment with us is terminated, without cause, within 12 or 24 months of a change of control of us or ROC; and (2) group health insurance for periods of either one or two years. The base salary payments are payable in bi-weekly installments subject to the employee's duty to mitigate by using his or her best efforts to find employment. As of December 31, 2002, the total amount that would be payable under all such agreements if all payment obligations were to be triggered was approximately $6.0 million, including $1.4 million in benefits. Compensation of Directors Messrs. Silver, Harvey and DiVito (effective as of his appointment in June 2002) are each paid an annual fee of $50,000 for serving as a Director of us and ROC. Each Director is also reimbursed for expenses incurred in connection with attendance at meetings of the Board of Directors. On March 5, 1996 we adopted the Directors' Option Plan, which was approved by our stockholders on May 10, 1996. Under the Directors' Option Plan, each individual elected, re-elected or continuing as a non-employee director will automatically receive a nonqualified stock option for 2,000 shares of our Common Stock, with an exercise price equal to the fair market value of our Common Stock on the date of grant. 50,000 shares have been reserved for issuance under the Directors' Option Plan. Options to purchase 2,000 shares at $13.50 per share were granted to Mr. Barengo on May 12, 1997, options to purchase 2,000 shares at $9.00 per share were granted to him on May 11, 1998, options to purchase 2,000 shares at $4.88 per share were granted to him on May 10, 1999 and options to purchase 2,000 shares at $7.75 per share were granted to him on May 10, 2000. No options have been granted to Mr. Barengo under the Directors' Option Plan after 2000 due to his becoming an employee effective January 1, 2001. Mr. Barengo was granted options to purchase 7,500 shares at $6.00 per share and 10,000 shares at $7.35 on August 7, 2001 and May 14, 2002, respectively, pursuant to our Stock Option Plan. Mr. Barengo's compensation in 2002 was $125,000. Upon becoming a Director, Mr. Silver was granted options under the Directors' Option Plan to purchase 2,000 shares at $7.05 per share on February 26, 2001. Mr. Silver was subsequently granted options to purchase 2,000 shares at $6.55 per share on May 10, 2001 and 2,000 shares at $7.75 on May 10, 2002. Upon becoming a Director, Mr. Harvey was granted options under the Directors' Option Plan to purchase 2,000 shares at $6.60 per share on May 18, 2001. Mr. Harvey was subsequently granted options to purchase 2,000 shares at $7.75 on May 10, 2002. Upon becoming a Director, Mr. DiVito was granted options under the Director's Option Plan, to purchase 2,000 shares at $5.60 per share on July 12, 2002. Directors who are also our or ROC's officers or employees do not receive additional compensation for services as a Director. Currently, Messrs. Westerman and Barengo are such Directors. Under our Stock Compensation Plan, the members of our Compensation Committee have the right to receive all or part of their annual fees in the form of our Common Stock having a fair market value equal to the amount of their fees. Of the 50,000 shares available under this plan, we issued 3,103 shares to Mr. Barengo for a portion of his director's fees in 1996 and 877 shares to him for a portion of his fees in 1997. Compensation Committee Report on Executive Compensation The Compensation Committee endeavors to ensure that the compensation program for our executive officers is effective in attracting and retaining key executives responsible for our success of the Company and is tailored to promote the long-term interests of the Company and its stockholders. The Company's executive officer compensation program in its last completed fiscal year was principally comprised of base salary, an executive incentive plan, a 401(k) plan, a profit-sharing plan (revised to provide contributions to ESOP) and long-term incentive compensation in the form of incentive stock options or non-qualified stock options, a deferred compensation plan and a restricted stock plan. The Compensation Committee takes into account various qualitative and quantitative indicators of corporate and individual performance in determining the level and composition of compensation for the Company's Chief Executive Officer and his recommendations regarding the other executive officers. In particular, the Compensation Committee considers several financial performance measures, including revenue growth and net income. However, the Compensation Committee does not apply any specific quantitative formula in making compensation decisions. The Committee also considers achievements that, while difficult to quantify, are important to the Company's long-term success. The Compensation Committee seeks to create a mutuality of interest between the executive officers and the Company's stockholders by increasing the executive officers' ownership of the Company's Common Stock through the Stock Option Plan, ESOP, Deferred Compensation Plan and Restricted Stock Plan. Salary levels for the Company's executive officers are significantly influenced by the need to attract and retain management employees with high levels of expertise. In each case, consideration is given both to personal factors, such as the individual's experience, responsibilities and work performance, and to external factors, such as salaries paid by comparable companies in the gaming industry. With regard to the latter, it is important to recognize that because of the opening of new properties on the Las Vegas Strip in 1998, 1999 and 2000 and the growth of riverboat and dockside gaming, Native American gaming operations and the proliferation of jurisdictions in which gaming is permitted, the Company competes with numerous other companies for a limited pool of experienced and skilled personnel. Therefore, it is critical that the Company provide base salaries that are competitive in the casino industry. With respect to the personal factors, the Compensation Committee makes salary decisions in an annual review based on the recommendations of the Chief Executive Officer. This annual review considers the decision-making responsibilities of each position as well as the experience and work performance of each executive. The Chief Executive Officer views work performance as the single most important measurement factor. As a baseline measure, the Compensation Committee engaged the services of an independent CPA firm, other than Deloitte & Touche, LLP, which conducted a compensation survey of comparable Las Vegas resorts. The CPA firm concluded that compensation of Company executives was consistent with other members of the industry. The compensation of Mr. Westerman for the Company's last completed fiscal year was set pursuant to the employment agreement described in the "Compensation of Executive Officers" section.
Date: February 28, 2003 Jeffrey A. Silver Chairman Robert R. Barengo Member Paul A. Harvey. Member Vincent L. DiVito Member
Compensation Committee Interlocks And Insider Participation In Compensation Decisions Mr. Silver is a shareholder in the law firm of Gordon & Silver, Ltd. Which has been engaged by the Company for various legal matters. Mr. Barengo has been an employee of Riviera Operating Corporation since January 1, 2001. Performance Graph The following graph compares the annual change in the cumulative total return, assuming reinvestment of dividends, on the Company's Common Stock with the annual change in the cumulative total returns of the NASDAQ Broad Market, the American Stock Exchange Index (the "AMEX Index"), the New York Stock Exchange (the "NYSE") and the NASDAQ Amusement and Recreation Services Index (the "NASDAQ 79xx"), which we consider to be our peer industry group. The graph assumes an investment of $100 on December 31, 1997, in each of our Common Stock, the stocks comprising the NASDAQ Broad Market, the stocks comprising the AMEX Index and the stocks comprising the NASDAQ 79xx. The graph is a Comparison of Cumulative Total Return Among us, NYSE/ AMEX/Nasdaq Stock Market (US Companies) and Nasdaq stocks (SIC 7900 - 7999 US Companies amusement and recreation services) (1).
Riviera NYSE/AMEX/Nasdaq Nasdaq U.S. Companies (SIC 79xx) US Amusement Companies 12/31/97 100.0 100.0 100.0 12/31/98 34.0 123.4 86.5 12/31/99 49.5 154.5 111.2 12/31/00 55.3 136.9 94.0 12/31/01 32.9 122.3 109.6 12/31/02 33.6 97.1 90.9
(1) Comprised of companies whose stock is traded on the Nasdaq National Market and whose standard industrial classification is within 7900-7999. We do not necessarily believe that this is an indication of the value of our stock. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS The following table sets forth certain information regarding the beneficial ownership of our Common Stock as of April 25, 2003, by (i) each person who, to our knowledge of, beneficially owns more than 5% of our outstanding Common Stock (based on reports filed with the Securities and Exchange Commission under the Securities Exchange Act of 1934, or upon information furnished to us), (ii) our directors and certain of our officers and (iii) all of our directors and executive officers as a group. The percentage of our outstanding Common Stock represented by each named person's stock ownership assumes the exercise by such person of all stock options that are exerciseable within 60 days of April 25, 2003, but does not assume the exercise of stock options by any other persons. The percentage of our outstanding common stock represented by the stock ownership of all executive officers and directors as a group assumes the exercise of stock options by all members of that group, but does not assume the exercise of options by any persons outside of that group. Except as indicated in the footnotes to the table, each person listed below has sole voting and investment power with respect to the shares set forth opposite such person's name.
Shares Beneficially Owned Name Number Percentage William L. Westerman(1)(2)(3) 673,628 18.7% Robert R. Barengo(1)(4) 129,906 3.6 Jeffrey A. Silver (1)(5) 7,000 * Paul A. Harvey(1)(6) 1,200 * Vincent L. DiVito(1) 0 * Robert A. Vannucci (1)(7) 145,411 4.0 Ronald P. Johnson(1)(8) 133,035 3.7 Duane R. Krohn(1)(9) 141,128 3.9 Jerome P. Grippe(1)(10) 84,584 2.3 Tullio J. Marchionne(1)(11) 9,426 * Donald J. Trump(12) 358,000 9.9 Sun America Life Insurance Company(13) 345,900 9.6 Diversified Equity Ventures, LLC(14) 320,000 8.9 Employee Stock Ownership Plan (ESOP) other than shares allocated to executive officers and directors(15) 325,981 9.0 All executive officers and directors as a group including shares allocated to them under the ESOP(3)(17) 1,651,298 43.2
- ------------------------------- * Less than 1%. (1) The address for each of our and ROC's directors and officers is c/o Riviera Holdings Corporation, 2901 Las Vegas Boulevard South, Las Vegas, Nevada 89109. (2) Includes 25,000 shares which may be acquired within 60 days of April 29, 2003, upon the exercise of outstanding options. (3) Our articles of incorporation provide that no owner of our Common Stock may vote more than 15% of the total number of outstanding shares of our Common Stock, except under certain limited conditions or circumstances that do not apply to Mr. Westerman's stock ownership. Consequently, of the total number of shares of Common Stock that Mr. Westerman beneficially owns, as reported in the table above, he can only vote the shares that do not exceed 15% of our total outstanding shares as of the shareholder vote in question. As of April 25, 2003, we had 3,606,155 shares outstanding, excluding shares that may be acquired within 60 days through the exercise of stock options but that we have not issued. By way of example, as of that date, Mr. Westerman had the power to vote 540,923 shares out of the 648,628 total shares that he beneficially owned and were actually outstanding on that date(excluding shares that he could acquire through the exercise of options) and all executive officers and directors as a group had the power to vote 1,328,843 shares out of 1,436,548 total shares that they beneficially owned and were actually outstanding on that date (excluding shares that they could acquire through the exercise of stock options). (4) Includes 17,550 shares which may be acquired within 60 days of April 29, 2003, upon the exercise of outstanding options. (5) Includes 2,000 shares which may be acquired within 60 days of April 29, 2003, upon the exercise of outstanding options. (6) Includes 1,200 shares which may be acquired within 60 days of April 29, 2003, upon the exercise of outstanding options. (7) Includes 50,000 shares which may be acquired within 60 days of April 29, 2003, upon the exercise of outstanding options, 60,277 shares under the our Restricted Stock Plan and 19,404 shares under our Deferred Compensation Plan. (8) Includes 40,000 shares which may be acquired within 60 days of April 29, 2003, upon the exercise of outstanding options and 29,435 shares under the our Deferred Compensation Plan. (9) Includes 40,000 shares which may be acquired within 60 days of April 29, 2003, upon the exercise of outstanding options and 48,029 shares under the our Deferred Compensation Plan. (10) Includes 31,000 shares which may be acquired within 60 days of April 29, 2003, upon the exercise of outstanding options, 8,217 shares under the our Restricted Stock Plan and 29,601 shares under the our Deferred Compensation Plan. (11) Includes 8,000 shares which may be acquired within 60 days of April 29, 2003, upon the exercise of outstanding options. (12) The address for Donald J. Trump is 725 Fifth Avenue, New York, New York 10022. Trump Hotels & Casino Resorts Holdings, L.P. ("THCR Holdings") has an option to purchase the shares of our Common Stock held by Mr. Trump. Trump Hotels and Casino Resorts, Inc. ("THCR") is the sole general partner of THCR Holdings. Both of THCR Holdings and THCR, therefore, may also be deemed the beneficial owner of those shares. The address for THCR Holdings and THCR is 1000 Boardwalk, Atlantic City, New Jersey 08401. (13) The address for SunAmerica Life Insurance Company ("SunAmerica") is One SunAmerica Center, Los Angeles, California 90067. (14) The address for Diversified Equity Ventures, LLC and its manager, Jeffrey P. Jacobs, is 1231 Main Avenue, Cleveland, Ohio 44113. (15) The Trustee of the ESOP and its address are Marshall & Ilsley Trust Company, 1000 North Water Street, Milwaukee, Wisconsin 53202. (16) Includes a total of 214,750 shares which may be acquired by directors and exective officers as a group within 60 days of April 25, 2003, upon the exercise of outstanding options. We are a party to a registration rights agreement with, among others, SunAmerica, which owns more than 5% of our Common Stock. Each of the three largest holders of Common Stock can require us to file a registration statement and holders of 51% or more of the shares of Common Stock then subject to the equity registration rights agreement can require us to file two registration statements, registering under the Securities Act, the offer and sale of Common Stock owned by such persons. All other holders of registerable shares will be entitled to have shares of Common Stock owned by them included in any such registrations. In addition, the agreement grants to each party the right to have included, subject to certain limitations, all shares of our Common Stock owned by such party in any registration statement filed by us under the Securities Act. Pursuant to the agreement, we will pay all costs and expenses, other than underwriting discounts and commissions, in connection with the registration and sale of Common Stock under the agreement.
