EMPLOYMENT TERMINATION AND SETTLEMENT AGREEMENT
This Employment Termination and Settlement Agreement (the "Agreement")
is entered into and effective as of September 7, 1999, by and between
Mirage Resorts, Incorporated, a Nevada corporation (the "Company"), and
Xxxxxx X. Xxx ("Employee").
WHEREAS, Employee has been employed by the Company as Senior Vice
President-Finance and Development, Chief Financial Officer and
Treasurer pursuant to an Employment Agreement dated as of July 16, 1997
(the "Employment Agreement"); and
WHEREAS, the Company and Employee wish to settle all outstanding issues
between them arising out of that employment relationship;
NOW, THEREFORE, in consideration of the foregoing and the mutual
promises contained herein, the parties agree as follows:
1. The Company and Employee represent and warrant to each other
that this Agreement is not in any respect an admission or statement
of liability or wrongdoing by either the Company or Employee.
2. Effective September 7, 1999, Employee shall resign, and the
Company shall permit Employee to resign, as an officer and employee
of the Company and an officer, fiduciary and/or director of all of
the Company's subsidiary corporations, committees and employee
benefit plans and programs. The Employment Agreement shall
terminate and be of no effect on the eighth day after this
Agreement's execution.
3.(a) Employee hereby for himself, his spouse, heirs, executors,
administrators, successors and assigns ("Employee Releasors") fully
and forever releases, acquits and discharges (i) the Company and
its past, present and future parent and subsidiary corporations,
divisions and affiliates, and (ii) the Company's past, present and
future partners, joint venturers, stockholders, predecessors,
successors, assigns, officers, directors, employees, agents,
representatives and any other person, firm or corporation with
whom any of them is now or may hereafter be affiliated (the persons
and entities identified in subparagraphs (i) and (ii) being
referred to as the "Company Releasees"), and each of them, from
and against any and all claims, demands, obligations, causes of
action, liabilities, damages and suits at law or in equity, which
Employee ever had, now has or may hereafter claim to have had
against the Company Releasees, arising out of or in any manner
relating to Employee's employment by the Company, the Employment
Exhibit 10.3
Agreement or Employee's separation from the Company, whether based
on contract, tort or other legal or equitable theory of recovery
and whether known or unknown, at any time up to and including the
date of execution of this Agreement, but as to the parties
described in subparagraph (ii), they are released only in their
representative capacities acting on behalf of the Company.
(b) The Company hereby for itself, the Company Releasees, its
successors and assigns, fully and forever releases, acquits and
discharges Employee Releasors from and against any and all claims,
demands, obligations, causes of action, liabilities, damages and
suits at law or in equity, which they ever had, now have or may
hereafter claim to have had against Employee Releasors, arising out
of or in any manner relating to Employee's employment by the
Company, the Employment Agreement or Employee's separation from the
Company, whether based on contract, tort or other legal or
equitable theory of recovery and whether known or unknown, at any
time up to and including the date of execution of this Agreement,
excluding, however, any claims, demands, obligations, causes of
action, liabilities, damages and suits at law or in equity which
relate to or arise out of Employee's fraud or criminal conduct.
(c) Excluded from the above releases in subsections (a) and (b)
are any claims arising out of this Agreement.
(d) The parties identified in Section 3(a)(i) jointly, severally
and in the alternative covenant and agree that the Company
Releasees, or any of them, shall not commence any action or suit at
law or in equity against the Employee Releasors or any other
person, corporation, partnership, trust or other entity or make,
institute or prosecute any claim, demand, action or cause of action
of any kind whatsoever for damages, costs, debts, expenses or
losses of any kind whatsoever (including, without limitation,
attorneys' fees) based on or arising from the released matters set
forth herein, or any of them. The parties identified in Section
3(a)(i) agree to indemnify Employee Releasors and each of them
against any damages, costs, debts, expenses and losses, including
without limitation, reasonable attorneys' fees, suffered or
incurred by Employee Releasors, or any of them, as a result of any
breach of the preceding sentence of this section.
