Document:

EXHIBIT 10.6

 

MGM RESORTS INTERNATIONAL

 

CHANGE OF CONTROL POLICY FOR EXECUTIVE OFFICERS

 

 

ADOPTED: JUNE 12, 2012
 AMENDED: NOVEMBER 5, 2012

 

MGM RESORTS INTERNATIONAL
  CHANGE OF CONTROL POLICY FOR EXECUTIVE OFFICERS

 

1. Definitions

 

For purposes of the Change of Control Policy for Executive Officers, the following terms are defined as set forth below (unless the context clearly indicates otherwise):

 

	
Administrator
    	
The   third-party accounting, actuarial, consulting or similar firm which shall be   retained by the Company prior to a Change of Control to administer this   Policy following a Change of Control.
    
	
 
    	
 
    
	
Annual   Base  Salary
    	
The   Participant’s base salary as in effect as of the date of a Change of Control.
    
	
 
    	
 
    
	
Board
    	
The   Board of Directors of the Company.
    
	
 
    	
 
    
	
Change   of Control
    	
“Change   of Control” shall have the meaning given such term in the Current Employment   Agreement, if more favorable; provided that if there is no Current Employment   Agreement or if such agreement does not include such term or a comparable term,   “Change of Control” means the first to occur of:

 

(1) the   date that a reorganization, merger, consolidation, recapitalization, or   similar transaction is consummated, unless: (i) at least 50% of the   outstanding voting securities of the surviving or resulting entity   (including, without limitation, an entity which as a result of such   transaction owns the Company either directly or through one or more   subsidiaries) (“Resulting Entity”) are beneficially owned, directly or   indirectly, by the persons who were the beneficial owners of the outstanding   voting securities of the Corporation immediately prior to such transaction in   substantially the same proportions as their beneficial ownership, immediately   prior to such transaction, of the outstanding voting securities of the   Corporation and (ii) immediately following such transaction no person or   persons acting as a group beneficially owns capital stock of the Resulting   Entity possessing thirty-five percent (35%) or more of the total voting power   of the stock of the Resulting Entity;

 

(2) the   date that a majority of members of the Company’s Board is replaced during any   twelve (12) month period by directors whose appointment or election is not   endorsed by a majority of the members of the Company’s Board before the date   of the appointment or election; provided that no individual shall be   considered to be so endorsed if such individual initially assumed office as a   result of either an actual or threatened “Election Contest” (as described in   Rule 14a-11 promulgated under the Securities Exchange Act of 1934) or   other actual or threatened solicitation of 
    

 

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proxies   or consents by or on behalf of a Person other than the Board (a “Proxy   Contest”) including by reason of any agreement intended to avoid or settle   any Election Contest or Proxy Contest;

 

(3) the   date that any one person, or persons acting as a group, acquires (or has or   have acquired as of the date of the most recent acquisition by such person or   persons) beneficial ownership of stock of the Company possessing thirty-five   percent (35%) or more of the total voting power of the stock of the Company;   or

 

(4) the   date that any one person acquires, or persons acting as a group acquire (or   has or have acquired as of the date of the most recent acquisition by such   person or persons), assets from the Company that have a total gross fair   market value equal to or more than forty percent (40%) of the total gross   fair market value of all of the assets of the Company immediately before such   acquisition or acquisitions. 

 

For   the avoidance of doubt, there can only be one Change of Control for purposes   of the Policy.
    
	
 
    	
 
    
	
Code
    	
The   Internal Revenue Code of 1986, as amended from time to time.
    
	
 
    	
 
    
	
Committee
    	
The   Board’s Compensation Committee or a subcommittee thereof, any successor   thereto or such other committee or subcommittee as may be designated by the   Board to administer the Policy.
    
	
 
    	
 
    
	
Company
    	
MGM   Resorts International, or any successor thereto.
    
	
 
    	
 
    
	
Current   Employment Agreement
    	
The   Participant’s employment agreement with the Company or any of its affiliates   (including, without limitation, any Parent or Subsidiary) in effect as of the   applicable date of determination, if any.
    
	
 
    	
 
    
	
Date   of Termination
    	
If   the Participant’s employment is terminated by:

 

(i) the   Employer with Employer’s Good Cause or by the Participant for Participant’s   Good Cause, the Date of Termination shall be the date on which the   Participant or the Employer, as the case may be, receives the Notice of   Termination (as described in Section 3.2(b)) or any later date specified   therein, as the case may be.

 

(ii) the   Employer without Employer’s Good Cause or by the Participant without   Participant’s Good Cause, the Date of Termination shall be the date on which   the Employer or the Participant, as applicable, notifies the other party of   such termination. 

 

Notwithstanding   the above, in the event that the Participant’s 
    

 

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employment   is terminated within six months prior to a Change of Control under   circumstances entitling the Participant to the benefits described in   Section 3 hereof were such termination of employment within the period   commencing on the Change of Control and ending on the one-year anniversary   thereof, the Participant’s Date of Termination for purposes of Section 3   hereof shall be the date of the Change of Control.
    
	
 
    	
 
    
	
Effective   Date
    	
June 12,   2012.
    
	
 
    	
 
    
	
Employer
    	
As   applicable, the Company, the Subsidiaries, any Parent and any affiliated   companies.
    
	
 
    	
 
    
	
Employer’s   Good Cause
    	
As   defined in Section 3.2(a).
    
	
 
    	
 
    
	
Excise   Tax
    	
The   excise tax imposed by Section 4999 of the Code, together with any   interest or penalties imposed with respect to such excise tax.
    
	
 
    	
 
    
	
Executive   Officer
    	
Any   executive officer of the Company.
    
	
 
    	
 
    
	
Net   After-Tax Benefit
    	
The   present value (as determined in accordance with Sections   280G(b)(2)(A)(ii) and 280G(d)(4) of the Code) of a Participant’s   Payments less any Federal, state, and local income taxes and any Excise Tax   payable on such amount.
    
	
 
    	
 
    
	
Parent
    	
A   parent corporation as defined in Section 424(e) of the Code.
    
	
 
    	
 
    
	
Participant
    	
An   Executive Officer who meets the eligibility requirements of Section 2.1.
    
	
 
    	
 
    
	
Participant’s   Good Cause
    	
As   defined in Section 3.2(a).
    
	
 
    	
 
    
	
Payment
    	
Any   payment or distribution in the nature of compensation (within the meaning of   Section 280G(b)(2) of the Code) to or for the benefit of the   Participant, whether paid or payable pursuant to this Policy or otherwise.
    
	
 
    	
 
    
	
Policy
    	
This   MGM Resorts International Change of Control Policy for Executive Officers.
    
	
 
    	
 
    
	
Separation   Benefits
    	
The   amounts and benefits payable or required to be provided in accordance with   Section 3.3 of this Policy.
    
	
 
    	
 
    
	
Subsidiary
    	
A   subsidiary corporation of the Company as defined in Section 
    

 

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424(f) of   the Code or corporation or other entity, whether domestic or foreign, direct   or indirect, in which the Company has or obtains a proprietary interest of   more than fifty percent (50%) by reason of stock ownership or otherwise.
    
