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EXHIBIT 10.3
EMPLOYMENT SEPARATION AGREEMENT
THIS AGREEMENT is made effective September 9, 1996 (the "Effective Date") by
and between Xxxxxxx X. Xxxxxx ("Xxxxxx"), and Grand Casinos, Inc. ("Grand").
WHEREAS, Xxxxxx is an employee, President and director of Grand; and
WHEREAS, Xxxxxx desires to resign from his position as employee, President and
director of Grand pursuant to the terms and conditions stated in this
Agreement; and
WHEREAS; Grand desires to accept such resignation;
NOW THEREFORE, in consideration of the foregoing, and the promises, agreements
and releases stated below, Grand and Xxxxxx hereby agree as follows:
1. Resignation. Xxxxxx hereby resigns as (i) an employee of Grand, (ii) as
President and director of Grand, and (iii) as director and officer of any and
all subsidiaries and affiliates of Grand, all effective as of the Effective
Date.
2. Continued Salary and Benefits. Grand shall continue to provide and pay to
Xxxxxx all salary and benefits to which Xxxxxx is entitled as an employee of
Grand to and including September 9, 1996. Such payment and provision shall be
at the rates and with such coverage as is in effect on the Effective Date.
3. Insurance. Xxxxxx and Grand acknowledge that Xxxxxx has the right under
applicable federal and state laws to, at Xxxxxx'x expense, continue the life,
dental and medical insurance coverage provided as of the Effective Date to
Xxxxxx and Xxxxxx'x spouse and dependents as a benefit related to Xxxxxx'x
employment by Grand. Grand shall make the payments for such life, dental and
medical insurance for the period from the Effective Date through
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December 31, 1996. Beginning on January 1, 1997, Xxxxxx shall become
responsible for making such payments.
Grand shall from January 1, 1997 until the date (the "Insurance Payment
Termination Date") which is the earlier of (i) December 31, 1997, or (ii) the
date on which Xxxxxx and his spouse and dependents no longer qualify for
insurance continuation pursuant to the Consolidated Omnibus Budget
Reconciliation Act ("COBRA"), pay to Xxxxxx for each month prior to such date,
the amount of $378.03 as reimbursement for a portion of the cost of such
insurance coverage for such month. Grand's payments for the period from January
1, 1997 to the Insurance Payment Termination Date shall be made
contemporaneously with the monthly payments to be made by Grand pursuant to
Section 5 below.
Grand shall have no obligation to provide or pay for any disability insurance
coverage for Xxxxxx after September 9, 1996.
4. Incentive Compensation. Grand shall pay to Xxxxxx an amount equal to 75% of
the portion of 1996 incentive compensation attributable to (i) financial
results, and (ii) guest service results which Xxxxxx would have received under
Grand's applicable 1996 incentive compensation program had Xxxxxx remained
continuously employed by Grand as an employee through the end of Grand's 1996
fiscal year. Payment of such portion of incentive compensation, if any, shall
be made to Xxxxxx within 5 business days after the date, if any, on which Vice
Presidents of Grand receive payment of their incentive compensation under such
incentive compensation program.
5. Severance Pay. Grand shall pay to Xxxxxx monthly severance pay as follows:
(i) on January 2, 1997, the amount of $86,905.52, which amount
equals $120,000 minus (a) the amount of $32,884.63 as salary paid by
Grand to Xxxxxx for the period from September 10, 1996 to October 4,
1996, and (b) the aggregate amount of $209.85 which amount equals
the aggregate sum paid by Grand
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for the insurance coverages described in Section 3 above which
exceeded or will exceed $378.03 per month for the period from
September 10, 1996 to December 31, 1996; and
(ii) consecutive monthly installments in the amount of $30,000 for
each calendar month during the period from February 1, 1997 to and
including December 31, 1997 (the "Severance Period"). Payments for
the months of February 1997 through December 1997 shall be made on
the first business day of each such month.
The payments to be made by Grand to Xxxxxx under this Section 5 shall not be
reduced by reason of any other income earned or received by Xxxxxx during the
Severance Period, but shall be subject to withholding and deductions required
by law.
