Document:

ex10-1.htm

    Exhibit
10.1

     

    
      _____________________________

      

      EMPLOYMENT
AGREEMENT

      _____________________________

      

      THIS EMPLOYMENT AGREEMENT
(“Agreement”) is made
and entered into as of the 5th day of May 2009, by and between WYNN LAS VEGAS, LLC (“Employer”) and SCOTT PETERSON (“Employee”).

      

      W I T N E S S E T
H:

      

      WHEREAS,
Employer is a limited liability company duly organized and existing under the
laws of the State of Nevada, maintains its principal place of business at 3131
Las Vegas Boulevard South, Las Vegas, Nevada 89109, and is engaged in the
business of developing, owning and operating a casino resort at such place of
business; and,

      

      WHEREAS, Employee is a party
to that certain Employment Agreement dated as of June 27,2005, as amended (the
“Prior Employment
Agreement”) with Worldwide Wynn, LLC (“WWW”), a affiliate of
Employer;

      

      WHEREAS, Employee and WWW have
agreed to terminate the Prior Employment Agreement in order to permit Employer
and Employee to enter into this Agreement;

      

      WHEREAS,
in furtherance of its business, Employer has need of qualified, experienced
personnel;

      

      WHEREAS,
Employee is an adult individual residing in Clark County, Nevada;

      

      WHEREAS,
Employee has represented and warranted to Employer that Employee possesses
sufficient qualifications and expertise in order to fulfill the terms of the
employment stated in this Agreement; and,

      

      WHEREAS,
Employer is willing to employ Employee, and Employee is desirous of accepting
employment from Employer under the terms and pursuant to the conditions set
forth herein.

      

      NOW,
THEREFORE, for and in consideration of the foregoing recitals, and in
consideration of the mutual covenants, agreements, understandings, undertakings,
representations, warranties and promises hereinafter set forth, and intending to
be legally bound thereby, Employer and Employee do hereby covenant and agree as
follows:

      

      1.           DEFINITIONS.  As used in this
Agreement, the words and terms hereinafter defined have the respective meanings
ascribed to them, unless a different meaning clearly appears from the
context:

      

      (a)           “Affiliate”
- means with respect to a specified Person, any other Person who or which is (i)
directly or indirectly controlling, controlled by or under common control with
the specified Person, or (ii) any member, director, officer or manager of the
specified Person.  For purposes of this 

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      definition
only, “control”, “controlling” and “controlled” mean the right to exercise,
directly or indirectly, more than fifty percent (50%) of the voting power of the
stockholders, members or owners and, with respect to any individual,
partnership, trust or other entity or association, the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of the controlled entity.  For purposes hereof, “Person”
shall mean an individual, partnership, corporation, limited liability company,
business trust, joint stock company, trust, unincorporated association, joint
venture or other entity of whatever nature.

      

      (b)           “Anniversary”
- means each anniversary date of the Effective Date during the Term (as defined
in Section 5 hereof).

      

      (c)           “Cause”
- means

      

      (i)           Employee’s
inability or failure to secure and/or maintain any licenses or permits required
by government agencies with jurisdiction over the business of Employer or its
Affiliate;

       

      (ii)           the
willful destruction by Employee of the property of Employer or its Affiliate
having a material value to Employer or such Affiliate;

       

      (iii)           fraud,
embezzlement, theft, or dishonest activity committed by Employee (excluding acts
involving a de minimis
dollar value and not related in any manner whatsoever to Employer or its
Affiliate or their business);

       

      (iv)           Employee’s
conviction of or entering a plea of guilty or nolo contendere to any crime
constituting a felony or any misdemeanor involving fraud, dishonesty or moral
turpitude (excluding acts involving a de minimis dollar value and
not related in any manner whatsoever to Employer or its Affiliate of their
business);

       

      (v)           Employee’s
breach of this Agreement;

       

      (vi)           Employee’s
neglect, refusal, or failure to discharge Employee’s duties (other than due to
physical or mental illness) commensurate with Employee’s title and function, or
Employee’s failure to comply with the lawful directions of
Employer;

       

      (vii)           Employee’s
failure or refusal to perform Employee’s duties within the expectations of
Employer or its Affiliate;

       

       

      
        
          
          

        

        
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      (viii)           a
knowing material misrepresentation to Employer;

       

      (ix)           a
willful failure to follow a material policy or procedure of Employer or its
Affiliate;

      

      (x)           Employee’s
material violation of a statute, regulation or common law, whether federal,
state or local, which applies to and/or governs the business of Employer or its
Affiliate;

      

      (xi)           Employee’s
material breach of a statutory or common law duty of loyalty or fiduciary duty
to Employer or its Affiliate including but not limited to Employer’s conflict of
interest policy; or

      

      (xii)           conduct
by Employee which adversely and materially reflects upon the business, affairs
or reputation of Employer and its affiliate,

      

      provided, however, that Employee’s complete
disability due to illness or accident or any other mental or physical incapacity
shall not constitute “Cause” as defined herein.

      

      (d)           “Change of
Control” - means the occurrence, after the Effective Date, of any of the
following events:

      

      (i)           any
"Person" or "Group" (as such terms are defined in Section 13(d) of the
Securities Exchange Act of 1934 (the "Exchange Act") and the rules
and regulations promulgated thereunder), excluding any Excluded Stockholder, is
or becomes the "Beneficial Owner" (within the meaning of Rule 13d-3
promulgated under the Exchange Act), directly or indirectly, of securities of
Wynn Resorts, Limited (“WRL”), or of any entity
resulting from a merger or consolidation involving WRL, representing more than
fifty percent (50%) of the combined voting power of the then outstanding
securities of WRL or such entity;

       

      (ii)           the
individuals who, as of the Effective Date,  are members of WRL’s Board
of Directors (the "Existing
Directors") cease, for any reason, to constitute more than fifty percent
(50%) of the number of authorized directors of WRL as determined in the manner
prescribed in WRL’s Articles of Incorporation and Bylaws; provided, however,
that if the election, or nomination for election, by WRL's stockholders of any
new director was approved by a vote of at least fifty percent (50%) of the
Existing Directors, such new director shall be considered an Existing Director;

       

      
        
          
          

        

        
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      provided
further, however,
that no individual shall be considered an Existing Director 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 Exchange Act)
or other actual or threatened solicitation of proxies by or on behalf of anyone
other than the Board (a "Proxy
Contest"), including by reason of any agreement intended to avoid or
settle any Election Contest or Proxy Contest; or

       

      (iii)           the
consummation of (x) a merger, consolidation or reorganization to which WRL
is a party, whether or not WRL is the Person surviving or resulting therefrom,
or (y) a sale, assignment, lease, conveyance or other disposition of all or
substantially all of the assets of WRL, in one transaction or a series of
related transactions, to any Person other than WRL, where any such transaction
or series of related transactions as is referred to in clause (x) or
clause (y) above in this subsection (iii) (singly or collectively, a
"Transaction") does not
otherwise result in a "Change in Control" pursuant to subsection (i) of
this definition of "Change in Control"; provided, however,
that no such Transaction shall constitute a "Change in Control" under this
subsection (iii) if the Persons who were the stockholders of WRL
immediately before the consummation of such Transaction are the Beneficial
Owners, immediately following the consummation of such Transaction, of fifty
percent (50%) or more of the combined voting power of the then outstanding
voting securities of the Person surviving or resulting from any merger,
consolidation or reorganization referred to in clause (x) above in this
subsection (iii) or the Person to whom the assets of WRL are sold,
assigned, leased, conveyed or disposed of in any transaction or series of
related transactions referred in clause (y) above in this
subsection (iii), in substantially the same proportions in which such
Beneficial Owners held voting stock in WRL immediately before such
Transaction.

       

      For
purposes of the foregoing definition of “Change in Control,” the term “Excluded
Stockholder” means Stephen A. Wynn, Elaine P. Wynn, and their respective
spouses, siblings, children, grandchildren or great grandchildren, any trust
primarily for the benefit of the foregoing persons, or any Affiliate of any of
the foregoing persons.

       

       (e)           “Complete
Disability” - means the inability of Employee, due to illness or accident
or other mental or physical incapacity, to perform Employee’s obligations under
this Agreement for a period as defined by Employer’s local disability plan or
plans.

       

      
        
          
          

        

        
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      (f)           “Confidential
Information” - means any
information that is possessed or developed by or for Employer or its Affiliate
and which relates to the Employer’s or Affiliate’s existing or potential
business or technology, which is not generally known to the public or to persons
engaged in business similar to that conducted or contemplated by Employer or
Affiliate, or which Employer or Affiliate seeks to protect from disclosure to
its existing or potential competitors or others, and includes without limitation
know how, business and technical plans, strategies, existing and proposed bids,
costs, technical developments, purchasing history, existing and proposed
research projects, copyrights, inventions, patents, intellectual property, data,
process, process parameters, methods, practices, products, product design
information, research and development data, financial records, operational
manuals, pricing and price lists, computer programs and information stored or
developed for use in or with computers, customer information, customer lists,
supplier lists, marketing plans, financial information, financial or business
projections, and all other compilations of information which relate to the
business of Employer or Affiliate, and any other proprietary material of
Employer or Affiliate, which have not been released to the general
public.  Confidential Information also includes information received
by Employer or any of its Affiliates from others that the Employer or Affiliate
has an obligation to treat as confidential.

      

      (g)           “Effective
Date” –
April 20, 2009.

      

      (h)           “Good
Reason” - means the occurrence, on or after the occurrence of a Change in
Control, of any of the following (except with Employee’s written consent or
resulting from an isolated, insubstantial and inadvertent action not taken in
bad faith and which is remedied by Employer or its Affiliate promptly after
receipt of notice thereof from Employee):

      

      (i)           Employer
or an Affiliate reduces Employee’s Base Salary (as defined in Subsection 8(a)
below);

       

      (ii)           Employer
discontinues its bonus plan in which Employee participates as in effect
immediately before the Change in Control without immediately replacing such
bonus plan with a plan that is the substantial economic equivalent of such bonus
plan, or amends such bonus plan so as to materially reduce Employee’s potential
bonus at any given level of economic performance of Employer or its successor
entity;

       

      (iii)           Employer
materially reduces the aggregate benefits and perquisites to Employee from those
being provided immediately before the Change in Control;

       

      
        
          
          

        

        
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       (iv)           Employer
or any of its Affiliates reduces Employee’s responsibilities or directs Employee
to report to a person of lower rank or responsibilities than the person to whom
Employee reported immediately before the Change in Control; or

       

      (v)           the
successor to Employer fails or refuses expressly to assume in writing the
obligations of Employer under this Agreement.

      

      (g)      ”Original
Hire Date” – means April 5,
1993.

      (i)          ”Separation
Payment” - means a lump sum equal to
(A) one year of Employee’s Base Salary (as defined in Subsection 8(a) of this
Agreement) plus (B) the bonus (specifically excluding any special or one time
bonus) that was paid to Employee under Subparagraph 7(b) for the preceding
annual bonus period, plus (C) any accrued but unpaid vacation pay plus (D) any
Gross-Up Payment required by Exhibit B to this Agreement, which is incorporated
herein by reference, said sum to be paid out over twelve (12) months in such
weekly, bi-weekly or semi-monthly installments as shall be convenient to
Employer.