	
 
    	
 
    
	
Target   Bonus
    	
The   annual target bonus award for which a Participant is eligible under the   Company’s Annual Performance-Based Incentive Plan for Executive Officers, or   any successor plan, as in effect as of the date of a Change of Control (or,   if greater, as of the Date of Termination).
    

 

2. Eligibility

 

2.1. Participation. Each Executive Officer set forth on Schedule A hereto shall be a Participant subject to the Policy effective as of the Effective Date and each other employee added to Schedule A by the Committee from time to time shall become a Participant subject to the Policy effective as of the date of such Committee action.

 

2.2. Duration of Participation. A Participant shall cease to be a Participant subject to the Policy if (i) the Participant terminates employment with the Employer under circumstances not entitling him or her to Separation Benefits or (ii) the Committee determines that Participant shall cease to be subject to the Policy prior to the occurrence of a Change of Control, provided that no Executive Officer may be so removed from Policy participation subsequent to or in connection with a Change of Control that actually occurs.  In the event that a Participant is removed from the Policy pursuant to the preceding sentence, the Company shall, effective as of the date of such removal, amend the terms of any equity award or other agreement between the Company and such Participant, to the minimum extent necessary, to avoid the imposition of any additional taxes and/or penalties under Section 409A of the Code on such Participant as a result of such removal.  Additionally, in the event that a Participant was removed from Policy participation in the six months prior to a Change of Control, such Participant will be deemed retroactively eligible to participate in the Policy. Furthermore, a Participant who is entitled to receive benefits under the Policy shall remain a Participant subject to the Policy until the amounts and benefits payable pursuant to the Policy have been paid or provided to the Participant in full.

 

3. Separation Benefits

 

3.1. Right to Separation Benefits. A Participant shall be entitled to receive from the Employer the Separation Benefits as provided in Section 3.3, if a Change of Control occurs and the Participant’s employment with the Employer is terminated under circumstances specified in Section 3.2(a) during the period commencing on the date that is six months prior to such Change of Control and ending on the first anniversary of such Change of Control.  Termination of employment shall have the same meaning as “separation from service” within the meaning of Treasury Regulation § 1.409A-1(h).

 

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3.2. Termination of Employment.

 

(a)                         Terminations which give rise to Separation Benefits under this Policy. The circumstances specified in this Section 3.2(a) are any termination of employment with the Employer by action of the Employer without Employer’s Good Cause (and not by reason of Participant’s death or disability) or by a Participant with Participant’s Good Cause.

 

For purposes of this Policy, “Employer’s Good Cause” shall have the following meaning, regardless of the definition given such term in any Current Employment Agreement:

 

(i)                                     Participant’s failure to reasonably abide by Employer’s policies and procedures, misconduct, insubordination, failure to perform the duties required of Participant up to reasonable standards established by the Employer’s senior management, or material breach of Participant’s Current Employment Agreement, which failure or breach is not cured by the Participant within ten (10) days after written notice thereof from Employer specifying the facts and circumstances of the alleged failure or breach, provided, however, that such notice and opportunity to cure shall not be required if, in the good faith judgment of the Board, such breach is not capable of being cured within ten (10) days;

 

(ii)                                  Participant’s failure or inability to apply for and obtain any license, qualification, clearance or other similar approval which the Employer or any regulatory authority which has jurisdiction over the Employer requests or requires that the Participant obtain;

 

(iii)                               The Employer is directed by any governmental authority in Nevada, New Jersey, Michigan, Mississippi, Illinois, Macau S.A.R., or any other jurisdiction in which the Employer is engaged in a gaming business or where the Employer has applied to (or during the term of the Participant’s employment under the Current Employment Agreement, may apply to) engage in a gaming business to cease business with the Participant; or

 

(iv)                              Any of the Employer’s gaming business licenses are threatened to be, or are, denied, curtailed, suspended or revoked as a result of the Participant’s employment by the Employer or as a result of the Participant’s actions.

 

For purposes of this Policy, “Participant’s Good Cause” shall have the following meaning, regardless of the definition given such term in any Current Employment Agreement:

 

(i)                                     The failure of Employer to pay Participant any compensation when due; or

 

(ii)                                  A material reduction in the scope of duties or responsibilities of Participant or any reduction in Participant’s salary or Target Bonus.

 

If circumstances constituting Participant’s Good Cause occur, the Participant shall give the Employer thirty (30) days’ advance written notice specifying the facts and circumstances of the alleged breach.  During such thirty (30) day period, the Employer may either cure the breach (in which case such notice will be considered withdrawn) or 

 

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declare (to the Participant in writing) that the Employer disputes that Participant’s Good Cause exists, in which case Participant’s Good Cause shall not exist until the dispute is resolved in accordance with the methods for resolving disputes specified in Exhibit A hereto.

 

(b)                         Notice of Termination. Any termination of employment initiated by the Employer for Employer’s Good Cause, or by the Participant for Employee’s Good Cause, shall be communicated by a Notice of Termination to the other party. For purposes of this Policy, a “Notice of Termination” means a written notice which (i) indicates the specific termination provision in this Policy relied upon, and (ii) to the extent applicable, sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Participant’s employment under the provision so indicated. The failure by the Participant or the Employer to set forth in the Notice of Termination any fact or circumstance which contributes to a showing of Employer’s Good Cause or Employee’s Good Cause shall not waive any right of the Employer or the Participant, respectively, hereunder or preclude the Employer or the Participant, respectively, from asserting such fact or circumstance in enforcing the Employer’s or the Participant’s rights hereunder.

 

3.3. Separation Benefits. If a Participant’s employment is terminated under the circumstances set forth in Section 3.2(a) entitling the Participant to Separation Benefits, and if the Participant executes the general release of claims described in Section 3.5 within 21 days following the Date of Termination, then, contingent upon the expiration of any revocation period provided in such release and subject to Section 6.6, within 30 days following the Date of Termination, the Participant shall become entitled to the benefits set forth in items (a) through (e) below (the “Separation Benefits”):

 

(a)                         The Employer shall pay to the Participant, in a lump sum in cash within 30 days after the Date of Termination, or on earlier date as required by applicable law, the sum of (A) the Participant’s Annual Base Salary through the Date of Termination to the extent not theretofore paid, (B) any bonus attributable to the Company’s most recently completed fiscal year to the extent not previously paid, and (C) any accrued vacation pay, in each case to the extent not theretofore paid. The sum of the amounts described in sub clauses (A), (B), and (C), shall be referred to as the “Accrued Obligations”.

 

(b)                         The Employer also shall pay to the Participant, in a lump sum in cash within 30 days after the Date of Termination, an amount (“Separation Pay”) equal to the product of (A) two and (B) the sum of (x) the Participant’s Annual Base Salary and (y) the Participant’s Target Bonus; provided, however, that the Separation Pay amount pursuant to this clause (b) shall not exceed $4,000,000 per Participant (or, in the case of a Participant who served as the Chief Executive Officer of the Company up to six (6) months prior to the Change of Control (not taking into account any change in title that would qualify as Employee’s Good Cause), $10,000,000).

