Employment Agreement - Circus Circus Enterprises Inc. and Gregg H. Solomon
EMPLOYMENT AGREEMENT
THIS AGREEMENT is made and entered into this 1st day of
June, 1995, by and between Circus Circus Enterprises, Inc., a
Nevada corporation (the "Company") and Gregg H. Solomon
("Executive").
W I T N E S S E T H:
WHEREAS, Executive and the Company deem it to be in
their respective best interests to enter into an agreement
providing for the Company's employment of Executive pursuant to
the terms herein stated;
NOW, THEREFORE, in consideration of the premises and
the mutual promises and agreements contained herein, it is hereby
agreed as follows:
1. Effective Date. This Agreement shall be effective
as of the 1st day of June, 1995, which date shall be referred to
herein as the "Effective Date".
2. Position and Duties.
(a) The Company hereby employs Executive as its
Senior Vice President - Operations commencing as of the Effective
Date for the "Term of Employment" (as herein defined below). In
this capacity, Executive shall devote his best efforts and his
full business time and attention to the performance of the
services customarily incident to such offices and position and to
such other services of a senior executive nature as may be
reasonably requested by the Board of Directors (the "Board") of
the Company which may include services for one or more
subsidiaries or affiliates of the Company. Executive shall in
his capacity as an employee of the Company be responsible to and
obey the reasonable and lawful directives of the Board and of any
officers ("Supervising Officers") to whom he shall report.
(b) Executive shall devote his full time and
attention to such duties, except for sick leave, reasonable vaca-
tions, and excused leaves of absence as more particularly pro-
vided herein. Executive shall use his best efforts during the
Term of Employment to protect, encourage, and promote the inter-
ests of the Company.
3. Compensation.
(a) Base Salary. The Company shall pay to Execu-
tive during the Term of Employment a minimum salary at the rate
of four hundred thousand dollars ($400,000) per calendar year and
agrees that such salary shall be reviewed at least annually. Such
salary shall be payable in accordance with the Company's normal
payroll procedures. (Executive's annual salary, as set forth
above or as it may be increased from time to time as set forth
herein, shall be referred to hereinafter as "Base Salary.") At
no time during the Term of Employment shall Executive's Base
Salary be decreased from the amount of Base Salary then in
effect.
(b) Performance Bonus. In addition to the
compensation otherwise payable to Executive pursuant to this
Agreement, Executive shall be eligible to receive an annual bonus
("Bonus") pursuant to a performance bonus plan (the "Bonus Plan")
which shall be established by the Company for its senior
executive officers and which shall provide for bonus compensation
to be payable based upon the financial and other performance of
the Company and its senior executives. It is intended that the
Bonus Plan shall conform to the requirements applicable to
"qualified performance based compensation" under Section 162(m)
of the Internal Revenue Code of 1986, as amended (the "Code").
During the Term of Employment, Executive's targeted annual bonus
under the Bonus Plan shall not be less than 100% of Executive's
then current Base Salary.
(c) Long Term Incentive/Stock Options. Executive
has been granted a stock option to purchase the Company's common
stock as set forth in that certain Non-Qualified Stock Option
Certificate and Agreement dated as of March 19, 1995 and attached
hereto as Exhibit A.
4. Benefits. During the Term of Employment:
(a) Executive shall be eligible to participate in
any life, health and long-term disability insurance programs,
pension and retirement programs, stock option and other incentive
compensation programs, and other fringe benefit programs made
available to senior executive employees of the Company from time
to time, and Executive shall be entitled to receive such other
fringe benefits as may be granted to him from time to time by the
Company's Board of Directors.
(b) Executive shall be allowed vacations and
leaves of absence with pay on the same basis as other senior
executive employees of the Company.
(c) The Company shall reimburse Executive for
reasonable business expenses incurred in performing Executive's
duties and promoting the business of the Company, including, but
not limited to, reasonable entertainment expenses, travel and
lodging expenses, following presentation of documentation in
accordance with the Company's business expense reimbursement
policies.