      

      (j)           “Trade
Secrets” - means unpublished inventions or works of
authorship, as well as all information possessed by or developed by or for
Employer or its Affiliate, including without limitation any formula, pattern,
compilation, program device, method, technique, product, system, process,
design, prototype, procedure, computer programming or code that (i) derives
independent economic value, actual or potential, from not being generally known
to, and not being readily ascertainable by proper means by the public or other
persons who can obtain economic value from its disclosure or use; and (ii) is
the subject of efforts that are reasonable to maintain its
secrecy.

      

      (k)           “Work
of Authorship” - means any
computer program, code or system as well as any literary, pictorial, sculptural,
graphic or audio visual work, whether published or unpublished, and whether
copyrightable or not, in whatever form and jointly with others that (i) relates
to any of Employer’s or its Affiliate’s existing or potential products,
practices, processes, formulations, manufacturing, engineering, research,
equipment, applications or other business or technical activities or
investigations; or  (ii) relates to ideas, work or investigations
conceived or carried on by Employer or its Affiliate or by Employee in
connection with or because of performing services for Employer or its
Affiliate.

      

      2.           BASIC
EMPLOYMENT AGREEMENT.  Subject to the terms
and pursuant to the conditions hereinafter set forth, Employer hereby employs
Employee during the Term hereinafter specified to serve in a capacity, under a
title, and with such duties not inconsistent with those set forth in Section 3
of this Agreement, as the same may be modified and/or assigned to Employee by
Employer from time to time; provided, however, 

       

      
        
          
          

        

        
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      that no
change in Employee’s duties shall be permitted if it would result in a material
reduction in the level of Employee’s duties as in effect prior to the change, it
being understood, however, that a change in Employee’s reporting
responsibilities is not, itself, a basis for finding a material reduction in the
level of duties.

      

      3.           DUTIES
OF EMPLOYEE.  Employee shall perform
such duties assigned to Employee by Employer as are generally associated with
the duties of Senior
Vice President and Chief
Financial Officer for Employer or such similar duties as may be assigned
to Employee by Employer as Employer may determine.  Employee’s duties
shall include, but not be limited to:  (i) the efficient and
continuous operation of Employer and its Affiliates; (ii) the preparation of
relevant budgets and allocation or relevant funds; (iii) the selection and
delegation of duties and responsibilities of subordinates; (iv) the direction,
review and oversight of all programs under Employee’s supervision; and (v) such
other and further duties as may be assigned by Employer to Employee from time to
time.  The foregoing notwithstanding, Employee shall devote such time
to Employer or its Affiliates as may be required by Employer, provided such
duties are not inconsistent with Employee’s primary duties to Employer
hereunder.

      

      4.           ACCEPTANCE
OF EMPLOYMENT/ TERMINATION OF PRIOR EMPLOYMENT AGREEMENT.  Employee hereby
unconditionally accepts the employment set forth hereunder, under the terms and
pursuant to the conditions set forth in this Agreement.  Employee
hereby covenants and agrees that, during the Term, Employee will devote the
whole of Employee’s normal and customary working time and best efforts solely to
the performance of Employee’s duties under this Agreement and that, except upon
Employer’s prior express written authorization to that effect, Employee shall
not perform any services for any casino, hotel/casino or other similar gaming or
gambling operation not owned by Employer or any of Employer’s
Affiliates.

      

      As a
condition to the acceptance of the employment hereunder and concurrent the
execution of this Agreement, Employee agrees that as of the Effective Date and
concurrent with the effectiveness of this Agreement Employee agrees to terminate
the Prior Employment Agreement by executing and delivering the Termination
Agreement attached hereto as Exhibit
A.

      

      5.           TERM.  Unless sooner
terminated as provided in this Agreement, the term of this Agreement (the “Term”) shall consist of three
years commencing on the Effective Date of this Agreement and terminating on the
third Anniversary of the Effective Date at which time the terms of this
Agreement shall expire and shall not apply to any continued employment of
Employee by Employer, except for those obligations under Paragraphs 9 and
10.  Following the Term, unless the parties enter into a new written
contract of employment, (a) any continued employment of Employee shall be
at-will, (b) any or all of the other terms and conditions of Employee’s
employment may be changed by Employer at its discretion, with or without notice,
and (c) the employment relationship may be terminated at any time by either
party, with or without cause or notice.

      

      Concurrent
with Employee’s resignation from Employer or upon the termination of Employee’s
employment with Employer, Employee agrees to resign, and shall be deemed to have
resigned, all other positions (including but not limited to board of

       

      
        
          
          

        

        
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      director
memberships) that Employee may have held with Employer and any affiliates of
Employer immediately prior to Employee’s resignation or
termination.

      

      6.           SPECIAL
TERMINATION PROVISIONS.  Notwithstanding
the provisions of Section 5, this Agreement shall terminate upon the occurrence
of any of the following events:

      

      (a)           the
death of Employee; or

      

      (b)           the
giving of written notice from Employer to Employee of the termination of this
Agreement upon the Complete Disability of Employee; or

      

      (c)           the
giving of written notice by Employer to Employee of the termination of this
Agreement upon the discharge of Employee for Cause (Employer’s right to
terminate for Cause (as defined in Section 1(c) shall survive the expiration of
this Agreement); or

      

       (d)           the
giving of written notice by Employer to Employee of the termination of this
Agreement following a disapproval of this Agreement or the denial, suspension,
limitation or revocation of Employee’s License (as defined in Subsection 8(b) of
this Agreement); or

      

      (e)           the
giving of written notice by Employee to Employer upon a material breach of this
Agreement by Employer, which material breach remains uncured for a period of
thirty (30) days after the giving of such notice.   “Material
breach” under this Section 6(e) shall not be construed to include temporary
suspension of the Employee from duty, pursuant to Employer’s policy, pending
investigation by Employer of any incident or occurrence that could give rise to
discipline or termination of employment;

      

      (f)           at
Employee’s sole election in writing as provided in Section 17 of this Agreement,
after both a Change of Control and as a result of Good Reason, provided, however, that,
within ten (10) calendar days after Employer’s receipt of Employee’s written
election, Employer must tender the Separation Payment to Employee;
or

      

      (g)           the
giving of written notice by Employer to Employee of immediate termination of
this Agreement Without Cause for any reason deemed sufficient by
Employer.  In the event of termination Without Cause, Employer’s sole
liability to Employee shall be (i) continued payment of Employee’s Base Salary
for that period of time equal to one-half the number of months remaining in the
Term of this Agreement following the effective date of termination (which in no
event shall be greater than twelve months or less than three months), calculated
at the Base Salary rate in force on the effective date of termination, plus (ii)
a monthly amount equal to one twelfth of the cash bonus amount (specifically
excluding any special or one time bonus) that was paid to Employee under
Subparagraph 7(b) for the preceding annual bonus period for the same period
of time that the Base Salary payments are made under Section 

       

      
        
          
          

        

        
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      6(g)(i).  Both
the Base Salary and bonus amounts shall paid according to the usual payroll
schedule in force for all employees of Employer less deductions of all
applicable taxes and withholdings.  Employee shall not be entitled to
payment of continued Base Salary or bonus amount unless and until Employee first
executes a written release-severance agreement, prepared and presented by
Employer, that fully releases Employer, Affiliates, and their officers,
directors, agents and employees, from any and all claims or causes of action,
whether based upon statute, contract (including without limitation breach or
construction of this Agreement), or common law, that have arisen as of the date
of such execution, irrespective of whether Employee has knowledge of the
existence of such claim; and provides for the confidentiality of both the terms
of the release-severance agreement and the compensation paid.  In the
event Employee fails or refuses to execute such release-severance agreement,
Employer shall have no further obligation to Employee other than payment of all
accrued but unpaid Base Salary through the date Employee last performs services
for Employer and vacation pay accrued but unpaid and expenses incurred but not
reimbursed through the termination date; specifically, in such event, Employee
shall not be entitled to any benefits pursuant to any severance plan in effect
by Employer or any of its Affiliates.

      

      In the
event of a termination of this Agreement pursuant to the provisions of
Subsection 6(a), (b), (c), or (d), Employer shall not be required to make
any payments to Employee other than payment of Base Salary and vacation pay
accrued but unpaid and expenses incurred but not reimbursed through the
termination date; specifically, in such event, Employee shall not be entitled to
any benefits pursuant to any severance plan in effect by Employer or any of its
Affiliates.

      

      It is
expressly acknowledged and agreed that the decision as to whether “Cause” exists
for termination of the employment relationship by Employer is delegated to the
Employer’s President.  If Employee disagrees with the decision reached
by Employer’s President, any dispute as to the “Cause” determination will be
limited to whether Employer’s President reached his/her decision in good faith,
based upon facts reasonably believed by Employer’s President to be true, and not
for any arbitrary, capricious or illegal reason,.  This shall be the
standard applied by any fact finder, and Employee shall bear the burden to prove
that “Cause,” under this standard, did not exist.

      

      7.           COMPENSATION
TO EMPLOYEE.  For
and in complete consideration of Employee's full and faithful performance of
Employee’s duties under this Agreement, Employer hereby covenants and agrees to
pay to Employee, and Employee hereby covenants and agrees to accept from
Employer, the following items of compensation:

      

      (a)           Base
Salary.
  Employer hereby covenants and agrees to pay to Employee, and
Employee hereby covenants and agrees to accept from Employer, a base salary at
the rate of Four Hundred Thousand Dollars and No Cents ($400,000.00) per annum,
payable in such installments as shall be convenient to Employer (the “Base
Salary”).  Employee shall be subject to performance reviews and
the Base Salary may be increased but not decreased as a result of any such
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      Base
Salary shall be exclusive of and in addition to any other benefits which
Employer, in its sole discretion, may make available to Employee, including, but
not limited to, any discretionary bonus, profit sharing plan, pension plan,
retirement plan, disability or life insurance plan, medical and/or
hospitalization plan, or any and all other benefit plans which may be in effect
during the Term.

      

      (b)           Bonus
Compensation.  Employee will be
eligible to receive a bonus at such times and in such amounts as Employer in its
sole and exclusive discretion may determine.  Employer retains the
discretion to adopt, amend or terminate any bonus plan at any time.

      

      (c)           Employee
Benefit Plans. 
Employer hereby covenants and agrees that it shall include Employee, if
otherwise eligible, in any profit sharing plan, pension plan, retirement plan,
disability or life insurance plan, medical and/or hospitalization plan, and any
other benefit plan which may be placed in effect by Employer or any of its
Affiliates and generally available to Employer’s employees during the
Term.  All issues as to eligibility for specific benefits and payment
of benefits shall be as set forth in the applicable insurance policies or plan
documents. Nothing in this Agreement shall limit Employer’s or any of its
Affiliates’ ability to exercise the discretion provided to it under any employee
benefit plan, or to adopt, amend or terminate any benefit plan at any
time.

      

      (d)           Expense
Reimbursement.  During the Term
and provided the same are authorized in advance by Employer, Employer shall
either pay directly or reimburse Employee for Employee’s reasonable expenses
incurred for the benefit of Employer in accordance with Employer’s general
policy regarding expense reimbursement, as the same may be modified from time to
time.  Prior to such payment or reimbursement, Employee shall provide
Employer with sufficient detailed invoices of such expenses as may be required
by Employer’s policy.