 

(c)                          The Employer also shall pay to the Participant, in a lump sum in cash within 30 days after the Date of Termination, an amount (“Benefits Pay”) equal in value to 24 months of continued health and other insurance benefits provided by the Employer to the Participant immediately prior to the Change of Control (or, if greater, as of the Date of Termination).

 

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(d)                         Notwithstanding anything to the contrary in the Company’s 2005 Omnibus Incentive Plan, or any successor thereto under which equity awards are granted, or the applicable award agreements with respect to any such equity awards, the Participant’s outstanding equity awards, if any, shall accelerate and vest in full with respect to any time-based vesting conditions, and with respect to any stock appreciation rights or stock options, the Participant may exercise such awards until the date that is one (1) year following the Date of Termination or the expiration of the maximum term of the award, if earlier.  For the avoidance of doubt, any performance criteria or performance requirements under outstanding equity awards that have not been satisfied or are not deemed to have been satisfied under the terms of such equity awards shall continue to apply in accordance with their terms.

 

If a Participant’s employment is terminated under the circumstances set forth in Section 3.2(a) entitling the Participant to Separation Benefits and such termination of employment occurs prior to the occurrence of a Change of Control, the Participant’s benefits under this Policy as described in this Section 3.3 shall commence upon the occurrence of the Change of Control (or such later date as may be required pursuant to Section 409A of the Code) and shall be offset against any severance compensation or benefits the Participant was entitled to and received as a result of such termination of employment prior to the Change of Control under any other agreement between the Participant and the Company or any other Company plan or policy.

 

Notwithstanding anything herein to the contrary, in the event the Change of Control does not meet the definition of a change in control event for purposes of Section 409A, to the extent required by Section 409A, the benefits set forth in Section 3.3 shall not be paid in accordance with the payment schedule set forth in Section 3.3, but shall be paid in accordance with the applicable payment schedule set forth in the Participant’s Current Employment Agreement or equity award agreement.

 

Further if a Participant’s employment is terminated under the circumstances set forth in Section 3.2(a) entitling the Participant to Separation Benefits and such termination of employment occurs prior to the occurrence of a Change of Control and the Change of Control does not meet the definition of a change in control event for purposes of Section 409A, to the extent required by Section 409A, the Participant’s benefits under this Policy as described in this Section 3.3 shall be paid in accordance with the applicable payment schedule set forth in the Participant’s Current Employment Agreement or equity award agreement.

 

3.4. Excise Tax.  Unless otherwise provided in a Current Employment Agreement, notwithstanding anything in this Plan to the contrary, in the event it shall be determined that any Payment would be subject to the Excise Tax, and if the Participant’s Net After-Tax Benefit would be greater if the amount of the Payments was one dollar less than the smallest amount that would give rise to any Excise Tax (the “Reduced Amount”), then the amount of the Payments will be reduced to the Reduced Amount.  The Company and its affiliates shall bear no responsibility for any Excise Tax payable on any Reduced Amount pursuant to a subsequent claim by the Internal Revenue Service or otherwise. For purposes of determining the Reduced Amount under this Section 3.4, amounts otherwise payable to the Participant shall be reduced such that the reduction of compensation to be provided to the Participant as a result of this Section 3.4 is minimized.  In applying this principle, the reduction shall be made in a manner 

 

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consistent with the requirements of Section 409A of the Code and where two economically equivalent amounts are subject to reduction but payable at different times, such amounts shall be reduced on a pro rata basis but not below zero.  All determinations required to be made under this Section 3.4, including whether a Reduced Amount or a Net After-Tax Benefit is payable, and the assumptions to be utilized in arriving at such determinations, shall be made by the Company’s independent auditors or such other nationally recognized certified public accounting firm as may be designated by the Company and approved by the Participant (the “Accounting Firm”), which shall provide detailed supporting calculations both to the Company and the Participant within 15 business days of the receipt of notice from the Participant that there has been a Payment, or such earlier time as is requested by the Company. All fees and expenses of the Accounting Firm shall be borne solely by the Company. Any determination by the Accounting Firm shall be binding upon the Company, its Affiliates and the Participant.

 

3.5. Payment Obligations Absolute.  Upon a Change of Control and termination of employment under the circumstances described in Section 3.2(a), subject to Participant’s execution of a general release, the obligations of the Employer to pay or provide the Separation Benefits described in Section 3.3 shall be absolute and unconditional and shall not be affected by any circumstances, including, without limitation, any set-off, counterclaim, recoupment, defense or other right which the Employer may have against any Participant. In no event shall a Participant be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to a Participant under any of the provisions of this Policy, nor shall the amount of any payment or value of any benefits hereunder be reduced by any compensation or benefits earned by a Participant as a result of employment by another employer.

 

3.6.  General Release of Claims.  Upon a Change of Control and termination of employment under the circumstances described in Section 3.2(a), the obligations of the Employer to pay or provide the Separation Benefits described in Section 3.3 are contingent on the Participant’s (for him/herself, his/her heirs, legal representatives and assigns) agreement to execute a general release in the form and substance to be provided by Employer, releasing the Employer, its affiliated companies and their officers, directors, agents and employees from any claims or causes of action of any kind that the Participant might have against any one or more of them as of the date of the release, regarding his/her employment or the termination of that employment.

 

3.7. Non-Exclusivity of Rights; Non-Duplication of Benefits. Nothing in this Policy shall prevent or limit the Participant’s continuing or future participation in any plan, program, policy or practice provided by the Employer and for which the Participant may qualify, nor shall anything herein limit or otherwise affect such rights as the Participant may have under any contract or agreement with the Employer; provided, however, that any payments under this Policy shall be reduced by any cash severance payments and/or insurance continuation benefits payable under any Current Employment Agreement. Amounts or benefits which the Participant is otherwise entitled to receive under any plan, policy, practice or program of or any contract or agreement with the Employer shall be payable in accordance with such plan, policy, practice or program or contract or agreement, except as explicitly modified by this Policy.

 

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4. Successor to Company

 

This Policy shall bind any successor of the Company, its assets or its businesses (whether direct or indirect, by purchase, merger, consolidation or otherwise), in the same manner and to the same extent that the Company or its Subsidiaries would be obligated under this Policy if no succession had taken place.

 

In the case of any transaction in which a successor would not by the foregoing provision or by operation of law be bound by this Policy, the Company shall require such successor expressly and unconditionally to assume and agree to perform the Company’s or its Subsidiaries’ obligations under this Policy, in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place. The term “Company,” as used in this Policy, shall mean the Company as hereinbefore defined and any successor or assignee to the business or assets which by reason hereof becomes bound by this Policy.

 

5. Duration, Amendment and Termination

 

5.1. Duration. This Policy shall remain in effect until terminated as provided in Section 5.2. Notwithstanding the foregoing, if a Change of Control occurs, this Policy shall continue in full force and effect and shall not terminate or expire until after all Participants who become entitled to any payments or benefits hereunder shall have received such payments or benefits in full.