6. Confidentiality; No Recruitment. Except to the extent provided by law,
Xxxxxx shall keep confidential and shall not, without Grand's prior written
consent, disclose to any third-party any information regarding Grand and its
affiliates, subsidiaries, business, methods of operation, employees, projects,
plans and prospects which information has not been released to the public by
Grand. If Xxxxxx believes such a disclosure is required by law, Xxxxxx shall,
promptly after discovering the requirement for disclosure, give Grand written
notice of both the disclosure requirement and the information which Xxxxxx
believes must be disclosed.
Xxxxxx shall not, during the Severance Period, solicit or recruit, or
participate in the solicitation or recruitment of, any employee of Grand for
employment by Xxxxxx or any other party.
7. Release. In consideration of the payments and other benefits to be provided
to Xxxxxx under this Agreement, Xxxxxx hereby releases and discharges Grand
from any and all claims arising from Xxxxxx'x employment by Grand and/or
Xxxxxx'x separation from such employment, excepting claims arising under or
reserved in this Agreement, including the amendments
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to stock option agreements and indemnification stated in Section 11
below. Xxxxxx acknowledges that Grand's agreements under this Agreement
constitute full and fair consideration for Xxxxxx'x release of the claims, if
any, described in the preceding sentence.
The claims which Xxxxxx is releasing in this Section 7, subject to the
exceptions stated in the preceding paragraph, include but are not limited to
the following:
(a) All claims for alleged discrimination against Xxxxxx under
any federal, state or local law, including but not limited to the
federal Age Discrimination in Employment Act (the "ADEA") and the
Minnesota Human Rights Act (the "MHRA");
(b) All claims for breach of contract, wrongful termination,
defamation and/or infliction of emotional distress;
(c) All claims for any other alleged unlawful employment practice
arising out of or relating to Xxxxxx'x employment by Grand or
Xxxxxx'x separation from such employment; and
(d) All claims for additional pay, benefits or any other form of
remuneration, including but not limited to holiday pay, vacation
pay, sick pay and/or other paid time off.
As used in the preceding two paragraphs, the term "Grand" shall include not
only Grand Casinos, Inc., but also all of its past and present affiliates,
subsidiaries, officers, directors, employees, insurers and agents, and all of
their respective successors and assigns. As used in the preceding two
paragraphs, the term "Xxxxxx" shall mean not only Xxxxxxx X. Xxxxxx, but also
each of his heirs, administrators, representatives and agents, and anyone else
who has or obtains rights through Xxxxxxx X. Xxxxxx.
Nothing in this Agreement shall be construed as an admission by Grand that
Grand has any liability for any of the claims described in this Section 7.
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In consideration of the promises contained in this Agreement, Grand hereby
releases and discharges Xxxxxx from any and all claims, whether known or
unknown, asserted or unasserted, arising during the term of Xxxxxx'x employment
with Grand, excepting claims based on any fraudulent activity or
misappropriation of Grand assets committed by Xxxxxx.
As used in the preceding paragraph, the term "Grand" shall include not only
Grand Casinos, Inc., but also all of its past and present affiliates and
subsidiaries and all of their respective successors and assigns. As used in
the preceding paragraph, the term "Xxxxxx" shall mean not only Xxxxxxx X.
Xxxxxx, but also each of his heirs, administrators, representatives and agents,
and anyone else who has or obtains rights through Xxxxxxx X. Xxxxxx.
8. Disparagement. Grand shall not disparage, defame or denigrate Xxxxxx, and
Xxxxxx shall not disparage, defame or denigrate Grand or its officers,
employees or operations. Nothing in the Section 8 shall limit or restrict
Xxxxxx'x or Grand's ability to truthfully testify in or cooperate with any
governmental investigation or proceeding.
9. Reference. If any party seeks a reference from Grand with respect to
Xxxxxx, Grand shall submit to such party a letter of reference in the form
attached to this Agreement as Exhibit A. Grand shall not provide to any party
any oral reference regarding Xxxxxx without Xxxxxx'x prior consent.
10. Rights to Counsel, Consider, Revoke or Rescind. Xxxxxx has retained an
attorney to review and provide advise regarding this Agreement. Xxxxxx
acknowledges that he has 21 days after the date on which he receives this
Agreement to consider his release of rights and claims of age discrimination
under ADEA, and he has the right to revoke the release of any rights or claims
of age discrimination under ADEA within 7 days after the date on which he signs
this Agreement. Xxxxxx acknowledges that this Agreement shall not become
effective or enforceable until such 7-day revocation period has expired.