      

      (e)           Vacations
and Holidays.  Commencing as of
the Effective Date of this Agreement, Employee shall be entitled to (i) four (4)
weeks paid vacation leave during each 12 month period of employment in
accordance with Employer’s standard policy, to be taken at such times as
selected by Employee and approved by Employer, and (ii) paid holidays (or,
at Employer’s option, an equivalent number of paid days off) in accordance with
Employer’s standard policy..

      

      (f)           
Withholdings.  All compensation
provided to Employee by Employer under this Section 7 shall be subject to
applicable withholdings for federal, state or local income or other taxes,
Social Security Tax, Medicare Tax, State Unemployment Insurance, State
Disability Insurance, charitable contributions and the like.

      

      With
respect to Employee employment with Worldwide Wynn, LLC (“WWW”) during 2009, Employer
covenants and agrees that Employee shall 

       

      
        
          
          

        

        
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      not be
required to pay any more income tax for his employment with WWW in Macau than he
would have been required to pay on the same amount of compensation had Employee
been employed by Employer in Las Vegas, Nevada, and Employer shall either pay,
or cause WWW to pay, any additional tax or “gross up” as much of Employee’s
compensation as may be necessary to enforce this covenant.

      

      (g)           Immigration
Assistance.  Employer agrees to reimburse Employee for up to
Twenty-Five Thousand Dollars ($25,000.00) in legal fees and expenses (including
airfare related expenses) incurred by Employee due to Employee’s spouse’s
immigration to the United States.

      

      (h)           Original
Hire Date.  Except as
specified in this Agreement, Employee's Original Hire Date shall be used for
determining benefits.

      

      8.           LICENSING
REQUIREMENTS.

      

      (a)           Employer
and Employee hereby covenant and agree that this Agreement and/or Employee’s
employment may be subject to the approval of one or more gaming regulatory
authorities (the “Authorities”) pursuant to the
provisions of the relevant gaming regulatory statutes (the “Gaming Acts”) and the
regulations promulgated thereunder (the “Gaming
Regulations”).  Employer and Employee hereby covenant and agree
to use their best efforts to obtain any and all approvals required by the Gaming
Acts and/or Gaming Regulations.  In the event that (i) an approval of
this Agreement or Employee’s employment by the Authorities is required for
Employee to carry out Employee’s duties and responsibilities set forth in
Section 3 of this Agreement, (ii) Employer and Employee have used their best
efforts to obtain such approval, and (iii) this Agreement or employee’s
employment is not so approved by the Authorities, then this Agreement shall
immediately terminate and shall be null and void, thus extinguishing any and all
obligations of Employer.

      

      (b)           If
applicable, Employer and Employee hereby covenant and agree that, in order for
Employee to discharge the duties required under this Agreement, Employee must
apply for or hold a license, registration, permit or other approval (the “License”) as issued by the
Authorities pursuant to the terms of the relevant Gaming Act and as otherwise
required by this Agreement.  In the event Employee fails to apply for
and secure, or the Authorities refuse to issue or renew Employee’s License,
Employee, at Employer’s sole cost and expense, shall promptly defend such action
and shall take such reasonable steps as may be required to either remove the
objections or secure or reinstate the Authorities’ approval,
respectively.  The foregoing notwithstanding, if the source of the
objections or the Authorities’ refusal to renew or maintain Employee’s License
arise as a result of any of the events described in Subsection 1(c) of this
Agreement, then Employer’s obligations under this Section 8 also shall not
be operative and Employee shall promptly reimburse Employer upon demand for any
expenses incurred by Employer pursuant to this Section 8.

      

      
        
          
          

        

        
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      (c)           Employer
and Employee hereby covenant and agree that the provisions of this
Section 8 shall apply in the event Employee’s duties require that Employee
also be licensed by governmental agencies other than the
Authorities.

      

      
        
          	
                          9.

                	
                  CONFIDENTIALITY.

                

        

      

      

      (a)           Employee hereby warrants,
covenants and agrees that Employee
shall not directly or indirectly use or disclose any Confidential Information,
Trade Secrets, or Works of Authorship, whether in written, verbal, electronic,
or model form, at any time or in any manner, except as required in the conduct
of Employer’s business or as expressly authorized by Employer in
writing.   Employee shall take all necessary and available
precautions to protect against the unauthorized disclosure of Confidential
Information, Trade Secrets, or Works of Authorship.  Employee
acknowledges and agrees that such Confidential Information, Trade Secrets, or
Works of Authorship are the sole and exclusive property of Employer or its
Affiliate.

      

      (b)           Employee shall not remove from
Employer’s premises any Confidential Information, Trade Secrets, Works of
Authorship, or any other documents pertaining to Employer’s or its Affiliate’s
business, unless expressly authorized by Employer in writing. Furthermore,
Employee specifically covenants and agrees not to make any duplicates, copies,
or reconstructions of such materials and that, if any such duplicates, copies,
or reconstructions are made, they shall become the property of Employer or its
Affiliate upon their creation.

      

      (c)           Upon termination of Employee’s
employment with Employer for any reason, Employee shall turn over to Employer
the originals and all copies of any and all papers, documents and things,
including information stored for use in or with computers and software, all
files, Rolodex cards, phone books, notes, price lists, customer contracts, bids,
customer lists, notebooks, books, memoranda, drawings, computer disks or drives,
or other documents: (i) made, compiled by, or delivered to Employee
concerning any customer served by Employer or its Affiliate or any product,
apparatus, or process manufactured, used, developed or investigated by Employer;
(ii) containing any Confidential Information, Trade Secret or Work of
Authorship; or (iii) otherwise relating to Employee’s performance of duties
under this Agreement.  Employee further acknowledges and agrees that
all such documents are the sole and exclusive property of Employer or its
Affiliate.

      

      (d)           Employee
hereby warrants, covenants and agrees that Employee shall not disclose to
Employer, or any Affiliate, officer, director, employee or agent of Employer,
any proprietary or confidential information or property, including but not
limited to any trade secret, formula, pattern, compilation, program, device,
method, technique or process, which 

       

      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

      Employee
is prohibited by contract, or otherwise, to disclose to Employer (the “Restricted
Information”).  In the event Employer requests Restricted
Information from Employee, Employee shall advise Employer that the information
requested is Restricted Information and may not be disclosed by
Employee.

      

      (e)           The obligations of this Section 9 are
continuing and shall survive the termination of Employee’s employment with
Employer for any reason.

      

      10.       RESTRICTIVE COVENANT/NO
SOLICITATION.

      

      (a)           Employee
hereby covenants and agrees that during the Term, or for such period as Employer
continues to employ or compensate Employee, whichever is longer, Employee shall
not, directly or indirectly, either as a principal, agent, employee, employer,
consultant, partner, member of a limited liability company, shareholder of a
closely held corporation, or shareholder in excess of two percent (2%) of a
publicly traded corporation, corporate officer or director, manager, or in any
other individual or representative capacity, engage or otherwise participate in
any manner or fashion in any business that is in competition in any manner
whatsoever with the principal business activity of Employer or its Affiliates,
in or about any market in which Employer or its Affiliates currently operate or
have announced, publicly or otherwise, a plan to have hotel or gaming
operations.

      

      (b)           Employee
hereby further covenants and agrees that, during the Term and for a period of
one (1) year following the expiration of the Term, Employee shall not, directly
or indirectly, solicit or attempt to solicit for employment any management level
employee of Employer or its Affiliates with or on behalf of any business that is
in competition in any manner whatsoever with the principal business activity of
Employer or its Affiliates, in or about any market in which Employer or its
Affiliates operate have publicly announced, publicly or otherwise, a plan to
have hotel or gaming operations.

      

      (c)           Employee
hereby further covenants and agrees that the restrictive covenants contained in
this Section 10 are reasonable as to duration, terms and geographical area
and that they protect the legitimate interests of Employer, impose no undue
hardship on Employee, and are not injurious to the public. In the event that any
of the restrictions and limitations contained in this Section 10 are deemed to
exceed the time, geographic or other limitations permitted by Nevada law, the
parties agree that a court of competent jurisdiction shall revise any offending
provisions so as to bring this Section 10 within the maximum time, geographical
or other limitations permitted by Nevada law.

      

      11.       REMEDIES.  Employee
acknowledges that Employer has and will continue to deliver, provide and expose
Employee to certain knowledge, information, practices, and procedures possessed
or developed by or for Employer at a considerable 

       

      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

      

      investment
of time and expense, which are protected as confidential and which are essential
for carrying out Employer’s business in a highly competitive
market.  Employee also acknowledges that Employee will be exposed to
Confidential Information, Trade Secrets, Works of Authorship, inventions and
business relationships possessed or developed by or for Employer or its
Affiliates, and that Employer or its Affiliates would be irreparably harmed if
Employee were to improperly use or disclose such items to competitors, potential
competitors or other parties. Employee further acknowledges that the protection
of Employer’s and its Affiliates’ customers and businesses is essential, and
understands and agrees that Employer’s and its Affiliates’ relationships with
its customers and its employees are special and unique and have required a
considerable investment of time and funds to develop, and that any loss of or
damage to any such relationship will result in irreparable
harm.  Consequently, Employee covenants and agrees that any violation by Employee of Section 9 or
10 shall entitle Employer to immediate injunctive relief in a court of competent
jurisdiction.  Employee further agrees that no cause of action for
recovery of materials or for breach of any of Employee’s representations,
warranties or covenants shall accrue until Employer or its Affiliate has actual
notice of such breach.

      

      12.       BEST
EVIDENCE.  This Agreement shall
be executed in original and “Xerox” or photostatic copies and each copy bearing
original signatures in ink shall be deemed an original.

      

      13.       SUCCESSION.  This
Agreement shall be binding upon and inure to the benefit of Employer and
Employee and their respective successors and assigns.

      

      14.       ASSIGNMENT.  Employee
shall not assign this Agreement or delegate Employee’s duties hereunder without
the express written prior consent of Employer thereto.  Any purported
assignment by Employee in violation of this Section 14 shall be null and
void and of no force or effect.  Employer shall have the right to
assign this Agreement freely, including without limitation Employee’s
obligations under Section 10, and Employee hereby acknowledges receipt of
consideration in exchange for Employee’s consent to the assignability of
Employee’s obligations under Section 10 that is additional to and separate from
the consideration provided to Employee exchange for the other covenants in this
Agreement.

      

      15.       AMENDMENT
OR MODIFICATION.  This Agreement may not
be amended, modified, changed or altered except by a writing signed by both
Employer and Employee.

      

      16.       GOVERNING
LAW.  This
Agreement shall be governed by and construed in accordance with the laws of the
State of Nevada, without regard to conflict of laws principles.

