Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
(e) Executive Officer Employment Agreements
William Hornbuckle Employment Agreement
On March 30, 2020, MGM Resorts International, a Delaware corporation (the
"Company"), entered into an employment agreement with William Hornbuckle,
President and Acting Chief Executive Officer of the Company (the "Hornbuckle
Employment Agreement"), effective as of April 1, 2020. The Hornbuckle Employment
Agreement provides for a term until March 31, 2024 and a minimum base salary of
$1,100,000 per year, which was reduced from his prior salary of $1,400,000. Mr.
Hornbuckle has voluntarily elected to take 100% of his base salary for the
remaining pay periods in 2020 in the form of restricted stock units, instead of
cash, which will vest and be paid in full on December 31, 2020 (or, if earlier
terminated a pro rata portion will vest and be paid on the termination date).
The Hornbuckle Employment Agreement also provides for an annual target bonus
equal to 150% of Mr. Hornbuckle's base salary, which was reduced from his prior
annual target bonus of 175% and results in a decrease to his annual target bonus
of $800,000, and certain other benefits and perquisites, which are discussed in
detail in the Hornbuckle Employment Agreement.
The Hornbuckle Employment Agreement also provides that Mr. Hornbuckle will be
eligible for annual equity grants from the Company. As part of the annual equity
award for 2020, Mr. Hornbuckle will be granted an award on April 1, 2020 of
45,000 restricted stock units vesting in four equal annual installments on the
first four anniversaries following the grant date. In connection with his
promotion to President and Acting Chief Executive Officer of the Company, Mr.
Hornbuckle will also be granted 290,000 restricted stock units vesting on the
second anniversary of the grant date.
In the event of a termination of Mr. Hornbuckle's employment as the result of
his death or a termination by the Company due to disability, the Company will
pay Mr. Hornbuckle one year of salary payable at regular payroll intervals (less
any payments received from an employer-paid short term disability policy).
In the event of a termination by the Company for no cause or by Mr. Hornbuckle
for good cause prior to the end of the term of the Hornbuckle Employment
Agreement, Mr. Hornbuckle will receive (i) an amount equal to his annual base
salary plus his target bonus amount, payable in 12 monthly installments;
(ii) any earned but unpaid discretionary bonus due to him; and (iii) a payment
equal to 1.5 times the cost of COBRA for a coverage period of 12 months, payable
in 12 monthly installments. If the Company terminates Mr. Hornbuckle for no
cause after the end of the term of the Hornbuckle Employment Agreement (at which
time he would be treated as an at-will employee of the Company), Mr. Hornbuckle
will receive a lump sum payment equal to one year of his base salary. Any such
severance payments will be subject to applicable taxes and Mr. Hornbuckle
execution and non-revocation of a general release of claims.
The Hornbuckle Employment Agreement also contains a non-compete covenant
generally prohibiting Mr. Hornbuckle from providing services to a competitor or
soliciting employees or business contacts for 12 months following his
termination of employment or for 12 months following the term of the Hornbuckle
Employment Agreement. In addition, the Hornbuckle Employment Agreement mandates
that Mr. Hornbuckle's confidentiality obligations continue even after his
termination of employment. The Hornbuckle Employment Agreement also provides for
a "Special No-Cause Termination," which would release Mr. Hornbuckle from the
non-compete covenant if a person other than Mr. Hornbuckle is appointed as Chief
Executive Officer during the term of the agreement. If Mr. Hornbuckle resigns in
connection with a Special No-Cause Termination, his grant of 290,000 restricted
stock units will vest and become payable within 30 days from the date of this
separation.
The Hornbuckle Employment Agreement provides that, to the extent required by the
Coronavirus Aid, Relief, and Economic Security Act (the "CARES" Act), in
connection with the Company becoming eligible for or entering into a loan, loan
guarantee or other form of financial assistance from a governmental entity, Mr.
Hornbuckle will agree to such limitations or reductions with respect to
compensation and severance pay as may be required to comply with the CARES Act.
The foregoing description is not a complete description of the Hornbuckle
Employment Agreement and is qualified in its entirety by reference to the full
text of the Hornbuckle Employment Agreement, a copy of which is attached hereto
as Exhibit 10.1, and the equity award forms, copies of which are attached as
Exhibit 10.4 and 10.5, each of which is incorporated by reference in this
Item 5.02.
Corey Sanders Employment Agreement
On March 31, 2020, the Company entered into an employment agreement with Corey
Sanders, Chief Financial Officer of the Company (the "Sanders Employment
Agreement"), effective as of April 1, 2020. The Sanders Employment Agreement
provides for a
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term until March 31, 2023 and a minimum base salary of $1,000,000 per year,
which was reduced from his prior salary of $1,250,000. Mr. Sanders has
voluntarily elected to take 50% of his base salary for the remaining pay periods
in 2020 in the form of restricted stock units, instead of cash, which will vest
and be paid in full on December 31, 2020 (or, if earlier terminated a pro rata
portion will vest and be paid on the termination date).
The Sanders Employment Agreement also provides for an annual target bonus equal
to 150% of Mr. Sanders' base salary, which was reduced from his prior annual
target bonus of 175% and results in a decrease to his annual target bonus of
$687,500, and certain other benefits and perquisites, which are discussed in
detail in the Sanders Employment Agreement. In the event of a termination of
Mr. Sanders' employment as the result of his death or a termination by the
Company due to disability, the Company will pay Mr. Sanders one year of salary
payable at regular payroll intervals (less any payments received from an
employer-paid short term disability policy).
The Sanders Employment Agreement also provides that Mr. Sanders will be eligible
for annual equity grants from the Company. As part of the annual equity award
for 2020, Mr. Sanders will be granted an award on April 1, 2020 of 35,400
restricted stock units vesting in four equal annual installments on the first
four anniversaries following the grant date.