Equity Compensation Plan Information Number of securities Number of securities remaining available for to be issued Weighted-average future issuance under upon exercise of outstanding options, exercise price of equity compensation plans Plan Category warrants and rights outstanding options, (excluding securities warrants and rights reflected in column (a)) (a) (b) (c) Equity compensation Employee Options: 555,000 $6.32 128,500 plans approved by security holders . Non Employee Director Options: 24,000 $7.12 24,000 - ----------------------------------------------------------------------------------------------------------------- Equity compensation plans not approved 0 0 131,506 by security holders(1) - ----------------------------------------------------------------------------------------------------------------- Total 579,000 284,006 (1) The shares are issuable under our Restricted Stock Plan, which is described under "Excutive Compensation-Restricted Stock Plan."
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS Jeffrey A. Silver is a shareholder in the law firm of Gordon & Silver, Ltd., which has been engaged by us for various legal matters. PART IV Item 15. Exhibits, Financial Statement Schedules and Reports on Form 8-K (a)(1) List of Financial Statements The following Independent Auditors' Report and the consolidated Financial Statements of the Company are incorporated by reference into this Item 15 of Form 10-K from Item 8 hereof: - Independent Auditors' Report. - Consolidated Balance Sheets as of December 31, 2002 and 2001. - Consolidated Statements of Operations for the Years Ended December 31, 2002, 2001 and 2000. - Consolidated Statements of Stockholders' Equity (Deficiency) for the Years Ended December 31, 2002, 2001 and 2000. - Consolidated Statements of Cash Flows for the Years Ended December 31, 2002, 2001 and 2000. - Notes to Consolidated Financial Statements. (a)(2) List of Financial Statement Schedules No financial statement schedules have been filed herewith since they are either not required, are not applicable, or the required information is shown in the consolidated financial statements or related notes. (a)(3) List of Exhibits Exhibits required by Item 601 of Regulation S-K are listed in the Exhibit Index herein, which information is in paragraph (c) of this Item 15. (b) Reports on Form 8-K During the last quarter of 2002, the Company filed the following reports on Form 8-K: 1. October 22, 2002 (filed October 23, 2002) - Reporting under Item 5 (Other Events) and Item 7 (Financial Statements, Pro Forma Financial Information and Exhibits). Summary financial information (unaudited) as of, and for the interim period ending on, September 30, 2002 was included in the filing. 2. October 24, 2002 (filed October 25, 2002) - Reporting under Item 5 (Other Events). 3. December 4, 2002 (filed December 5, 2002) - Reporting under Item 5 (Other Events) (c) Exhibits EXHIBIT INDEX Exhibit Description Number 3.1* Second Restated Articles of Incorporation of the Company (see Exhibit 3.1 to Registration Statement on Form S-4 filed with the Commission on September 10, 1997, Commission File No. 0-21430) 3.2* Bylaws of the Company (see Exhibit 3.2 to Registration Statement on Form S-4 filed with the Commission on September 10, 1997, Commission File No. 0-21430) 3.3* Articles of Incorporation of Riviera Operating Corporation (see Exhibit 3.3 to Registration Statement on Form S-4 filed with the Commission on September 10, 1997, Commission File No. 0-21430) 3.4* Bylaws of Riviera Operating Corporation (see Exhibit 3.4 to Registration Statement on Form S-4 filed with the Commission on September 10, 1997, Commission File No. 0-21430) 3.5* Articles of Incorporation of Riviera Gaming Management, Inc. (see Exhibit 3.5 to Registration Statement on Form S-4 filed with the Commission on September 10, 1997, Commission File No. 0-21430) 3.6* Bylaws of Riviera Gaming Management, Inc. (see Exhibit 3.6 to Registration Statement on Form S-4 filed with the Commission on September 10, 1997, Commission File No. 0-21430) 3.7* Articles of Incorporation of Riviera Gaming Management-Elsinore, Inc. (see Exhibit 3.7 to Registration Statement on Form S-4 filed with the Commission on September 10, 1997, Commission File No. 0-21430) 3.8* Bylaws of Riviera Gaming Management - Elsinore, Inc. (see Exhibit 3.8 to Registration Statement on Form S-4 filed with the Commission on September 10, 1997, Commission File No. 0-21430) 3.9* Articles of Amendment to the Articles of Incorporation of Riviera Black Hawk, Inc. (see Exhibit 3.01 to Amendment No. 1 to Registration Statement on Form S-4 filed by Riviera Black Hawk, Inc. with the Commission on August 31, 1999, Commission File No. 333-81613) 3.10*Articles of Incorporation of Riviera Black Hawk, Inc. (see Exhibit 3.02 to Amendment No. 1 to Registration Statement on Form S-4 filed by Riviera Black Hawk, Inc. with the Commission on August 31, 1999, Commission File No. 333-81613) 3.11*Bylaws of Riviera Black Hawk, Inc. (see Exhibit 3.03 to Amendment No. 1 to Registration Statement on Form S-4 filed by Riviera Black Hawk, Inc. with the Commission on August 31, 1999, Commission File No. 333-81613) 4.1* Indenture dated as of June 26, 2002 among the Company, the Guarantors party thereto and The Bank of New York, as trustee. (see Exhibit 4.1 to Registration Statement on Form S-4 filed with the Commission on August 9, 2002, Commission File No. 333-97907) 4.2* Form of the Company's 11% Senior Secured Notes due 2010 (included in Exhibit 4.1 to Registration Statement on Form S-4 filed with the Commission on August 9, 2002, Commission File No. 333-97907) 10.1*Registration Rights Agreement dated as of June 26, 2002 by and among the Company, the Guarantors party thereto, and Jefferies & Company, Inc.(see Exhibit 10.1 to Registration Statement on Form S-4 filed with the Commission on August 9, 2002, Commission File No. 333-97907) 10.2*Purchase Agreement dated June 19, 2002 among the Company, the Guarantors party thereto, and Jefferies & Company, Inc. (see Exhibit 10.2 to Registration Statement on Form S-4 filed with the Commission on August 9, 2002, Commission File No. 333-97907) 10.3*Amended and Restated Lease Agreement between Riviera Operating Corporation and Mardi Gras Food Court, Inc. dated March 15, 1998. (see Exhibit 10.3 to Registration Statement on Form S-4 filed with the Commission on August 9, 2002, Commission File No. 333-97907) 10.4* Lease Agreement between Riviera, Inc. and Leroy's Horse and Sports Place (see Exhibit 10.3 to Form 10, Commission File No. 0-21430) 10.5*Indemnity Agreement, dated June 30, 1993, from Riviera, Inc. and Meshulam Riklis in favor of the Company and Riviera Operating Corporation (see Exhibit 10.7 to Registration Statement on Form S-1 filed with the Commission on August 11, 1993, Commission File No. 33-67206) 10.6*Equity Registration Rights Agreement dated June 30, 1993, among the Company and the Holders of Registerable Shares (see Exhibit 10.9 to Registration Statement on Form S-1 filed with the Commission on August 11, 1993, Commission File No. 33-67206) 10.7*Operating Agreement dated June 30, 1993, between the Company and Riviera Operating Corporation (see Exhibit 10.15 to Registration Statement on Form S-1 filed with the Commission on August 11, 1993, Commission File No. 33-67206) 10.8*Adoption Agreement regarding Profit Sharing and 401(k) Plans of the Company (see Exhibit 10.16 to Registration Statement on Form S-1 filed with the Commission on August 11, 1993, Commission File No. 33-67206) 10.9*Merrill Lynch Special Prototype Defined Contribution Plan Adoption Agreement dated June 29, 1993, as amended through November 15, 1996. (see Exhibit 10.9 to Registration Statement on Form S-4 filed with the Commission on August 9, 2002, Commission File No. 333-97907) 10.10*(A) Form of Termination Agreement with the Company dated June 11, 2002. (see Exhibit 10.10 to Registration Statement on Form S-4 filed with the Commission on August 9, 2002, Commission File No. 333-97907) 10.11* Tax Sharing Agreement between the Company and Riviera Operating Corporation dated June 30, 1993 (see Exhibit 10.24 to Amendment No. 1 to Registration Statement on Form S-1 filed with the Commission on August 19, 1993, Commission File No. 33-67206) 10.12* Tax Sharing Agreement between the Company and Riviera Black Hawk, Inc. dated March 31, 1999. (see Exhibit 10.12 to Registration Statement on Form S-4 filed with the Commission on August 9, 2002, Commission File No. 333-97907) 10.13*(A) The Company's 1993 Employee Stock Option Plan (see Exhibit 10.25 to Amendment No. 1 to Registration Statement on Form S-1 filed with the Commission on August 19, 1993, Commission File No. 33-67206) 10.14*(A) The Company's 1996 Non-Qualified Stock Option Plan. (see Exhibit 10.14 to Registration Statement on Form S-4 filed with the Commission on August 9, 2002, Commission File No. 333-97907) 10.15*(A) Employment Agreement dated as of November 21, 1996 by and between the Company, Riviera Operating Corporation and William L. Westerman (see Exhibit 10.31 to Form 10-K for the fiscal year ended December 31, 1996, Commission File No. 0-21430) 10.16*(A) Employment Agreement between the Company and Robert A. Vannucci effective July 1, 1998 (see Exhibit 10.36 to Form 10-Q filed November 6, 1998) 10.17*(A) Amendment to Employment Agreement between the Company and Robert A. Vannucci effective October 1, 2000 (see Exhibit 10.39 to Form 10-K filed March 23, 2001) 10.18*(A) Amendment to Employment Agreement between the Company and William L. Westerman effective January 1, 2001 (see Exhibit 10.40 to Form 10-K filed March 23, 2001) 10.19 (A) Deferred Compensation Plan dated November 1, 2000, adopted by the Company on October 2, 2000 and amended by Unamimous Consent of Directors effective as of December 15, 2001 10.20 (A) Restricted Stock Plan dated January 2, 2001, adopted by the Company on October 2, 2000 10.21* Deed of Trust, Assignment of Rents, Leases, Fixture Filing and Security Agreement dated June 26, 2002, executed by the Company for the benefit of The Bank of New York. (see Exhibit 10.21 to Registration Statement on Form S-4 filed with the Commission on August 9, 2002, Commission File No. 333-97907) 10.22* Deed of Trust to Public Trustee, Security Agreement, Fixture Filing and Assignment of Rents, Leases and Leasehold Interests dated as of June 26, 2002, by Riviera Black Hawk, Inc. for the benefit of The Bank of New York. (see Exhibit 10.22 to Registration Statement on Form S-4 filed with the Commission on August 9, 2002, Commission File No. 333-97907) 10.23* Security Agreement dated June 26, 2002 by and among the Company, Riviera Operating Corporation, Riviera Gaming Management, Inc., Riviera Gaming Management of Colorado, Inc., Riviera Black Hawk, Inc, and The Bank of New York. (see Exhibit 10.23 to Registration Statement on Form S-4 filed with the Commission on August 9, 2002, Commission File No. 333-97907) 10.24* Assignment of Rents, Leases and Leasehold Interests dated as of June 26, 2002 by Riviera Black Hawk, Inc. for the benefit of The Bank of New York. (see Exhibit 10.24 to Registration Statement on Form S-4 filed with the Commission on August 9, 2002, Commission File No. 333-97907) 10.25* Stock Pledge and Security Agreement dated June 26, 2002, executed by the Company. (see Exhibit 10.25 to Registration Statement on Form S-4 filed with the Commission on August 9, 2002, Commission File No. 333-97907) 10.26* Stock Pledge and Security Agreement dated June 26, 2002, executed by Riviera Operating Corporation. (see Exhibit 10.26 to Registration Statement on Form S-4 filed with the Commission on August 9, 2002, Commission File No. 333-97907) 10.27* Stock Pledge and Security Agreement dated June 26, 2002, executed by Riviera Gaming Management, Inc. (see Exhibit 10.27 to Registration Statement on Form S-4 filed with the Commission on August 9, 2002, Commission File No. 333-97907) 39 10.28* Environmental Indemnity dated as of June 26, 2002 by and among the Company and Riviera Black Hawk, Inc., as indemnitors, and The Bank of New York, as trustee. (see Exhibit 10.28 to Registration Statement on Form S-4 filed with the Commission on August 9, 2002, Commission File No. 333-97907) 10.29* Environmental Indemnity dated as of June 26, 2002 by and between the Company, as indemnitor, and The Bank of New York, as trustee. (see Exhibit 10.29 to Registration Statement on Form S-4 filed with the Commission on August 9, 2002, Commission File No. 333-97907) 10.30* Loan and Security Agreement dated as of July 26, 2002 by and among the Company and the other Borrower parties thereto, the Guarantors parties thereto and Foothill Capital Corporation. (see Exhibit 10.30 to Registration Statement on Form S-4 filed with the Commission on August 9, 2002, Commission File No. 333-97907) 10.31* Intercreditor Agreement dated as of July 26, 2002 by and between The Bank of New York, as trustee, and Foothill Capital Corporation. (see Exhibit 10.31 to Registration Statement on Form S-4 filed with the Commission on August 9, 2002, Commission File No. 333-97907) 10.32* Fee Letter, dated July 26, 2002, issued by the Company, Riviera Black Hawk, Inc. and Riviera Operating Corporation to Foothill Capital Corporation. (see Exhibit 10.32 to Registration Statement on Form S-4 filed with the Commission on August 9, 2002, Commission File No. 333-97907) 10.33* Intellectual Property Security Agreement dated as of July 26, 2002 by and between the Company and the other Debtors parties thereto, and Foothill Capital Corporation. (see Exhibit 10.33 to Registration Statement on Form S-4 filed with the Commission on August 9, 2002, Commission File No. 333-97907) 10.34* Deed of Trust, Assignment of Rents, Leases, Fixture Filing and Security Agreement dated July 26, 2002, executed by the Company for the benefit of Foothill Capital Corporation. (see Exhibit 10.34 to Registration Statement on Form S-4 filed with the Commission on August 9, 2002, Commission File No. 333-97907) 10.35* Environmental Indemnity dated July 26, 2002 from the Company in favor of Foothill Capital Corporation. (see Exhibit 10.35 to Registration Statement on Form S-4 filed with the Commission on August 9, 2002, Commission File No. 333-97907) 10.36* Continuing Guaranty dated July 26, 2002 by and among the Company, the other Borrowers parties thereto and the Guarantors parties thereto in favor of Foothill