      

      17.       NOTICES.  Any
and all notices required under this Agreement shall be in writing and shall be
either hand-delivered or mailed, certified mail, return receipt requested,
addressed to:

      

      
        
          
            
              	 
      	
                      TO
      EMPLOYER:

                    	
                      Wynn
      Las Vegas, LLC

                    
	 
      	 
      	
                      3131
      Las Vegas Boulevard South

                    
	 
      	 
      	
                      Las
      Vegas, Nevada 89109

                    
	 
      	 
      	
                      Attn:
      Legal Department

                    
	 
      	 
      	 
      

            

          

        

      

       

       

      
        
          
          

        

        
          14

          
            

          

        

        
          
          

        

      

       

      
        	
              	 
      	 
      
	 
      	
                TO
      EMPLOYEE:

              	
                Scott
      Peterson

              
	 
      	 
      	
                [intentionally
      omitted]

              
	 
      	 
      	
                      
                  [intentionally
      omitted]

                

              

      All
notices hand-delivered shall be deemed delivered as of the date actually
delivered.  All notices mailed shall be deemed delivered as of three
(3) business days after the date postmarked.  Any changes in any of
the addresses listed herein shall be made by notice as provided in this
Section 17.

      

      18.       INTERPRETATION.  The preamble recitals
to this Agreement are incorporated into and made a part of this Agreement;
titles of paragraphs are for convenience only and are not to be considered a
part of this Agreement.

      

      19.       SEVERABILITY.  In
the event any one or more provisions of this Agreement is declared judicially
void or otherwise unenforceable, the remainder of this Agreement shall survive
and such provision(s) shall be deemed modified or amended so as to fulfill the
intent of the parties hereto.

      

      20.       WAIVER.  None of the terms of
this Agreement, or any term, right or remedy hereunder, shall be deemed waived
unless such waiver is in writing and signed by the party to be charged therewith
and in no event by reason of any failure to assert or delay in asserting any
such term, right or remedy or similar term, right or remedy
hereunder.

      

      21.       DISPUTE
RESOLUTION.  Except for a claim by either Employee or Employer
for injunctive relief where such would be otherwise authorized by law to enforce
Sections 9, 10 and/or 11 of this Agreement, any controversy or claim arising out
of or relating to this Agreement, the breach hereof, or Employee's employment by
Employer, including without limitation any claim involving the interpretation or
application of this Agreement, or claims for wrongful termination,
discrimination, or other claims based upon statutory or common law, shall be
submitted to binding arbitration in accordance with the employment arbitration
rules then in effect of the American Arbitration (“AAA”), to the extent not
inconsistent with this Section as set forth below.  This Section 21
applies to any claim Employee might have against any officer, director,
employee, or agent of Employer or its Affiliate, and all successors and assigns
of any of them. These arbitration provisions shall survive the termination of
Employee’s employment with Employer and the expiration of the
Agreement.

      

      (a)           Coverage
of Arbitration Agreement:   The promises by Employer 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.  The parties contemplate by this Section
21 arbitration of all clams against each of them to the fullest extent permitted
by law except as specifically excluded by this Agreement.  Only claims
that are justiciable or arguably justiciable under applicable federal, state or
local law are covered by this Section, and include, without limitation, any and
all alleged violations of any federal, state or local law whether common law,
statutory, arising under regulation or 

       

      
        
          
          

        

        
          15

          
            

          

        

        
          
          

        

      

      ordinance,
or any other law, brought by any current or former employee.  Such
claims may include, but are not limited to, claims for: wages or other
compensation; breach of contract; torts; work-related injury claims not covered
under workers’ compensation laws; wrongful discharge; and any and all unlawful
employment discrimination and/or harassment claims.  This Section 21
excludes claims under state workers’ compensation or unemployment compensation
statutes; claims pertaining to any of Employer’s employee welfare, insurance,
benefit, and pension plans, with respect to which are applicable the filing and
appeal procedures of such plans shall apply to any denial of benefits; and
claims for injunctive or equitable relief for violations of non-competition
and/or confidentiality agreements in Sections 9, 10 and 11.

      

      (b)           Waiver
of Rights to Pursue Claims in Court and to Jury Trial: This Section 21 does not
in any manner waive any rights or remedies available under applicable statutes
or common law, but does waive Employer’s and Employee's rights to pursue those
rights and remedies in a judicial forum and waive any right to trial by jury of
any claims covered by this Section 21(a).  By signing this Agreement,
the parties voluntarily agree to arbitrate any covered claims against each
other.  In the event of any administrative or judicial action by any
agency or third party to adjudicate, on behalf of Employee, a claim subject to
arbitration, 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 will be any award decreed
by an arbitrator pursuant to the provisions of this Agreement.

      

      (c)           Initiation
of Arbitration:  To commence arbitration of a claim subject to this
Section 21, the aggrieved party must, within the time frame provided in Section
21(d) below, make written demand for arbitration and provide written notice of
that demand to the other party. If a claim is brought by Employee against
Employer, such notice shall be given to Employer’s Legal
Department.  Such written notice must identify and describe the nature
of the claim, the supporting facts, and the relief or remedy
sought.  In the event that either party files an action in any court
to pursue any of the claims covered by this Section 21, the complaint, petition
or other initial pleading commencing such court action shall be considered the
demand for arbitration.  In such event, the other party may move that
court to compel arbitration.

      

      (d)           Time
Limit to Initiate Arbitration: To ensure timely resolution of disputes, Employee
and Employer must initiate arbitration within the statute of limitations
(deadline for filing) provided by applicable law pertaining to the claim, or one
year, whichever is shorter, except that the statute of limitations imposed by
relevant law will solely apply in circumstances where such statute of
limitations cannot legally be shortened by private agreement. The failure to
initiate arbitration within this time limit will bar any such
claim.  The parties understand that Employer and Employee are waiving
any longer statutes of limitations 

       

      
        
          
          

        

        
          16

          
            

          

        

        
          
          

        

      

      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.

      

      (e)           Arbitrator
Selection:  The parties contemplate that, except as specifically set
forth in this Section 21, selection of one (1) arbitrator shall take place
pursuant to the then-current rules of the AAA applicable to employment
disputes.  The arbitrator must be either a retired judge or an
attorney experienced in employment law. The parties will select one arbitrator
from among a list of qualified neutral arbitrators provided by
AAA.  If the parties are unable to agree on the arbitrator, the
parties will select an arbitrator by alternatively striking names from a list of
qualified arbitrators provided by AAA.  AAA will flip a coin to
determine which party has the final strike (that is, when the list has been
narrowed by striking to two arbitrators). The remaining named arbitrator will be
selected.

      

      (f)           Arbitration
Rights and Procedures:  Employee may be represented by an attorney of
his/her choice at his/her own expense.  Any arbitration hearing or
proceeding will take place in private, not open to the public, in Clark County,
Nevada.  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. The arbitrator is without power
or jurisdiction to apply any different substantive law or law of remedies or to
modify any term or condition of this Agreement.  The arbitrator will
have no power or authority to award non-economic damages or punitive damages
except where such relief is specifically authorized by an applicable federal,
state or local statute or ordinance, 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.    The
applicable law with respect to privilege, including attorney-client privilege,
work product, and offers to compromise must be followed.   The
parties will 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 AAA.  The arbitrator will decide disputes
regarding the scope of discovery and will have authority to regulate the conduct
of any hearing.  The arbitrator will have the right to entertain a
motion or request to dismiss, for summary judgment, or for other summary
disposition.   The parties will exchange witness lists at least
30 days prior to the hearing.  The arbitrator will have subpoena power
so that either Employee or Employer may summon witnesses.  The
arbitrator will use the Federal Rules of Evidence in connection with the
admission of all evidence at the hearing.  Both parties shall have the
right to file post-hearing briefs.  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)           Arbitrator’s
Award: The arbitrator will issue a written decision containing the specific
issues raised by the parties, the specific findings of 

       

      
        
          
          

        

        
          17

          
            

          

        

        
          
          

        

      

      fact,
and the specific conclusions of law.  The award will be rendered
promptly, typically within 30 days after conclusion of the arbitration hearing,
or after the submission of post-hearing briefs if requested.  The
arbitrator shall have no power or authority to award any relief or remedy in
excess of what a court could grant under applicable law.  The
arbitrator’s decision shall be final and binding on both
parties.  Judgment upon an award rendered by the arbitrator may be
entered in any court having competent jurisdiction.

      

      (h)           Fees
and Expenses:  Unless the law requires otherwise for a particular
claim or claims, the party demanding arbitration bears the responsibility for
payment of the fee to file with AAA and the fees and expenses of the arbitrator
shall be allocated by the AAA under its rules and procedures. Employee and
Employer shall each pay his/her/its own expenses for presentation of their
cases, including but not limited to attorney’s fees, costs, and fees for
witnesses, photocopying and other preparation expenses.  If any party
prevails on a statutory claim that affords the prevailing party attorney’s fees
and 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.

      

      22.       PAROL.  This Agreement
constitutes the entire agreement between Employer and Employee, and supersedes
any prior understandings, agreements, undertakings or severance policies or
plans by and between Employer or its Affiliates, on the one side, and Employee,
on the other side, with respect to its subject matter or Employee’s employment
with Employer or its Affiliates.   As of the Effective Date, this
Agreement supersedes and replaces any and all prior employment agreements
(including, but not limited to, any prior Employment Agreement), change in
control agreements and severance plans or agreements, whether written or oral,
by and between Employee, on the one side, and Employer or any of Employer’s
Affiliates, on the other side, or under which Employee is a
participant.  From and after the Effective Date, Employee shall be
employed by Employer under the terms and pursuant to the conditions set forth in
this Agreement.

      

      23.       SECTION 409A
PROVISION.  Notwithstanding any provision of the Agreement to
the contrary, if, at the time of Employee’s termination of employment with the
Employer, he or she is a “specified employee” as defined in Section 409A of the
Internal Revenue Code (the “Code”), and one or more of the
payments or benefits received or to be received by Employee pursuant to the
Agreement would constitute deferred compensation subject to Section 409A, no
such payment or benefit will be provided under the Agreement until the earlier
of:  (a) the date that is six (6) months following Employee’s
termination of employment with the Employer or (b) the Employee’s
death.  The provisions of this Section shall only apply to the extent
required to avoid Employee’s incurrence of any penalty tax or interest under
Section 409A of the Code or any regulations or Treasury guidance promulgated
thereunder.  In addition, if any provision of the Agreement would
cause Employee to incur any penalty tax or interest under Section 409A of the
Code or any regulations or Treasury guidance promulgated thereunder, the
Employer may reform such provision to maintain the 

       

      
        
          
          

        

        
          18

          
            

          

        

        
          
          

        

      

      maximum
extent practicable the original intent of the applicable provision without
violating the provisions of Section 409A of the Code.

      

      24.       REVIEW BY PARTIES
AND THEIR LEGAL COUNSEL. The parties represent
that they have read this Agreement and acknowledge that they have discussed its
contents with their respective legal counsel or have been afforded the
opportunity to avail themselves of the opportunity to the extent they each
wished to do so.

      

      IN WITNESS
WHEREOF AND INTENDING TO BE LEGALLY BOUND THEREBY, the parties hereto
have executed and delivered this Agreement as of the year and date first above
written.

