THIS EMPLOYMENT
AGREEMENT (this “Agreement”) by and between Las Vegas
Sands Corp., a Nevada corporation (the “Company), and Kenneth
J. Kay (the “Executive”) is made as of December 1,
2008 (the “Effective Date”).
WHEREAS, the
Company desires to employ the Executive under the terms of this
Agreement, and the Executive desires to be employed by the Company
subject to the terms and conditions of this Agreement.
NOW, THEREFORE, in
consideration of the promises and mutual covenants contained herein
and for other good and valuable consideration, the Company and the
Executive (each individually a “Party” and together the
“Parties”) agree as follows.
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1.1
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“ Affiliate ”
shall mean any parent, subsidiary or affiliated company of the
Company.
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1.2
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“ Applicable Period
” shall mean 12 months following termination of
employment.
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1.3
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“ Base Salary ”
shall mean the salary provided for in Section 3 of this
Agreement or any increased salary granted to the Executive pursuant
to the provisions of Section 3.
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1.4
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“ Cause ” shall
mean:
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(a)
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(i) conviction of a felony,
misappropriation of any material funds or material property of the
Company or any of its Affiliates, (ii) commission of fraud or
embezzlement with respect to the Company or any of its Affiliates
or (iii) any material act of dishonesty relating to the
Executive’s employment by the Company resulting in direct or
indirect personal gain or enrichment at the expense of the Company
or any of its Affiliates;
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(b)
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use
of alcohol or drugs that renders the Executive materially unable to
perform the functions of his job or carry out his duties to the
Company;
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(c)
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a
material breach of this Agreement by the Executive;
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(d)
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committing any act or acts of
serious and willful misconduct (including disclosure of
Confidential Information) that is likely to cause a material
adverse effect on the business of the Company or any of its
Affiliates; or
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(e)
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the
withdrawal with prejudice, denial, revocation or suspension of the
License by the Nevada Gaming Authorities;
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provided
that, with respect to (b), (c) or (e) above, the Company
shall have first provided the Executive with written notice stating
with specificity the acts, duties or directives the Executive has
committed or failed to observe or perform, and the Executive shall
not have corrected the acts or omissions complained of within
thirty (30) days of receipt of such notice.
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1.5
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“ Code ” shall
mean the Internal Revenue Code of 1986, as amended.
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1.6
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“ Confidential
Information ” shall mean all material private, personal,
confidential or proprietary information, tangible or intangible,
owned by or pertaining to the Company or its Affiliates, which
information was learned or acquired by the Executive as a result of
the employment relationship with the Company; provided ,
however , that “Confidential Information” shall
not include information or data: (i) generally publicly known,
(ii) learned by the Executive from third persons with a legal
right to disclose such information or (iii) discovered by the
Executive through means entirely independent from and in no way
arising from the disclosure to the Executive by the
Company.
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1.7
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“ Disability ”
shall mean that the Executive shall, in the opinion of an
independent physician selected by agreement between the Company and
the Executive, become so physically or mentally incapacitated that
he is unable to perform the duties of his employment for an
aggregate of 180 days in any 365 day consecutive period
or for a continuous period of six (6) consecutive
months.
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1.8
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“ Term ” shall
mean the Initial Term together with any Renewal Term, as specified
in Section 2.2.
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1.9
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“ Option Shares ”
shall have the meaning set forth in Section 6.
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1.10
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“ Trade Secrets ”
shall mean the Company’s and/or its Affiliates’
“trade secrets” as such term is defined in the Uniform
Trade Secrets Act, as promulgated generally in the United States of
America.
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2.
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Term, Positions and
Duties .
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2.1
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Employment Accepted
. The Company hereby
employs the Executive, and the Executive hereby accepts employment
with the Company, for the Term, in the position and with the duties
and responsibilities set forth in Section 2.3 or in such other
position as reasonably assigned by the President and Chief
Operating Officer of the Company, and upon such other terms and
conditions as are hereinafter stated.