Capital Corporation. (see Exhibit 10.36 to Registration Statement on Form S-4 filed with the Commission on August 9, 2002, Commission File No. 333-97907) 10.37* Subordination Agreement dated July 26, 2002 by and among the Company and the other Creditors parties thereto in favor of Foothill Capital Corporation. (see Exhibit 10.37 to Registration Statement on Form S-4 filed with the Commission on August 9, 2002, Commission File No. 333-97907) 10.38* Stock Pledge and Security Agreement dated July 26, 2002, executed by the Company. (see Exhibit 10.38 to Registration Statement on Form S-4 filed with the Commission on August 9, 2002, Commission File No. 333-97907) ` 40 10.39* Stock Pledge and Security Agreement dated July 26, 2002, executed by Riviera Operating Corporation. (see Exhibit 10.39 to Registration Statement on Form S-4 filed with the Commission on August 9, 2002, Commission File No. 333-97907) 10.40* Stock Pledge and Security Agreement dated July 26, 2002, executed by Riviera Gaming Management, Inc. (see Exhibit 10.40 to Registration Statement on Form S-4 filed with the Commission on August 9, 2002, Commission File No. 333-97907) 10.41* Deed of Trust to Public Trustee, Security Agreement, Fixture Filing and Assignment of Rents, Leases and Leasehold Interests dated July 26, 2002, executed by Riviera Black Hawk, Inc. for the benefit of Foothill Capital Corporation. (see Exhibit 10.41 to Registration Statement on Form S-4 filed with the Commission on August 9, 2002, Commission File No. 333-97907) 10.42* Environmental Indemnity dated July 26, 2002 from the Company and Riviera Black Hawk, Inc. in favor of Foothill Capital Corporation. (see Exhibit 10.42 to Registration Statement on Form S-4 filed with the Commission on August 9, 2002, Commission File No. 333-97907) 10.43*(A) The Company's Stock Compensation Plan. (see Exhibit 10.43 to Registration Statement on Form S-4 filed with the Commission on August 9, 2002, Commission File No. 333-97907) 10.44*(A)Second Amendment to Employment Agreement between the Company and Robert Vannucci effective July 1, 2002. (included in original filing of Form 10-K on March 17, 2003 prior to this Amendment No. 1) 10.45*(A)Third Amendment to Employment Agreement between the Company and Robert Vannucci effective March 3, 2003.(included in original filing of Form 10-K on March 17, 2003 prior to this Amendment No. 1) 10.46(A) Trust under the Company's Deferred Compensation Plan dated November 1, 2000, as amended May 8, 2001. 21.1*Subsidiaries of the Company. (see Exhibit 21.1 to Registration Statement on Form S-4 filed with the Commission on August 9, 2002, Commission File No. 333-97907) 99.1 Certification of Chief Executive Officer 99.2 Certification of Chief Financial Officer * These are incorporated herein by reference as exhibits hereto. Following the description of each such exhibit is a reference to it as it appeared in a specified document previously filed with the Commission, to which there have been no amendments or changes. (A) Management contract or compensatory plan or arrangement SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. RIVIERA HOLDINGS CORPORATION By:/s/ WILLIAM L. WESTERMAN ------------------------------ William L. Westerman Chief Executive Officer and President (Principal Executive Officer) April 29, 2003 Pursuant to the requirements of the Securities Exchange Act of 1934, this Amendment has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated. Signature Title Date /s/ WILLIAM L. WESTERMAN Chairman of the Board, Chief April 29, 2003 - ------------------------ Executive Officer and President William L. Westerman /s/ DUANE R. KROHN Treasurer (Principal Financial April 29, 2003 - ------------------------ and Accounting Officer) Duane R. Krohn /s/ ROBERT R. BARENGO Director April 29, 2003 - ------------------------ Robert R. Barengo /s/ JEFFREY A. SILVER Director April 29, 2003 - ------------------------ Jeffrey A. Silver /s/ PAUL A. HARVEY Director April 29, 2003 - ------------------------ Paul A. Harvey /s/ VINCENT L. DIVITO Director April 29, 2003 - ------------------------ Vincent L. Divito CERTIFICATIONS I, William L. Westerman, the Chief Executive Officer of Riviera Holdings Corporation, certify that: 1. I have reviewed this first amended annual report on Form 10-K of Riviera Holdings Corporation; 2. Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report; 3. Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have: a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the "Evaluation Date"); and c) presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officers and I have indicated in this annual report whether there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: April 29, 2003 WILLIAM L. WESTERMAN - -------------------- William L. Westerman Chairman of the Board and Chief Executive Officer I, Duane R. Krohn, the Chief Financial Officer of Riviera Holdings Corporation, certify that: 1. I have reviewed this first amended annual report on Form 10-K of Riviera Holdings Corporation; 2. Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report; 3. Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have: a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the "Evaluation Date"); and c) presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officers and I have indicated in this annual report whether there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: April 29, 2003 DUANE R. KROHN - ---------------------------------- Duane R. Krohn Treasurer and Chief Financial Officer EX-99 3 exhibit10_19deferedcomplan.txt EXHIBIT10_19DEFEREDCOMP Riviera Holdings Corporation DEFERRED COMPENSATION PLAN (Effective November 1, 2000) CERTIFICATE OF ADOPTION RIVIERA HOLDINGS CORPORATION, acting through the Compensation Committee of its Board of Directors, hereby adopts the RIVIERA HOLDINGS CORPORATION DEFERRED COMPENSATION PLAN in the form attached hereto, effective November 1, 2000. RIVIERA HOLDINGS CORPORATION By_________________________________ On behalf of the Compensation Committee ATTEST: - ------------------------
TABLE OF CONTENTS PAGE SECTION 1................................................................................1 Purpose.........................................................................1 1.1 Purpose.......................................................1 1.2 Employer......................................................1 1.3 Effective Date................................................1 1.4 Administration of Plan........................................2 1.5 Notices.......................................................2 SECTION 2................................................................................3 Eligibility and Participation...................................................3 2.1 Eligibility...................................................3 2.2 Participation.................................................3 2.3 Cessation of Participation....................................3 SECTION 3................................................................................4 Enrollment and Deferral Elections...............................................4 3.1 Salary Deferral Elections.....................................4 3.2 Bonus Deferral Elections......................................4 3.3 Effective Period for Deferral Election........................4 3.4 Distribution Elections........................................5 3.5 Deferral Account..............................................7 3.6 Investment of Deferral Account................................7 3.7 Adjustment of Participants' Deferral Account..................8 3.8 Statement of Account..........................................9 3.9 Additional Limitation on Deferral Elections...................9 SECTION 4...............................................................................10 Employer Contributions.........................................................10 4.1 Amount of Employer Contribution..............................10 4.2 Accounting for Employer Contributions........................10 4.3 Vesting of Employer Contributions............................10 SECTION 5...............................................................................11 Distribution of Deferral Accounts..............................................11 5.1 Distributions Upon Separation From Service...................11 5.2 Form of Distributions........................................11 5.3 Designation of Beneficiary...................................11 5.4 Withholding of Employment Taxes..............................12 SECTION 6...............................................................................13 Miscellaneous..................................................................13 6.1 No Right to Company Assets...................................13 6.2 No Employment Rights.........................................13 6.3 Facility of Payment..........................................13 6.4 Nonassignability.............................................14 6.5 Effect on Other Benefits.....................................14 6.6 Independence of Plan.........................................14 6.7 Responsibility For Legal Effect..............................14 6.8 Action by the Company........................................15 6.9 Successors, Acquisitions, Mergers, Consolidations............15 6.10 Gender and Number............................................15 6.11 Governing Law................................................15 6.12 Claims Procedure.............................................15 SECTION 7...............................................................................16 The Compensation Committee.....................................................16 7.1 Compensation Committee's General Powers, Rights, and Duties..16 7.2 Interested Compensation Committee Member.....................17 7.3 Compensation Committee Expenses..............................17 7.4 Information Required by Compensation Committee...............17 7.5 Uniform Rules................................................17 7.6 Review of Benefit Determinations.............................17 7.7 Compensation Committee's Decision Final, Mistakes............18 7.8 Indemnification..............................................18 SECTION 8...............................................................................19 Amendment and Termination......................................................19
Riviera Holdings Corporation DEFERRED COMPENSATION PLAN (Effective July 1, 2000) SECTION 1 Purpose 1.1 Purpose RIVIERA HOLDINGS CORPORATION DEFERRED COMPENSATION PLAN (the "Plan") has been established by RIVIERA HOLDINGS CORPORATION (the "Company") to enable designated employees of the Company and RIVIERA OPERATING CORPORATION ("ROC") to defer a portion of their salaries and bonuses, and also to provide those employees with an opportunity to receive monetary payments based on the increase in value of the Common Stock of the Company ("Company Stock") or other investment funds. By allowing key management employees to participate in the Plan, the Company expects the Plan to benefit it in attracting and retaining the most capable individuals to fill its executive positions. The Plan is intended to be unfunded for tax purposes and for purposes of Title I of the Employee Retirement Income Security Act of 1974, as amended from time to time; however, the Company reserves the right to fund the Plan at any time. 1.2 Employer The Plan as set forth below shall apply to eligible employees of the Company, ROC, and any other subsidiary or affiliate of the Company which adopts the Plan with the consent of the Compensation Committee of the Board of Directors (the "Compensation Committee"). The Company and each subsidiary or affiliate that adopts the Plan with the Compensation Committee's consent will be referred to as an "Employer" and may be referred to collectively as the "Employers." 1.3 Effective Date The "Effective Date" of the Plan as set forth below is November 1, 2000. The Plan will be administered on the basis of a 12-month period beginning on each January 1 (the "Plan Year"). 1.4 Administration of Plan The Plan will be administered by the Compensation Committee, as provided in Section 7. 1.5 Notices Any notice or document relating to the Plan which is to be filed with the Company may be delivered, or mailed by registered or certified mail, postage prepaid, to the Compensation Committee in care of the Company at the Company's headquarters. SECTION 2 Eligibility and Participation 2.1 Eligibility Before the beginning of each Plan Year, the Compensation Committee will designate the employees eligible to participate in the Plan during such Plan Year. In general, employees eligible for the Plan will be limited to a select group of management or highly compensated employees, which means all employees whose Compensation was $100,000 or more in the year prior to the year in which the Participant makes a salary deferral election pursuant to subsection 3.1. An employee's eligibility to make a deferral to the Plan in any given Plan Year does not guarantee that employee the right to make a deferral in any subsequent Plan Year. 2.2 Participation An employee designated as eligible to participate in the Plan for any Plan Year may make a deferral election on a timely basis as described in Section 3, and if the employee makes such a deferral election he shall be referred to as a "Participant" until he has received a distribution of his entire Deferral Account (as defined in subsection 3.7). 