In the event of a termination by the Company for no cause or by Mr. Sanders for
good cause prior to the end of the term of the Sanders Employment Agreement,
Mr. Sanders will receive (i) an amount equal to his annual base salary plus his
target bonus amount, payable in 12 monthly installments; (ii) any earned but
unpaid discretionary bonus due to him; and (iii) a payment equal to 1.5 times
the cost of COBRA for a coverage period of 12 months, payable in 12 monthly
installments. If the Company terminates Mr. Sanders for no cause after the end
of the term of the Sanders Employment Agreement (at which time he would be
treated as an at-will employee of the Company), Mr. Sanders will receive a lump
sum payment equal to one year of his base salary. Any such severance payments
will be subject to applicable taxes and Mr. Sanders execution and non-revocation
of a general release of claims.
The Sanders Employment Agreement also contains a non-compete covenant generally
prohibiting Mr. Sanders from providing services to a competitor or soliciting
employees or business contacts for 12 months following his termination of
employment or for 12 months following the term of the Sanders Employment
Agreement. In addition, the Sanders Employment Agreement mandates that
Mr. Sanders' confidentiality obligations continue even after his termination of
employment.
The Sanders Employment Agreement provides that, to the extent required by the
CARES Act, in connection with the Company becoming eligible for or entering into
a loan, loan guarantee or other form of financial assistance from a governmental
entity, Mr. Sanders will agree to such limitations or reductions with respect to
compensation and severance pay as may be required to comply with the CARES Act.
The foregoing description is not a complete description of the Sanders
Employment Agreement and is qualified in its entirety by reference to the full
text of the Sanders Employment Agreement, a copy of which is attached hereto as
Exhibit 10.2, and the equity award form, a copy of which is attached as Exhibit
10.4, each of which is incorporated by reference in this Item 5.02.
John McManus Employment Agreement
On March 30, 2020, the Company entered into an employment agreement with John
McManus, Executive Vice President, General Counsel and Secretary of the Company
(the "McManus Employment Agreement"), effective as of April 1, 2020. The McManus
Employment Agreement provides for a term until March 31, 2023 and a minimum base
salary of $700,000 per year, which was reduced from his prior salary of
$850,000. Mr. McManus has voluntarily elected to take 50% of his base salary for
the remaining pay periods in 2020 in the form of restricted stock units, instead
of cash, which will vest and be paid in full on December 31, 2020 (or, if
earlier terminated a pro rata portion will vest and be paid on the termination
date).
The McManus Employment Agreement also provides for an annual target bonus equal
to 120% of Mr. McManus' base salary, which was reduced from his prior annual
target bonus of 125% and results in a decrease to his annual target bonus of
$222,500, and certain other benefits and perquisites, which are discussed in
detail in the McManus Employment Agreement. In the event of a termination of
Mr. McManus' employment as the result of his death or a termination by the
Company due to disability, the Company will pay Mr. McManus one year of salary
payable at regular payroll intervals (less any payments received from an
employer-paid short term disability policy).
The McManus Employment Agreement also provides that Mr. McManus will be eligible
for annual equity grants from the Company. As part of the annual equity award
for 2020, Mr. McManus will be granted an award on April 1, 2020 of 26,100
restricted stock units vesting in four equal annual installments on the first
four anniversaries following the grant date.
In the event of a termination by the Company for no cause or by Mr. McManus for
good cause prior to the end of the term of the McManus Employment Agreement,
Mr. McManus will receive (i) an amount equal to his annual base salary plus his
target bonus
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amount, payable in 12 monthly installments; (ii) any earned but unpaid
discretionary bonus due to him; and (iii) a payment equal to 1.5 times the cost
of COBRA for a coverage period of 12 months, payable in 12 monthly installments.
If the Company terminates Mr. McManus for no cause after the end of the term of
the McManus Employment Agreement (at which time he would be treated as an
at-will employee of the Company), Mr. McManus will receive a lump sum payment
equal to one year of his base salary. Any such severance payments will be
subject to applicable taxes and Mr. McManus execution and non-revocation of a
general release of claims.
The McManus Employment Agreement also contains a non-compete covenant generally
prohibiting Mr. McManus from providing services to a competitor or soliciting
employees or business contacts for 12 months following his termination of
employment or for 12 months following the term of the McManus Employment
Agreement. In addition, the McManus Employment Agreement mandates that
Mr. McManus' confidentiality obligations continue even after his termination of
employment.
The McManus Employment Agreement provides that, to the extent required by the
CARES Act, in connection with the Company becoming eligible for or entering into
a loan, loan guarantee or other form of financial assistance from a governmental
entity, Mr. McManus will agree to such limitations or reductions with respect to
compensation and severance pay as may be required to comply with the CARES Act.
The foregoing description is not a complete description of the McManus
Employment Agreement and is qualified in its entirety by reference to the full
text of the McManus Employment Agreement, a copy of which is attached hereto as
Exhibit 10.3, and the equity award form, a copy of which is attached as Exhibit
10.4, each of which is incorporated by reference in this Item 5.02.
Item 9.01 Financial Statements and Exhibits.
(a) Not applicable.
(b) Not applicable.
(c) Not applicable.
(d) Exhibits:
Exhibit No. Description
10.1 Employment Agreement, effective as of April 1, 2020, by and between
the Company and William Hornbuckle .
10.2 Employment Agreement, effective as of April 1, 2020, by and between
the Company and Corey Sanders.
10.3 Employment Agreement, effective as of April 1, 2020, by and between
the Company and John McManus .
10.4 Form of RSU Agreement.
10.5 Form of RSU Agreement (Hornbuckle).
104 Cover Page Interactive Data File (embedded within the Inline XBRL document).
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