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 August 18, 2022, MGM Resorts International, a Delaware corporation (the
"Company"), entered into an employment agreement with William Hornbuckle,
President and Chief Executive Officer of the Company (the "Hornbuckle Employment
Agreement"), effective as of September 1, 2022. The Hornbuckle Employment
Agreement provides for a term until August 31, 2026 and a minimum base salary of
$2,000,000 per year.
The Hornbuckle Employment Agreement also provides for an annual target bonus
equal to 200% of Mr. Hornbuckle's base salary; provided that, for the 2023
fiscal year and thereafter, any amounts paid in excess of 150% of
Mr. Hornbuckle's target bonus will be paid in fully vested deferred restricted
stock units payable in 25% installments over the 4-year period following the
grant date (and subject to acceleration in the event Mr. Hornbuckle's employment
with the Company is terminated for any reason) ("DRSUs"). For the 2022 fiscal
year, any amounts paid in excess of target will be paid in DRSUs.
The Hornbuckle Employment Agreement also provides that, subject to the
discretion of the Human Capital and Compensation Committee (the "Committee") of
the Board, Mr. Hornbuckle will be eligible for annual equity grants in 2022,
2023, 2024 and 2025 with an expected grant date accounting value of $10,000,000
each year, which are expected to be provided 60% in the form of performance
share units and 40% in the form of restricted stock units. The Hornbuckle
Employment Agreement further provides Mr. Hornbuckle with certain other benefits
and perquisites, which are discussed in detail in the Agreement.
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 one and a half times (i) his annual base
salary and (ii) his target bonus, payable in 12 monthly installments. Any such
severance payments will be subject to applicable taxes and Mr. Hornbuckle's
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 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 incorporated by reference in this Item 5.02.
Corey Sanders Employment Agreement
On August 18, 2022, the Company entered into an employment agreement with Corey
Sanders, Chief Operating Officer of the Company (the "Sanders Employment
Agreement"), effective as of September 1, 2022. The Sanders Employment Agreement
provides for a term until August 31, 2025 and a minimum base salary of
$1,250,000 per year.
The Sanders Employment Agreement also provides for an annual target bonus equal
to 175% of Mr. Sanders' base salary, and certain other benefits and perquisites,
which are discussed in detail in the Sanders Employment Agreement. For 2022,
100% of Mr. Sanders' annual bonus will be payable in cash and for the 2023
fiscal year and thereafter, any amounts paid in excess of 150% of Mr. Sanders'
target bonus will be paid in DRSUs.
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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, subject to the discretion
of the Committee of the Board, Mr. Sanders will be eligible for annual equity
grants in 2022, 2023 and 2024 with an expected grant date accounting value of
$3,750,000 each year, which are expected to be provided 60% in the form of
performance share units and 40% in the form of restricted stock units.
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 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 incorporated by reference in this Item 5.02.
Jonathan Halkyard Employment Agreement
On August 18, 2022, the Company entered into an employment agreement with
Jonathan S. Halkyard, Chief Financial Officer and Treasurer of the Company (the
"Halkyard Employment Agreement"), effective as of September 1, 2022. The
Halkyard Employment Agreement provides for a term until February 1, 2026 and a
minimum base salary of $1,100,000 per year.
The Halkyard Employment Agreement also provides for an annual target bonus equal
to 150% of Mr. Halkyard's base salary, and certain other benefits and
perquisites, which are discussed in detail in the Halkyard Employment Agreement.
For 2022, any amounts Mr. Halkyard receives above his target bonus will be
payable in DRSUs and for the 2023 fiscal year and thereafter, any amounts paid
in excess of 150% of Mr. Halkyard's target bonus will be paid in DRSUs.
In the event of a termination of Mr. Halkyard's employment as the result of his
death or a termination by the Company due to disability, the Company will pay
Mr. Halkyard one year of salary payable at regular payroll intervals (less any
payments received from an employer-paid short term disability policy).