 

5.2. Amendment and Termination. The Policy may be terminated or amended in any respect by resolution adopted by the Committee prior to the occurrence of a Change of Control. However, after the Board has knowledge of a possible transaction or event that if consummated would constitute a Change of Control, this Policy may not be terminated or amended in any manner which would adversely affect the rights or potential rights of Participants, unless and until the Board has determined that all transactions or events that, if consummated, would constitute a Change of Control have been abandoned and will not be consummated, and, provided that, the Board does not have knowledge of other transactions or events that, if consummated, would constitute a Change of Control. If a Change of Control occurs, the Policy shall no longer be subject to amendment, change, substitution, deletion, revocation or termination in any respect that adversely affects the rights of Participants, and no Participant shall be removed from Policy participation.

 

6. Miscellaneous

 

6.1. Legal Fees. The Employer agrees to pay, to the full extent permitted by law, all reasonable legal fees and expenses which the Participant may reasonably incur as a result of any contest by the Employer, the Participant or others of the validity or enforceability of, or liability under, any provision of this Policy or any guarantee of performance thereof (including as a result of any contest by the Participant about the amount of any payment pursuant to this Policy); provided that the Employer shall have no obligation under this Section 6.1 to the extent the resolution of any such contest includes a finding denying, in total, the Participant’s claims in such contest.  Such fees and expenses shall be paid within thirty (30) days following an invoice from the Participant to the Company following the initial resolution of any contest.

 

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6.2. Employment Status. This Policy does not constitute a contract of employment or impose on the Participant, the Company or the Participant’s Employer any obligation to retain the Participant as an employee or to change the Employer’s policies regarding termination of employment.

 

6.3. Tax Withholding. The Employer may withhold from any amounts payable under this Policy such federal, state, local or foreign taxes as shall be required to be withheld pursuant to any applicable law or regulation.

 

6.4. Validity and Severability. The invalidity or unenforceability of any provision of the Policy shall not affect the validity or enforceability of any other provision of the Policy, which shall remain in full force and effect, and any prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

 

6.5. Governing Law. The validity, interpretation, construction and performance of the Policy shall in all respects be governed by the laws of the State of Delaware, without reference to principles of conflict of law.

 

6.6. Section 409A of the Code. Notwithstanding anything herein to the contrary:

 

(a)                           The Policy shall be interpreted, construed and operated to reflect the intent of the Company that all aspects of the Policy shall be interpreted either to be exempt from the provisions of Section 409A of the Code or, to the extent subject to Section 409A of the Code, comply with Section 409A of the Code and any regulations and other guidance thereunder.  This Policy may be amended at any time, without the consent of any Participant, to avoid the application of Section 409A of the Code in a particular circumstance or to the extent determined necessary or desirable to satisfy any of the requirements under Section 409A of the Code, but the Employer shall not be under any obligation to make any such amendment.  Nothing in the Policy shall provide a basis for any person to take action against the Employer based on matters covered by Section 409A of the Code, including the tax treatment of any award made under the Policy, and the Employer shall not under any circumstances have any liability to any Participant or other person for any taxes, penalties or interest due on amounts paid or payable under the Policy, including taxes, penalties or interest imposed under Section 409A of the Code.

 

(b)                           To the extent that any payment or benefit pursuant to this Policy constitutes a “deferral of compensation” subject to Section 409A of the Code (after taking into account to the maximum extent possible any applicable exemptions) (a “409A Payment”) treated as payable upon a separation from service (as defined under Section 409A of the Code, then, if on the date of the Participant’s separation from service, the Participant is a specified employee (as defined under Section 409A of the Code), then to the minimum extent required for the Participant not to incur additional taxes pursuant to Section 409A of the Code, no such 409A Payment shall be made to the Participant sooner than the earlier of (i) six (6) months after the Participant’s separation from service; or (ii) the date of the Participant’s death, at which time all such delayed payments shall be paid in lump sum without interest.

 

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(c)                            No 409A Payment payable under this Policy shall be subject to acceleration or to any change in the specified time or method of payment, except as otherwise provided under this Policy and consistent with Section 409A.  If under this Policy, a 409A Payment is to be paid in two or more installments, for purposes of Section 409A, each installment shall be treated as a separate payment.  Moreover, if the Company determines in good faith that any provision of this Policy has the effect of impermissibly delaying or accelerating any payment schedule initially set forth in any applicable employment agreement or equity award, the applicable provision (or part thereof) of this Policy shall be disregarded and have no force or effect and the payment schedule shall be governed by the applicable provision of the applicable employment agreement or equity award agreement.

 

6.7 Claim Procedure. If a Participant makes a written request alleging a right to receive Separation Benefits under the Policy or alleging a right to receive an adjustment in benefits being paid under the Policy, the Company shall treat it as a claim for benefits. All claims for Separation Benefits under the Policy shall be sent to the General Counsel of the Company and must be received within 30 days after the Date of Termination. If the Company determines that any individual who has claimed a right to receive Separation Benefits under the Policy is not entitled to receive all or a part of the benefits claimed, it will inform the claimant in writing of its determination and the reasons therefore in terms calculated to be understood by the claimant. The notice will be sent within 90 days of the written request, unless the Company determines additional time, not exceeding 90 days, is needed and provides the Participant with notice, during the initial 90-day period, of the circumstances requiring the extension of time and the length of the extension. The notice shall make specific reference to the pertinent Policy provisions on which the denial is based, and describe any additional material or information that is necessary. Such notice shall, in addition, inform the claimant what procedure the claimant should follow to take advantage of the review procedures set forth below in the event the claimant desires to contest the denial of the claim. The claimant may within 90 days thereafter submit in writing to the Administrator a notice that the claimant contests the denial of his or her claim by the Company and desires a further review. The Administrator shall within 60 days thereafter review the claim and authorize the claimant to appear personally and review the pertinent documents and submit issues and comments relating to the claim to the persons responsible for making the determination on behalf of the Administrator. The Administrator will render its final decision with specific reasons therefor in writing and will transmit it to the claimant within 60 days of the written request for review, unless the Administrator determines additional time, not exceeding 60 days, is needed, and so notifies the Participant during the initial 60-day period. The Committee may revise the foregoing procedures as it determines necessary to comply with changes in the applicable U.S. Department of Labor regulations.

 

6.8. Unfunded Status. This Policy is intended to be an unfunded plan and to qualify as a severance pay plan within the meaning of Department of Labor regulations Section 2510.3-2(b). All payments pursuant to the Policy shall be made from the general funds of the Employer and no special or separate fund shall be established or other segregation of assets made to assure payment. No Participant or other person shall have under any circumstances any interest in any particular property or assets of the Employer as a result of being subject to the Policy.  Notwithstanding the foregoing, the Committee may authorize the creation of trusts or other arrangements to assist in accumulating funds to meet the obligations created under the Policy; 

 

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provided, however, that, unless the Committee otherwise determines, the existence of such trusts or other arrangements is consistent with the “unfunded” status of the Policy.

 

6.9. Reliance on Adoption of Policy. Subject to Section 5.2, each person who shall become a Participant shall be deemed to have served and continue to serve in such capacity in reliance upon the Change on Control provisions contained in this Policy.

 

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SCHEDULE A

 

To be determined by Committee from time to time.

 

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EXHIBIT A

 

ARBITRATION

 

This Exhibit A sets forth the methods for resolving disputes should any arise under the Policy, and accordingly, this Exhibit A shall be considered a part of the Policy.