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2.2
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Term . Subject to any early termination
as provided in accordance with the terms of this Agreement, the
term of employment shall be considered as commencing on the
Effective Date of this Agreement and shall terminate at the close
of business on December 31, 2011 (the “Initial
Term”), and shall renew automatically thereafter for
successive terms of one year each (each, a “Renewal
Term”), unless, not later than 90 days prior to the
expiration of the Initial Term or any Renewal Term, either Party
shall provide written notice to the other Party of its or his
desire not to extend the Initial Term or any Renewal
Term.
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2.3
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Duties and
Responsibilities . During the Term, the Executive
shall be employed as “Chief Financial Officer” with the
Company and shall report directly to the President and Chief
Operating Officer. The Executive shall be responsible for and shall
have such powers, duties and responsibilities as are generally
associated with his offices, as the same may be modified and/or
assigned to the Executive from time to time by the President and
Chief Operating Officer, and subject to
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the
supervision, direction and control of the President and Chief
Operating Officer and the Board of Directors of the
Company.
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2.4
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Licensing and Compliance
Requirement . The Executive shall file an
application to obtain a finding of suitability as an officer of the
Company (the “License”) with the Nevada State Gaming
Control Board and the Nevada Gaming Commission (collectively, the
“Nevada Gaming Authorities”), pursuant to the
provisions of applicable Nevada gaming laws and the regulations of
the Nevada Gaming Commission. The Executive agrees, at the
Company’s sole cost and expense, to cooperate with the Nevada
Gaming Authorities at all times, including but not limited to in
connection with the processing of such application and any
investigation thereof undertaken by the Nevada Gaming Authorities.
In the event the Executive’s application to obtain a finding
of suitability is rejected by the Nevada Gaming Authorities, this
agreement shall automatically terminate within sixty (60) days
from the date of such rejection. Such termination hereunder shall
be considered a Termination Without Cause pursuant to the
provisions of Section 8.2.
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2.5
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Performance . The Executive hereby accepts the
employment described herein under the terms and conditions set
forth in this Agreement. The Executive covenants and agrees that
during the Term, he will faithfully and diligently perform the
duties of his employment, devoting his full business and
professional time, attention, energy, experience and ability to
promote the business interests of the Company. The Executive
further agrees that during the period of his employment with the
Company, he will not engage in any other employment, occupation,
consultation or business or professional pursuits whatsoever unless
the Company’s President and Chief Operating Officer shall
consent thereto in writing; provided, however, that the foregoing
shall not preclude the Executive from engaging in civic,
charitable, or religious activities or from devoting a reasonable
amount of time to private investments that do not unreasonably
interfere or conflict with the performance of the Executive’s
duties under this Agreement.
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2.6
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Policies and Procedures
. In addition to the
terms herein, the Executive agrees to be bound by the
Company’s policies and procedures as such may be amended by
the Company from time to time. In the event the terms in this
Agreement conflict with the Company’s policies and
procedures, the terms herein shall take precedence.
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3.
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Base Salary
. During the Term, the
Executive shall be entitled to receive an annual base salary of
Nine Hundred Thousand Dollars ($900,000) payable in equal
bi-monthly installments or as otherwise in accordance with the
regular payroll of the Company. The base salary as then in effect
shall be increased effective January 1, 2010, and
January 1, 2011, in each case by a minimum of four percent
(4%).
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4.
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Intentionally Omitted
.
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5.
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Annual Bonus
. The Executive shall be
eligible to receive an annual cash bonus. The amount and payment of
any bonus shall be based on the achievement of performance
objectives that shall be reasonably determined annually by the
Company; provided, that the amount of any such bonus shall not be
more than 100% of Base Salary per year
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absent a
determination of unusual circumstances or exceptional performance,
at the Company’s sole discretion. Additionally, the Executive
shall not have any enforceable right to receive any bonus except
for such bonuses as are formally approved by the Company. Any bonus
payable pursuant to this Section 5 shall be paid by the end of
the first calendar quarter of the year following the year to which
the bonus relates. Upon termination of the Executive’s
employment for any reason whatsoever, the Company shall have no
obligation to pay the Executive any bonus, except to the extent
provided elsewhere in this Agreement.