2.3 Cessation of Participation A Participant in the Plan who separates from service with the Company and all its subsidiaries and affiliates for any reason will cease to be eligible to defer compensation under this plan, and will become entitled to distributions as described in Section 5. SECTION 3 Enrollment and Deferral Elections 3.1 Salary Deferral Elections Except as provided in Section 3.9, an employee designated as a Participant for a Plan Year may elect to defer not less than 1% nor more than 100% (in whole 1% increments) of his Compensation (as defined below) for that year. A Participant's "Compensation" means the total cash compensation paid to a Participant for services rendered to the Company as an employee (as reported on Form W-2). For all Plan Years, a Participant must make his salary deferral election in advance by signing a salary deferral agreement and filing it with the Compensation Committee no later than the December 1 which precedes the Plan Year to which the election relates. For any Plan Year, the amount deferred by a Participant under this subsection, together with amounts deferred under subsection 3.2, shall not be more than the maximum deferral amount (or percentage of compensation) communicated to the employee by the Compensation Committee for that Plan Year. 3.2 Bonus Deferral Elections An employee designated as a Participant for a Plan Year may elect to defer not less than 1% nor more than 100 percent (in whole 1% increments) of any bonus received or any amount paid to him under a stay bonus agreement in that Plan Year (collectively, a "bonus"). For all Plan Years, a Participant must make his bonus deferral election in advance by signing a deferral agreement and filing it with the Compensation Committee no later than the December 1 which precedes the Plan Year to which the election relates. Bonus deferral elections, together with salary and Incentive Payment deferral elections, are subject to the annual minimum and maximum deferral limits described in subsection 3.1. 3.3 Effective Period for Deferral Election (a) A Participant's salary or bonus deferral elections shall remain in effect only for the Plan Year specified in the deferral agreement. An eligible employee must file a separate salary or bonus deferral election on or before December 1 in order to make deferrals for the following Plan Year. An employee's eligibility to make a salary or bonus deferral to the Plan in any given Plan Year does not guarantee that employee the right to make a deferral in any subsequent Plan Year. Subject to subparagraph (c) below, a Participant's salary or bonus deferral election filed with the Compensation Committee is irrevocable on and after the deadline for filing the election. (b) In the event of an unforeseeable emergency, a Participant may request in writing that salary or bonus deferral elections elected by him hereunder cease for the then current Plan Year. Such emergency must inflict hardship upon the Participant and must arise from causes beyond the Participant's control. The Compensation Committee shall, in its reasonable judgment, determine whether such an emergency exists. If the Compensation Committee determines that such an emergency exists, the Participant's deferrals for such Plan Year shall cease, and the Participant shall not be eligible to resume deferrals hereunder (if otherwise eligible) until the second Plan Year following the Plan Year in which such cessation occurred. 3.4 Distribution Elections Participants are permitted to make distribution elections with regard to their Deferral Accounts (as described in subsection 3.5), as follows: (a) Scheduled Salary and Bonus Distributions. Each deferral election made by a Participant under subsections 3.1 and 3.2 shall include an election of the date on which the amount of such deferral (together with any investment gains thereon) will be distributed. Such date shall be referred to as the "Distribution Date" and shall not be later than the third year after the Plan Year to which the deferral election relates. The Distribution Date, once elected by the Participant, shall be irrevocable, subject only to: (i) subsection 5.1, which provides for distribution provisions upon separation from service in certain cases; (ii) a subsequent election by the Participant to postpone the Distribution Date, such election to be made no later the January 1 preceding the Plan Year in which the Distribution Date was to occur. If a Participant makes a second such subsequent election, it will be of no effect unless approved by the Compensation Committee. No more than two subsequent elections are permitted under the Plan. (b) Unscheduled In-Service Withdrawal Election Subject to Penalty. At any time during his employment with the Employers, a Participant may, by writing filed with the Compensation Committee, elect to withdraw a portion of the balance in his Deferral Account, subject to the following penalties: (i) ten percent (10%) of the amount of the Participant's withdrawal request will be permanently forfeited, and the remaining balance will be payable to the Participant; and (ii) no deferrals or other contributions of any kind will be withheld from compensation and credited to the Participant under the Plan prior to the beginning of the second Plan Year following the Plan Year of withdrawal. (c) Hardship Withdrawal. If a Participant incurs a hardship of the type described below, he may request a withdrawal of a portion of his Deferral Account, provided that the withdrawal is necessary in light of immediate and heavy financial needs of the Participant. Such a withdrawal shall not exceed the amount required to meet the immediate financial need and not reasonably available from other resources of the Participant (including all other distributions and non-taxable loans currently available under any qualified retirement plan of an Employer). Each such withdrawal election shall be made at such time and in such manner as the Compensation Committee shall determine, and shall be effective in accordance with such rules as the Compensation Committee shall establish and publish from time to time. Immediate and heavy financial needs are limited to amounts necessary for: (i) Unreimbursed medical or accident expenses incurred by the Participant, his spouse, or his dependents. (ii) Casualty loss pertaining to a principal residence of the Participant, or other property lost by the Participant. (iii) Preventing foreclosure on or eviction from the Participant's principal residence. If a Participant makes a withdrawal under this subparagraph, he must discontinue all deferral elections under the Plan from the date of withdrawal through the remainder of that Plan Year. 3.5 Deferral Account The Compensation Committee shall maintain in the name of each Participant a bookkeeping account known as the Participant's "Deferral Account" for deferrals made in accordance with subsections 3.1 and 3.2. A Participant's Deferral Account shall include a subaccount for each deferral made under the Plan and any employer contributions made to the Participant under the Plan. Each such subaccount shall reflect: (a) the amount deferred or contributed during that Plan Year, (b) any amounts distributed during that Plan Year, and (c) the total investment gains on the Deferral Account described in subsection 3.6. Deferred amounts shall be credited to subaccounts as soon as practicable following the date bonuses and salary would otherwise have been paid to the Participant but for his deferral election. 3.6 Investment of Deferral Account A Participant shall direct the investment of his Deferral Account. A Participant shall have the right to elect to have his Deferral Account deemed to be invested, in percentages elected by the Participant, in hypothetical funds, the value of which shall track either the stock of the Company and or the investment funds available under the Riviera Hotel & Casino Employee 401(k) Savings Plan (the "Measurement Funds"). Participants may change their investment elections quarterly on such date and in such manner as determined by the Compensation Committee in its sole discretion. A Participant's Deferral Account shall be credited or debited each payroll period (or, with respect to that portion of a Participant's Deferral Account attributable to bonus deferral elections, each time a bonus is deferred into the Plan) based on the performance of each Measurement Fund selected by the Participant, as though (i) Participant's Deferral Account balance as of the first day of a payroll period were invested in the Measurement Fund(s) selected by Participant, in the percentages applicable to such payroll period, as of the close of business on the first business day of such payroll period, at the closing price on such date; and (ii) any distributions made to Participant that decrease Participant's Deferral Account balance ceased being invested in the Measurement Fund(s) and in the percentages applicable to such payroll period, no earlier than the last day of the payroll period preceding the date of distribution, at the closing price on such date. Thereafter, the Measurement Funds that the Participant elects will be revalued each payroll period, based on the price of the stock of the Company on that date, the value of the investment funds of the Riviera Hotel & Casino Employee 401(k) Savings Plan on that date, and the percentages in which the Participant is invested in each of the Measurement Funds. Notwithstanding any other provision of this Agreement that may be interpreted to the contrary, the Measurement Fund(s) are to be used for measurement purposes only, and the allocation of Participant's Deferral Account to such Measurement Fund(s), the calculation of additional amounts and the crediting or debiting of such additional amounts to Participant's Deferral Account shall not be considered or construed in any manner as an actual investment of Participant's Deferral Account in any such Measurement Fund(s). Notwithstanding any provision of this subsection to the contrary, to the extent a Participant's Account is not entirely distributed within three years from the date the Participant separates from service with the Company for any reason, the Participant's entire vested Deferral Account shall thereafter be deemed to be invested in a money market fund designated by the Compensation Committee until such Deferral Account is fully distributed to the Participant. 3.7 Adjustment of Participants' Deferral Account As of the last day of each payroll period (each such date, and any other accounting date as determined by the Compensation Committee in its sole discretion, is referred to below as an "Accounting Date"), the Compensation Committee shall: (a) First, charge to the proper Deferral Accounts all payments or distributions made since the last preceding Accounting Date. (b) Next, credit each Participant's Deferral Account with amounts deferred on behalf of the Participant made since the last preceding Accounting Date; and (c) Next, credit each Participant's Deferral Account with any Employer Contributions (as defined in subsection 4.1) made on behalf of the Participant since the last preceding Accounting Date. 3.8 Statement of Account As soon as practicable after the end of each calendar quarter, the Compensation Committee shall furnish each Participant with a statement of the value of the Participant's Account. 3.9 Additional Limitation on Deferral Elections Notwithstanding anything in this Section to the contrary, the Compensation Committee may limit a Participant's deferral election if, as a result of any election, a Participant's compensation from the Employers would be insufficient to cover taxes and withholding applicable to the Participant. SECTION 4 Employer Contributions 4.1 Amount of Employer Contribution For each Plan Year, the Employers may cause the Compensation Committee to credit a Participant's Deferral Account with an amount (the "Employer Contribution") determined by the Employer in its discretion. Such contribution shall be allocated based upon such factors as the Employer determines in its discretion. 4.2 Accounting for Employer Contributions Employer Contributions on behalf of a Participant will be recorded in a separate subaccount maintained in the Participant's Deferral Account as of the same date (the "Crediting Date") that the underlying deferral is credited to the Participant's Deferral Account. Such subaccount will be deemed to be invested in Company Stock and will be adjusted from time to time in the same manner as described in subsection 3.7. 4.3 Vesting of Employer Contributions At all times, a Participant shall be fully vested in his Employer Contribution. SECTION 5 Distribution of Deferral Accounts 5.1 Distributions Upon Separation From Service If a Participant separates from service with the Employers, the vested balance in the Participant's Deferral Account shall be distributed to him on the Distribution Dates previously elected by the Participant under subparagraph 3.4(a); provided, however, that: (a) if on any Distribution Date, the accounting steps described in subsection 3.7 have not been completed, such distribution will be delayed until the accounting steps described in subsection 3.7 have been completed. (b) the Compensation Committee, in its discretion, may decide to pay the Participant the remaining balance in his Deferral Account in a lump sum prior to the Distribution Dates previously elected by the Participant. 5.2 Form of Distributions Amounts deferred under this Plan for each Plan Year (and investment gains and losses thereon) shall be distributed to the Participant in cash with respect to the portion that the Participant directed to be tied to the value of the investment funds of the Riviera Hotel & Casino Employee 401(k) Savings Plan or, at the Participant's election, either in cash or in stock with respect to the portion that the Participant directed to be tied to the value of the stock of the Company. At the time of his deferral election, the Participant shall elect whether the deferred amounts shall be distributed in a lump sum or installments over a period not to exceed 3 years. Distribution shall be made to the Participant or, in the event of his death, to his beneficiary. 5.3 Designation of Beneficiary A Participant may designate a beneficiary under this Plan by filing a written notice with the Compensation Committee in such form as the Compensation Committee requires. A Participant may from time to time change his designated beneficiary without the consent of such beneficiary by filing a new designation in writing with the Compensation Committee. If no designation under this Plan is in effect at the death of the Participant, the beneficiary shall be the beneficiary designated under the Riviera Hotel & Casino Employee 401(k) Savings Plan, and if no designation was ever filed under that plan, the beneficiary shall be the spouse of the Participant at the time of his death or, if no spouse is living at the death of the Participant, the representative of the Participant's estate. 