(d) Executive shall be added as an additional
named insured under all liability insurance policies now in force
or hereafter obtained covering any officer or director of the
Company in his or her capacity as an officer or director. Compa-
ny shall indemnify Executive in his capacity as an officer or
director and hold him harmless from any cost, expense or liabil-
ity arising out of or relating to any acts or decisions made by
him on behalf of or in the course of performing services for the
Company (to the maximum extent provided by the Company's Bylaws
and applicable law).
5. Term; Termination of Employment. As used herein,
the phrase "Term of Employment" shall mean the period commencing
on the Effective Date and ending three (3) years from the
Effective Date, provided that as of the expiration date of each
of (i) the initial three (3) year Term of Employment and (ii) if
applicable, any Renewal Period (as defined below), the Term of
Employment shall automatically be extended for a one (1) year
period (each a "Renewal Period") unless either the Company or
Executive provides six (6) months' notice to the contrary.
Notwithstanding the foregoing, the Term of Employment shall
expire on the first to occur of the following:
(a) Termination by the Company Without Cause or
By Executive With Good Reason. Notwithstanding anything to the
contrary in this Agreement, whether express or implied, the
Company may, at any time, terminate Executive's employment for
any reason other than Cause (as defined below) by giving
Executive at least 60 days' prior written notice of the effective
date of termination. In the event Executive's employment
hereunder is terminated by the Company other than for Cause or by
Executive for Good Reason (as defined below), Executive shall be
entitled to receive (x) his Base Salary as he would have received
such amounts during the period commencing on the effective date
of such termination and ending on the later of (i) the expiration
of the Term of Employment or (ii) the date that is twelve (12)
months following the effective date of such termination (the
"Salary Continuation Period"), as if Executive were still em-
ployed hereunder during the Salary Continuation Period; (y) if it
has not previously been paid to Executive, any Bonus to which
Executive had become entitled under the Bonus Plan prior to the
effective date of such termination; and (z) annual Bonuses during
the Salary Continuation Period in an amount equal to the product
of Executive's Base Salary on the effective date of such
termination and the minimum targeted bonus percentage specified
in Section 3(b), payable in the ordinary course and prorated, as
applicable, for any partial fiscal year of the Bonus Plan ending
on the final day of the Salary Continuation Period. In addition,
all of Executive's stock options with respect to the Company's
stock shall become immediately and fully exercisable. During the
Salary Continuation Period, Executive and his spouse and depen-
dents shall be entitled to continue to be covered by all group
medical, health and accident insurance or other such health care
arrangements in which Executive was a participant as of the date
of such termination, at the same coverage level and on the same
terms and conditions which applied immediately prior to the date
of Executive's termination of employment, until Executive obtains
alternative comparable coverage under another group plan, which
coverage does not contain any pre-existing condition exclusions
or limitations; provided, however, that if, as the result of the
termination of Executive's employment, Executive and/or his
otherwise eligible dependents or beneficiaries shall become
ineligible for benefits under any one or more of the Company's
benefit plans, the Company shall continue to provide Executive
and his eligible dependents or beneficiaries, through other
means, with benefits at a level at least equivalent to the level
of benefits for which Executive and his dependents and
beneficiaries were eligible under such plans immediately prior to
the date of Executive's termination of employment. At the
termination of the benefits coverage under the preceding
sentence, Executive and his spouse and dependents shall be
entitled to continuation coverage pursuant to Section 4980B of
the Internal Revenue Code of 1986, as amended, Sections 601-608
of the Employee Retirement Income Security Act of 1974, as
amended, and under any other applicable law, to the extent
required by such laws, as if Executive had terminated employment
with the Company on the date such benefits coverage terminates.
For purposes of this Agreement, "Good Reason" shall mean,
without the express written consent of Executive, the occurrence
of any of the following events unless such events are fully
corrected within 30 days following written notification by
Executive to the Company that he intends to terminate his
employment hereunder for one of the reasons set forth below:
i) a material breach by the Company of any
material provision of this Agreement;
ii) the Company's requiring Executive to be based
anywhere other than the metropolitan area
where he currently works and resides for a
period in excess of eighteen (18) months;
iii) the occurrence of a "Change in Control" as
defined below; or
iv) the Company's notifying Executive that it
does not consent to any automatic one-year
extension of the Term of Employment.