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6.
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Stock Options
. The Executive shall be
eligible to receive equity awards under the Company’s 2004
Equity Award Plan (the “Plan”). Management will
recommend that the Compensation Committee of the Company’s
Board of Directors, which administers the Plan, approve a one-time
award of non-qualified options to purchase one hundred thousand
(100,000) shares of the Company’s common stock (the
“Option Shares”) to vest as follows:
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one
third of the Option Shares (33,333 shares) shall become vested and
exercisable as follows: (i) 15% of such third of the Option
Shares (5,000 shares) on the first anniversary of the Date of
Grant; (ii) 22.5% of such third of the Option Shares (7,500
shares) on the second anniversary of the Date of Grant;
(iii) 27.5% of such third of the Option Shares (9,166 shares)
on the third anniversary of the Date of Grant; and (iv) 35% of
such third of the Option Shares (11,667 shares) on the fourth
anniversary of the Date of Grant;
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one
third of the Option Shares (33,333 shares) shall become vested and
exercisable as follows: (i) 15% of such third of the Option
Shares (5,000 shares) on the second anniversary of the Date of
Grant; (ii) 22.5% of such third of the Option Shares (7,500
shares) on the third anniversary of the Date of Grant;
(iii) 27.5% of such third of the Option Shares (9,166 shares)
on the fourth anniversary of the Date of Grant; and (iv) 35%
of such third of the Option Shares (11,667 shares) on the fifth
anniversary of the Date of Grant; and
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one
third of the Option Shares (33,334 shares) shall become vested and
exercisable as follows: (i) 15% of such third of the Option
Shares (5,000 shares) on the third anniversary of the Date of
Grant; (ii) 22.5% of such third of the Option Shares (7,500
shares) on the fourth anniversary of the Date of Grant;
(iii) 27.5% of such third of the Option Shares (9,166 shares)
on the fifth anniversary of the Date of Grant; and (iv) 35% of
such third of the Option Shares (11,668 shares) on the sixth
anniversary of the Date of Grant.
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The
exercise price of the Option Shares described above will be equal
to the Fair Market Value (as defined in the Plan) of the
Company’s common stock on the Date of Grant (as defined in
the Plan), and the Date of Grant will be the first day of January,
2009. The additional terms of any option award will be governed by
the terms of an option agreement to be provided to Employee upon
the grant of the options and the terms of the Plan.
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Employee may become eligible to
receive additional stock options or other equity based compensation
in such amounts and upon such terms as the Company may decide in
its own discretion, it being expressly understood and agreed that
this paragraph does not create any obligation on the part of the
Company to grant any such options or equity.
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7.
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Employment Benefit
Programs .
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7.1
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Benefit Plans
. During the Term, the
Executive shall be entitled to participate in any fringe group
health, medical, dental, hospitalization, life, accident insurance
or other welfare plans, and any tax-qualified pension,
tax-qualified profit sharing or tax-qualified retirement plans,
which may be placed in effect or maintained by the Company during
the Term hereof for the benefit of its employees generally, or for
its senior executives subject to all restrictions and limitations
contained in such plans or established by governmental regulation.
In addition to the foregoing, the Executive shall be entitled to
participate in such executive retirement and capital accumulation
plans as may be established, sponsored or maintained by the Company
and in effect from time to time for the benefit of its senior
executives, including without limitation, any nonqualified
supplemental executive retirement plan or deferred compensation
plan.