The Halkyard Employment Agreement also provides that, subject to the discretion
of the Committee of the Board, Mr. Halkyard will be eligible for annual equity
grants in 2022, 2023 and 2024 with an expected grant date accounting value of
$2,750,000 each year, which are expected to be provided 60% in the form of
performance share units and 40% in the form of restricted stock units.
In the event of a termination by the Company for no cause or by Mr. Halkyard for
good cause prior to the end of the term of the Halkyard Employment Agreement,
Mr. Halkyard 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. Halkyard for no cause after the end
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of the term of the Halkyard Employment Agreement (at which time he would be
treated as an at-will employee of the Company), Mr. Halkyard 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. Halkyard's execution and
non-revocation of a general release of claims.
The Halkyard Employment Agreement also contains a non-compete covenant generally
prohibiting Mr. Halkyard 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 Halkyard Employment
Agreement. In addition, the Halkyard Employment Agreement mandates that
Mr. Halkyard's confidentiality obligations continue even after his termination
of employment.
The foregoing description is not a complete description of the Halkyard
Employment Agreement and is qualified in its entirety by reference to the full
text of the Halkyard Employment Agreement, a copy of which is attached hereto as
Exhibit 10.3 and incorporated by reference in this Item 5.02.
John McManus Employment Agreement
On August 18, 2022, the Company entered into an employment agreement with John
McManus, Chief Legal and Administrative Officer and Secretary of the Company
(the "McManus Employment Agreement"), effective as of September 1, 2022. The
McManus Employment Agreement provides for a term until August 31, 2026 and a
minimum base salary of $900,000 per year.
The McManus Employment Agreement also provides for an annual target bonus equal
to 125% of Mr. McManus' base salary, and certain other benefits and perquisites,
which are discussed in detail in the McManus Employment Agreement. For 2022,
100% of Mr. McManus' annual bonus will be payable in cash and for the 2023
fiscal year and thereafter, any amounts paid in excess of 150% of Mr. McManus'
target bonus will be paid in DRSUs.
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, subject to the discretion
of the Committee of the Board, Mr. McManus will be eligible for annual equity
grants in 2022, 2023, 2024 and 2025 with an expected grant date accounting value
of $2,250,000 each year, which are expected to be provided 60% in the form of
performance share units and 40% in the form of restricted stock units.
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 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.
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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 104 and incorporated by reference in this Item 5.02.
Amended and Restated Change of Control Policy
On August 16, 2022, the Committee adopted an Amended and Restated Change of
Control Policy for Executive Officers, effective as of April 16, 2022 (the
"Policy"). The Board amended the Policy to, among other things, (i) amend the
definition of "Change of Control" to replace the prior asset sale language with
an "all or substantially all" standard, (ii) amend the definition of "Separation
Benefits" (Separation Benefits are generally payable if the participant is
terminated within six months before or one year after a Change of Control by the
Employer without "Employer's Good Cause" or by the participant with
"Participant's Good Cause," as such terms are defined in the Policy) to include
a prorated portion of their target bonus through the date of termination , (iii)
revise the definition of "Employer's Good Cause" to include termination in
connection with a participant's conviction of a crime related to the Company or
any felony and to heighten the misconduct standard to gross misconduct,
(v) remove the maximum dollar limitations on separation payments payable to the
Chief Executive Officer ("CEO") and other participants and (vi) reduce the
severance multiple for the non-CEO participants from two times to one and a half
times. The foregoing description of the Policy is not complete and is subject
to, and qualified in its entirety by, the full text of the Policy, which is
attached as Exhibit 10.5 to this Current Report on Form 8-K and incorporated
herein by reference.
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 September 1, 2022, by and
between the Company and William Hornbuckle.
10.2 Employment Agreement, effective as of September 1, 2022,by and
between the Company and Corey Sanders.
10.3 Employment Agreement, effective as of September 1, 2022, by and
between the Company and Jonathan S. Halkyard.
10.4 Employment Agreement, effective as of September 1, 2022, by and
between the Company and John McManus.
10.5 Amended and Restated Change of Control Policy for Executive
Officers, effective August 16, 2022
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document).
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