For purposes of this Agreement a "Change in Control" shall
mean an event as a result of which: (i) any "person" (as such
term is used in Sections 13(d) and 14(d) of the Securities and
Exchange Act of 1934 (the "Exchange Act")), is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange
Act, except that a person shall be deemed to have "beneficial
ownership" of all securities that such person has the right to
acquire, whether such right is exercisable immediately or only
after the passage of time), directly or indirectly, of more than
50% of the total voting power of the voting stock of the Company;
(ii) the Company consolidates with, or merges with or into
another corporation or sells, assigns, conveys, transfers, leases
or otherwise disposes of all or substantially all of its assets
to any person, or any corporation consolidates with, or merges
with or into, the Company, in any such event pursuant to a trans-
action in which the outstanding voting stock of the Company is
changed into or exchanged for cash, securities or other property,
other than any such transaction where (A) the outstanding voting
stock of the Company is changed into or exchanged for (x) voting
stock of the surviving or transferee corporation or (y) cash,
securities (whether or not including voting stock) or other
property, and (B) the holders of the voting stock of the Company
immediately prior to such transaction own, directly or indi-
rectly, not less than 50% of the voting power of the voting stock
of the surviving corporation immediately after such transaction;
or (iii) during any period of two consecutive years, individuals
who at the beginning of such period constituted the Board of the
Company (together with any new directors whose election by such
Board or whose nomination for election by the stockholders of the
Company was approved by a vote of 66-2/3% of the directors then
still in office who were either directors at the beginning of
such period or whose election or nomination for election was
previously so approved) cease for any reason to constitute a
majority of the Board of the Company then in office; or (iv) the
Company is liquidated or dissolved or adopts a plan of
liquidation, provided however that a Change in Control shall not
include any going private or leveraged buy-out transaction which
is sponsored by Executive or in which Executive acquires an
equity interest materially in excess of his equity interest in
the Company immediately prior to such transaction (each of the
events described in (i), (ii), (iii) or (iv) above, as provided
otherwise by the preceding clause being referred to herein as a
"Change in Control").
(b) Termination for Cause. The Company shall
have the right to terminate Executive's employment at any time
for Cause by giving Executive written notice of the effective
date of termination (which effective date may, except as
otherwise provided below, be the date of such notice). If the
Company terminates Executive's employment for Cause, Executive
shall be paid his unpaid Base Salary through the date of
termination and the amount of any unpaid Bonus to which Executive
had become entitled under the Bonus Plan prior to the effective
date of such termination and the Company shall have no further
obligation hereunder from and after the effective date of
termination and the Company shall have all other rights and
remedies available under this or any other agreement and at law
or in equity.
For purposes of this Agreement only, Cause shall mean:
i) fraud, misappropriation, embezzlement, or
other act of material misconduct against the
Company or any of its affiliates;
ii) substantial and willful failure to perform
specific and lawful directives of the Board
or any Supervising Officer, as reasonably de-
termined by the Board;
iii) willful and knowing violation of any rules or
regulations of any governmental or regulatory
body, which is materially injurious to the
financial condition of the Company;
iv) conviction of or plea of guilty or nolo
contendere to a felony; or
v) Executive's loss of any personal gaming or
related regulatory approval or license
required to perform his duties under this
Agreement;
provided, however, that with regard to subparagraph ii) above,
Executive may not be terminated for Cause unless and until the
Board has given him reasonable written notice of its intended
actions and specifically describing the alleged events, activi-
ties or omissions giving rise thereto and with respect to those
events, activities or omissions for which a cure is possible, a
reasonable opportunity to cure such breach; and provided,
further, that for purposes of determining whether any such Cause
is present, no act or failure to act by Executive shall be
considered "willful" if done or omitted to be done by Executive
in good faith and in the reasonable belief that such act or
omission was in the best interest of the Company and/or required
by applicable law.
