This Employment
Agreement (this “Agreement”) is entered into as of
September 10, 2007 by and between MGM MIRAGE
(“Employer”, “we” or “us”), and
Robert C. Selwood (“Employee” or “you”) and
supersedes the Employment Agreement between Employer and Employee
entered into as of November 1, 2005.
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1.
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Employment . We hereby employ you, and you
hereby accept employment by us, as our Executive Vice President and
Chief Accounting Officer to perform such executive, managerial or
administrative duties as we may specify from time to time during
the Specified Term (as defined in Section 2). In construing
the provisions of this Agreement, the term “Employer”,
“we” or “us” includes all of our
subsidiary, parent and affiliated companies, but specifically
excludes Tracinda Corporation, its stockholder or stockholders, and
its subsidiaries.
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2.
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Term . The term of your employment under
this Agreement commences on September 10, 2007 and it
terminates on September 10, 2011 (the “Specified
Term”). Unless a new written employment agreement is executed
by the parties, upon the expiration of the Specified Term, all
terms and conditions of this Agreement will continue, except that
the new Specified Term of the Agreement shall be three
(3) months, which shall renew for successive three
(3) month periods on each successive three (3) month
anniversary, if the Agreement is not otherwise terminated pursuant
to its terms.
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3.
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Compensation . During the Specified Term, we
shall pay you a minimum annual salary of $400,000 payable in
arrears at such frequencies and times as we pay our other
employees. You are also eligible to receive generally applicable
fringe benefits commensurate with our employees in positions
comparable to yours. We will also reimburse you for all reasonable
business and travel expenses you incur in performing your duties
under this Agreement, payable in accordance with our customary
practices and policies, as we may modify and amend them from time
to time. Your performance may be reviewed periodically. You are
eligible for consideration for a discretionary raise, annual bonus
of up to 75% of your annual salary, promotion, and/or participation
in discretionary benefit plans; provided, however, whether and to
what extent you will be granted any of the above will be determined
by us in our sole and absolute discretion.
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4.
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Extent of Services
. You agree that your
employment by us is full time and exclusive. You further agree to
perform your duties in a competent, trustworthy and businesslike
manner. You agree that during the Specified Term, you will not
render any services of any kind (whether or not for compensation)
for any person or entity other than us, and that you will not
engage in any other business activity (whether or not for
compensation) that is similar to or conflicts with your duties
under this Agreement, without the approval of the Board of
Directors of MGM MIRAGE or the person or persons designated by the
Board of Directors to determine such matters.
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5.
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Policies and Procedures
. You agree and
acknowledge that you are bound by our policies and procedures as
they may be modified and amended by us from time to time. In the
event the terms in this Agreement conflict with our policies and
procedures, the terms of this Agreement shall take precedence. As
you are aware,
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problem gaming
and underage gambling can have adverse effects on individuals and
the gaming industry as a whole. You acknowledge that you have read
and are familiar with our policies, procedures and manuals and
agree to abide by them. Because these matters are of such
importance to us, you specifically confirm that you are familiar
with and will comply with our policies of prohibiting underage
gaming, supporting programs to treat compulsive gambling, and
promoting diversity in all aspects of our business.
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6.
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Licensing Requirements
. You acknowledge that
we are engaged in a business that is or may be subject to and
exists because of privileged licenses issued by governmental
authorities in Nevada, New Jersey, Michigan, Mississippi, Illinois,
Macau S.A.R., the United Kingdom and other jurisdictions in which
we are engaged in a gaming business or where we have applied to (or
during the Specified Term may apply to) engage in a gaming
business. You shall apply for and obtain any license,
qualification, clearance or other similar approval which we or any
regulatory authority which has jurisdiction over us requests or
requires that you obtain.
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7.
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Failure to Satisfy Licensing
Requirement . We have the right to terminate
your employment under Section 10.1 of this Agreement if:
(i) you fail to satisfy any licensing requirement referred to
in Section 6 above; (ii) we are directed to cease
business with you by any governmental authority referred to in
Section 6 above; (iii) we determine, in our sole and
exclusive judgment, that you were, are or might be involved in, or
are about to be involved in, any activity, relationship(s) or
circumstance which could or does jeopardize our business,
reputation or such licenses; or (iv) any of our licenses is
threatened to be, or is, denied, curtailed, suspended or revoked as
a result of your employment by us or as a result of your
actions.
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8.1
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Competition . You acknowledge that, in the
course of performing your responsibilities under this Agreement,
you will form relationships and become acquainted with Confidential
Information. You further acknowledge that such relationships and
the Confidential Information are valuable to us, and the
restrictions on your future employment contained in this Agreement,
if any, are reasonably necessary in order for us to remain
competitive in our various businesses. In consideration of this
Agreement and the compensation payable to you under this Agreement,
and in recognition of our heightened need for protection from abuse
of relationships formed or Confidential Information garnered before
and during the Specified Term of this Agreement, you covenant and
agree that, except as otherwise explicitly provided in
Section 10 of this Agreement, if you are not employed by us
for the entire Specified Term, then during the entire Restrictive
Period you shall not directly or indirectly be employed by, provide
consultation or other services to, engage in, participate in or
otherwise be connected in any way with any Competitor. The terms
“Confidential Information,” “Restrictive
Period” and “Competitor” are defined in
Section 22. Your obligations during the Specified Term and
Restrictive Period under this Section 8.1 include but are not
limited to the following:
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8.1.1
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You
will not make known to any third party the names and addresses of
any of our customers, or any other information pertaining to those
customers.