      

      
        
          	
                   

                	 
      	
                   

                
	 	
                  WYNN
      LAS VEGAS, LLC

                	 	
                  EMPLOYEE

                
	 
      	 
      	 
      	 
      
	
                  By:

                	
                  /s/
      Andrew Pascal

                	 
      	
                  /s/
      Scott Peterson

                
	 
      	
                  Andrew
      Pascal, President

                	 
      	
                  Scott
      Peterson

                

        

      

      

      

      

      

      

      
        
          
          

        

        
          19

          
            

          

        

        
          
          

        

      

      

      

      

      

      

      

      

      ____________________________________________

      

      EMPLOYMENT
AGREEMENT

      (“Agreement”)

      

      - by
and between -

      

      WYNN
LAS VEGAS, LLC

      (“Employer”)

      

      - and
-

      

      SCOTT
PETERSON

       (“Employee”)

      ____________________________________________

      

      DATED:                      as
of May 5, 2009

      ____________________________________________

      

      

      

      

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      

      EXHIBIT
A

      

      TERMINATION
AGREEMENT

      

      This
Termination Agreement (“Termination Agreement”) is
made and entered into as of the 5th day of May 2009, by and between Scott
Peterson (“Employee”)
and Worldwide Wynn, LLC (“WWW”).

      

      WHEREAS, Employee has entered
into that certain Employment Agreement dated as of June 27, 2005, as amended
(the “Prior Employment
Agreement”) with WWW; and

      

      WHEREAS, Employee has agreed
to enter into an employment agreement with Wynn Las Vegas, LLC (the “WLV Employment Agreement”)
subject to and concurrent with the termination of the Prior Employment
Agreement; and

      

      WHEREAS, Employee and WWW have
agreed to terminate the Prior Employment Agreement concurrent with the
effectiveness of the Macau Employment Agreement.

      

      NOW,
THEREFORE, for and in consideration of the foregoing recitals, and in
consideration of the mutual covenants, agreements, understandings, undertakings,
representations, warranties and promises hereinafter set forth, and intending to
be legally bound thereby, WLV and Employee do hereby covenant and agree as
follows:

      

      
        	
                1.

              	
                TERMINATION OF
      AGREEMENT.  Employee and WLV agree that the Prior
      Employment Agreement shall terminated and be of no further force or effect
      concurrent with the effectiveness of the WLV Employment Agreement which is
      scheduled to be come effective as of April 20,
  2009.

              

      

      

      IN WITNESS
WHEREOF AND INTENDING TO BE LEGALLY BOUND THEREBY, the parties hereto
have executed and delivered this Agreement as of the year and date first above
written.

      

      
        
          
            
              
                
                  	
                          WORLDWIDE
      WYNN, LLC

                        	 
      	
                          EMPLOYEE

                        
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	
                          By:

                        	 
      	 
      	 
      
	 
      	
                          MARC
      D. SCHORR

                        	 
      	
                          SCOTT
      PETERSON

                        
	 	President	 	 

                

              

            

          

        

      

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      EXHIBIT
B

      

      Indemnification and Gross-Up
for Excise Taxes

      

      (a)           Employer
shall indemnify and hold Employee harmless from and against any and all
liabilities, costs and expenses (including, without limitation, attorney's fees
and costs) which Employee may incur as a result of the excise tax imposed by
Section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”) or any similar
provision of state or local income tax law (the "Excise Tax"), to the end that
Employee shall be placed in the same tax position with respect to the Severance
Payment under Employee’s Employment Agreement and all other payments from
Employer to Employee in the nature of compensation as Employee would have been
in if the Excise Tax had never been enacted.  In furtherance of such
indemnification, Employer shall pay to Employee a payment (the "Gross-Up Payment") in an
amount such that, after payment by Employee of all taxes, including income taxes
and the Excise Tax imposed on the Gross-Up Payment and any interest or penalties
(other than interest and penalties imposed by reason of Employee’s failure to
file timely tax returns or to pay taxes shown due on such returns and any tax
liability, including interest and penalties, unrelated to the Excise Tax or the
Gross-Up Amount), Employee shall be placed in the same tax position with respect
to the Severance Payment under this Plan and all other payments from Employer to
Employee in the nature of compensation as Employee would have been in if the
Excise Tax had never been enacted.  When Employer pays Employee’s
Severance Payment, it shall also pay to Employee a Gross-Up Payment for the
Severance Payment and any other payments in the nature of compensation that
Employer determines are "excess parachute payments" under Section 280G(b)(1) of
the Code ("Excess Parachute
Payments").  If, through a determination of the Internal
Revenue Service or any state or local taxing authority (a "Taxing Authority"), or a
judgment of any court, Employee becomes liable for an amount of Excise Tax not
covered by the Gross-Up Payment payable pursuant to the preceding sentence,
Employer shall pay Employee an additional Gross-Up Payment to make Employee
whole for such additional Excise Tax; provided, however, that, pursuant to
paragraph (c), Employer shall have the right to require Employee to protest,
contest, or appeal any such determination or judgment.  For purposes
of this Exhibit B, any amount that Employer is required to withhold under
Sections 3402 or 4999 of the Code or under any other provision of law shall be
deemed to have been paid to Employee.

       

      (b)           Upon
payment to Employee of a Gross-Up Payment, Employer shall provide Employee with
a written statement showing Employer's computation of such Gross-Up Payment and
the Excess Parachute Payments and Excise Tax to which it relates, and setting
forth Employer's determination of the amount of gross income Employee is
required to recognize as a result of such payments and Employee’s liability for
the Excise Tax.  Employee shall cause his or her federal, state, and
local income tax returns for the period in which Employee receive such Gross-Up
Payment to be prepared and filed in accordance with such statement, and, upon
such filing, Employee shall certify in writing to Employer that such returns
have been so prepared and filed.  Notwithstanding the provisions of
paragraph (a), Employer shall not be obligated to indemnify Employee from and
against any tax liability, cost or expense (including, without limitation, any
liability for the Excise Tax or attorney's fees or costs) to the extent

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      such
tax liability, cost or expense is attributable to your failure to comply with
the provisions of this paragraph (b).

       

      (c)           If
any controversy arises between Employee and a Taxing Authority with respect to
the treatment on any return of the Gross-Up Amount, or of any payment Employee
receives from Employer as an Excess Parachute Payment, or with respect to any
return which a Taxing Authority asserts should show an Excess Parachute Payment,
including, without limitation, any audit, protest to an appeals authority of a
Taxing Authority or litigation (a "Controversy"), Employer shall
have the right to participate with Employee in the handling of such
Controversy.  Employer shall have the right, solely with respect to a
Controversy, to direct Employee to protest or contest any proposed adjustment or
deficiency, initiate an appeals procedure within any Taxing Authority, commence
any judicial proceeding, make any settlement agreement, or file a claim for
refund of tax, and Employee shall not take any of such steps without the prior
written approval of Employer, which Employer shall not unreasonably
withhold.  If Employer so elects, Employee shall be represented in any
Controversy by attorneys, accountants, and other advisors selected by Employer,
and Employer shall pay the fees, costs and expenses of such attorneys,
accountants, or advisors, and any tax liability Employee may incur as a result
of such payment.  Employee shall promptly notify Employer of any
communication with a Taxing Authority, and Employee shall promptly furnish to
Employer copies of any written correspondence, notices, or documents received
from a Taxing Authority relating to a Controversy. Employee shall cooperate
fully with Employer in the handling of any Controversy by furnishing Employer
any information or documentation relating to or bearing upon the Controversy;
provided, however, that
Employee shall not be obligated to furnish to Employer copies of any portion of
his or her tax returns which do not bear upon, and are not affected by, the
Controversy.

       

      (d)           Employee
shall pay over to Employer, within ten (10) days after receipt thereof, any
refund Employee receive from any Taxing Authority of all or any portion of the
Gross-Up Payment or the Excise Tax, together with any interest Employee receive
from such Taxing Authority on such refund.  For purposes of this
paragraph (d), a reduction in Employee’s tax liability attributable to the
previous payment of the Gross-Up Amount or the Excise Tax shall be deemed to be
a refund.  If Employee would have received a refund of all or any
portion of the Gross-Up Payment or the Excise Tax, except that a Taxing
Authority offset the amount of such refund against other tax liabilities,
interest, or penalties, Employee shall pay the amount of such offset over to
Employer, together with the amount of interest Employee would have received from
the Taxing Authority if such offset had been an actual refund, within ten (10)
days after receipt of notice from the Taxing Authority of such
offset.ex10-1.htm

    
      Exhibit
10.1

       

      FORM OF INDEMNIFICATION
AGREEMENT

       

      This
Indemnification Agreement (this “Agreement”) is made as of ________ __, 2009 by
and between Endo Pharmaceuticals Holdings Inc., a Delaware corporation (the
“Company”), and ______________ (“Indemnitee”).  This Agreement
supersedes and replaces any and all previous agreements between the Company and
Indemnitee covering the subject matter of this Agreement.

       

      RECITALS

       

      WHEREAS,
it is essential to the Company to retain and attract as directors and officers
the most capable persons available;

       

      WHEREAS,
capable persons have become more reluctant to serve publicly-held corporations
as directors, officers or in other capacities unless they are provided with
adequate protection through insurance or adequate indemnification against
inordinate risks of claims and actions against them arising out of their service
to and activities on behalf of the Company;

       

      WHEREAS,
Indemnitee is a director of the Company’s Board of Directors (the “Board”)
and/or an officer of the Company;

       

      WHEREAS,
both the Company and Indemnitee recognize the increased risk of litigation and
other claims being asserted against directors and officers of publicly-held
corporations in today’s environment and the need for substantial protection
against personal liability in order to enhance Indemnitee’s continued service to
the Company in an effective manner;

       

      WHEREAS,
the Company has determined that its inability to retain and attract as directors
and officers the most capable persons would be detrimental to the interests of
the Company, and that the Company therefore should seek to assure such persons
that indemnification and insurance coverage will be available in the
future;

       

      WHEREAS,
the Company’s Amended and Restated Certificate of Incorporation and Amended and
Restated By-Laws (collectively, the “Charter Documents”) require the Company to
indemnify and advance Expenses (as defined below) to its directors and officers
to the extent provided therein, and Indemnitee serves as a director and/or
officer of the Company, in part, in reliance on such provisions in the Charter
Documents; and

       

      WHEREAS,
in recognition of Indemnitee’s need for substantial protection against personal
liability in order to enhance Indemnitee’s continued service to the Company in
an effective manner and Indemnitee’s reliance on the Charter Documents, and in
part to provide Indemnitee with specific contractual assurance that the
protection promised by the Charter Documents will be available to Indemnitee
(regardless of, among other things, any amendment to or revocation of the
applicable provisions of the Charter Documents or any change in the composition
of the governing bodies of the Company or any acquisition transaction relating
to the Company), the Company wishes to provide in this Agreement for the
indemnification of and the advancing of Expenses (as defined below) to
Indemnitee to the fullest extent (whether partial or complete) permitted by law
and as set forth in this Agreement, and, to the extent insurance
is

      
        
           

        

        
          1

          
            

          

        

        
           

        

      

       

      maintained,
for the continued coverage of Indemnitee under the directors’ and officers’
liability insurance policy of the Company.