 

1.              Except for a claim by either Participant or the Company for injunctive relief where such would be otherwise authorized by law, any controversy or claim arising out of or relating to the Policy or the breach hereof including without limitation any claim involving the interpretation or application of the Policy, shall be submitted to binding arbitration in accordance with the employment arbitration rules then in effect of the Judicial Arbitration and Mediation Service (“JAMS”), to the extent not inconsistent with this paragraph.  This Exhibit A covers any claim Participant might have against the Company, any officer, director, employee, or agent of the Company, or any of the Company’s subsidiaries, divisions, and affiliates, and all successors and assigns of any of them.  The promises by the Company and Participant to arbitrate differences, rather than litigate them before courts or other bodies, provide consideration for each other, in addition to other consideration provided under the Policy.

 

2.              Claims Subject to Arbitration.  This Exhibit A contemplates mandatory arbitration to the fullest extent permitted by law.  Only claims that are justiciable under applicable state or federal law are covered by this Exhibit A.  Such claims include any and all alleged violations of any state or federal law whether common law, statutory, arising under regulation or ordinance, or any other law, brought by any current or former employees.

 

3.              Non-Waiver of Substantive Rights.  This Exhibit A does not waive any rights or remedies available under applicable statutes or common law.  However, it does waive Participant’s right to pursue those rights and remedies in a judicial forum.  By accepting benefits under the Policy, the Participant shall be deemed to have voluntarily agreed to arbitrate his or her claims covered by this Exhibit A.

 

4.              Time Limit to Pursue Arbitration; Initiation:  To ensure timely resolution of disputes, Participant and the Company must initiate arbitration within the statute of limitations (deadline for filing) provided for by applicable law pertaining to the claim.  The failure to initiate arbitration within this time limit will bar any such claim.  The parties understand that the Company and Participant are waiving any longer statutes of limitations that would otherwise apply, and any aggrieved party is encouraged to give written notice of any claim as soon as possible after the event(s) in dispute so that arbitration of any differences may take place promptly.  The parties agree that the aggrieved party must, within the time frame provided by this Exhibit A, give written notice of a claim.  In the event such notice is to be provided to the Company, the Participant shall provide a copy of such notice of a claim to the Company’s Executive Vice President and General Counsel.  Written notice shall identify and describe the nature of the claim, the supporting facts and the relief or remedy sought.

 

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5.              Selecting an Arbitrator:  This Exhibit A mandates Arbitration under the then current rules of the Judicial Arbitration and Mediation Service (JAMS) regarding employment disputes.  The arbitrator shall be either a retired judge or an attorney experienced in employment law and licensed to practice in the state in which arbitration is convened.  The parties shall select one arbitrator from among a list of three qualified neutral arbitrators provided by JAMS.  If the parties are unable to agree on the arbitrator, each party shall strike one name and the remaining named arbitrator shall be selected.

 

6.              Representation/Arbitration Rights and Procedures:

 

a.              Participant may be represented by an attorney of his/her choice at his/her own expense.

 

b.              The arbitrator shall apply the substantive law (and the law of remedies, if applicable) of Nevada (without regard to its choice of law provisions) and/or federal law when applicable.  In all cases, this Exhibit A shall provide for the broadest level of arbitration of claims between the Company and Participant under Nevada or applicable federal law.  The arbitrator is without jurisdiction to apply any different substantive law or law of remedies.

 

c.               The arbitrator shall have no authority to award non-economic damages or punitive damages except where such relief is specifically authorized by an applicable state or federal statute or common law.  In such a situation, the arbitrator shall specify in the award the specific statute or other basis under which such relief is granted.

 

d.              The applicable law with respect to privilege, including attorney-client privilege, work product, and offers to compromise must be followed.

 

e.               The parties shall have the right to conduct reasonable discovery, including written and oral (deposition) discovery and to subpoena and/or request copies of records, documents and other relevant discoverable information consistent with the procedural rules of JAMS.  The arbitrator shall decide disputes regarding the scope of discovery and shall have authority to regulate the conduct of any hearing and/or trial proceeding.  The arbitrator shall have the right to entertain a motion to dismiss and/or motion for summary judgment.

 

f.                The parties shall exchange witness lists at least 30 days prior to the trial/hearing procedure.  The arbitrator shall have subpoena power so that either Participant or the Company may summon witnesses.  The arbitrator shall use the Federal Rules of Evidence.  Both parties have the right to file a post hearing brief.  Any party, at its own expense, may arrange for and pay the cost of a court reporter to provide a stenographic record of the proceedings.

 

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g.               Any arbitration hearing or proceeding shall take place in private, not open to the public, in Las Vegas, Nevada.

 

7.                                      Arbitrator’s Award: The arbitrator shall issue a written decision containing the specific issues raised by the parties, the specific findings of fact, and the specific conclusions of law.  The award shall be rendered promptly, typically within 30 days after conclusion of the arbitration hearing, or the submission of post-hearing briefs if requested.  The arbitrator may not award any relief or remedy in excess of what a court could grant under applicable law.  The arbitrator’s decision is final and binding on both parties.  Judgment upon an award rendered by the arbitrator may be entered in any court having competent jurisdiction.

 

a.              Either party may bring an action in any court of competent jurisdiction to compel arbitration under this Exhibit A and to enforce an arbitration award.

 

b.              In the event of any administrative or judicial action by any agency or third party to adjudicate a claim on behalf of Participant which is subject to arbitration under this Exhibit A, Participant hereby waives the right to participate in any monetary or other recovery obtained by such agency or third party in any such action, and Participant’s sole remedy with respect to any such claim shall be any award decreed by an arbitrator pursuant to the provisions of this Exhibit A.

 

8.                                      Fees and Expenses: The Company shall be responsible for paying any filing fee and the fees and costs of the arbitrator; provided, however, that if Participant is the party initiating the claim, Participant will contribute an amount equal to the filing fee to initiate a claim in the court of general jurisdiction in the state in which Participant is (or was last) employed by the Company.  Participant and the Company shall each pay for their own expenses, attorney’s fees (a party’s responsibility for his/her/its own attorney’s fees is only limited by any applicable statute specifically providing that attorney’s fees may be awarded as a remedy), and costs and fees regarding witness, photocopying and other preparation expenses.  If any party prevails on a statutory claim that affords the prevailing party attorney’s fees and costs, or if there is a written agreement providing for attorney’s fees and/or costs, the arbitrator may award reasonable attorney’s fees and/or costs to the prevailing party, applying the same standards a court would apply under the law applicable to the claim(s).

 

9.                                      The arbitration provisions of this Exhibit A shall survive the termination of Participant’s employment with the Company.  These arbitration provisions can only be modified or revoked in a writing signed by both parties and which expressly states an intent to modify or revoke the provisions of this Exhibit A.

 

10.                               The arbitration provisions of this Exhibit A do not alter or affect the termination provisions of the Policy.

 

11.                               Capitalized terms not defined in this Exhibit A shall have the same definition as in the Policy to which this is Exhibit A.