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8.1.2
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You
will not call on, solicit and/or take away, or attempt to call on,
solicit and/or take away, any of our customers, either for your own
account or for any third party.
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8.1.3
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You
will not call on, solicit and/or take away, any of our potential or
prospective customers, on whom you called or with whom you became
acquainted during employment by us (either before or during the
Specified Term), either for your own account or for any third
party.
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8.1.4
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You
will not approach or solicit any of our employees with a view
towards enticing such employee to leave our employ to work for you
or for any third party, or hire any of our employees, without our
prior written consent, which we may give or withhold in our sole
discretion.
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8.2
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Confidentiality
. You further covenant
and agree that you will not at any time during or after the
Specified Term, without our prior written consent, disclose to any
other person or business entities any Confidential Information or
utilize any Confidential Information in any way, including
communications with or contact with any of our customers or other
persons or entities with whom we do business, other than in
connection with your employment hereunder.
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8.3
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Employer’s Property
. You hereby confirm
that the Confidential Information constitutes our sole and
exclusive property (regardless of whether you possessed or claim to
have possessed any of such Confidential Information prior to the
date hereof). You agree that upon termination of your active
employment with us, you will promptly return to us all notes,
notebooks, memoranda, computer disks, and any other similar
repositories of Confidential Information (regardless of whether you
possessed such Confidential Information prior to the date hereof)
containing or relating in any way to the Confidential Information,
including but not limited to the documents referred to on
Exhibit A hereto. Such repositories of Confidential
Information also include but are not limited to any so-called
personal files or other personal data compilations in any form,
which in any manner contain any Confidential
Information.
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8.4
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Notice to Employer
. You agree to notify us
immediately of any other persons or entities for whom you work or
provide services during the Specified Term or within the
Restrictive Period. You further agree to promptly notify us, during
the Specified Term, of any contacts made by any gaming licensee
which concern or relate to an offer to employ you or for you to
provide consulting or other services.
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9.
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Representation and Additional
Agreements .
You hereby represent, warrant and agree that:
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9.1
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The
covenants and agreements contained in Sections 4 and 8 above
are reasonable in their geographic scope, duration and content; our
agreement to employ you and a portion of the compensation and
consideration we have agreed to pay you under Section 3 of
this Agreement, are in partial consideration for such covenants and
agreements; you agree that you will not raise any issue of the
reasonableness of the geographic scope, duration or content of such
covenants and agreements in any proceeding to enforce such
covenants and agreements, and such covenants and agreements shall
survive the termination of this Agreement;
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9.2
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The
enforcement of any remedy under this Agreement will not prevent you
from earning a livelihood, because your past work history and
abilities are such that you can reasonably expect to find work in
other areas and lines of business;
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9.3
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The
covenants and agreements stated in Sections 4, 6, 7 and 8 of
this Agreement are essential for our reasonable
protection;
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9.4
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We
have reasonably relied on your representations, warranties and
agreements, including those set forth in this Section 9;
and
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9.5
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You
have the full right to enter into this Agreement and by entering
into and performance of this Agreement, you will not violate or
conflict with any arrangements or agreements you may have with any
other person or entity.
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9.6
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You
agree that in the event of your breach of any covenants and
agreements set forth in Sections 4 and 8 above, we may seek to
enforce such covenants and agreements through any equitable remedy,
including specific performance or injunction, without waiving any
claim for damages. In any such event, you waive any claim that we
have an adequate remedy at law.
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10.1
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Employer’s Good Cause
Termination .
We have the right to terminate this Agreement at any time during
the Specified Term hereof for Employer’s Good Cause (which
term is defined in Section 22). Upon any such termination, we
will have no further liability or obligations whatsoever to you
under this Agreement except as provided under Sections 10.1.1,
10.1.2, and 10.1.3 below.
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10.1.1
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In
the event Employer’s Good Cause termination is the result of
your death during the Specified Term, your beneficiary (as
designated by you on our benefit records) will be entitled to
receive your salary for a three (3) month period following
your death, such amount to be paid at regular payroll
intervals.
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10.1.2
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In
the event Employer’s Good Cause termination is the result of
your Disability (which term is defined in Section 22), we will
pay you (or your beneficiary in the event of your death during the
period in which payments are being made) an amount equal to
your
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salary for
three (3) months following your termination, such amount to be
paid at regular payroll intervals, net of payments received by you
from any short term disability policy which is either self-insured
by us or the premiums of which were paid by us (and not charged as
compensation to you).