5.4 Withholding of Employment Taxes To the extent required by law in effect at the time distribution is made from the Plan, the Employers shall withhold any taxes required to be withheld by Federal, state, or local governments. SECTION 6 Miscellaneous 6.1 No Right to Company Assets No Participant or other person shall acquire by reason of the Plan any right in or title to any assets, funds, or property of the Employers whatsoever including, without limiting the generality of the foregoing, any specific funds, assets, or other property which the Employers, in their sole discretion, may set aside in anticipation of a liability hereunder. Any benefits which become payable hereunder shall be paid from the general assets of the Employers, unless the Employers decide to fund the Plan. A Participant shall have only a contractual right to the amounts, if any, payable hereunder to that Participant. The Employers' obligations under this Plan are not secured or funded in any manner, even though the Employers may elect to establish a grantor trust to assist in the payment of benefits. If the Employers do not elect to establish a grantor trust to assist in the payment of benefits, the Company will provide notice to Participants of such decision. 6.2 No Employment Rights Nothing herein shall constitute a contract of continuing service or in any manner obligate the Company or any of its subsidiaries to continue the employment of any Participant, or obligate any Participant to continue in the employment of the Company or any of its subsidiaries, and nothing herein shall be considered as fixing or regulating the compensation payable to a Participant. 6.3 Facility of Payment When a person entitled to benefits under the Plan is under legal disability, or, in Compensation Committee's opinion, is in any way incapacitated so as to be unable to manage his financial affairs, the Compensation Committee may direct payment of benefits to such person's legal representative, or to a relative or friend of such person for such person's benefit, or the Compensation Committee may direct the application of such benefits for the benefit of such person. Any payment made in accordance with the preceding sentence shall be a full and complete discharge of any liability for such payment under the Plan. 6.4 Nonassignability No Participant or other person shall have any right to commute, sell, assign, pledge, anticipate, mortgage, or otherwise encumber, transfer, or convey in advance of actual receipt the amounts, if any, payable hereunder. No amounts payable hereunder shall, prior to actual payment, be subject to claims of creditors, seizure, or sequestration for the payment of any debts, judgments, alimony, domestic relations order, or separate maintenance owed by the Participant or any other person, or be transferable by operation of law in the event of the Participant's or any other person's bankruptcy or insolvency. Notwithstanding the foregoing, if an estate or trust is a beneficiary entitled to distributions from the Plan upon the death of the Participant, the representatives of the estate or the trustees of the trust may assign the right to receive such payments to the persons, estates, or trusts beneficially entitled thereto, and the Compensation Committee may rely conclusively and without any liability on the certification. 6.5 Effect on Other Benefits Except as provided below in this subsection, the Participant's compensation for purposes of calculating his awards and benefits under any employee benefit plan or program maintained by the Company shall not be reduced on account of deferrals under this Plan. However, amounts deferred under this Plan shall not be included when calculating a Participant's benefits or contributions under any retirement plan sponsored by the Company which is qualified under Section 401(a) of the Internal Revenue Code. Any distributions made from this Plan shall be excluded from a Participant's compensation in years distributed for purposes of calculating the Participant's awards and benefits under any employee benefit plan or program (other than this Plan) maintained by the Company. 6.6 Independence of Plan Except as otherwise expressly provided herein, the Plan shall be independent of, and in addition to, any employment agreement or other plan or rights that may exist from time to time between an Employer and a Participant in the Plan. 6.7 Responsibility For Legal Effect No representations or warranties, express or implied, are made by the Employers or the Compensation Committee and neither the Employers nor the Compensation Committee assumes any responsibility concerning the legal, tax, or other implications or effects of the Plan. 6.8 Action by the Company Any action required or permitted to be taken under the Plan by the Company shall be by one or more officers designated by the Board of Directors of the Company. 6.9 Successors, Acquisitions, Mergers, Consolidations The terms and conditions of the Plan shall inure to the benefit of and bind the Employers, the Participants, their successors, assigns, and personal representatives. 6.10 Gender and Number Wherever appropriate herein, the masculine may mean the feminine and the singular may mean the plural or vice versa. 6.11 Governing Law This Plan shall be construed and administered according to the laws of the State of Nevada. 6.12 Claims Procedure The Compensation Committee will provide notice in writing to any Participant or beneficiary whose claim for benefits under the Plan is denied, and the Compensation Committee shall also afford such Participant or beneficiary a full and fair review of its decision if so requested. The Compensation Committee has discretionary authority and responsibility to construe and interpret the provisions of the Plan and make factual determinations thereunder, including the power to determine the rights or eligibility of employees or Participants and any other persons, and the amounts of their benefits under the Plan, and to remedy ambiguities, inconsistencies, or omissions. Each such determination by the Compensation Committee shall be binding on all parties. Any interpretation of the provisions of the Plan and any decisions on any matter within the discretion of the Compensation Committee made in good faith shall be binding on all persons. SECTION 7 The Compensation Committee 7.1 Compensation Committee's General Powers, Rights, and Duties Except as otherwise specifically provided and in addition to the powers, rights, and duties specifically given to the Compensation Committee elsewhere in the Plan, the Compensation Committee shall have the following discretionary powers, rights, and duties: (a) To construe and interpret the provisions of the Plan and make factual determinations thereunder, including the power to determine the rights or eligibility of employees or Participants and any other persons, and the amounts of their benefits under the Plan, and to remedy ambiguities, inconsistencies, or omissions, and such determinations shall be binding on all parties. (b) To adopt such rules of procedure and regulations as in its opinion may be necessary for the proper and efficient administration of the Plan and as are consistent with the Plan. (c) To enforce the Plan in accordance with the terms of the Plan and the rules and regulations adopted by the Compensation Committee as above. (d) To direct any trustee as respects payments or distributions in accordance with the provisions of the Plan. (e) To furnish the Employers with such information as may be required by them for tax or other purposes in connection with the Plan. (f) To employ agents, attorneys, accountants, or other persons (who also may be employed by the Employers) and to allocate or delegate to them such powers, rights, and duties as the Compensation Committee may consider necessary or advisable to properly carry out administration of the Plan, provided that such allocation or delectation and the acceptance thereof by such agents, attorneys, accountants, or other persons, shall be in writing. 7.2 Interested Compensation Committee Member If a member of the Compensation Committee is also a Participant in the Plan, he may not decide or determine any matter or question concerning distributions of any kind to be made to him or the nature or mode of settlement of his benefits unless such decision or determination could be made by him under the Plan if he were not serving on the Compensation Committee. 7.3 Compensation Committee Expenses All costs, charges, and expenses reasonably incurred by the Compensation Committee will be paid by the Employers in such proportions as the Company may direct. No compensation will be paid to a Compensation Committee member as such. 7.4 Information Required by Compensation Committee Each person entitled to benefits under the Plan shall furnish the Compensation Committee with such documents, evidence, data, or information as the Compensation Committee considers necessary or desirable for the purpose of administering the Plan. The Employers shall furnish the Compensation Committee with such data and information as the Compensation Committee may deem necessary or desirable in order to administer the Plan. The records of the Employers as to a Participant's period of employment, termination of employment and the reason therefor, leave of absence, reemployment, and earnings will be conclusive on all persons unless determined to the Compensation Committee's satisfaction to be incorrect. 7.5 Uniform Rules The Compensation Committee shall administer the Plan on a reasonable and nondiscriminatory basis and shall apply uniform rules to all persons similarly situated. 7.6 Review of Benefit Determinations As provided in subsection 6.12, The Compensation Committee will provide notice in writing to any Participant or beneficiary whose claim for benefits under the Plan is denied and the Compensation Committee shall afford such Participant or beneficiary a full and fair review of its decision if so requested. 7.7 Compensation Committee's Decision Final, Mistakes Subject to applicable law, any interpretation of the provisions of the Plan and any decisions on any matter within the discretion of the Compensation Committee made by the Compensation Committee in good faith shall be binding on all persons. A misstatement or other mistake of fact shall be corrected when it becomes known and the Compensation Committee shall make such adjustment on account thereof as it considers equitable and practicable. 7.8 Indemnification To the extent permitted by applicable state law, the Employers shall indemnify and save harmless the Compensation Committee and each member thereof, and any delegate of the Compensation Committee who is an employee of an Employer against any and all expenses, liabilities, and claims including legal fees to defend against such liabilities and claims arising out of their discharge in good faith of responsibilities under or incident to the Plan, other than expenses and liabilities arising out of willful misconduct or gross negligence. This indemnity shall not preclude such further indemnities as may be available under insurance purchased by an Employer or provided by an Employer under any bylaw, agreement, or otherwise, as such indemnities are permitted under state law. SECTION 8 Amendment and Termination The Company reserves the right, in its sole discretion, to amend, discontinue, or completely terminate the Plan at any time. If the Plan is discontinued with respect to future deferrals, Participants' Deferral Account balances shall be distributed on the Distribution Dates elected in accordance with subsection 3.4, unless the Compensation Committee designates an earlier Distribution Date. As of the date designated by the Compensation Committee following the date of complete termination of the Plan, each Participant shall receive a distribution of his entire Deferral Account balance as if his elected Distribution Dates had occurred. The Plan may be amended or terminated by a written instrument executed by the Company, provided that an amendment or termination of the Plan may not reduce the balance in a Participant's Deferral Account as of the date the amendment is adopted. CHI99 3449523-2.057029.0012 UNANIMOUS CONSENT OF DIRECTORS OF RIVIERA HOLDINGS CORPORATION The undersigned, who constitute all of the directors of RIVIERA HOLDINGS CORPORATION (the "Company"), in lieu of a meeting, hereby consent to the adoption of the following resolution: WHEREAS, the Company established the Rivera Holdings Corporation Deferred Compensation Plan, Effective as of November 1, 2000 (the "Deferred Compensation Plan"), to provide for a deferred compensation benefit for certain designated employees of the Company and Riviera Operating Corporation; and WHEREAS, the Deferred Compensation Plan permits the participants to direct the investment of their Deferral Account in one or more hypothetical investment funds that track either the stock of the Company or the investment funds available under the Riviera Hotel & Casino Employee 401(k) Savings Plan; and WHEREAS, the Company intended that distributions from a participant's Deferral Account that was directed to be invested in Company stock would be distributed in-kind in shares of Company stock. WHEREAS, the Company proposes to amend the Deferred Compensation Plan, effective as of December 15, 2001, in a manner that conforms the Plan to the Company's original intent. NOW, THEREFORE, it is hereby: RESOLVED, that pursuant to the Company's authority under Section 8 of the Deferred Compensation Plan, the first sentence of Section 5.2 of the Deferred Compensation Plan be, and it hereby is, amended to provide as follows: "Amounts deferred under this Plan for each Plan Year (and investment gains and losses thereon) shall be distributed to the Participant in cash with respect to the portion that the Participant directed to be tied to the value of the investment funds of the Riviera Hotel & Casino Employee 401(k) Savings Plan and, in-kind in shares of Company stock with respect to the portion that the Participant directed to be invested in and delivered in-kind in the stock of the Company. Once a participant chooses to invest in Company Stock, such election may not be changed." FURTHER RESOLVED, that the President of the Company, or an officer designated by the President, shall notify the participants in writing of this amendment of the Deferred Compensation Plan and shall obtain their written acknowledgment of such amendment. FURTHER RESOLVED, that the President of the Company, or an officer designated by the President, shall notify the Trustee of the grantor trust and was established in connection with the Deferred Compensation Plan of this amendment. FURTHER RESOLVED, that the officers of the Company are hereby authorized to take such action as is necessary to carry out the intent of these resolutions, effective as of December 15, 2001. DATED:_____________, 2001 _____________________________ WILLIAM L. WESTERMAN, Director DATED:_____________, 2001 _____________________________ ROBERT R. BARENGO, Director DATED:_____________, 2001 _____________________________ JAMES N. LAND, JR., Director DATED:_____________, 2001 _____________________________ JEFFREY A. SILVER, Director DATED:_____________, 2001 _____________________________ PAUL A. HARVEY, Director EX-99 4 exhibit10_20restrickstk.txt EXHIBIT10_20RESTRICKSTOCK RIVIERA HOLDINGS CORPORATION RESTRICTED STOCK PLAN 1. Purpose. The Riviera Holdings Corporation ("RHC") Restricted Stock Plan (the "Plan") is intended to provide incentives which will attract and retain highly competent persons as officers and key employees of Riviera Operating Corporation ("ROC") (collectively the "Company") by providing them opportunities to receive restricted shares of the Company's Common Stock, par value $.001 per share ("Common Stock"), or to receive payments based on the increase in value of the Company's Common Stock, pursuant to the Awards described herein. 