 

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12.                               If any provision of this Exhibit A is adjudged to be void or otherwise unenforceable, in whole or in part, such adjudication shall not affect the validity of the remainder of Exhibit A.  All other provisions shall remain in full force and effect.

 

ACKNOWLEDGMENT

 

BOTH PARTIES ACKNOWLEDGE THAT:  THEY HAVE CAREFULLY READ THIS EXHIBIT A IN ITS ENTIRETY, THEY UNDERSTAND ITS TERMS, EXHIBIT A CONSTITUTES A MATERIAL TERM AND CONDITION OF POLICY TO WHICH IT IS EXHIBIT A, AND THEY AGREE TO ABIDE BY ITS TERMS.

 

The parties also specifically acknowledge that by accepting benefits under the Policy and thereby agreeing to the terms of this Exhibit A, they are waiving the right to pursue claims covered by this Exhibit A in a judicial forum and instead agree to arbitrate all such claims before an arbitrator without a court or jury.  It is specifically understood that this Exhibit A does not waive any rights or remedies which are available under applicable state and federal statutes or common law.  Both parties enter into this Exhibit A voluntarily and not in reliance on any promises or representation by the other party other than those contained in the Agreement or in this Exhibit A.

 

Participant further acknowledges that Participant has been given the opportunity to discuss this Exhibit A with Participant’s private legal counsel and that Participant has availed himself/herself of that opportunity to the extent Participant wishes to do so.

 

*              *              *

 

18EXHIBIT 10.7

 

FORM OF MEMORANDUM AGREEMENT RE: CHANGES TO SEVERANCE AND CHANGE OF CONTROL POLICIES

 

[MGM RESORTS LETTERHEAD]

 

November 5, 2012

 

Re:  Changes to Severance and Change of Control Policies

 

To: [Name]

 

I am pleased to inform you that the Compensation Committee of the Board of Directors (the “Committee”) has approved certain changes to our compensation program that will provide you with severance protection and other benefits described below.

 

These changes affect your change of control severance benefits, your “regular” severance benefits and the treatment of your outstanding equity compensation awards (SARs and RSUs) and future grants of equity compensation awards in the event of your termination of employment.

 

Change of Control Policy

 

As you may know, the Committee adopted the MGM Resorts International Change of Control Policy for Executive Officers (the “COC Policy”), a copy of which has been included with this memorandum.  Pursuant to the terms of the COC Policy, only those executive officers of MGM Resorts International (the “Company”) selected by the Committee for participation will be entitled to the protections and benefits provided for in the COC Policy.  The Committee has determined that you will be eligible to participate in the COC Policy.

 

As described in more detail in the COC Policy included herewith, the COC Policy generally provides for the following severance benefits in the event of any termination of your employment by the Company other than for Employer’s Good Cause (as defined in the COC Policy) or by you for Participant’s Good Cause (as defined in the COC Policy) (and not by reason of your death or disability), in each case, during the period (the “COC Protection Period”) beginning six (6) months prior to a Change of Control (as defined under the COC Policy) and ending on the first anniversary of the Change of Control, subject to your execution and non-revocation of a general release of claims against the Company:

 

·                  a lump sum payment of an amount equal to two (2) times the sum of your annual base salary and target annual bonus (subject to a maximum payment of $4 million),

 

·                  a lump-sum payment equal to 1.5 times the cost of COBRA coverage (which is generally equivalent in value to the value of continued health and other insurance benefits) for a period of twenty-four (24) months following separation,

 

·                  full vesting of your then outstanding and unvested equity incentive awards with respect to any time-based vesting conditions.  With respect to equity awards with performance-based vesting conditions, any performance criteria or performance 

 

 

requirements that have not been satisfied or are not deemed to have been satisfied under the terms of such equity awards shall continue to apply in accordance with their terms.

 

However, due to limitations imposed on the Company under Section 409A of the Internal Revenue Code of 1986, as amended (“Section 409A”), in no event will the COC Policy alter the timing of severance benefits that are considered nonqualified deferred compensation that is subject to (and not exempt from) Section 409A to a time different than the time period specified in your current employment agreement in the event of your termination of employment prior to the expiration of the specified term of your current employment agreement if such change in the timing of such benefits would result in a violation of Section 409A.  In implementing the preceding sentence, any additional severance benefits provided under the COC Policy in excess of the benefits provided under your employment agreement shall be paid on the first anniversary of the date of your termination of employment.

 

For the avoidance of doubt, in the event your employment terminates within the COC Protection Period, but prior to a Change of Control, any severance benefits provided to you under your existing employment agreement shall be offset against the payments and benefits otherwise due under the COC Policy.

 

Conditions

 

Subject to the provisions of Section 409A, the Committee has conditioned your participation in the COC Policy and receipt of the protection provided therein upon your agreement to: (i) waive any rights to any other severance compensation and/or benefits in connection with a termination of employment during the COC Protection Period, (ii) amend any provisions in your current employment agreement with the Company providing for severance compensation and/or benefits upon termination of employment outside of the COC Protection Period to provide for the severance benefits described below under the heading “Regular Severance” upon applicable terminations of employment, rather than the severance benefits currently provided for in your employment agreement, and (iii) amend any contrary provisions in each award agreement between you and the Company evidencing your outstanding SARs and RSUs to provide for the treatment upon termination of employment set forth below under the heading “Treatment of Equity Awards” rather than the treatment provided in your current award agreements.

 

Regular Severance

 

In addition to adopting the new COC Policy, the Committee has also adopted a new policy regarding severance compensation outside of the COC Protection Period.  Currently, severance benefits outside of a change of control scenario are generally equal to continued payment of your base salary through the end of your contract term, although some employment agreements may provide for additional severance compensation.

 

By signing below, you agree to waive the severance provisions of your employment agreement with the Company.  Instead, by signing below, upon any termination of your employment (other than during the COC Protection Period) by the Company other than for Employer’s Good Cause (as defined in your employment agreement) or by you for Employee’s Good Cause (as defined in 

 

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your employment agreement), you will be entitled to the following severance benefits, subject to your execution and non-revocation of a general release of claims against the Company as provided for in your employment agreement:

 

·                  payment of an amount equal to the sum of your annual base salary and target annual bonus (subject to a maximum payment of $3 million), payable in twelve (12) monthly installments commencing upon the date that is thirty (30) days after the date of termination,

 

·                  a lump-sum payment equal to 1.5 times the cost of COBRA coverage (which is generally equivalent in value to the value of continued health and other insurance benefits) for a period of twelve (12) months following separation, payable within thirty (30) days following the date of termination, and

 

·                  one (1) year of continued vesting of your then outstanding equity incentive awards as if your employment continued during such one-year period; provided that such continued vesting shall immediately cease and the then unvested portion of your outstanding equity awards, shall be forfeited in the event you breach any post-termination covenant with the Company or its affiliate in an employment agreement (after taking into account any applicable cure period).  With respect to equity awards with performance-based vesting conditions, any performance criteria or performance requirements that have not been satisfied or are not deemed to have been satisfied under the terms of such equity awards shall continue to apply in accordance with their terms.

