Employment Agreement - Las Vegas Sands Inc. d/b/a Venetian Hotel Resort Casino and Bradley H. Stone
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
THIS AGREEMENT ("Agreement") is made as of January 1, 2002 between LAS
VEGAS SANDS, INC., a Nevada corporation having its principal place of business
at 3355 Las Vegas Boulevard South, Las Vegas, Nevada, d/b/a Venetian Hotel
Resort Casino ("LVSI") and BRADLEY H. STONE, an individual residing at 9113
Eagle Hill Drive, Las Vegas, Nevada ("Stone").
WHEREAS:
LVSI is engaged in the business of owning and operating The Venetian
Resort Hotel Casino on property owned by LVSI on the "Strip" in Las Vegas,
Nevada (the "Venetian Property");
LVSI desires to further develop the Venetian Property and to construct
additional improvements thereon (the "Phase II Development");
In furtherance of its business and development plans, LVSI has need of
qualified, experienced, management personnel;
On November 1, 1995 Stone and LVSI entered into an Employment
Agreement (the "Original Employment Agreement") pursuant to which Stone has
served, and continues to serve, as Executive Vice President of LVSI;
The Original Employment Agreement, which would have expired on
December 31, 1998, was extended by LVSI pursuant to its terms and expired
on December 31, 2000; and
LVSI and Stone now wish to further extend Stone's employment by LVSI,
and to modify and amend the Original Employment Agreement and restate the
terms, provisions and conditions thereof, as set forth herein
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants, understandings, representations, warranties, undertakings and
promises hereinafter set forth, and intending to be legally bound thereby, LVSI
and Stone agree as follows:
1. EMPLOYMENT. LVSI shall employ Stone, during the term and subject to
the conditions set forth in this Agreement, to serve as Executive Vice President
of LVSI or in such other managerial or executive capacity as the Board of
Directors of LVSI (sometimes hereinafter referred to as "the Board") may from
time to time determine.
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2. DUTIES. Stone shall have such powers, duties and responsibilities
as are generally associated with his office, as the same may be modified and/or
assigned to Stone from time to time by the Chairman of the Board or President,
and subject to the supervision, direction and control of the Chairman and the
Board and President, including but not limited to:
(a) participation and involvement in the proposed development
activities of LVSI, including the planning, financing, construction and
implementation stages, as shall be requested by the Chairman of the Board;
(b) the efficient operation and maintenance of the hotel and casino
properties of LVSI;
(c) the promotion, marketing and sale of the goods and services
offered by LVSI;
(d) the preparation of budgets and allocation of funds;
(e) the establishment or continuation of adequate management reporting
and control systems;
(f) the recruitment, selection, training, delegation of duties and
responsibilities, and supervision, of subordinates; and
(g) the direction, review and oversight of all programs, systems,
departments and functions related to the management and administration
of LVSI.
3. PERFORMANCE. Stone hereby unconditionally accepts the employment
described herein under the terms and conditions set forth in this Agreement.
Stone covenants and agrees faithfully and diligently to perform all of the
duties of his employment, devoting his full business and professional time,
attention, energy and ability to promote the business interests of LVSI. Stone
further agrees that during the period of his employment with LVSI, he will not
engage in any other business or professional pursuit whatsoever unless LVSI
shall consent thereto in writing.
4. TERM. The term of Stone's employment hereunder commenced on
December 1, 1995 (the "Effective Date"). The initial term of this Amended and
Restated Agreement (the "Initial Term") shall expire on December 31, 2005,
unless sooner terminated as provided herein. The Initial Term shall be
automatically extended for successive one-year periods thereafter (each, a
"Renewal Term") unless, no later than 120 days prior to the expiration of the
Initial Term or any Renewal Term, one party shall give written notice to the
other of his or its intention not to extend, in which event this Agreement shall
terminate at the end of the then current Initial or Renewal Term.
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5. LICENSING REQUIREMENT. Stone is presently licensed as a casino key
employee ("the License") issued by the Nevada Gaming Commission upon the
recommendation of the state Gaming Control Board (collectively, the "Nevada
Gaming Authorities"), pursuant to the provisions of applicable Nevada laws and
regulations. Stone agrees to cooperate with the Nevada Gaming Authorities to
maintain the License in full force and effect and in good standing. If the
Nevada Gaming Authorities shall refuse to grant the License to Stone, then this
Agreement shall, at any time, suspend or revoke the License, then this Agreement
shall terminate and neither LVSI nor Stone shall have any further obligation
hereunder.