       

      NOW,
THEREFORE, in consideration of the premises and the covenants contained herein,
and of Indemnitee continuing to serve the Company, the Company and Indemnitee do
hereby covenant and agree as follows:

       

      Section
1.       Definitions.  As
used in this Agreement:

       

      (a)        “Corporate Status” shall mean the status of a person who
is or was a director, officer, employee, trustee, agent or fiduciary of the
Company or of any other corporation, limited liability company, partnership
or joint venture, trust, employee benefit plan or other enterprise which such
person is or was serving at the request of the Company.

       

      (b)        “Change in Control” shall be deemed to occur if and
when:  (i)  any person (including as such term is used in
Sections 13(d) and 14(d)(2) of the 1934 Act (as defined below)) is or becomes
the “beneficial owner” (as defined in Rule 13d-3 under the
1934 Act (as defined below)), directly or indirectly, of securities representing
25% or more of the combined voting power of
the Company’s then outstanding securities (not
including in the securities beneficially owned by such person any securities
acquired directly from the Company), other than a trustee or other fiduciary
holding securities under an
employee benefit plan of the Company, a corporation owned directly or
indirectly by the stockholders of the Company in substantially the same
proportions as their ownership of stock of the Company, or any Person who becomes such a
beneficial owner in connection with a transaction
described in clause (A) of paragraph (iii) below; or (ii) during any period of two consecutive
years, individuals who at the beginning of such period constitute the Board and
any new director whose election by the Board or nomination for election by the
Company’s stockholders was approved by a vote of
at least two-thirds (2/3) of the directors then still in office who either were
directors at the beginning of the period or whose election or nomination for
election was previously so
approved, cease for any reason to constitute a majority thereof; or (iii) the
Company’s shareholders approve a merger, or
consolidation other than a merger or consolidation, (A) which would result in the voting
securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity) at least 50% of the total voting
power represented by the voting securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation, or (B) effected to implement a
recapitalization of the Company (or similar transaction) in which no person is
or becomes the “beneficial owner,” directly or indirectly, of
securities representing 25% or more of the combined
voting power of the Company’s then outstanding
securities (not including
in the securities beneficially owned by such person any securities acquired
directly from the Company); or (iv) the Company’s shareholders approve a sale or disposition of all
or substantially all of the Company’s assets (in one transaction or a series
of transactions) or a plan or partial or complete
liquidation,   other than a sale or disposition by the Company of
all or substantially all of
the Company’s assets to an entity at least 75% of
the combined voting power of the voting securities of which are owned by persons
in substantially the same proportions as their ownership of the Company
immediately prior to such sale or disposition.  “1934 Act” means the Securities and Exchange Act
of 1934, as amended, including the rules and regulations promulgated
thereunder.

      
        
           

        

        
          2

          
            

          

        

        
           

        

      

       

      (c)        “Disinterested Director” shall mean a director of the Company
who is not and was not a party to the Proceeding (as defined below) in respect of which
indemnification is sought by Indemnitee.

       

      (d)        “Enterprise” shall mean the Company and any other
corporation, limited liability company, partnership, joint venture, trust,
employee benefit plan or other enterprise of which Indemnitee is or was serving at the request
of the Company as a director, officer, employee, trustee, agent or
fiduciary.

       

      (e)        “Expenses” shall mean all expenses and
liabilities, including judgments, fines, penalties, interest, amounts paid in
settlement with the
approval of the Company, reasonable attorneys’ fees, retainers, court costs,
transcript costs, fees of experts, witness fees, travel expenses, duplicating
costs, printing and binding costs, telephone charges, postage, delivery service
fees, any federal, state,
local, foreign or other taxes imposed on Indemnitee as a result of the actual or
deemed receipt of any payments under this Agreement, penalties arising from breaches of Part
4 of Title I of ERISA and
related taxes under the United States Internal Revenue Code of 1986, as
amended, and all other disbursements or
expenses of the types customarily incurred in connection with prosecuting,
defending, preparing to prosecute or defend, investigating, being or preparing
to be a witness in, or otherwise participating in, a
Proceeding.  Expenses also shall include (i) Expenses incurred in
connection with any appeal resulting from any Proceeding, including without
limitation the premium, security for, and other costs relating to any cost bond,
supersedeas bond, or other appeal bond or its equivalent,
and (ii) Expenses incurred by Indemnitee in connection with the
interpretation, enforcement or defense of
Indemnitee’s rights under this Agreement, by
litigation or otherwise.  The parties agree that for the purposes
of any advancement of
Expenses for which Indemnitee has made written demand to the Company in
accordance with this Agreement, all Expenses included in such demand that are
certified by affidavit of Indemnitee’s counsel as being reasonable shall be
presumed conclusively to be
reasonable.

       

      (f)        “Independent Counsel” shall mean a law firm, or a member of a
law firm, that is experienced in matters of corporation law and neither
presently is, nor in the past three (3) years has been, retained to
represent:  (i) the Company or Indemnitee in any matter
material to either such party (other than with respect to matters concerning
Indemnitee under this Agreement, or of other indemnitees under similar
indemnification agreements), or (ii) any other party to the Proceeding giving rise to a claim for
indemnification hereunder.  Notwithstanding the foregoing, the term
“Independent Counsel” shall not include any person who, under
the applicable standards of professional conduct then prevailing, would have a
conflict of interest in
representing either the Company or Indemnitee in an action to determine
Indemnitee’s rights under this
Agreement.  The Company agrees to pay the reasonable fees and expenses
of the Independent Counsel and to fully indemnify such counsel against any
and all expenses, claims,
liabilities and damages arising out of or relating to this Agreement or its
engagement pursuant hereto.

       

      (g)        “Proceeding” shall mean any threatened, asserted,
pending or completed action, suit, arbitration, alternate dispute
resolution mechanism,
investigation, inquiry, administrative hearing or any other actual, threatened
or completed proceeding, whether brought in the right of the Company or
otherwise and whether of a civil, criminal,
administrative

      
        
           

        

        
          3

          
            

          

        

        
           

        

      

       

      legislative, or investigative (formal or informal) nature, including
any appeal therefrom, in which Indemnitee was, is or will be involved as a
party, potential party, non-party witness or otherwise by reason of the fact
that Indemnitee is or was a director, officer, employee, trustee, agent or fiduciary of an Enterprise,
or by reason of anything done or not done by Indemnitee in any such capacity, by
reason of any action taken by him/her or of any action on his/her part while
acting pursuant to his/her Corporate Status, in each case whether or not serving in such capacity
at the time any liability or Expense is incurred for which indemnification,
reimbursement, or advancement of Expenses can be provided under this
Agreement.  If Indemnitee reasonably believes in good faith that a
given situation may lead to or culminate in
the institution of a Proceeding, such situation shall be considered a Proceeding
under this paragraph.

       

      (h)        “Reviewing Party” shall mean any appropriate person or
body consisting of a member or members of the Board or any other person or body appointed by
the Board who is not a party to the particular Proceeding for which Indemnitee
is seeking indemnification, or Independent Counsel.

       

      Section
2.       Indemnity in Third-Party
Proceedings.  The Company shall indemnify Indemnitee in
accordance with the provisions of this Section 2 if Indemnitee was, is, or is
threatened to be made, a party to, a witness or other participant in any
Proceeding, other than a Proceeding by or in the right of the Company to procure
a judgment in its favor.  Pursuant to this Section 2, Indemnitee shall
be indemnified to the fullest extent permitted by applicable law, as soon as
practicable but in any event no later than thirty (30) days after written demand
is presented to the Company, against all Expenses (including all interest,
assessments and other charges paid or payable in connection with or in respect
of such Expenses) actually and reasonably incurred by Indemnitee or on his/her
behalf in connection with such Proceeding or any claim, issue or matter therein,
if Indemnitee acted in good faith and in a manner he/she reasonably believed to
be in or not opposed to the best interests of the Company and, in the case of a
criminal proceeding had no reasonable cause to believe that his/her conduct was
unlawful.  No change in applicable law shall have the effect of
reducing the benefits available to Indemnitee hereunder.

       

      Section
3.       Indemnity in Proceedings by
or in the Right of the Company.  The Company shall indemnify
Indemnitee in accordance with the provisions of this Section 3 if Indemnitee
was, is, or is threatened to be made, a party to, a witness or other participant
in any Proceeding by or in the right of the Company to procure a judgment in its
favor.  Pursuant to this Section 3, Indemnitee shall be indemnified to
the fullest extent permitted by applicable law, as soon as practicable but in
any event no later than thirty (30) days after written demand is presented to
the Company, against all Expenses actually and reasonably incurred by him/her or
on his/her behalf in connection with such Proceeding or any claim, issue or
matter therein, if Indemnitee acted in good faith and in a manner he/she
reasonably believed to be in or not opposed to the best interests of the
Company.  No indemnification for Expenses shall be made under this
Section 3 in respect of any claim, issue or matter as to which Indemnitee shall
have been finally adjudged by a court to be liable to the Company, unless and
only to the extent that the Delaware Court of Chancery or any court in which the
Proceeding was brought shall determine upon application that, despite the
adjudication of liability but in view of all the circumstances of the case,
Indemnitee is entitled to indemnification.  No change in applicable
law shall have the effect of reducing the benefits available to Indemnitee
hereunder.

      
        
           

        

        
          4

          
            

          

        

        
           

        

      

       

      Section
4.       Indemnification for Expenses
of a Party Who is Wholly or Partly Successful.  Notwithstanding
any other provisions of this Agreement, to the fullest extent permitted by
applicable law and to the extent that Indemnitee is a party to (or a participant
in) and is successful, on the merits or otherwise, in any Proceeding or in
defense of any claim, issue or matter therein, in whole or in part, the Company
shall indemnify Indemnitee against all Expenses actually and reasonably incurred
by him/her in connection therewith.  If Indemnitee is entitled under
any provision of this Agreement to indemnification by the Company for some or a
portion of the Expenses, the Company shall indemnify Indemnitee for the portion
thereof to which Indemnitee is entitled.  For purposes of this Section
4 and without limitation, the termination of any claim, issue or matter in such
a Proceeding by dismissal, with or without prejudice, shall be deemed to be a
successful result as to such claim, issue or matter.

       

      Section
5.       Indemnification For Expenses
of a Witness.  Notwithstanding any other provision of this
Agreement, to the fullest extent permitted by applicable law and to the extent
that Indemnitee is, by reason of his/her Corporate Status, a witness or
otherwise asked to participate in any Proceeding to which Indemnitee is not a
party, he/she shall be indemnified against all Expenses actually and reasonably
incurred by him/her or on his/her behalf in connection therewith.