(c) Termination on Account of Death. In the
event of Executive's death while in the employ of the Company,
his employment hereunder shall terminate on the date of his death
and Executive shall be paid his unpaid Base Salary through the
date of termination and the amount of any unpaid Bonus to which
Executive had become entitled under the Bonus Plan prior to the
effective date of such termination. In addition, any other bene-
fits payable on behalf of Executive shall be determined under the
Company's insurance and other compensation and benefit plans and
programs then in effect in accordance with the terms of such
programs.
(d) Voluntary Termination by Executive. In the
event that Executive's employment with the Company is voluntarily
terminated by Executive other than for Good Reason, Executive
shall be paid his unpaid Base Salary through the date of
termination and the amount of any unpaid Bonus to which Executive
had become entitled under the Bonus Plan prior to the effective
date of such termination, and the Company shall have no further
obligation hereunder from and after the effective date of
termination and the Company shall have all other rights and
remedies available under this Agreement or any other agreement
and at law or in equity. Executive shall give the Company at
least 30 days' advance written notice of his intention to
terminate his employment hereunder.
(e) Termination on Account of Disability. To the
extent not prohibited by The Americans With Disabilities Act of
1990 or Chapter 613 of the Nevada Revised Statutes, if, as a
result of Executive's incapacity due to physical or mental
illness (as determined in good faith by a physician acceptable to
the Company and Executive), Executive shall have been absent from
the full-time performance of his duties with the Company for 120
consecutive days during any twelve (12) month period or if a
physician acceptable to the Company advises the Company that it
is likely that Executive will be unable to return to the full-
time performance of his duties for 120 consecutive days during
the succeeding twelve (12) month period, his employment may be
terminated for "Disability." During any period that Executive
fails to perform his full-time duties with the Company as a
result of incapacity due to physical or mental illness, he shall
continue to receive his Base Salary, Bonus and other benefits
provided hereunder, together with all compensation payable to him
under the Company's disability plan or program or other similar
plan during such period, until Executive's employment hereunder
is terminated pursuant to this Section 5(e). Thereafter,
Executive's benefits shall be determined under the Company's
retirement, insurance, and other compensation and benefit plans
and programs then in effect, in accordance with the terms of such
programs.
6. Confidential Information, Non-Solicitation and Non-
Competition.
(a) During the Term of Employment and for three
(3) years thereafter, Executive shall not, except as may be re-
quired to perform his duties hereunder or as required by
applicable law, disclose to others or use, whether directly or
indirectly, any Confidential Information regarding the Company.
"Confidential Information" shall mean information about the
Company, its subsidiaries and affiliates, and their respective
clients and customers that is not available to the general public
and that was learned by Executive in the course of his employment
by the Company, including (without limitation) any proprietary
knowledge, trade secrets, data, formulae, information, and client
and customer lists and all papers, resumes, records (including
computer records) and the documents containing such Confidential
Information. Executive acknowledges that such Confidential
Information is specialized, unique in nature and of great value
to the Company, and that such information gives the Company a
competitive advantage. Upon the termination of his employment
for any reason whatsoever, Executive shall promptly deliver to
the Company all documents, computer tapes and disks (and all
copies thereof) containing any Confidential Information.
(b) During the period that Executive is receiving
payments under this Agreement (which Executive may elect to
terminate at any time), Executive shall not, directly or
indirectly in any manner or capacity (e.g., as an advisor,
principal, agent, partner, officer, director, shareholder,
employee, member of any association or otherwise) engage in, work
for, consult, provide advice or assistance or otherwise
participate in any activity which is competitive with the
business of the Company in any geographic area in which the
Company is now or shall then be doing business. Executive
further agrees that during such period he will not assist or
encourage any other person in carrying out any activity that
would be prohibited by the foregoing provisions of this Section 6
if such activity were carried out by Executive and, in
particular, Executive agrees that he will not induce any employee
of the Company to carry out any such activity; provided, however,
that the "beneficial ownership" by Executive, either individually
or as a member of a "group," as such terms are used in Rule 13d
of the General Rules and Regulations under the Exchange Act, of
not more than five percent (5%) of the voting stock of any
publicly held corporation shall not be a violation of this
Agreement. It is further expressly agreed that the Company will
or would suffer irreparable injury if Executive were to compete
with the Company or any subsidiary or affiliate of the Company in
violation of this Agreement and that the Company would by reason
of such competition be entitled to injunctive relief in a court
of appropriate jurisdiction, and Executive further consents and
stipulates to the entry of such injunctive relief in such a court
prohibiting Executive from competing with the Company or any
subsidiary or affiliate of the Company in violation of this
Agreement.