 

However, due to limitations imposed on the Company under Section 409A, in no event will the amendments described above alter the timing of severance benefits that are considered nonqualified deferred compensation that is subject to (and not exempt from) Section 409A to a time different than the time period specified in your current employment agreement in the event of your termination of employment prior to the expiration of the specified term of your current employment agreement if such change in the timing of such benefits would result in a violation of Section 409A.  In implementing the preceding sentence, any additional severance benefits provided hereunder in excess of the benefits provided under your employment agreement shall be paid on the first anniversary of the date of your termination of employment.

 

Treatment of Equity Awards

 

In addition, by signing below, you agree that any provisions in the current award agreements between you and the Company evidencing your outstanding SARs and RSUs regarding vesting at or after termination of employment (for any reason) are hereby amended, effective immediately, to provide that, upon termination of your employment with the Company for any reason the then unvested portion of your outstanding SARs and/or RSUs shall be forfeited immediately without any consideration; provided, however, that, (i) upon termination of employment by the Company without Employer’s Good Cause (as defined under the applicable award agreement) or by you with Participant’s Good Cause (as defined under the applicable award agreement), the terms of the COC Policy or as described above under “Regular Severance” shall apply and (ii) upon termination of employment by the Company due to your 

 

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death or disability (as defined under the applicable award agreement), the portion of your SARs and/or RSUs, as applicable, that would have become vested and exercisable (but for such termination) under the schedule set forth in the applicable award agreement during the twelve (12) months from the date of the termination of employment shall become vested and exercisable on the same schedule.  With respect to equity awards with performance-based vesting conditions, any performance criteria or performance requirements that have not been satisfied or are not deemed to have been satisfied under the terms of such equity awards shall continue to apply in accordance with their terms.

 

For the avoidance of doubt, the amendments your outstanding equity award agreements described above shall in no event change the time or form of payment under any equity award that is subject to (and not exempt from) Section 409A in a manner that would result in a violation of Section 409A.

 

Arbitration

 

In addition to the above, by signing below, you acknowledge and agree that any disputes between you and the Company relating to any of the above and/or the COC Policy shall be subject to resolution as described in the arbitration policy attached as Exhibit A hereto.

 

Miscellaneous

 

This is not an employment contract.  This memorandum is not to be interpreted as a guarantee or contract of continuing employment.

 

I continue to value your efforts to the Company and look forward to your continued contribution.

 

	
 
    	
Sincerely,
    
	
 
    	
 
    
	
 
    	
[NAME]
    

 

I accept and agree to the terms of this memorandum and accept participation the COC Policy on the conditions described herein.  I understanding that my acceptance of participation in the COC Policy does not in any way alter the Committee’s rights to remove me as a Participant pursuant to Section 2.2 of the COC Policy.

 

	
 
    	
 
    	
 
    	
 
    
	
[NAME]
    	
 
    	
Date
    	
 
    

 

4

 

EXHIBIT A

ARBITRATION

 

This Exhibit A sets forth the methods for resolving disputes should any arise under the Agreement, and accordingly, this Exhibit A shall be considered to be a part of the Agreement.

 

1.                                      Except for a claim by either Employee or the Company for injunctive relief where such would be otherwise authorized by law, any controversy or claim arising out of or relating to the agreement or policy, as applicable, the breach hereof, or Employee’s employment by the Company, including without limitation any claim involving the interpretation or application of the agreement or policy, as applicable, or wrongful termination or discrimination claims, shall be submitted to binding arbitration in accordance with the employment arbitration rules then in effect of the Judicial Arbitration and Mediation Service (“JAMS”), to the extent not inconsistent with this paragraph.  This Exhibit A covers any claim Employee might have against any officer, director, employee, or agent of the Company, or any of the Company’s subsidiaries, divisions, and affiliates, and all successors and assigns of any of them.  The promises by the Company and Employee to arbitrate differences, rather than litigate them before courts or other bodies, provide consideration for each other, in addition to other consideration provided under the agreement or policy, as applicable.

 

2.                                      Claims Subject to Arbitration.  This Exhibit A covers all claims arising in the course of Employee’s employment by the Company except for those claims specifically excluded from coverage as set forth in paragraph 3 of this Exhibit A.  It contemplates mandatory arbitration to the fullest extent permitted by law.  Only claims that are justifiable under applicable state or federal law are covered by this Exhibit A.  Such claims covered by this arbitration provision include, but are not limited to, any dispute or controversy arising out of Employee’s employment, the events leading up to Employee being offered employment, the cessation of Employee’s employment, the compensation, terms, and other conditions of Employee’s employment, or statements made or actions taken at any time regarding Employee’s employment at the Company which could have been brought in a court of competent jurisdiction, including, but not limited to, claims under the Age Discrimination in Employment Act; Title VII of the Civil Rights Act of 1964, as amended; the Americans with Disabilities Act of 1990; Sections 1981 through 1988 of Title 42 of the United States Code; the Fair Labor Standards Act, as amended; the federal Family and Medical Leave Act; the Lilly Ledbetter Act; GINA; all laws arising under the State of Nevada pertaining to civil rights, employment, whistleblower, or common law, and any other federal, state, or local civil or human rights law, or any other local, state or federal law, regulation, or ordinance, as well as any claim based on any public policy, contract, tort, or common law or any claim for costs, attorney’s or other fees, or other expenses, wages or other compensation; work related injury claims not covered under workers’ compensation laws; wrongful discharge; and any and all unlawful employment discrimination and/or harassment claims (collectively, “Claims”).  Employee expressly understands and agrees that Employee shall have no right or authority to raise any dispute or to have any dispute heard or arbitrated as a class or collective action or in a representative or private attorney general capacity on behalf of a class of persons or the general public.  This arbitration provision does not 

 

 

require arbitration of claims for workers’ compensation or unemployment insurance.  This Arbitration Agreement is intended to be construed as broadly as possible under applicable law so that all claims and defenses that could be raised before a court must instead be raised in arbitration.  However, nothing in this arbitration provision shall be construed as precluding Employee from filing a charge or complaint with the Equal Employment Opportunity Commission or equivalent state agency, the National Labor Relations Board, or any other similar state or federal agency seeking administrative resolution of a dispute or claim.

 

3.                                      Claims Not Subject to Arbitration.  Claims under state workers’ compensation statutes or unemployment compensation statutes are specifically excluded from this Exhibit A.  Claims pertaining to any of the Company’s employee welfare benefit and pension plans are excluded from this Exhibit A.  In the case of a denial of benefits under any of the Company’s employee welfare benefit or pension plans, the filing and appeal procedures in those plans must be utilized.  Claims by the Company or Employee for injunctive or other relief for violations of non-competition and/or confidentiality agreements are also specifically excluded from this Exhibit A.

 

4.                                      Non-Waiver of Substantive Rights.  This Exhibit A does not waive any rights or remedies available under applicable statutes or common law.  However, it does waive Employee’s right to pursue those rights and remedies in a judicial forum.  By signing the acknowledgment at the end of this Exhibit A, the undersigned Employee voluntarily agrees to arbitrate his or her claims covered by this Exhibit A. This Exhibit A also does not waive the Employee’s right to file a charge or complaint with any federal or state agency, including with the Equal Employment Opportunity Commission.