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7.2
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Permitted Leave
. The Executive shall be
entitled to vacations and holidays as provided in the
Company’s vacation, holiday or flex day policies as in effect
from time to time, but no less than the following: four
(4) weeks of paid vacation leave per year at such times as may
be requested by the Executive and approved by the Company. No more
than three (3) weeks of vacation shall be taken consecutively.
Up to two (2) weeks of vacation may be carried over to the
following year (but not to the next). The Executive shall also be
entitled to the same sick time, leaves of absence, and other
time-off to which all other employees of the Company are entitled,
and in accordance with the rules and regulations applicable to all
other employees of the Company.
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8.1
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Termination by the Company for
Cause . In
the event the Company terminates the Executive’s employment
for Cause after the applicable cure period, the Executive shall be
entitled to:
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(a)
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Base Salary at the rate in effect at
the time of the termination through the date of termination of
employment;
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(b)
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Reimbursement for expenses incurred,
but not paid prior to such termination of employment, subject to
the receipt of supporting information by the Company;
and
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(c)
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Such rights to other compensation
and benefits as may be provided in applicable plans and programs of
the Company, according to the terms and conditions of such plans
and programs.
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The
exercise and termination of the Executive’s stock options
referred to in Section 6 and any other option grants to the
Executive awarded pursuant to
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option
agreements that are dated during the Term (and any extensions of
the Term) shall be governed by the Plan and the Executive’s
option agreements issued pursuant to the Plan.
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8.2
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Termination by the Company Without
Cause or By the Executive for Good Reason . In the event that the Company
terminates the Executive’s employment without Cause or the
Executive terminates his employment for Good Reason, the Executive
shall thereupon be entitled to:
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(a)
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Continuation of the Base Salary,
payable in bi-monthly installments or otherwise in accord with the
Company’s policies and procedures, for the Applicable Period
(the “Salary Continuation”) in addition to the payment
of the pro-rated portion of the Annual Bonus Employee would have
earned during the year this Agreement was terminated;
provided , however , that if the Executive obtains
replacement employment whether as an employee or as a consultant
and compensation is earned or accrued within the Applicable Period
(“Offsetting Compensation”), the Salary Continuation
shall be reduced by the amount of the Offsetting Compensation;
provided , further , that in the event the Executive
terminates his employment for Good Reason pursuant to
Section 8.3(1)(b) of this Agreement, (i) the Applicable
Period shall be deemed to be equal to 12 months following
termination of employment and (ii) the Salary Continuation
shall not be reduced by any Offsetting Compensation .
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(b)
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Reimbursement for reasonable
expenses incurred, but not paid prior to such termination of
employment, subject to the receipt of supporting information by the
Company.
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(c)
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Continued participation in the
health and welfare benefit plans of the Company described in
Section 7.1 for the Executive and his spouse and dependents,
if any, during the Applicable Period; provided ,
however , that in the event the Executive terminates his
employment for Good Reason pursuant to Section 8.3(1)(b) of
this Agreement, (i) the Applicable Period shall be deemed to
be equal to 12 months following termination of employment and
(ii) the Salary Continuation shall not be reduced by any
Offsetting Compensation.
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The
exercise and termination of the Executive’s stock options
referred to in Section 6 and any other option grants awarded
to the Executive pursuant to option agreements that are dated
during the Term (and any extensions of the Term) shall be governed
by the Plan and the Executive’s option agreements issued
pursuant to the Plan.
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Notwithstanding anything in this
Section 8.2 to the contrary, in the event that the Executive
is deemed to be a “specified employee” within the
meaning of Section 409A(a)(2)(B)(i) of the Code, no payment
described in this Section 8.2 that is “deferred
compensation” subject to Section 409A of the Code and
the regulations and guidance issued thereunder (“
Section 409A ”) shall be made to the Executive
prior to the date that is six (6) months after the date of the
Executive’s “separation from service” (as defined
in Section 409A) or, if earlier, the
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Executive’s date of death. In such event,
all payments subject to the six
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