(e) Employee Releasors jointly, severally and in the alternative
covenant and agree that the Employee Releasors, or any of them,
shall not commence any action or suit at law or in equity against
the Company Releasees or any other person, corporation, partner-
ship, trust or other entity or make, institute or prosecute any
claim, demand, action or cause of action of any kind whatsoever for
damages, costs, debts, expenses or losses of any kind whatsoever
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(including, without limitation, attorneys' fees) based on or
arising from the released matters set forth herein, or any of them.
Employee Releasors agree to indemnify Company Releasees and each of
them against any damages, costs, debts, expenses and losses,
including without limitation, reasonable attorneys' fees, suffered
or incurred by Company Releasees, or any of them, as a result of
any breach of the preceding sentence of this section.
4. Without limiting the generality of Section 3(a), Employee
waives any and all claims arising under the Age Discrimination
in Employment Act of 1967 (the "Act"). Employee understands that
pursuant to the Act, upon his receipt of this Agreement, he has a
period of 21 days within which to consider this Agreement before
signing it, and that for a period of seven additional days
following his signing of this Agreement he may revoke this Agree-
ment by delivery of written notice of revocation to the Company.
Employee further acknowledges that he has carefully read this
Agreement, that he has had the opportunity to have its provisions
fully explained to him, that he has had the opportunity to review
this Agreement with an attorney before signing it and that the
only promises made to Employee to sign this Agreement are those
contained in this Agreement, and Employee is signing this Agreement
voluntarily.
5.(a) From the date of this Agreement through and including
September 7, 2000, the Company shall pay Employee the aggregate
amount of $600,000 (subject to statutory withholding, if any),
payable in substantially equal installments every two weeks in
accordance with the Company's normal payroll procedures.
(b) On or before January 31, 2000, if bonuses comparable in
amount to those paid in prior years are paid to the Company's
officers for the year ending December 31, 1999, the Company shall
pay Employee the aggregate amount of $200,000 (subject to
statutory withholding, if any). If bonuses are paid that are
substantially less in amount than those paid in prior years,
the amount of $200,000 shall be reduced equitably in accordance
with the bonuses paid to the Company's five highest paid officers.
6. Not later than 30 days from the date of this Agreement, the
Company shall for no further consideration transfer ownership to
Employee of the Company's Lexus LX 470 vehicle that Employee is
currently using. Following the transfer of ownership, the Company
shall have no further responsibility or liability with respect to
or arising out of the vehicle.
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7.(a) From the date of this Agreement through and including
September 7, 2000, the Company, without cost to Employee, shall
continue to cover Employee and his spouse and dependents under the
Company's executive medical reimbursement plan or shall provide
substantially equivalent medical insurance coverage to Employee and
his spouse and dependents. Notwithstanding the foregoing, such
coverage shall terminate at such time as Employee becomes covered
under another employer-sponsored health or medical insurance plan.
Employee agrees to promptly advise the Company of the effective
date of any such coverage. Upon termination of such coverage,
Employee may elect to continue coverage at Employee's cost for up
to an additional 18 months under the Company's standard employee
health plan in accordance with the requirements of COBRA.
(b) The Company shall continue to cover Employee as an insured
person under its "D & O" insurance policy at no cost to Employee to
the extent permitted by such policy. The Company shall indemnify
and hold Employee harmless to the fullest extent permitted under
Nevada law, including NRS 78.751 and 78.7502, arising from his
services.
8. Within 90 days from the date of this Agreement, upon submission
by Employee of any required forms, the Company shall distribute
to Employee Employee's account balance in the Company's Non-
Qualified Deferred Compensation Plan and shall at Employee's
request either distribute to Employee or transfer to another
qualified plan of Employee Employee's account balance in the
Company's Retirement Savings Voluntary Participation (Section
401(k)) Plan.
9.(a) Employee may exercise any or all of his 889,200 currently
exercisable and vested employee stock options with an exercise
price of $4.85 per share at any time until September 7, 2000.
(b) Commencing on February 24, 2000 and ending on September 7,
2000, Employee may exercise any or all of his 159,912 employee
stock options with an exercise price of $14.375 per share which
were scheduled to become exercisable and vest on February 24, 2000.
(c) Except as provided in this Section 9, which modifies when
Employee may exercise the stock options under Sections 2, 3, 5 and
6 of the Stock Option Agreements between the Company and Employee,
the stock options shall continue to be governed by the terms of
such Stock Option Agreements.