 

5.                                      Time Limit to Pursue Arbitration; Initiation:  To ensure timely resolution of disputes, Employee and the Company must initiate arbitration within the statute of limitations (deadline for filing) provided for by applicable law pertaining to the claim.  The failure to initiate arbitration within this time limit will bar any such claim.  Any aggrieved party is encouraged to give written notice of any claim as soon as possible after the event(s) in dispute so that arbitration of any differences may take place promptly.  The parties agree that the aggrieved party must, within the time frame provided by this Exhibit A, give written notice of a claim to the other party.  If the Employee is the aggrieved party, notice must be given to the President of the Company with a copy to MGM Resorts International’s Executive Vice President and General Counsel.  If the Company is the aggrieved party, notice must be given to the Employee at the last known address provided by Employee.  The written notice shall identify and describe the nature of the claim, the supporting facts and the relief or remedy sought.

 

6.                                      Selecting an Arbitrator:  This Exhibit A mandates Arbitration under the then current rules of the Judicial Arbitration and Mediation Service (JAMS) regarding employment disputes.  The arbitrator shall be either a retired judge or an attorney experienced in employment law and licensed to practice in the state in which arbitration is convened.  The parties shall select one arbitrator from among a list of seven qualified neutral arbitrators provided by JAMS.  If the parties are unable to agree on the arbitrator, each party shall strike one name and the remaining named arbitrator shall be selected.

 

 

7.                                      Representation/Arbitration Rights and Procedures:

 

a.              Employee may be represented by an attorney of Employee’s choice at Employee’s own expense.

 

b.              The arbitrator shall apply the substantive law (and the law of remedies, if applicable) of Nevada (without regard to its choice of law provisions) and/or federal law when applicable.  In all cases, this Exhibit A shall provide for the broadest level of arbitration of claims between an employer and employee under Nevada law.  The arbitrator is without jurisdiction to apply any different substantive law or law of remedies.

 

c.               The arbitrator shall have no authority to award non-economic damages or punitive damages except where such relief is specifically authorized by an applicable state or federal statute or common law.  In such a situation, the arbitrator shall specify in the award the specific statute or other basis under which such relief is granted.

 

d.              The applicable law with respect to privilege, including attorney-client privilege, work product, and offers to compromise must be followed.

 

e.               The parties shall have the right to conduct reasonable discovery, including written and oral (deposition) discovery and to subpoena and/or request copies of records, documents and other relevant discoverable information consistent with the procedural rules of JAMS.  The arbitrator shall decide disputes regarding the scope of discovery and shall have authority to regulate the conduct of any hearing and/or trial proceeding.  The parties shall have the right to file a motion to dismiss and a motion for summary judgment, and the arbitrator shall entertain such motions.

 

f.                The parties shall exchange witness lists at least 30 days prior to the trial/hearing procedure.  The arbitrator shall have subpoena power so that either Employee or the Company may summon witnesses.  The arbitrator shall use the Federal Rules of Evidence.  Both parties have the right to file a post hearing brief.  Any party, at its own expense, may arrange for and pay the cost of a court reporter to provide a stenographic record of the proceedings.

 

g.               Any arbitration hearing or proceeding shall take place in private, not open to the public, in Las Vegas, Nevada, except that if the Employee is employed by the Company in the United States but outside Clark County, Nevada, the arbitration hearing or proceeding shall take place in the county and State in which Employee is employed or was last employed.

 

8.                                      Arbitrator’s Award: The arbitrator shall issue a written decision containing the specific issues raised by the parties, the specific findings of fact, and the specific conclusions of law.  The award shall be rendered promptly, typically within 30 days after conclusion of the arbitration 

 

 

hearing, or the submission of post-hearing briefs if requested.  The arbitrator may not award any relief or remedy in excess of what a court could grant under applicable law.  The arbitrator’s decision is final and binding on both parties.  Judgment upon an award rendered by the arbitrator may be entered in any court having competent jurisdiction.

 

a.              Either party may bring an action in any court of competent jurisdiction to compel arbitration under this Exhibit A and to confirm, enforce, vacate or modify an arbitration award.

 

b.              In the event of any administrative or judicial action by any agency or third party to adjudicate a claim on behalf of Employee which is subject to arbitration under this Exhibit A, Employee hereby waives the right to participate in any monetary or other recovery obtained by such agency or third party in any such action, and Employee’s sole remedy with respect to any such claim shall be any award decreed by an arbitrator pursuant to the provisions of this Exhibit A.

 

9.                                      Fees and Expenses: The Company shall be responsible for paying any filing fee and the fees and costs of the arbitrator.  Employee and the Company shall each pay for their own expenses, attorney’s fees (a party’s responsibility for his/her/its own attorney’s fees is only limited by any applicable statute specifically providing that attorney’s fees may be awarded as a remedy), and costs and fees regarding witness, photocopying and other preparation expenses.  If any party prevails on a statutory claim that affords the prevailing party attorney’s fees and costs, or if there is a written agreement providing for attorney’s fees and/or costs, the arbitrator may award reasonable attorney’s fees and/or costs to the prevailing party, applying the same standards a court would apply under the law applicable to the claim(s).

 

10.                               The arbitration provisions of this Exhibit A shall survive the termination of Employee’s employment with the Company and the expiration of the agreement or policy, as applicable.  These arbitration provisions can only be modified or revoked in a writing signed by both parties and which expressly states an intent to modify or revoke the provisions of this Exhibit A.

 

11.                               The arbitration provisions of this Exhibit A do not alter or affect the termination provisions of the COC Policy or any agreement between the Company and Employee.

 

12.                               Capitalized terms not defined in this Exhibit A shall have the same definition as in the memorandum to which this is Exhibit A.

 

13.                               If any provision of this Exhibit A is adjudged to be void or otherwise unenforceable, in whole or in part, such adjudication shall not affect the validity of the remainder of Exhibit A.  All other provisions shall remain in full force and effect.

 

 

ACKNOWLEDGMENT

 

BOTH PARTIES ACKNOWLEDGE THAT:  THEY HAVE CAREFULLY READ THIS EXHIBIT A IN ITS ENTIRETY, THEY UNDERSTAND ITS TERMS, EXHIBIT A CONSTITUTES A MATERIAL TERM AND CONDITION OF THE AGREEMENT BETWEEN THE PARTIES TO WHICH IT IS EXHIBIT A, AND THEY AGREE TO ABIDE BY ITS TERMS.

 

The parties also specifically acknowledge that by agreeing to the terms of this Exhibit A, they are waiving the right to pursue claims covered by this Exhibit A in a judicial forum and instead agree to arbitrate all such claims before an arbitrator without a court or jury.  It is specifically understood that this Exhibit A does not waive any rights or remedies which are available under applicable state and federal statutes or common law. Both parties enter into this Exhibit A voluntarily and not in reliance on any promises or representation by the other party other than those contained in this Exhibit A.

 

Employee further acknowledges that Employee has been given the opportunity to discuss this Exhibit A with Employee’s private legal counsel and that Employee has availed himself/herself of that opportunity to the extent Employee wishes to do so.

 

 

	
EMPLOYEE
    	
 
    	
COMPANY
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:

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