6. COMPENSATION. For all of the services to be rendered by Stone to
LVSI hereunder, LVSI shall pay Stone the following:
(a) SALARY. After the execution hereof and during the remainder
of the Initial Term, Stone shall receive a monthly salary at the rate of Nine
Hundred Fifteen Thousand Two Hundred Dollars ($915,200) per year, payable in
accordance with the usual payroll practices of LVSI. At the start of each
calendar year of the Initial Term, beginning with 2003, and each Renewal Term,
if any, Stone's salary shall be increased over the salary in effect immediately
prior to the start of such calendar year or Renewal Term by four percent (4%).
(b) BONUS. With respect to each calendar year during the Initial
Term and any Renewal Term hereof, beginning with the 2002 calendar year, Stone
shall receive additional compensation on account of such year (the "Annual
Bonus") calculated as follows: For the year 2002, the "Budgeted EBITDAR" shall
be $190 Million and the "Bonus Threshold" shall be $160 Million., the difference
between the Budgeted EBITDAR and the Bonus Threshold being called the
"Budget/Bonus Spread." For each $1 Million of EBITDAR earned by LVSI in excess
of the Bonus Threshold, Stone shall receive an Annual Bonus of 1.666% (the
"Budget Increment Percentage") of the salary set forth in Section 6(a) above, up
to a maximum Annual Bonus of 50% of salary when the EBITDAR earned by LVSI shall
equal the Budgeted EBITDAR. In subsequent years, Budgeted EBITDAR shall be
established based upon the budget presented by LVSI management and approved by
the Board, the Bonus Threshold shall be 84.21% of Budgeted EBITDAR rounded to
the nearest $1 Million, the Budget/Bonus Spread (expressed in $Millions) shall
be divided by 50 to determine the Budget Increment Percentage, and the Annual
Bonus paid to Stone shall be the Budget Increment Percentage multiplied by
Stone's salary in effect for that year multiplied by the number of Millions of
dollars of EBITDAR earned by LVSI in excess of the Bonus Threshold. The Annual
Bonus shall be payable within 30 days after the accountants regularly employed
by LVSI have determined the EBITDAR for the year.
(c) EMPLOYEE BENEFIT PLANS. LVSI shall include Stone in any group
health, medical, dental, hospitalization, life or accident insurance plans, and
any qualified pension, profit sharing or retirement plans, which may be placed
in effect or maintained by LVSI during the Term hereof for the benefit of its
employees generally, subject to all restrictions and limitations contained
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in such plans or established by governmental regulation.
(d) EXPENSE REIMBURSEMENT. Stone is authorized to incur such
reasonable expenses as may be necessary for the performance of his duties
hereunder in accordance with the policies of LVSI established and in effect from
time to time and, except as may be otherwise agreed, LVSI will reimburse Stone
for all such authorized expenses upon submission of an itemized accounting and
substantiation of such expenditures adequate to secure for LVSI a tax deduction
for the same in accordance with applicable Internal Revenue Service guidelines.
(e) VACATIONS AND HOLIDAYS. Stone shall be entitled to vacations
and holidays as provided in LVSI's Flex Day Plan as in effect from time to time,
but no less than the following: four weeks of paid vacation leave per year at
such times as may be requested by Stone and approved by LVSI. No more than three
weeks of vacation shall be taken consecutively. Up to two weeks of vacation may
be carried over to the following year (but not to the next). In addition, Stone
may take the following paid holidays or, at LVSI's option, an equivalent number
of paid days off: New Year's Day, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day.
(f) LICENSING EXPENSES. LVSI shall pay all fees and expenses
incurred by Stone in securing and maintaining such licenses and permits as may
be required by the Nevada Gaming Authorities in order to perform his duties
under this Agreement.
7. STOCK OPTIONS. In addition to all other sums payable hereunder,
LVSI or its principal shareholder, Sheldon G. Adelson ("Adelson"), (LVSI and
Adelson being hereinafter sometimes referred to, collectively or individually,
as "Grantor") has granted to Stone the option to acquire certain shares of the
common capital stock of LVSI in accordance with the terms of a Stock Option
Agreement between LVSI and Stone under LVSI's 1997 Fixed Stock Option Plan.