(c) During the Term of Employment and for three
(3) years thereafter, Executive shall not, directly or
indirectly, influence or attempt to influence customers or
suppliers of the Company or any of its subsidiaries or
affiliates, to divert their business to any competitor of the
Company.
(d) Executive recognizes that he will possess
confidential information about other employees of the Company
relating to their education, experience, skills, abilities,
compensation and benefits, and interpersonal relationships with
customers of the Company. Executive recognizes that the
information he will possess about these other employees is not
generally known, is of substantial value to the Company in
developing its business and in securing and retaining customers,
and will be acquired by him because of his business position with
the Company. Executive agrees that, during the Term of
Employment, and for a period of three (3) years thereafter, he
will not, directly or indirectly, solicit or recruit any employee
of the Company for the purpose of being employed by him or by any
competitor of the Company on whose behalf he is acting as an
agent, representative or employee and that he will not convey any
such confidential information or trade secrets about other
employees of the Company to any other person.
(e) If it is determined by a court of competent
jurisdiction in any state that any restriction in this Section 6
is excessive in duration or scope or is unreasonable or
unenforceable under the laws of that state, it is the intention
of the parties that such restriction may be modified or amended
by the court to render it enforceable to the maximum extent
permitted by the law of that state.
7. No Offset - No Mitigation. Executive shall not be
required to mitigate damages under this Agreement by seeking
other comparable employment. The amount of any payment or bene-
fit provided for in this Agreement, including welfare benefits,
shall not be reduced by any compensation or benefits earned by or
provided to him as the result of employment by another employer,
except as provided otherwise in Section 5(a) with respect to
health and insurance benefits provided during the Salary
Continuation Period.
8. Designated Beneficiary. In the event of the death
of Executive while in the employ of the Company, or at any time
thereafter during which amounts remain payable to Executive under
Section 5, such payments (other than the right to continuation of
welfare benefits) shall thereafter be made to such person or
persons as Executive may specifically designate (successively or
contingently) to receive payments under this Agreement following
Executive's death by filing a written beneficiary designation
with the Company during Executive's lifetime. Such beneficiary
designation shall be in such form as may be prescribed by the
Company and may be amended from time to time or may be revoked by
Executive pursuant to written instruments filed with the Company
during his lifetime. Beneficiaries designated by Executive may
be any natural or legal person or persons, including a fiduciary,
such as a trustee or a trust or the legal representative of an
estate. Unless otherwise provided by the beneficiary designation
filed by Executive, if all of the persons so designated die
before Executive on the occurrence of a contingency not contem-
plated in such beneficiary designation, then the amounts payable
under this Agreement shall be paid to Executive's estate.
9. Taxes. All payments to be made to Executive under
this Agreement will be subject to any applicable withholding of
federal, state and local income and employment taxes.
10. Miscellaneous. This Agreement shall also be
subject to the following miscellaneous considerations:
(a) Executive and the Company each represent and
warrant to the other that he or it has the authorization, power
and right to deliver, execute, and fully perform his or its
obligations under this Agreement in accordance with its terms.
(b) This Agreement contains a complete statement
of all the arrangements between the parties with respect to
Executive's employment by the Company, this Agreement supersedes
all prior and existing negotiations and agreements between the
parties concerning Executive's employment, and this Agreement can
only be changed or modified pursuant to a written instrument duly
executed by each of the parties hereto.
(c) If any provision of this Agreement or any
portion thereof is declared invalid, illegal, or incapable of
being enforced by any court of competent jurisdiction, the
remainder of such provisions and all of the remaining provisions
of this Agreement shall continue in full force and effect.