(d) All other stock options held by Employee shall terminate on
the date of this Agreement.
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(e) The Company shall take no action to prevent Employee from
exercising such stock options in accordance with the terms of the
applicable Stock Option Agreement, as modified hereby, and the
Company hereby releases any right it might otherwise have to do so
(by way of setoff, counterclaim or otherwise), regardless of any
claims which the Company might have or assert against Employee,
whether or not such claims relate to or arise out of Employee's
breach of this Agreement or any future agreement or relationship
between the Company and Employee. The Company is expressly
reserving any such claims.
10. For nine months from the date of this Agreement, Employee
agrees to reasonably cooperate in good faith with the Company in
order to assist the Company and Employee's successor as Chief
Financial Officer in achieving an orderly transition, including
discussing the transition with the Company's lenders, investment
bankers and securities analysts. Employee also agrees to assist
the Company and its counsel in any litigation or other proceedings,
including providing testimony at deposition and at trial, with
respect to any matters which arose during or after Employee's
employment by the Company and of which Employee has personal
knowledge. Such assistance and cooperation shall not require any
minimum time commitment by Employee and shall be scheduled at
times mutually convenient to Employee and the Company. Employee
shall be reimbursed for all reasonable out-of-pocket costs and
expenses incurred in this assistance and cooperation.
11. For a period of five years from the date of this Agreement,
neither Employee nor the Company (which, in the case of the
Company, shall be deemed to be limited to the Company's directors,
executive officers and the presidents of its subsidiaries), nor
anyone acting on behalf of or with the authorization of Employee
or the Company, shall make any disparaging statements, either oral
or in writing, whether true or untrue, and whether opinion or fact,
to any third party, including but not limited to members of the
media, concerning the other party's or any of its affiliates'
business, services, operations, financial condition, management,
employees or conduct. Notwithstanding the foregoing, either party
may make statements that are necessary to comply with any lawful
process or that are made in the course of any legal proceeding.
Neither party shall directly or indirectly instigate any legal
proceeding for the purpose of evading the prohibition contained
in this Section. The Company (and its directors, executive officers
and presidents of its subsidiaries) agree to answer any inquiries
about Employee's services to the effect that, to the Company's
knowledge, Employee performed his duties with integrity and in good
faith.
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12. Except for disclosure to his family and legal and financial
advisors, Employee agrees not to directly or indirectly disclose or
permit the disclosure of the terms or substance of this Agreement
to any person or entity, including without limitation any future
employer, until such time, if any, as the Company has publicly
disclosed all of the material terms of this Agreement. Notwith-
standing the foregoing, Employee may state that a written agreement
was executed resolving his separation from the Company in a manner
satisfactory to all parties and that its terms forbid him from
further commenting upon the Agreement. The parties have prepared
a joint press release which is attached hereto as Exhibit 1, and
the parties agree to make no further statements inconsistent with
the press release.
13. Employee reaffirms and agrees that he will not at any time
disclose any trade secrets or other confidential information
regarding the Company and its services, operations, customers or
financial condition which Employee acquired during his employment
relationship with the Company, or use any such trade secrets or
other confidential information in any manner detrimental to the
Company. "Trade secrets or other confidential information" shall
not include (i) information which, at the time of disclosure, is
in the public domain, (ii) information which Employee can show is
in his possession at the time of disclosure and was not acquired,
directly or indirectly, from the Company or (iii) information
which was received by Employee from a third party having the legal
right to transmit the same. Within five days following the date
of this Agreement, Employee shall return to the Company all
documents, computer printouts, computer media, keys and other
property which belongs to the Company within his possession or
control. Employee agrees that the Company may notify any of
Employee's prospective or future employers of the existence of this
Section.
14. Each party agrees that, in the event of a breach or threatened
breach of the provisions of this Agreement, the other party shall
be entitled, in addition to all other remedies available at law
or in equity, to obtain a temporary or permanent injunction
enjoining the breaching party from any violation or threatened
violation of any of its covenants contained in this Agreement.
15. This Agreement shall be binding upon and inure to the benefit
of the parties and their respective successors, assigns, heirs and
legal representatives.