Stone acknowledges and agrees that the stock option grant made in the Stock
Option Agreement represents all of the stock to be issued to Stone under this
Employment Agreement and shall, in all respects, be subject to the approval of
the Nevada Gaming Authorities.
8. CONFIDENTIALITY. Stone agrees that he will hold in strictest
confidence and, without the prior express written approval of LVSI, will not
disclose to any person, firm, corporation or other entity, any confidential
information which he has acquired or may hereafter acquire during his employment
by LVSI pertaining to the business or affairs of LVSI, including but not limited
to (i)
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proprietary information or other documents concerning LVSI's policies, prices,
systems, methods of operation, contractual arrangements, customers or suppliers;
(ii) LVSI's marketing methods, credit and collection techniques and files; and
(iii) LVSI's trade secrets and other "know how" or information concerning its
business and affairs not of a public nature. The covenant and agreement set
forth in this Section shall apply during Stone's employment by LVSI and shall
survive termination of this Agreement by any means and shall remain binding upon
Stone without regard to the passage of time or other events.
9. RESTRICTIVE COVENANT. Stone shall not, either during the term of
this Agreement or until December 31, 2005 (the "Restrictive Covenant Expiration
Date") if the Agreement terminates prior to the end of the Initial Term by
reason of a Cause Termination, Stone Breach Termination, Voluntary Termination,
or Licensing Termination (all as defined in Section 11 (a)), or by reason of an
LVSI Breach Termination, Constructive Termination, or Involuntary Termination if
and only if LVSI is paying to Stone the amount set forth in Section 11 (d) (iv),
directly or indirectly, either as principal, agent, employee, consultant,
partner, officer, director, shareholder, or in any other individual or
representative capacity, own, manage, finance, operate, control or otherwise
engage or participate in any manner or fashion in, any hotel or casino in the
City of Las Vegas or Clark County, Nevada. In the event that this Agreement
shall be extended beyond the Initial Term, the Restrictive Covenant Expiration
Date shall be extended to the second anniversary of the date of any Termination
Event. Stone acknowledges and agrees that the restrictive covenant contained in
this Section is reasonable as to duration, terms, and geographical scope and
that the covenant protects the legitimate interests of LVSI and imposes no undue
hardship on Stone and is not injurious to the public.
10. DISABILITY. If, during his employment by LVSI, Stone shall, in the
opinion of an independent physician selected by agreement between the Board and
Stone, become suddenly and immediately unable to perform the duties of his
employment due to severe illness or accident or other grave mental or physical
incapacity, or if Stone shall be unable to perform the duties of his employment
for a continuous period of three months, then LVSI shall have the right to
suspend in whole or in part the future payments of compensation hereunder or to
terminate Stone's employment hereunder in accordance with the provisions of
Section 11.
11. TERMINATION.
(a) Notwithstanding the provisions of Section 4 of this
Agreement, Stone's employment hereunder shall terminate upon the occurrence of
any of the following events (each, a "Termination Event"):
(i) Stone's death (a "Death Termination");
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(ii) the giving of written notice of termination by LVSI
based upon Stone's disability, as defined in Section 10 hereof (a
"Disability Termination");
(iii) the giving of written notice to Stone by LVSI that he
is discharged for Cause (as hereinafter defined) (a "Cause
Termination");
(iv) the giving of written notice by LVSI to Stone of a
material breach of this Agreement by Stone, which breach remains
uncured for a period of ten (10) days after receipt of such notice by
Stone (a "Stone Breach Termination");
(v) the giving of written notice by Stone to LVSI of a
material breach of this Agreement by LVSI, which breach remains
uncured for a period of ten (10) days following receipt of such notice
by LVSI (an "LVSI Breach Termination");
(vi) the giving of written notice by Stone to LVSI that a
Constructive Termination (as hereinafter defined) has occurred and
that he has elected to resign, in which event termination shall occur
thirty (30) days after delivery of such notice unless such
Constructive Termination has been cured (a "Constructive
Termination");
(vii) the giving of sixty (60) days written notice to Stone
by LVSI that LVSI has chosen to terminate his employment without Cause
(an "Involuntary Termination");
(viii) the giving of written notice by Stone that he has
chosen to terminate his employment with LVSI, no breach or
Constructive Termination by LVSI having occurred, in which case his
employment shall terminate sixty (60) days after receipt of such
notice by LVSI (a "Voluntary Termination");
(ix) the revocation or suspension of the License by the
Nevada Gaming Authorities for a period longer than thirty (30) days (a
"Licensing Termination"); or
(x) if a notice of intention not to extend the Term is
sent by LVSI pursuant to Section 4 hereof, upon the discharge of Stone
at the end of the then current Initial or Renewal Term (a "Non-Renewal
Termination") or at any time thereafter (a "Post-Contract
Termination").