2. Participants. Participants will consist of such officers and key employees of the Company as the Compensation Committee of the Board of Directors of the Company (the "Compensation Committee") determines in its sole discretion to be significantly responsible for the success and future growth and profitability of the Company. Designation of a participant in any year shall not require the Company or the Compensation Committee to designate such person to receive an Award in any other year or, once designated, to receive the same type or amount of Awards as granted to the participant or any other participant in any year. The Company shall consider such factors as it deems pertinent in selecting participants and in determining the amount, type and terms and conditions of their respective Awards. 3. Types of Awards. Awards under the Plan may be granted as either (i) restricted stock awards or (ii) phantom stock awards, each as described below (collectively, "Awards"). Each Award shall be made pursuant to a written agreement between the Company and the Award recipient (the "Award Agreement"). 4. Shares Reserved under the Plan. There is hereby reserved for issuance, as Awards of restricted stock under the Plan and Awards of phantom stock under the Plan, an aggregate of Two Hundred Thousand (200,000) shares of Common Stock, which may be (or in the case of the phantom awards, may represent) treasury or authorized but unissued shares, and which represent five percent (5.0 %) of the issued and outstanding shares of stock of the Company on a fully diluted basis. If there is a lapse, cancellation, expiration, termination or forfeiture of any Award, or if shares are issued under an Award and thereafter are reacquired by the Company pursuant to rights reserved by the Company upon issuance of such shares, the shares subject to such Award may thereafter be subjected to new Awards under this Plan. 5. Restricted Stock Awards. Awards of "Restricted Stock" will consist of Common Stock transferred to participants without other payment therefor as additional compensation for services rendered or to be rendered to the Company. Awards of Restricted Stock shall be subject to such terms and conditions as the Company determines to be appropriate at the time of grant, including, without limitation, restrictions on the sale or other disposition of such shares and provisions for the forfeiture of such shares for no consideration upon termination of the participant's employment within specified periods or under certain conditions. 6. Phantom Stock Awards. Awards of "Phantom Stock" will consist of Awards that will entitle the holder to receive the appreciation in the Fair Market Value of the shares of Common Stock subject thereto up to a specified date or dates. Payment of such appreciation shall be made in cash or in shares of Common Stock, or a combination thereof, as set forth in the Award. Each Award of Phantom Stock shall be subject to such terms and conditions as the Company determines to be appropriate at the time of grant. 7. Shareholder Rights. The recipient of an Award of Restricted Stock or Phantom Stock shall not be deemed for any purpose to be a stockholder of the Company with respect to any of the shares subject thereto, except to the extent that a certificate shall have been issued and delivered to the participant. 8. Adjustment Provisions. If the Company shall at any time change the number of issued shares of Common Stock without new consideration to the Company (such as by stock dividend, stock split, recapitalization, reorganization, exchange of shares, or other change in corporate structure affecting the Common Stock), the total number of shares reserved for Awards under this Plan shall be appropriately adjusted. The Company may provide for equitable adjustments in the terms of any Awards granted hereunder after changes in any common stock of the Company resulting from any merger, consolidation, sale of assets, acquisition of property or stock, recapitalization, reorganization or similar occurrence upon such terms and conditions as it may, in its sole discretion, deem equitable and appropriate; provided, however, that any such adjustment shall not cause the number of shares reserved for Awards under the Plan to exceed ten percent (10%) of the issued and outstanding shares of the stock of the Company on a fully diluted basis. 9. Nontransferability. Each Award granted under the Plan to a participant shall, unless otherwise set forth in the Award Agreement, not be transferable otherwise than by will or the laws of descent and distribution. 10. Other Provisions. Awards under the Plan may also be subject to such other provisions (whether or not applicable to the Award granted to any other participant) as the Company or the Compensation Committee determines appropriate. 11. Fair Market Value. Except as otherwise expressly provided in an Award Agreement, for purposes of this Plan and any Awards hereunder, the "Fair Market Value" of a share of Common Stock shall mean (i) prior to the date of the registration of the Common Stock under the Securities Act of 1933 and of becoming readily tradable on a national securities exchange ("Readily Tradable"), the amount equal to the price of a share of the Company's Common Stock as reflected by the most recently preceding valuation of the shares of Common Stock under the Company's Employee Stock Ownership Plan, after adjusting for a non-marketability and minority interest discount; if applicable, and (ii) on or after the date that the Common Stock is Readily Tradable, the closing price of the Common Stock on the relevant date, as reported on the national securities exchange. 12. Tenure. A participant's right, if any, to continue to serve the Company as an officer, employee, or otherwise, shall not be enlarged or otherwise affected by his or her designation as a participant under the Plan, nor shall this Plan in any way interfere with the right of the Company, subject to the terms of any separate employment agreement to the contrary, at any time to terminate such employment or to increase or decrease the compensation of the participant from the rate in existence at the time of the grant of an Award. 13. Administration. The Plan will be administered by the Company, which shall act through its Board of Directors or the Compensation Committee. The Board of Directors is authorized, subject to the provisions of the Plan, to establish such rules and regulations as it deems necessary for the proper administration of the Plan and to make such determinations and interpretations and to take such action in connection with the Plan, any Awards granted hereunder, or any related agreements, as it deems necessary or advisable. All determinations and interpretations made by the Board of Directors or the Compensation Committee shall be binding and conclusive on all participants and their legal representatives. No member of the Board of Directors or the Compensation Committee, and no employee of the Company shall be liable for any act or failure to act hereunder, by any other member or employee or by any agent to whom duties in connection with the administration of this Plan have been delegated or, except in circumstances involving his or her bad faith, gross negligence or fraud, for any act or failure to act by such member of the Board of Directors or Compensation Committee or employee. 14. Amendment and Termination. The Board of Directors may amend the Plan from time to time or terminate the Plan at any time. However, no action authorized by this paragraph shall change the terms and conditions of any existing Award without the participant's consent. 15. Governing Law. This Plan and actions taken in connection herewith shall be governed and construed in accordance with the laws of the State of Nevada (regardless of the law that might otherwise govern under applicable Nevada principles of conflict of laws). 16. Approval. The Plan was adopted by the Board of Directors of the Company on October 2, 2000. CERTIFICATE OF ADOPTION I, Tullio J. Marchionne, Secretary of RIVIERA HOLDINGS CORPORATION (the "Company"), hereby certifies that the Company adopted the RIVIERA HOLDINGS CORPORATION RESTRICTED STOCK PLAN in the form attached hereto, effective as of October 1, 2000. Dated this ______ day of ______, 2001. RIVIERA HOLDINGS CORPORATION By_________________________________ Secretary ATTEST: - --------------------------------- EX-99 5 exhibit10_46trustdefcomp.txt EXHIBIT10.46TRUSTDEFCOMP TRUST UNDER THE RIVIERA HOLDINGS CORPORATION DEFERRED COMPENSATION PLAN THIS AGREEMENT made this 1st day of November 2000 by and between RIVIERA HOLDINGS CORPORATION (Company)1 and U.S. BANK NATIONAL ASSOCIATION (Trustee). WHEREAS, Company has entered the Deferred Compensation Plan as listed in Appendix A; and WHEREAS, Company has incurred or expects to incur liability under the terms of such Plan; and WHEREAS, Company wishes to a trust (hereinafter called the "Trust") and to contribute to the Trust assets that shall be held therein, subject to the claims of the Company's creditors in the event of the Company's Insolvency, as herein defined, until paid under the Plan in such manner and at such time as specified in the Plan; 2 and WHEREAS, it is the intention of the parties that this Trust shall constitute an unfunded arrangement and shall not affect the status of the Plan as an unfunded plan maintained for the purposes of providing deferred compensation for a select group of management or highly compensated employees for purposes of Title I of the Employment Retirement Income Security Act of 1974; and WHEREAS, it is the intention of Company to make contributions to the Trust to provide itself with a source of funds to assist it in the meeting of its liabilities under the Plan; and NOW, THEREFORE, the parties do hereby establish the Trust and agree that the Trust shall be comprised, held and disposed of as follows: Section 1. Establishment of Trust (a) Company hereby deposits with Trustee in trust one thousand dollars ($1,000.00) which shall become the principal of the Trust to be held, administered and disposed of by Trustee as provided in this Trust Agreement. (b) The Trust shall become irrevocable upon approval by the Board of Directors of the Company. (c) The Trust is intended to be a grantor trust for tax purposes, of which Company is the grantor, within the meaning of subpart E, part I, subchapter J, chapter 1, subtitle A of the Internal Revenue Code of 1986, as amended, and shall be construed accordingly. (d) The principal of the Trust, and any earnings thereon shall be held separate and apart from the other funds of Company and shall be used exclusively for the uses and purposes of the Participant and general creditors as herein set forth. Participant and his beneficiaries shall have no preferred claim on, or any beneficial ownership interest in, any assets of the Trust. Any rights created under the Plan and this Trust Agreement shall be merely unsecured contractual rights of the Plan Participants and their beneficiaries against Company. Any assets held by the Trust will be subject to the claims of Company's general creditors under federal and state law in the event of Insolvency, as defined in Section 3(a) herein. (e) Company, in its sole discretion, may at any time, or from time to time, make additional deposits of cash or other property in trust with Trustee to augment the principal to be held, administered and disposed of by Trustee as provided in this Trust Agreement. Neither Trustee nor the Plan Participant or any beneficiary shall have any right to compel such additional deposits, other than a deposit due pursuant to Section (f). (f) Company shall make irrevocable contributions to the Trust at the times and in the amounts specified in paragraph 4.1 of the Plan. Section 2. Payments to Participant and His Beneficiaries. (a) Company shall deliver to Trustee a schedule the "Payment Schedule") that indicates the amounts payable in respect to the Plan Participants (and each of their beneficiaries), that provides a formula or other instructions acceptable to trustee for determining the amounts so payable, the form in which such amount is to be paid (as provided for or available under the Plan), and the time of commencement for payment of such amounts. Except as otherwise provided herein, Trustee shall make payments to the Plan Participants and their beneficiaries in accordance with such Payment Schedule. The Trustee shall make provision for the reporting and withholding of any federal, state or local taxes that may be required to be withheld with respect to the payment of benefits pursuant to the terms of the Plan(s) and shall pay amounts withheld to the appropriate taxing authorities or determine that such amounts have been reported, withheld and paid by the Company.3 (b) The entitlement of the Plan Participant or their beneficiaries to benefits under the Agreement shall be determined by Company or such party as it shall designate under the