       

      Section
6.       Exclusions.  Notwithstanding
any provision in this Agreement, the Company shall not be obligated under this
Agreement to make any indemnity in connection with any claim made against
Indemnitee:

       

      (a)        for which payment has actually been
made to or on behalf of
Indemnitee under any insurance policy or other indemnity provision in the
Charter Documents, except with respect to any excess beyond the amount paid
under any insurance policy or other indemnity provision.  In the event
that such actual payment is made under any insurance
policy or indemnity provision after the Company has made an indemnity
payment under this Agreement, Indemnitee shall
promptly reimburse the Company for such indemnity in the amount of such payment;
or

       

      (b)        for (i) an accounting of profits made from the
purchase and sale (or sale and purchase) by Indemnitee of securities of the
Company within the meaning of Section 16(b) of the 1934 Act or similar
provisions of state statutory law or common law, or (ii) any
reimbursement of the Company by Indemnitee of any
bonus or other incentive-based or equity-based compensation or of any profits
realized by Indemnitee from the sale of securities of the Company, as required
in each case under the 1934 Act (including any such reimbursements that arise from an accounting
restatement of the Company pursuant to Section 304 of the Sarbanes-Oxley Act of
2002 (the “Sarbanes-Oxley Act”), or the payment to the Company of
profits arising from the purchase and sale by Indemnitee of securities in
violation of Section 306 of
the Sarbanes-Oxley Act); or

       

      (c)        in connection with any Proceeding (or
any part of any Proceeding) initiated by Indemnitee, including any Proceeding
(or any part of any Proceeding) initiated by Indemnitee against the Company or
its directors, officers,
employees or other indemnitees, unless (i) the Board authorized the Proceeding
(or any part of any Proceeding) prior to its initiation, (ii) the Proceeding is
for enforcement of this Agreement (to the extent that
Indemnitee

      
        
           

        

        
          5

          
            

          

        

        
           

        

      

       

      prevails), or (iii) the Company provides the
indemnification, in its sole discretion, pursuant to the powers vested in the
Company under applicable law; or

       

      (d)        for which the Reviewing Party shall have
determined (in a written opinion, in any case in which the Independent Counsel is involved) that
Indemnitee would not be permitted to be indemnified under applicable law;
provided, however, Indemnitee shall have the right to
commence litigation in any court in the States of Pennsylvania or
Delaware having subject
matter jurisdiction thereof and in which venue is proper seeking an initial
determination by the court or challenging any such determination by the
Reviewing Party or any aspect thereof, including the legal or factual bases
thereof, and the Company hereby consents to service
of process and to appear in any such proceeding.  Any determination by
the Reviewing Party otherwise shall be conclusive and binding on the Company and
Indemnitee.  If Indemnitee commences legal proceedings in a
court of competent jurisdiction to secure a
determination that Indemnitee should be indemnified under applicable law, any
determination made by the Reviewing Party that Indemnitee is not entitled to be
indemnified under applicable law shall not be binding until a final judicial determination is made
(as to which all rights of appeal therefrom have been exhausted or lapsed) that
Indemnitee is not entitled to be so indemnified under applicable
law.

       

      Section
7.       Advances of
Expenses.

       

      (a)        Notwithstanding any provision of this Agreement to the contrary,
the Company shall advance or reimburse, to the extent not prohibited by law, the
Expenses incurred by Indemnitee in connection with any Proceeding (or any part
of any Proceeding)
(“Advances”).  Advances shall be
made within twenty-one (21)
days after the receipt by the Company of a statement or statements requesting
such Advances from time to time, whether prior to or after final disposition of
any Proceeding.  Advances shall be unsecured and interest
free.  Advances shall be made without regard to
Indemnitee’s ability to repay the Expenses and
without regard to Indemnitee’s ultimate entitlement to
indemnification under the other provisions of this
Agreement.  Advances shall also include any and all reasonable
Expenses incurred pursuing
an action to enforce this right of advancement, including Expenses incurred
preparing and forwarding statements to the Company to support the Advances
claimed.  This Section 7 shall not apply to any claim made by
Indemnitee for which indemnity is excluded pursuant to Section
6.

       

      (b)        The obligation of the Company to make an
advancement of Expenses pursuant to Section 7(a) shall be subject to the
condition that, if, when and to the extent that the Reviewing Party determines
that Indemnitee would not
be permitted to be so indemnified under applicable law, the Company shall be
entitled to be reimbursed by Indemnitee (who hereby agrees to reimburse the
Company) for all such amounts paid; provided, however, that if Indemnitee has commenced or
thereafter commences legal
proceedings in a court of competent jurisdiction to secure a determination that
Indemnitee should be indemnified under applicable law, any determination made by
the Reviewing Party that Indemnitee would not be permitted to be
indemnified under applicable law shall not be
binding and Indemnitee shall not be required to reimburse the Company for
any Advance until a final judicial determination is made with respect thereto
(as to which all rights of appeal therefrom have been exhausted or
lapsed).  Indemnitee’s undertaking to repay such Advances
shall be unsecured and interest-free.

      
        
           

        

        
          6

          
            

          

        

        
           

        

      

       

      Section
8.       Procedure for Notification
and Defense of Claim.

       

      (a)        Indemnitee shall notify the Company in
writing of any matter with respect to which Indemnitee intends to seek indemnification or
advancement of Expenses hereunder as soon as reasonably practicable following
the receipt by Indemnitee of any written notice, summons, citation, subpoena,
complaint, indictment, information or other document relating to any Proceeding or matter which may
be subject to indemnification or advancement of Expenses covered under this
Agreement.  The written notification to the Company shall include a
description of the nature of the Proceeding, the facts underlying the
Proceeding, and documentation and
information as is reasonably available to Indemnitee and is reasonably necessary
to determine whether and to what extent Indemnitee is entitled to
indemnification.  The failure by Indemnitee to notify the Company
hereunder will not relieve the Company from any
liability which it may have to Indemnitee hereunder or otherwise than under this
Agreement, and any delay in so notifying the Company shall not constitute a
waiver by Indemnitee of any rights under this Agreement.  The
Secretary of the Company shall, promptly
upon receipt of such a request for indemnification, advise the Board in writing
that Indemnitee has requested indemnification.

       

      (b)        The Company will be entitled to
participate in the Proceeding at its own expense.

       

      Section
9.       Procedure Upon Application
for Indemnification.

       

      (a)        Upon written request by Indemnitee for
indemnification pursuant to Section 8(a), a determination with respect to
Indemnitee’s entitlement thereto shall be made by
the Reviewing Party, who shall be: (i) if a Change in
Control (other than a Change in Control which
has been approved by a majority of the Board who were directors immediately
prior to such Change in Control) shall have occurred, Independent
Counsel, retained pursuant
to Section 9(c);
or (ii) if a Change in
Control shall not have occurred, (A) selected by a majority vote of the
Disinterested Directors, even though less than a quorum of the Board, or (B) if
there are no such Disinterested Directors or, if such Disinterested Directors so
direct, Independent Counsel, retained by
the Company (who shall make such determination in the form of a written opinion
to the Board, a copy of which shall be delivered to
Indemnitee).  Indemnitee shall cooperate with the Reviewing Party,
including providing to such person, persons or entity
upon reasonable advance request any documentation or information which is not
privileged or otherwise protected from disclosure and which is reasonably
available to Indemnitee and reasonably necessary to such determination.  Any costs or Expenses
(including attorneys’ fees and disbursements) incurred by
Indemnitee in so cooperating with the Reviewing Party shall be borne by the
Company (irrespective of the determination as to Indemnitee’s entitlement to
indemnification).

       

      (b)        In the event that Independent Counsel is
retained by the Company pursuant to Section 9(a), written notice of the
selection shall be provided promptly to Indemnitee. Upon the due commencement of any
judicial proceeding pursuant to Section 11(a) of this Agreement, legal counsel shall be
discharged and relieved of any further responsibility in such capacity (subject
to the applicable standards of professional conduct then
prevailing).

      
        
           

        

        
          7

          
            

          

        

        
           

        

      

       

      (c)        The Company agrees that if there is a
Change in Control of the
Company (other than a Change in Control which
has been approved by a majority of the Board who were directors immediately
prior to such Change in Control) then with respect to all matters
thereafter arising concerning the rights of Indemnitee to indemnity
payments and Advances under
this Agreement or any other agreement or the Charter Documents now or hereafter
in effect relating to any Proceeding , the Company shall seek legal advice only
from Independent Counsel selected by Indemnitee and approved by the
Company (which approval shall not be
unreasonably withheld).  Such Independent Counsel, among other things,
shall render its written opinion to the Company and Indemnitee as to whether and
to what extent Indemnitee would be permitted to be indemnified under applicable law.  The Company
agrees to pay the reasonable fees of the Independent Counsel and to indemnify
fully such Independent Counsel against any and all expenses (including
attorneys’ fees), claims, liabilities and damages
arising out of or relating to this Agreement or its engagement
pursuant hereto.

       

      Section
10.     Presumptions and Effect of
Certain Proceedings.

       

      (a)        In making a determination with respect
to entitlement to indemnification hereunder, the Reviewing Party shall, to the
fullest extent not prohibited by law, presume that Indemnitee
is entitled to indemnification under this Agreement if Indemnitee has submitted
a request for indemnification in accordance with Section 8(a) of this Agreement,
and the Company shall, to the fullest extent not prohibited by law, have the burden of proof to
overcome that presumption in connection with the making by any person, persons
or entity of any determination contrary to that presumption.

       

      (b)        Subject to Section 11(d), if the
Reviewing Party shall not have made a determination within sixty (60) days
after receipt by the Company of the request thereof, the requisite determination
of entitlement to indemnification shall, to the fullest extent not prohibited by
law, be deemed to have been made and Indemnitee shall be entitled to such indemnification,
absent (i) a misstatement by Indemnitee of a material fact, or an omission of a
material fact necessary to make Indemnitee’s statement not materially misleading,
in connection with the request for indemnification, or (ii) a prohibition of such indemnification
under applicable law; provided, however, that such 60-day period may be
extended for a reasonable time, not to exceed an additional thirty (30) days, if
the person, persons or entity making the determination with respect to entitlement to indemnification
in good faith requires such additional time for the obtaining or evaluating of
documentation and/or information relating thereto; and provided, further, that the foregoing provisions of this
Section 10(b) shall not apply if the determination of entitlement
to indemnification is to be made by Independent Counsel pursuant to Section 9(a)
of this Agreement.

       

      (c)        The termination of any Proceeding or of
any claim, issue or matter therein, by judgment, order, settlement or
conviction, or upon a plea
of nolo contendere or its equivalent, shall not (except as
otherwise expressly provided in this Agreement) adversely affect the right of Indemnitee to
indemnification or create a presumption that Indemnitee did not meet any
particular standard of
conduct, act in good faith and in a manner which he/she reasonably believed to
be in or not opposed to the best interests of the Company or, with respect to
any criminal Proceeding, that Indemnitee had reasonable cause to believe that
his/her conduct was
unlawful.

      
        
           

        

        
          8

          
            

          

        

        
           

        

      

       

      (d)        Actions of
Others.  The
knowledge and/or actions, or failure to act, of any director, officer, employee,
trustee, agent or fiduciary of the Enterprise shall not be imputed to Indemnitee for
purposes of determining the right to indemnification under this
Agreement.

       

      Section
11.     Remedies of
Indemnitee.

       

      (a)        Subject to Section 11(d), in the event
that (i) the advancement
of Expenses is not timely made pursuant to Section 7
of this Agreement, (ii)
no determination of entitlement to indemnification
shall have been made pursuant to Section 9(a) of this Agreement within ninety
(90) days after receipt by the Company of the request for indemnification,
(iii)
the payment of indemnification is not made pursuant to Section 2 or 3 within
thirty
(30) days after receipt by the Company of a written request thereof, or
(iv)
the Company or any other person takes or threatens to take any action to declare
this Agreement void or unenforceable, or institutes any litigation or other
action or Proceeding
designed to deny, or to recover from, Indemnitee the benefits provided or
intended to be provided to Indemnitee hereunder, Indemnitee shall be entitled to
an adjudication by a court of his/her entitlement to such indemnification or
advancement of Expenses.