(b) "Cause," as used in Subsection (a)(iii) above, shall
mean:
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(i) conviction of a felony, misappropriation of any
material funds or property of LVSI, commission of fraud or
embezzlement with respect to LVSI, or any material act or acts of
dishonesty relating to Stone's employment by LVSI resulting or
intended to result in direct or indirect personal gain or enrichment
at the expense of LVSI;
(ii) use of alcohol or drugs that renders Stone materially
unable to perform the functions of his job or carry out his duties to
LVSI;
(iii) materially failing to fulfill the duties set forth in
Section 2 hereof; or
(iv) committing any act or acts of serious and willful
misconduct (including disclosure of confidential information) that is
likely to cause a material adverse effect on the business of LVSI;
provided that, with respect to (iii) or (iv) above, LVSI shall have first
provided Stone with written notice stating with specificity the acts, duties or
directives Stone has committed or failed to observe or perform, and Stone shall
not have corrected the acts or omissions complained of within thirty (30) days
of receipt of such notice. Any dispute between the parties as to whether a
"cause" has occurred shall be resolved by binding Arbitration in Las Vegas,
Nevada before a single arbitrator jointly selected by the parties or, if the
parties cannot agree, by the American Arbitration Association, such arbitration
to be conducted in accordance with the rules of the American Arbitration
Association.
(c) "Constructive Termination," as used in Subsection (a)(vi) above,
shall mean:
(i) the failure of LVSI to re-elect Stone as a named
officer of LVSI;
(ii) a material change in the duties and responsibilities
of office that would cause Stone's position to have less dignity,
importance or scope than intended at the Effective Date and as set
forth herein;
(iii) liquidation, dissolution or bankruptcy of LVSI; or
(d) Termination pursuant to this Section shall have the following
consequences:
(i) in the case of a Death Termination, salary shall be
paid through the date of death;
(ii) in the case of a Disability Termination, salary, less
any applicable
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disability insurance payments, shall be continued for a period of six
months following the date of termination;
(iii) in the case of a Cause Termination, Stone Breach
Termination, Voluntary Termination, or Licensing Termination, salary
and benefits payable to Stone shall immediately cease, subject to any
requirements of law;
(iv) in the case of an LVSI Breach Termination,
Constructive Termination, or Involuntary Termination, LVSI shall
continue to pay to Stone the salary set forth in Section 6(a) hereof
for the Term of this Agreement unless and until Stone shall become
employed elsewhere in which event LVSI shall pay only the difference,
if any, between the income earned in such employment, including salary
and bonus compensation, and the salary set forth in Section 6(a)
hereof; and
(v) in the case of a Non-Renewal Termination or a
Post-Contract Termination, salary shall be paid only through the date
of discharge.
12. ASSIGNMENT AND ASSUMPTION. LVSI and Stone acknowledge and agree
that the Phase II Development or any subsequent public offering of securities
may lead to a restructuring or other reorganization of LVSI or its assets. In
such event, this Agreement may be assigned to, and assumed by, any new or
different corporation, limited liability company or other entity that shall own
the hotel/casinos constructed on the Venetian Property and Stone's employment
shall continue pursuant to the terms hereof as if such assignee, rather than
LVSI, had been an original party to this Agreement. Upon such assignment, all
rights and obligations of LVSI hereunder shall inure to the benefit of and be
binding upon the designated assignee. No such assignment shall relieve LVSI of
its obligations hereunder to the extent that those obligations are not satisfied
or discharged by the assignee.
13. APPROVAL OF AGREEMENT. Stone and LVSI acknowledge that the terms
of this Agreement are subject to the approval of the Nevada Gaming Authorities
and each agrees to make reasonable modifications in this Agreement, if
necessary, to secure such approval. If this Agreement shall be disapproved by
the Nevada Gaming Authorities and reasonable modifications shall be insufficient
to obtain such approval, then this Agreement shall terminate and neither party
shall have any further responsibility to the other hereunder.