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Xxxxxx hereby acknowledges that he has the right to rescind his release of
rights and claims of discrimination under MHRA within 15 days after the date on
which he signs this Agreement. To be effective, such a rescission must be made
in writing and delivered to Grand in person or by mail within the 15-day
rescission period. Xxxxxx'x notice of rescission must be (i) postmarked within
such 15-day rescission period; (ii) properly addressed to Xxxxxx X. Xxxxxx,
President, Grand Casinos, Inc., 000 Xxxxxxxx Xxxx, Xxxxxxxxxx, Xxxxxxxxx 00000;
and (iii) sent by certified mail, return receipt requested.
If Xxxxxx exercises his rights to revoke and/or rescind any of the releases set
forth in Section 7 above, in the manner described above or in any manner
pursuant to applicable law, this Agreement shall without further action be null
and void and of no further force and effect.
11. Indemnification. Grand shall continue to indemnify Xxxxxx to the fullest
extent permitted by the Minnesota Business Corporation Act as of the date
hereof for any and all third-party actions, claims, demands and law suits made
against Xxxxxx (whether before, on or after the date hereof and whether based
on Xxxxxx being an employee, officer, director or agent of Grand or any
subsidiary thereof) based on acts or omissions of Xxxxxx which occurred during
the period during which Xxxxxx was employed by Grand as an employee.
12. Proceedings Involving Grand. In the event that the Xxxxxx is requested or
required to respond to investigative or discovery requests or to provide
testimony or information in any legal proceeding or matter involving Grand,
Xxxxxx shall, prior to responding or providing testimony or information, give
written notice to Grand of any such request or requirement as soon as
reasonably practical after Xxxxxx receives such request or becomes aware of
such requirement. Xxxxxx shall, at Grand's expense, make himself available at
reasonable times for interviews, depositions and testimony in connection with
legal proceedings involving Grand and its subsidiaries and affiliates.
13. Complete Agreement. This Agreement is the complete agreement between
Xxxxxx and Grand regarding the matters described herein. This
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Agreement shall not be amended or modified in any manner except by
a written document signed by each of Grand and Xxxxxx.
14. Amendments to Stock Option Agreements. Grand and Xxxxxx previously
entered into (i) an Option Agreement dated as of June 22, 1994 as amended by
First Amendment to Option Agreement dated effective June 24, 1994 (the "First
Option Agreement"), (ii) an Option Agreement (the "Second Option Agreement")
dated as of October 4, 1994, and (iii) an Option Agreement (the "Third Option
Agreement") dated as of May 6, 1996, pursuant to which Grand granted Xxxxxx
certain options to purchase shares of common stock of Grand on the respective
terms and conditions stated in each of the First Option Agreement, Second
Option Agreement and Third Agreement (individually each an "Option Agreement").
Each Option Agreement states a schedule pursuant to which the stock options
granted therein will vest. Such agreements provide that Xxxxxx must be an
employee of Grand on each scheduled vesting date for the vesting scheduled for
such date to become effective.
As of the Effective Date, the following options (adjusted to reflect the 3 for
2 stock split implemented by Grand in late 1995) have vested:
(a) 105,000 shares under the First Option Agreement;
(b) 30,000 shares under the Second Option Agreement; and
(c) 0 shares under the Third Option Agreement.
Grand hereby agrees that an additional 30,000 shares (on a post 3 for 2 stock
split basis) shall be vested under the Second Option Agreement as of the
Effective Date. Grand further agrees that all of the shares vested under the
First Option Agreement and the Second Option Agreement as of the Effective Date
shall, notwithstanding any provision to the contrary in either the First Option
Agreement or the Second Option Agreement, be exercisable at any time on or
before September 30, 1998. Any such options which are not fully
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exercised by Xxxxxx on or prior to the close of Grand's business on
September 30, 1998 shall expire and terminate without further action by any
party.
This Section 15 shall be an amendment to each of the First Option Agreement and
the Second Option Agreement to the extent (and only to the extent) stated in
this Section 15.
IN WITNESS WHEREOF, Grand and Xxxxxx have signed this Agreement as of the
Effective Date.
Grand Casinos, Inc.
By: s/ Xxxx Xxxxxx s/ Xxxxxxx X. Xxxxxx
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Name: Xxxx Xxxxxx Xxxxxxx X. Xxxxxx
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Title: CEO
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