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10.1.3
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You
or your beneficiary will be entitled to exercise your vested but
unexercised stock options to acquire Company’s stock, stock
appreciation rights (“SAR”) or other stock-based
compensation (“Other Right”) as of the date of
termination, if any, upon compliance with all of the terms and
conditions required to exercise such options, SARs or Other
Rights.
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10.2
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Employer’s No Cause
Termination .
We have the right to terminate this Agreement on written notice to
you in our sole discretion for any cause we deem sufficient or for
no cause, at any time during the Specified Term. Upon such
termination, our sole liability to you shall be as
follows:
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10.2.1
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We
will treat you as an inactive employee through the Specified Term
and (i) pay your salary for the period remaining in the Specified
Term, and (ii) maintain you as a participant in all health and
insurance programs in which you and your dependents, if applicable,
are then participating (as such programs may be changed by us from
time to time for its employees in positions comparable to yours and
subject to satisfying the eligibility requirements of such programs
to the extent imposed by third party providers) through the first
to occur of (x) the end of the Specified Term or (y) the
date on which you become eligible to receive health and/or
insurance benefits, as applicable from a new employer. However, you
would not be eligible for flex or vacation time, discretionary
bonus or new grants of stock options, SARs or Other Rights, but
(subject to Section 10.5.1 of this Agreement, if applicable)
you would continue to vest previously granted stock options, SARs
or Other Rights, if any, for the shorter of twelve (12) months
from the date you are placed in an inactive status or the remaining
period of the Specified Term if you remain in inactive status for
such period; and
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10.2.2
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You
will be entitled to exercise your vested but unexercised stock
options to acquire Company stock, SARs or Other Rights, if any,
while you are on inactive status and upon termination of your
inactive status, upon your compliance with all of the terms and
conditions required to exercise such options, SARs or Other
Rights.
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Upon any such
termination, you will continue to be bound by the restrictions in
Section 8 above. Notwithstanding anything herein to the
contrary, while you are in an inactive status, you may be employed
by or provide consultation services to a non-Competitor, provided
that we will be entitled to offset the compensation being paid by
us during the Specified Term by the compensation and/or
consultant’s fees being paid to you, and provided further,
that we will not be required to continue to provide benefits to the
extent that you are entitled to receive benefits from
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a third party.
In addition, at any time after the end of the Restrictive Period,
if you are in an inactive status, you may notify us in writing that
you desire to terminate your inactive status (an “Employee
Inactive Termination Notice”) and immediately thereafter we
will have no further liability or obligations to you, except under
Section 10.2.2 above.
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10.3
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Employee’s Good Cause
Termination .
You may terminate this Agreement for Employee’s Good Cause
(which term is defined in Section 22). Prior to any
termination under this Section 10.3 being effective, you agree
to give us thirty (30) days’ advance written notice
specifying the facts and circumstances of our alleged breach.
During such thirty (30) day period, we may either cure the
breach (in which case your notice will be considered withdrawn and
this Agreement will continue in full force and effect) or declare
that we dispute that Employee’s Good Cause exists, in which
case this Agreement will continue in full force until the dispute
is resolved in accordance with Section 12. In the event this
Agreement is terminated under this Section 10.3, you will be
entitled to exercise your vested but unexercised stock options to
acquire Company stock, SARs or Other Rights, if any, upon your
compliance with all the terms and conditions required to exercise
such options, SARs or Other Rights, but you will have no further
claim against us arising out of such breach. In the event of
termination of this Agreement under Section 10.3, the
restrictions of Section 8.1 shall no longer apply.
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10.4
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Employee’s No Cause
Termination .
In the event you terminate your employment under this Agreement
without cause, we will have no further liability or obligations
whatsoever to you hereunder, except that you will be entitled to
exercise your vested but unexercised stock options to acquire
Company stock, SARs or Other Rights, if any, upon your compliance
with all the terms and conditions required to exercise such
options, SARs or Other Rights and all salary through the date of
termination; provided, however, that we will be entitled to all of
our rights and remedies by reason of such termination, including
without limitation, the right to enforce the covenants and
agreements contained in Section 8 and our right to recover
damages.
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10.5
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Change in Control
. In the event there is
a Change in Control of Company (which term is defined in
Section 22), then:
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10.5.1
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All
of your unvested options, SARs, or Other Rights, if any, shall
become fully vested.
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10.5.2
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If
the Change of Control results from an exchange of outstanding
common stock as a result of which the common stock of MGM MIRAGE is
no longer publicly held, then all your options to purchase common
stock of MGM MIRAGE, SARs and Other Rights will vest or be
exercisable, as applicable, at the time or times they would
otherwise have vested or been exercisable for the consideration
(cash, stock or otherwise) which the holders of MGM MIRAGE common
stock received in such exchange. For example, if immediately prior
to the Effective Date, you had vested and exercisable options to
acquire 5,000 shares of MGM MIRAGE’s common stock and the
exchange of stock is one share of common stock of MGM MIRAGE for
two shares of common
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stock of the
acquiring entity, then your options will be converted into options
to acquire, upon payment of the exercise price, 10,000 shares of
the acquiring entity’s common stock. If, in addition, you had
vested but unexercisable stock options, at the time
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