14. MISCELLANEOUS PROVISIONS.
(a) [Notices] All notices and other communications required or
permitted hereunder shall be in writing and shall be deemed to have been duly
given if sent via a national overnight courier service or by certified mail,
return receipt requested, postage prepaid, addressed to
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the parties as follows:
If to Stone, to:
Bradley H. Stone
9113 Eagle Hill Drive
Las Vegas, Nevada 89134
If to LVSI, to:
Las Vegas Sands, Inc.
3355 Las Vegas Boulevard South
Las Vegas, Nevada 89109
Att: Sheldon G. Adelson, Chairman
With a copy to:
Paul G. Roberts
Vice President and General Counsel
The Interface Group
300 First Avenue
Needham, Massachusetts 02194
or to such other address as any party shall request of the others by giving
notice in accordance with this Section.
(b) [Approval or Consent] Whenever under any provision of this
Agreement the approval or consent of either party is required, said approval or
consent shall be given or denied in a prompt manner.
(c) [Integration] This Agreement is the result of substantial
negotiations between the parties, represents the complete agreement of the
parties with respect to the subject matter hereof, and supersedes all prior
agreements and understandings.
(d) [Severability] If any provision of this Agreement shall be
declared void or unenforceable by any judicial or administrative authority, the
validity of any other provision and of the entire Agreement shall not be
affected thereby.
(e) [Waiver of Provisions] The failure of either party to insist upon
a strict performance of any of the terms or provisions of this Agreement or to
exercise any option, right, or remedy herein contained, shall not be construed
as a waiver or as a relinquishment for the future of such term, provision,
option, right, or remedy, but the same shall continue and remain in full force
and effect. No waiver by either party of any term or provision hereof shall be
deemed to have been
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made unless expressed in writing and signed by such party.
(f) [Fees and Expenses] Each of the parties hereto shall bear its own
attorneys fees, consultants fees and other costs, fees, and expenses incurred in
connection with the negotiation, preparation and consummation of this Agreement
and the transactions contemplated hereby.
(g) [Amendments] This Agreement may not be amended, changed or
modified except by a written document signed by each of the parties hereto.
(h) [Successors and Assigns] All provisions of this Agreement shall
be binding upon, inure to the benefit of, and be enforceable by and against the
parties hereto, and their respective heirs, personal representatives, successors
and permitted assigns.
(i) [Governing Law] This Agreement shall be governed by, construed
under, and interpreted in accordance with the laws of the State of Nevada, and
enforced (except as otherwise provided) only in its state and federal courts.
(j) [Headings] Section and Subsection headings in this Agreement are
included for convenience of reference only and are not intended to define, limit
or describe the scope or intent of any provision of this Agreement.
(k) [Counterparts] This Agreement may be executed in two
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
(l) [Survival] The representations, warranties, and covenants
contained in this Agreement shall survive its termination for any reason.
IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement at Las Vegas, Nevada as a contract under seal on May 1, 2002.
LAS VEGAS SANDS, INC.
By /s/ Sheldon G. Adelson
----------------------------
Sheldon G. Adelson
Chairman of the Board
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/s/ Bradley H. Stone
------------------------------
BRADLEY H. STONE
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TERMINOLOGY USED IN THIS AGREEMENT
TERM DEFINED AT
---- ----------
Adelson Section 7
Agreement Recitals
Annual Bonus Section 6(b)
Board Section 1
Budget/Bonus Spread Section 6(b)
Budgeted EBITDAR Section 6(b)
Budget Increment Percentage Section 6(b)
Budget Threshold Section 6(b)
Cause Section 11(b)
Cause Termination Section 11(a)(iii)
Constructive Termination Section 11(c)
Death Termination Section 11(a)(i)
Disability Termination Section 11(a)(ii)
Effective Date Section 4
Grantor Section 7
Initial Term Section 4
Involuntary Termination Section 11(a)(vii)
License Section 5
Licensing Termination Section 11(a)(ix)
LVSI Recitals
LVSI Breach Termination Section 11(a)(v)
Nevada Gaming Authorities Section 5
Non-Renewal Termination Section 11(a)(x)
Options Section 7 (a)
Phase II Development Section 12
Post-Contract Termination Section 11(a)(x)
Renewal Term Section 4
Restrictive Covenant Expiration Date Section 9
Stone Recitals
Stone Breach Termination Section 11 (a)(iv)
Termination Event Section 11 (a)
Venetian Property Recitals
Voluntary Termination Section 11(a)(viii)
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