Plan, and any claim for such benefits shall be considered and reviewed under the procedures set out in the Plan. (c) Company may make payment of benefits directly to the Plan Participant or their beneficiaries as they become due under the terms of the Plan Agreement. Company shall notify Trustee of its decision to make payment of benefits directly priors to the time amounts are payable to participants or their beneficiaries. In addition, if the principal of the Trust, and any earnings thereon, are not sufficient to make payments of benefits in accordance with the terms of the Plan, Company shall make the balance of each such payment as it falls due. Trustee shall notify Company where principal and earnings are not sufficient. Section 3. Trustee Responsibility Regarding Payments to Trust Beneficiary When Company is Insolvent. (a) Trustee shall cease payment of benefits to the Plan Participants and their beneficiaries if the Company is Insolvent. Company shall be considered "Insolvent" for purposes of this Trust Agreement if (i) Company is unable to pay its debts as they become due, or (ii) Company is subject to a pending proceeding as a debtor under the United States Bankruptcy Code. (b) At all times during the continuance of this Trust, as provided in Section 1(d) hereto, the principal and income of the Trust shall be subject to claims of general creditors of Company under federal and state law as set forth below. (i) The Board of Directors and the chairman of the Board of Directors of Company shall have the duty to inform Trustee in writing of Company's Insolvency. If a person claiming to be a creditor of Company alleges in writing to Trustee that Company has become Insolvent, Trustee shall determine whether Company is Insolvent and, pending such determination, Trustee shall discontinue payment of benefits to the Participant or his beneficiaries.4 (ii) Unless Trustee has actual knowledge of Company's Insolvency, or has received notice from Company or a person claiming to be a creditor alleging that Company is Insolvent, Trustee shall have no duty to inquire whether company is Insolvent. Trustee may in all events rely on such evidence concerning Company's solvency as may be furnished to Trustee and that provides Trustee with a reasonable basis for making a determination concerning Company's solvency as described in Section 3.b.(i). (iii) If at any time Trustee has determined that Company is Insolvent, Trustee shall discontinue payments to the Participant or his beneficiaries and shall hold the assets of the Trust for the benefit of Company's general creditors. Nothing in this Trust Agreement shall in any way diminish any rights of the Participant or his beneficiaries to pursue their rights as general creditors of Company with respect to benefits due under the Agreement or otherwise. (iv) Trustee shall resume the payment of benefits to the Plan Participants or their beneficiaries in accordance with Section 2 of this Trust Agreement only after Trustee has determined that Company is not Insolvent as described in Section 3.B.(i). (or is no longer Insolvent). (c) Provided that there are sufficient assets, if Trustee discontinues the payment of benefits from the Trust pursuant to Section 3(b) hereof and subsequently resumes such payments, the first payment following such discontinuance shall include the aggregate amount of all payments due to the Participant or his beneficiaries under the terms of the Agreement for the period of such discontinuance, less the aggregate amount of any payments made to Plan participants or their beneficiaries by Company in lieu of the payments provided for hereunder during any such period of discontinuance. Section 4. Payments to Company. Except as provided in Section 3 hereof, after the Trust has become irrevocable, Company shall have no right or power to direct Trustee to return to Company or to divert to others any of the Trust assets before all payment(s) of benefits have been made to the Participant and his beneficiaries pursuant to the terms of the Plan. Section 5. Investment Authority. (a) Trustee shall invest and reinvest the principal and income of the Trust pursuant to the direction of a Plan Administrative Committee in securities and in any other form of property not prohibited by law and to written investment guidelines, if any, as Company may provide in writing from time to time to the Trustee (See APPENDIX "B" and Exhibit "B-1"). The original selection of mutual funds will be the funds recommended by the Trustee. Changes in the mutual fund families or selected funds will be communicated to the bank in writing in advance of any changes.5 (b) Trustee may invest in securities (including stock or rights to acquire stock) or obligations issued by Company. All rights associated with assets of the Trust shall be exercised by Trustee or the person designated by Trustee, and shall in no event be exercisable by or rest with the Participant, except that voting rights with respect to Trust assets will be exercised by Company. Section 6. Disposition of Income During the term of this Trust, all of the income received by the Trust, net of expenses and taxes, shall be accumulated and reinvested. Section 7. Accounting by Trustee Trustee shall keep accurate and detailed records of all investments, receipts, disbursements, and all other transactions required to be made, including such specific records as shall be agreed upon in writing between Company and Trustee. Within 90 days following the close of each calendar year and within 30 days after the removal or resignation of Trustee, Trustee shall deliver to Company a written account of its administration of the Trust during such year or during the period from the close of the last preceding year to the date of such removal or resignation, setting forth all investments, receipts, disbursements and other transactions effected by it, including a description of all securities and investments purchased and sold with the cost or net proceeds of such purchases or sales (accrued interest paid or receivable being shown separately), and showing all cash, securities and other property held in the Trust at the end of such year or as of the date of such removal or resignation, as the case may be. The Trustee shall provide quarterly statements including break down by participant accounts in detail similar to other brokerage accounts. Section 8. Responsibility of Trustee (a) Trustee shall act with the care, skill, prudence and diligence under the circumstances then prevailing that a prudent person acting in the like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims, provided, however, that Trustee shall incur no liability to any person for any action taken pursuant to a direction, request or approval given by Company which is contemplated by, and in conformity with, the terms of the Agreement or this Trust and is given in writing by Company. The Company will indemnify and hold harmless the Trustee for selection of investments that are directed by the Company. In the event of a dispute between Company and a party, Trustee may apply to a court of competent jurisdiction to receive the dispute. (b) If Trustee undertakes or defends any litigation arising in connection with this Trust, Company agrees to indemnify Trustee against Trustee's costs, expenses and liabilities (including, without limitation, attorneys' fees and expenses) relating thereto and to be primarily liable for such payments. If Company does not pay such costs, expenses and liabilities in a reasonably timely manner, Trustee may obtain payment from the Trust. (c) Trustee may consult with legal counsel (who may also be counsel for Company generally) with respect to any of its duties or obligations hereunder. (d) Trustee may hire agents, accountants, actuaries, investment advisors, financial consultants or other professionals to assist it in performing any of its duties or obligations hereunder. (e) Trustee shall have, without exclusion, all powers conferred on Trustees by applicable law, unless expressly provided otherwise herein, provided, however, that if an insurance policy is held as an asset of the Trust, Trustee shall have no power to name a beneficiary of the policy other than the Trust, to assign the policy (as distinct from conversion of the policy to a different form) other than to a successor Trustee, or to loan to any person the proceeds of any borrowing against such policy. (f) Notwithstanding any powers granted to Trustee pursuant to this Trust Agreement or by applicable law, Trustee shall not have any power that could give this Trust the objective of carrying on a business and dividing the gains therefrom, within the meaning of section 301.7701-2 of the Procedure and Administrative Regulations promulgated pursuant to the Internal Revenue Code. (g) The Company, at its option may provide, at its own expense, insurance for the deferred compensation plan. Section 9. Compensation and Expenses of Trustee Company shall pay all administrative and Trustee's fees (pursuant to its schedule of fees) and expenses. The minimum fee will be $250 per month. If not so paid in 30 days, the fees and expenses shall be paid from the Trust. Section 10. Registration and Removal of Trustee (a) Trustee may resign at any time by written notice to Company, which shall be effective 90 days after receipt of such notice unless Company and Trustee agree otherwise. (b) Trustee may be removed by Company on 90 days notice or upon shorter notice accepted by Trustee. (c) Upon a Change of Control, as defined herein, Trustee may not be removed by Company for three years. (d) If Trustee resigns within three years after a Change of Control, as defined herein, Company shall apply to a court of competent jurisdiction for the appointment of a successor Trustee or for instructions. (e) If Trustee resigns or is removed prior to a change of control or within 3 years of a Change of Control, as defined herein, Trustee shall select a successor Trustee in accordance with the provisions of Section 11(b) hereof prior to the effective date of Trustee's resignation or removal.6 (f) Upon resignation or removal of Trustee and appointment of a successor Trustee, all assets shall subsequently be transferred to the successor Trustee. The transfer shall be completed within 60 days after receipt of notice of resignation, removal or transfer, unless Company extends the time limit. (g) If Trustee resigns or is removed, a successor shall be appointed, in accordance with Section 11 hereof, by the effective date of resignation or removal under paragraph(s) (a) or (b) of this section. If no such appointment has been made, Trustee may apply to a court of competent jurisdiction for appointment of a successor or for instructions. All expenses of Trustee in connection with the proceeding shall be allowed as administrative expenses of the Trust. (h) The Trustee shall have the duty and responsibility to vote the securities held in the Trust (including stock issued by the Company) in its sole discretion.7 Section 11. Appointment of Successor (a) If Trustee resigns or is removed in accordance with Section 10(a) or 10 (b) hereof, Company may appoint any third party, such as a bank trust department or other party that may be granted corporate trustee powers under state law, as a successor to replace Trustee upon resignation or removal. The appointment shall be effective when accepted in writing by the new Trustee, who shall have all of the rights and powers of the former Trustee, including ownership rights in the Trust assets. The former Trustee shall execute any instrument necessary or reasonably requested by Company or the successor Trustee to evidence the transfer. (b) If Trustee resigns pursuant to the provisions of Section 10 (d) hereof and selects a successor Trustee, Trustee may appoint any third party such as a bank trust department or other party that may be granted corporate trustee powers under state law. The appointment of a successor Trustee shall be effective when accepted in writing by the new Trustee. The new Trustee shall have all the rights and powers of the former Trustee, including ownership rights in Trust assets. The former Trustee shall execute any instrument necessary or reasonably requested by the successor Trustee to evidence the transfer. (c) The successor Trustee need not examine the records and acts of any prior Trustee and any retain or dispose of existing Trust assets, subject to Sections 7 and 8 hereof. The successor Trustee shall not be responsible for and Company shall indemnify and defend the successor Trustee from any claim or liability resulting from any action or inaction of any prior Trustee or from any other past event, or any condition existing at the time it becomes successor Trustee. Section 12. Amendment and Termination (a) This Trust Agreement may be amended by a written instrument executed by Trustee and Company. Notwithstanding the foregoing, no such amendment shall conflict with the terms of the Plan or shall make the Trust revocable after it has become irrevocable in accordance with Section 1(b) hereof. (b) The Trust shall not terminate until the date on which the Participant and his beneficiaries are no longer entitled to benefits pursuant to the terms of the Plan. Upon termination of the Trust any assets remaining in the Trust shall be returned to Company. (c) Section(s) 1 through 5, inclusive, and 7 through 13, inclusive of this Trust Agreement may not be amended by Company for three years following a Change of Control, as defined herein. Section 13. Miscellaneous (a) Any provision of this Trust Agreement prohibited by law shall be ineffective to the extent of any such prohibition, without invalidating the remaining provisions hereof. (b) Benefits payable to the Participant and his beneficiaries under this Trust Agreement may not be anticipated, assigned (either at law or in equity), alienated, pledged, encumbered or subjected to attachment, garnishment, levy, execution or other legal or equitable process. (c) This Trust Agreement shall be governed by and construed in accordance with the laws of the State of Nevada. (d) For purposes of this Trust, "Change of Control" shall mean (i) the sale of substantially all of the Company's assets; (ii) the sale of more than a majority of the Company's common stock; (iii) a merger in which the Company is not the surviving company; or (iv) a merger where a