16. This Agreement contains the entire understanding and agreement
of the parties relating to the subject matter hereof and supersedes
any and all prior negotiations, discussions and agreements, whether
oral or written, including without limitation the Employment
Agreement. This Agreement may not be amended, nor may any provision
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hereof be waived, except in a writing signed by Employee and a
duly authorized representative of the Company.
17.(a) This Agreement shall be governed by and construed in
accordance with the laws of the State of Nevada, excluding its
conflict of laws principles. Any litigation relating to or arising
out of this Agreement shall be instituted and maintained
exclusively in state or federal court in Xxxxx County, Nevada,
and the parties hereby consent to the exclusive jurisdiction of
such courts and to such venue. In the event of litigation between
the parties concerning this Agreement, the prevailing party shall
be entitled to recover its reasonable attorneys' fees and expenses
and court costs from the non-prevailing party.
(b) Upon the demand of either party, whether made before the
institution of any judicial proceeding or not more than 10 days
after service of a complaint, third-party complaint, cross-claim or
counterclaim or any answer thereto or any amendment to any of the
above, any Dispute (as defined below) shall be resolved by binding
arbitration in accordance with the terms of this arbitration
clause. A "Dispute" shall include any dispute or controversy
between the parties arising out of any matters addressed in this
Agreement. Arbitrations conducted pursuant to this Agreement,
including selection of arbitrators, shall be administered in Las
Vegas, Nevada by the American Arbitration Association
("Administrator") pursuant to the Commercial Arbitration Rules of
the Administrator. Any party who fails to submit to binding
arbitration following a lawful demand by the opposing party shall
bear all costs and expenses, including reasonable attorneys' fees,
incurred by the opposing party in compelling arbitration of any
Dispute. Arbitrators may make an award of attorneys' fees and
expenses. An arbitration panel shall be composed of three
arbitrators. The award of the arbitrators shall be in writing and
shall specify the factual and legal basis for the award. To the
maximum extent practicable, the Administrator, the arbitrators and
the parties shall take any action necessary to require that an
arbitration proceeding hereunder be concluded within 80 days of the
filing of the Dispute with the Administrator. The arbitrators
shall be empowered to impose sanctions for any party's failure to
proceed within the times established herein. Each party agrees to
keep all disputes and arbitration proceedings strictly
confidential, except for disclosures of information required in the
ordinary course of business of the parties or as required by
applicable law or regulation. Otherwise the provisions of NRS
38.015-38.205 shall apply.
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18. If any term or provision of this Agreement shall be declared by
a court of competent jurisdiction to be invalid or unenforceable,
the remainder of this Agreement shall not be affected thereby.
19. Any and all notices required or permitted to be given here-
under shall be in writing and sent by personal delivery or
registered or certified mail to Employee's last known residence
(as reflected in the Company's personnel file), in the case of
Employee, or to the Company's principal office in Las Vegas,
Nevada, in the case of the Company, or to such other address as
either party may notify the other.
20. Nothing contained herein is intended to prevent, limit,
restrict or interfere with Employee's search for employment, or
employment, including in a similar position in the gaming or
hospitality industry, and Employee's acceptance of such employment
or rendering of services shall not reduce or otherwise limit the
cash payments, stock option rights or other benefits due Employee
hereunder or the Company's rights hereunder.
21. Upon reasonable request by either party, the parties agree to
execute any and all further agreements, instruments or documents,
and to take any and all further action, as may be necessary to
carry out the purposes and intent of this Agreement.
22. The person executing this Agreement on behalf of the Company
warrants that he has full power and authority to so execute this
Agreement and legally bind the Company and that he has been
given all necessary authority, and all corporate actions have been
taken, to make this Agreement binding and enforceable.
IN WITNESS WHEREOF, the Company and Employee have executed this
Agreement effective as of September 7, 1999.
MIRAGE RESORTS, INCORPORATED
Date: 9/7/99 By: XXXXX X. XXXXX
------ -----------------------------------
Xxxxx X. Xxxxx
Vice President and General Counsel
Date: 9/7/99 XXXXXX X. XXX
------ -----------------------------------
XXXXXX X. XXX
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