       

      (b)        Any judicial proceeding commenced
pursuant to this Section 11 shall be conducted in all respects as a
de novo trial on the merits and the Company shall have the burden of
proving that Indemnitee is not entitled to indemnification or advancement of
Expenses.

       

      (c)        If a determination shall have been made
that Indemnitee is entitled to indemnification, the Company shall be bound by
such determination in any judicial proceeding commenced pursuant to this
Section 11, absent (i) a misstatement by Indemnitee of a material fact, or an omission of a
material fact necessary to make Indemnitee’s statement not materially misleading,
in connection with the request for indemnification, or (ii) a prohibition of
such indemnification under applicable law.

       

      (d)        Notwithstanding anything in this Agreement to the
contrary, no determination as to entitlement of Indemnitee to indemnification
under this Agreement shall be required to be made prior to the final disposition
of the Proceeding.

       

      Section
12.     Non-exclusivity; Insurance;
Subrogation; Other Payments.

       

      (a)        The rights of indemnification and to
receive advancement of Expenses as provided by this Agreement shall not be
deemed exclusive of any other rights to which Indemnitee may at any time be
entitled under applicable law, the Charter Documents, any agreement, a
vote of stockholders or a resolution of the Board, or otherwise.  To
the extent that a change in Delaware law, whether by statute or judicial
decision, permits greater indemnification or advancement of Expenses
than would be afforded currently under the
Charter Documents and this Agreement, it is the intent of the
parties hereto that Indemnitee shall, by this Agreement, enjoy the greater
benefits so afforded by such change.  To the extent that there is a
conflict or inconsistency
between the terms of this Agreement and the Charter Documents, it is the intent
of the parties hereto that Indemnitee shall enjoy the greater benefits
regardless of whether contained herein or in the Charter
Documents.  No amendment or alteration of the Charter Documents or any
other agreement shall adversely affect the rights provided to Indemnitee under
this Agreement.

      
        
           

        

        
          9

          
            

          

        

        
           

        

      

       

      (b)        To the extent that the Company maintains
an insurance policy or policies providing liability insurance for directors,
officers, employees, or
agents of the Enterprise, Indemnitee shall be covered by such policy or policies
in accordance with its or their terms to the maximum extent of the coverage
available for any such director, officer, employee or agent under such
policy or policies.  If, at the
time of the receipt of a notice of a claim pursuant to the terms hereof, the
Company has director and officer liability insurance in effect, the Company
shall give prompt notice of such claim or of the commencement of a
Proceeding, as the case may be, to the insurers
in accordance with the procedures set forth in the respective
policies.  The Company shall thereafter take all necessary or
desirable action to cause such insurers to pay, on behalf of Indemnitee, all amounts payable
as a result of such
Proceeding in accordance with the terms of such policies.

       

      (c)        In the event of any payment under this
Agreement, the Company shall be subrogated to the extent of such payment to all
of the rights of recovery of Indemnitee, who shall execute all papers required and take all
action necessary to secure such rights, including execution of such documents as
are necessary to enable the Company to bring suit to enforce such
rights.  The Company shall pay or reimburse all expenses actually and
reasonably incurred by Indemnitee in
connection with such subrogation.

       

      (d)        The Company’s obligation to indemnify or advance
Expenses hereunder to Indemnitee who is or was serving at the request of the
Company as a director, officer, employee, trustee, agent or fiduciary of any Enterprise shall
be reduced by any amount Indemnitee has actually received as indemnification or
advancement of Expenses from such other corporation, limited liability company,
partnership, joint venture, trust, employee benefit plan or other enterprise shall be reduced by
any amount Indemnitee has actually received as indemnification or advancement of
Expenses from such other corporation, limited liability company, partnership,
joint venture, trust or other enterprise.

       

      Section
13.     Actions of the
Company.  To the extent that this Agreement contemplates
actions to be taken by the Company, any officer engaging in such actions shall
not be a party to the Proceeding in respect of which indemnification is
sought.

       

      Section
14.     Duration of
Agreement.  This Agreement shall continue until and terminate
upon the later of: (a) ten (10) years after the date that Indemnitee shall have
ceased to serve as a director or an officer of the Company or in other Corporate
Status due to service as a director or an officer of the Company or (b) one (1)
year after the final termination of any Proceeding then pending in respect of
which Indemnitee is granted rights of indemnification or advancement of Expenses
hereunder and of any proceeding commenced by Indemnitee pursuant to
Section 11 of this Agreement relating thereto.  This Agreement
shall be binding upon the Company and its successors and assigns, and the
Company agrees to assign this Agreement to any purchaser of substantially all of
the assets and to secure the agreement of such purchaser to assume this
Agreement.  This Agreement shall inure to the benefit of Indemnitee
and his/her heirs, executors and administrators.

      
        
           

        

        
          10

          
            

          

        

        
           

        

      

       

      Section
15.     Reliance as Safe
Harbor.  Indemnitee shall be entitled to indemnification for
any action or omission to act undertaken (a) in good faith reliance upon
the records of the Company, including its financial statements, or upon
information, opinions, reports or statements furnished to Indemnitee by the
officers or employees of the Company or any of its subsidiaries in the course of
their duties, or by committees of the Board, or by any other person as to
matters Indemnitee reasonably believes are within such other person’s
professional or expert competence, or (b) on behalf of the Company in
furtherance of the interests of the Company in good faith in reliance upon, and
in accordance with, the advice of legal counsel or accountants, provided such
legal counsel or accountants were selected with reasonable care by or on behalf
of the Company.  In addition, the knowledge and/or actions, or
failures to act, of any director, officer, agent or employee of the Company
shall not be imputed to Indemnitee for purposes of determining the right to
indemnity hereunder.

       

      Section
16.     Severability.  If
any provision or provisions of this Agreement shall be held to be invalid, void,
illegal or otherwise unenforceable for any reason whatsoever, by a court of
competent jurisdiction: (a) the validity, legality and enforceability of the
remaining provisions of this Agreement (including without limitation, each
portion of any Section of this Agreement containing any such provision held to
be invalid, illegal or unenforceable, that is not itself invalid, illegal, void
or otherwise unenforceable) shall not in any way be affected or impaired thereby
and shall remain enforceable to the fullest extent permitted by law; (b) such
provision or provisions shall be deemed reformed to the extent necessary to
conform to applicable law and to give the maximum effect to the intent of the
parties hereto; and (c) to the fullest extent possible, the provisions of this
Agreement shall be construed so as to give effect to the intent manifested
thereby.

       

      Section
17.     Merger.  This
Agreement constitutes the entire agreement between the parties hereto with
respect to the subject matter hereof and supersedes all prior agreements and
understandings, oral, written and implied, between the parties hereto with
respect to the subject matter hereof; provided, however, that this
Agreement is a supplement to and in furtherance of the Charter Documents and
applicable law, and shall not be deemed a substitute thereof, nor to diminish or
abrogate any rights of Indemnitee thereunder.

       

      Section
18.     Modification and
Waiver.  No supplement, modification or amendment of this
Agreement shall be binding unless executed in writing by both of the parties
hereto.  No waiver of any of the provisions of this Agreement shall be
deemed or shall constitute a waiver of any other provisions hereof (whether or
not similar) nor shall such waiver constitute a continuing waiver.  In
the event the Company or any of its subsidiaries enters into an indemnification
agreement with another director, officer, employee, trustee, agent or fiduciary
of the Company or any of its subsidiaries containing a term or terms more
favorable to Indemnitee than the terms contained herein (as determined by
Indemnitee), Indemnitee shall be afforded the benefit of such more favorable
term or terms and such more favorable term or terms shall be deemed incorporated
by reference herein as if set forth in full herein.  As promptly as
practicable following the execution by the Company or the relevant subsidiary of
each indemnity agreement with any such other director, officer, employee,
trustee, agent or fiduciary (i) the Company shall send a copy of the indemnity
agreement to Indemnitee, and (ii) if requested by Indemnitee, the Company shall
prepare, execute and deliver to Indemnitee an amendment to this Agreement
containing such more favorable term or terms.

      
        
           

        

        
          11

          
            

          

        

        
           

        

      

       

      Section
19.     Notices. All notices, requests,
demands and other communications under this Agreement shall be in writing and
shall be deemed to have been duly given if (a) delivered by hand and receipted
for by the party to whom said notice or other communication shall have been
directed, (b) mailed by certified or registered mail, with postage prepaid, on
the third business day after the date on which it is so mailed, (c) mailed by
reputable overnight courier and receipted for by the party to whom said notice
or other communication shall have been directed or (d) sent by facsimile
transmission, with receipt of oral confirmation that such transmission has been
received, for each party, at the address indicated on the signature page of this
Agreement, or at such other address as each party shall provide to the other
party.

       

      Section
20.     Applicable Law and Consent
to Jurisdiction.  This Agreement and the legal relations among
the parties shall be governed by, and construed and enforced in accordance with,
the laws of the State of Delaware, without regard to its conflict of laws and/or
rules.  The Company and Indemnitee hereby irrevocably and
unconditionally (i) agree that any action or proceeding arising out of or in
connection with this Agreement may be brought in the Chancery Court of the State
of Delaware (the “Delaware Court”), or in any other state or federal court in
the United States of America with subject matter and personal jurisdiction, but
not in any court in any other country, (ii) waive any objection to the laying of
venue of any such action or proceeding in the Delaware Court, and (iii) waive,
and agree not to plead or to make, any claim that any such action or proceeding
brought in the Delaware Court has been brought in an improper or inconvenient
forum.

       

      Section
21.     Period of
Limitations.  No legal action shall be brought and no cause of
action shall be asserted by or in the right of the Company against Indemnitee,
Indemnitee’s spouse, heirs, executors or personal or legal representatives after
the expiration of two (2) years from the date of accrual of such cause of
action, and any claim or cause of action of the Company shall be extinguished
and deemed released unless asserted by the timely filing of a legal action
within such two-year period; provided, however, that if any
shorter period of limitations is otherwise applicable to any such cause of
action such shorter period shall govern.

       

      Section
22.     Identical
Counterparts.  This Agreement may be executed in one or more
counterparts, each of which shall for all purposes be deemed to be an original
but all of which together shall constitute one and the same
Agreement.

       

      Section
23.     Headings.  The
headings contained in this Agreement are inserted for convenience only and shall
not be deemed to affect construction of this Agreement.

      

      
        
           

        

        
          12

          
            

          

        

        
           

        

      

       

      IN
WITNESS WHEREOF, the parties have caused this Agreement to be signed as of the
day and year first above written.

       

      
        
          
            
              
                	
                        ENDO
      PHARMACEUTICALS HOLDINGS INC.

                      	 	
                        INDEMNITEE

                      
	 	 	 
	 	 	 
	 	 	 
	
                        By:________________________

                      	 	________________________
	
                        Name:

                      	 	
                        Name:

                      
	
                        Title:

                      	 	
                        Title:

                      
	
                        Address:

                      	 	
                        Address:

                      
	 
      	 	 
      

              

            

          

        

      

      

       

       

       

      13

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