majority of the stock of the Company, as the surviving company, shall be held by a party or related group of parties other than Westerman or executives of the Company with more than two (2) years seniority.8 Section 14. Effective Date The effective date of this Trust Agreement shall be ____________, 2000. RIVIERA HOLDINGS CORPORATION Attest: By - ------------------------------- ------------------------------------ Secretary Treasurer U.S. BANK NATIONAL ASSOCIATION Attest: By - ------------------------------- ------------------------------------ Trust Officer Vice President [Corporate Seal] CHI99 3481273-1.057029.0012 STATE OF NEVADA : : SS. COUNTY OF : On the ____ day of ____________, I, the undersigned, as Secretary of RIVIERA HOLDING CORPORATION, a corporation duly created and existing under the laws of the State of Nevada, being duly sworn according to law, say that I was personally present at the execution of the foregoing Trust Agreement; that I personally affixed thereto the seal of RIVIERA HOLDING CORPORATION, having the authority so to do by virtue of my office; that the seal so affixed is the common or corporate seal of RIVIERA HOLDING CORPORATION; that the foregoing Trust Agreement was executed and delivered by ________________________ as ________________________ of the said corporation for the uses and purposes therein maintained, and that the name of this deponent as Secretary is subscribed to the foregoing Trust Agreement in attestation of its due execution and delivery. Secretary SWORN and subscribed before me the day and year aforesaid. WITNESS my hand and seal. Notary Public My Commission Expires: STATE OF NEVADA : : SS. COUNTY OF : On the ____ day of ____________, I, the undersigned, as Trust Officer of U.S. BANK , being duly sworn according to law, say that I was personally present at the execution of the foregoing Trust Agreement; and personally affixed thereto the common or corporate seal of U.S. BANK NATIONAL ASSOCIATION, that the seal so affixed is the common or corporate seal of the said corporation; that the foregoing Trust Agreement was executed and delivered by ________________________ as a Vice President of the said corporation for the uses and purposes therein maintained, and that the name of this deponent as Trust Officer is in attestation of its due execution and delivery. Trust Officer SWORN and subscribed before me the day and year aforesaid. WITNESS my hand and seal. Notary Public My Commission Expires: Appendix A The Plan to which reference is made in the Trust instrument to which this Appendix is attached is as follows: (1) Riviera Holdings Corporation Deferred Compensation Plan dated as of June 1, 2000. THIS APPENDIX A CANNOT BE AMENDED AFTER THERE HAS OCUCRRED A CHANGE OF CONTROL, AS DEFINED IN THE TRUST TO WHICH THIS APPENDIX IS ATTACHED. Appendix b INSTURCTIONS FOR INVESTMENTS IN RIVIERA STOCK Quarterly during the period 48 hours after release of earnings and for the next 14 calendar days, an authorized representative of the Company will instruct the trustee regarding the dollar amount and price limits for acquiring Riviera Holdings Corporation Common Stock (AMEX symbol RIV) for the Trust. The Trustee will establish a separate trading account with a broker of its choice to acquire the shares. After the acquisition is complete, the shares will be divided among the separate accounts maintained by the Trustee. A copy of the Form of Instructions is attached herewith as Exhibit B-1. The procedure for acquiring shares from the Company treasury if the shares cannot be acquired on the open market in 20 trading days is described in Exhibit B-1. Exhibit B-1 Date:_____________ U.S. Bank National Association Gentlemen: In accordance with the Trust Agreement dated September 1, 2000 under the Riviera Holdings Corporation Deferred Compensation Plan you are instructed to acquire Riviera Holdings Corporation common stock on the open market at a limit price of $______:
Beneficiary: Total Fund A Fund B Fund C Fund D ----- ------ ------ ------ ------ Ronald Johnson $_________ $_________ $_________ $_________ $_________ Duane Krohn $_________ $_________ $_________ $_________ $_________ Robert Vannucci $_________ $_________ $_________ $_________ $_________ Jerome Grippe $_________ $_________ $_________ $_________ $_________ Total $_________ $_________ $_________ $_________ $_________
These instructions are effective until revoked or superceded. If you are not able to acquire the "Open Market" shares in 20 trading days, the Company may agree, by notifying the Trustee in writing, to provide shares from the treasury at the market price not to exceed $____ and not at a price lower than the Company's average cost of approximately $7.50. The Company will indicate, in its notification, how many shares are being provided, the price and the total amount to be paid by the Trustee. The Company will also indicate which beneficiaries are affected and how many shares are to be allocated to each Beneficiary's account. The Trustee will acquire the stock from the Company for individual accounts (or in a separate account subject to later distribution to the beneficiary's accounts) depending on the processing method used by the Trustee. To the extent open market shares or treasury shares cannot be acquired, the amounts shall revert to the mutual funds as previously instructed and the shares purchased will be divided pari passu to the beneficiary accounts. Very truly yours, Duane Krohn, Treasurer Riviera Holdings Corporation - -------- 1 Note, in order to avoid adverse income tax consequences for any subsidiary that has executive who participate in the deferred compensation plan funded through this trust, the subsidiary must become a party to the Trust Agreement and the assets of the trust must be subject to the claim of the subsidiary's creditors. (See, IRS Notice 2000-59). Please let me know if any executives of the subsidiaries will participate in the plan. 2 The provisions adding a reference to multiple accounts were deleted in order to assure that the trust follows the model trust agreement as set forth in IRS Revenue Procedure 92-64. Failure to be a qualified trust can result in adverse tax consequence. The Trustee should administer the trust with recordkeeping entries for multiple accounts. But, the trust assets belong to the Trust as a whole. 3 This last sentence was added back to the agreement. It is a required provision in the IRS model trust agreement. More importantly, the Company needs to be sure that the trustee understands and will undertake the tax withholding responsibilities. 4 Deletion of the provision requiring the Trustee to review the Company's SEC filings and to determine if the Company is solvent is fine. 5 This provision is not consistent with the IRS Model trust agreement. However, I do not believe that the provision is not inconsistent with the status of the trust as a grantor trust and, therefore, is permissible. 6 This provision is included for the protection of the executives who are beneficiaries under the Plan. You may want to consider leaving it. 7 I added this provision to be sure that it is understood that the Trustee will vote the shares of RIV stock held in the trust. 8 This definition is fine. But we need to be sure that it is identical to the provision in the Deferred Compensation Plan. AMENDMENT TO TRUST UNDER THE RIVIERA HOLDINGS CORPORATION DEFERRED COMPENSATION PLAN This AMENDMENT ("Amendment") is dated as of May 8, 2001, by and between RIVIERA HOLDINGS CORPORATION ("Company") and U.S. BANK NATIONAL ASSOCIATION ("Trustee"). WHEREAS, the parties have entered into a Trust Agreement dated January 3, 2001, with regards to the Company's Deferred Compensation Plan (the "Agreement"); and WHEREAS, the parties wish to amend that Agreement. NOW, THEREFORE, the parties do hereby amend the Agreement as follows: 1. The third "WHEREAS" of the Agreement is hereby amended to read as follows: "WHEREAS, Company wishes to establish a trust (hereinafter) called the "Trust") and to contribute to the Trust assets that shall be held therein, subject to the claims of the Company's and the Company's wholly owned subsidiary's, Riviera Operating Corporation ("Subsidiary"), creditors in the event of the Company's or its Subsidiary's insolvency, as herein defined, until paid under the Plan in such manner and at such time as specified in the Plan; and. 2. Section 1. (d) is hereby amended to read as follows: (d) The principal of the Trust, and any earnings thereon shall be held separate and apart from the other funds of Company and shall be used exclusively for the uses and purposes of the Participant and general creditors as herein set forth. Participant and his beneficiaries shall have no preferred claim on, or any beneficial ownership interest in, any assets of the Trust. Any rights created under the Plan and this Trust Agreement shall be merely unsecured contractual rights of the Plan Participants and their beneficiaries against Company and its Subsidiary. Any assets held by the Trust will be subject to the claims of Company's and its Subsidiary's general creditors under federal and state law in the event of Insolvency, as defined in Section 3(a) herein. 3. Section 3. Trustee Responsibility Regarding Payments to Trust Beneficiary When Company is Insolvent, is amended in its entirety as follows: (a) Trustee shall cease payment of benefits to the Plan Participants and their beneficiaries if the Company or its Subsidiary is Insolvent. Company or its Subsidiary shall be considered "Insolvent" for purposes of this Trust Agreement if either (i) is unable to pay its debts as they become due, or (ii) is subject to a pending proceeding as a debtor under the United States Bankruptcy Code. (b) At all times during the continuance of this Trust, as provided in Section 1(d) hereto, the principal and income of the Trust shall be subject to claims of general creditors of Company and its Subsidiary under federal and state law as set forth below. (i) The Board of Directors and the Chairman of the Board of Directors of Company or its Subsidiary shall have the duty to inform Trustee in writing of Company's or its Subsidiary's Insolvency. If a person claiming to be a creditor of Company or its Subsidiary alleges in writing to Trustee that Company or its Subsidiary has become Insolvent, Trustee shall determine whether Company or its Subsidiary is Insolvent and, pending such determination, Trustee shall discontinue payment of benefits to the Participants or their beneficiaries. (ii) Unless Trustee has actual knowledge of Company's or its Subsidiary's Insolvency, or has received notice from Company, its Subsidiary or a person claiming to be a creditor alleging that Company or its Subsidiary is Insolvent, Trustee shall have no duty to inquire whether Company or its Subsidiary is Insolvent. Trustee may in all events rely on such evidence concerning Company's or its Subsidiary's solvency as may be furnished to Trustee and that provides Trustee with a reasonable basis for making a determination concerning Company's or its Subsidiary's solvency as described in Section 3.b.(i). (iii) If at any time Trustee has determined that Company or its Subsidiary is Insolvent, Trustee shall discontinue payments to the Participant or his beneficiaries and shall hold the assets of the Trust for the benefit of Company's or its Subsidiary's general creditors. Nothing in this Trust Agreement shall in any way diminish any rights of the Participant or his beneficiaries to pursue their rights as general creditors of Company or its Subsidiary with respect to benefits due under the Agreement or otherwise. (iv) Trustee shall resume the payment of benefits to the Plan Participants or their beneficiaries in accordance with Section 2 of this Trust Agreement only after Trustee has determined that Company and its Subsidiary are not Insolvent as described in Section 3.B.(i). (or are no longer Insolvent). (c) Provided that there are sufficient assets, if Trustee discontinues the payment of benefits from the Trust pursuant to Section 3(b) hereof and subsequently resumes such payments, the first payment following such discontinuance shall include the aggregate amount of all payments due to the Participant or his beneficiaries under the terms of the Agreement for the period of such discontinuance, less the aggregate amount of any payments made to Plan Participants or their beneficiaries by Company in lieu of the payments provided for hereunder during any such period of discontinuance. 4. Except as Amended herein, the terms and conditions of the original Trust Agreement dated January 3, 2001, shall remain in full force and effect. IN WITNESS WHEREOF, the parties have duly executed this Amendment to Trust Under The Riviera Holdings Corporation Deferred Compensation Plan as of the date first written above. RIVIERA HOLDINGS CORPORATION Attest: By:__________________________ By:____________________________ U.S. BANK NATIONAL ASSOCIATION Attest: By:__________________________ By:_____________________________ EX-99 6 certification99_1.txt EXHIBIT99.1CERTIFICATION RIVIERA HOLDINGS CORPORATION Form 10-K Exhibit 99.1 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Annual Report of Riviera Holdings Corporation (the "Company") on Form 10-K for the period ending December 31, 2002 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), William L. Westerman, Chief Executive Officer of the Company, certifies, pursuant to 18 U.S.C. 1350, as adopted pursuant to 906 of the Sarbanes-Oxley Act of 2002, that: 1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company. ____________________________ By: /s/ William L. Westerman William L. Westerman Chairman of the Board and Chief Executive Officer EX-99 7 certification99_2.txt EXHIBIT99.2CERTIFICATION RIVIERA HOLDINGS CORPORATION Form 10-K Exhibit 99.2 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Annual Report of Riviera Holdings Corporation (the "Company") on Form 10-K for the period ending December 31, 2002 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), Duane Krohn, Chief Financial Officer of the Company, certifies, pursuant to 18 U.S.C. 1350, as adopted pursuant to 906 of the Sarbanes-Oxley Act of 2002, that: 1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company. ____________________ By: /s/ Duane Krohn Duane Krohn Treasurer and Chief Financial Officer -----END PRIVACY-ENHANCED MESSAGE-----