(d) This Agreement shall be governed by and
construed in accordance with the internal laws of the State of
Nevada, except to the extent governed by federal law.
(e) The Company may assign this Agreement to any
direct or indirect subsidiary or parent of the Company or joint
venture in which the Company has an interest, or any successor
(whether by merger, consolidation, purchase or otherwise) to all
or substantially all of the stock, assets or business of the
Company and this Agreement shall be binding upon and inure to the
benefit of such successors and assigns. Except as expressly pro-
vided herein, Executive may not sell, transfer, assign, or pledge
any of his rights or interests pursuant to this Agreement.
(f) Any rights of Executive hereunder shall be in
addition to any rights Executive may otherwise have under benefit
plans, agreements, or arrangements of the Company to which he is
a party or in which he is a participant, including, but not
limited to, any Company-sponsored employee benefit plans. Provi-
sions of this Agreement shall not in any way abrogate Executive's
rights under such other plans, agreements, or arrangements.
(g) For the purpose of this Agreement, notices
and all other communications provided for in this Agreement shall
be in writing and shall be deemed to have been duly given when
delivered or mailed by United States certified or registered
mail, return receipt requested, postage prepaid, addressed to the
named Executive at the address set forth below under his
signature; provided that all notices to the Company shall be
directed to the attention of the Board with a copy to the Secre-
tary of the Company, or to such other address as either party may
have furnished to the other in writing in accordance herewith,
except that notice of change of address shall be effective only
upon receipt.
(h) Section headings in this Agreement are
included herein for convenience of reference only and shall not
constitute a part of this Agreement for any other purpose.
(i) Failure to insist upon strict compliance with
any of the terms, covenants, or conditions hereof shall not be
deemed a waiver of such term, covenant, or condition, nor shall
any waiver or relinquishment of, or failure to insist upon strict
compliance with, any right or power hereunder at any one or more
times be deemed a waiver or relinquishment of such right or power
at any other time or times.
(j) This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but
all of which together will constitute one and the same
instrument.
11. Resolution of Disputes. Any dispute or
controversy arising under or in connection with this Agreement
shall be settled exclusively by arbitration, conducted before a
panel of three arbitrators in Las Vegas, Nevada in accordance
with the rules of the American Arbitration Association then in
effect. The Company and Executive hereby agree that the
arbitrator will not have the authority to award punitive damages,
damages for emotional distress or any other damages that are not
contractual in nature. Judgment may be entered on the
arbitrator's award in any court having jurisdiction; provided,
however, that the Company shall be entitled to seek a restraining
order or injunction in any court of competent jurisdiction to
prevent any continuation of any violation of the provisions of
Section 6, and Executive consents that such restraining order or
injunction may be granted without the necessity of the Company's
posting any bond except to the extent otherwise required by
applicable law. The expense of such arbitration shall be borne
by the Company.
12. Attorneys' Fees. Should either party hereto or
their successors retain counsel for the purpose of enforcing, or
preventing the breach of, any provision hereof, including, but
not limited to, by instituting any action or proceeding in
arbitration or a court to enforce any provision hereof or to
enjoin a breach of any provision of this Agreement, or for a
declaration of such party's rights or obligations under the
Agreement, or for any other remedy, whether in arbitration or in
a court of law, then the successful party shall be entitled to be
reimbursed by the other party for all costs and expenses incurred
thereby, including, but not limited to, reasonable fees and ex-
penses of attorneys and expert witnesses, including costs of
appeal. If such successful party shall recover judgment in any
such action or proceeding, such costs, expenses and fees may be
included in and as part of such judgment. The successful party
shall be the party who is entitled to recover his costs of suit,
whether or not the suit proceeds to final judgment. If no costs
are awarded, the successful party shall be determined by the
arbitrator or court, as the case may be.
IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the day and year first above written.
EXECUTIVE COMPANY
GREGG H. SOLOMON CIRCUS CIRCUS ENTERPRISES, INC.
By: By:
Title: Senior Vice President - Operations Title:
Address: