A termination agreement released Friday between embattled casino mogul Steve Wynn and the company bearing his name leaves him without any severance or compensation and prohibits his involvement in any competing gambling business for two years.
The Las Vegas billionaire resigned as chairman and CEO of Wynn Resorts this month amid sexual misconduct allegations. Matt Maddox, a long-time Wynn lieutenant was appointed chief executive officer in his place.
As part of the agreement, Steve Wynn also agreed to cooperate with any investigation or lawsuits involving his time with the company, which experts have said are likely to keep mounting.
Wynn has vehemently denied the misconduct accusations and attributed them to a campaign led by his ex-wife. The allegations surfaced last month, when the Wall Street Journal reported that a number of women said Wynn harassed or assaulted them and that one case led to a USD7.5 million settlement.
An attorney for Elaine Wynn has denied that she instigated the news report.
Wynn is facing scrutiny by gambling regulators in Nevada and Massachusetts, where the company is building a roughly $2.4 billion casino just outside Boston. Regulators in Macau are also inquiring about the accusations.
In addition, groups of stockholders have filed three lawsuits in state court in Las Vegas in the wake of the scandal. The groups, including Pennsylvania-based Operating Engineers Construction Industry and Miscellaneous Pension Fund, have accused Wynn and the company’s board of directors of breaching their fiduciary duties.
The lawsuit filed Thursday by the pension fund of the operating engineers argues that the company’s “unwaveringly loyal” board “turned a blind eye to reports of sexual harassment and coercion.” The shareholders claim that the board “through its action and inaction” allowed Wynn “to repeatedly coerce his female employees in sexual conduct.”
Wynn Resorts has created a committee to investigate the allegations. On Monday, the group announced it was expanding its scope to review the company’s internal policies and procedures to ensure a “safe and respectful workplace for all employees.”
The termination agreement also stipulates that Wynn’s lease of his private residence at one of his luxury casino-resorts on the Las Vegas Strip will end no later than June 1. He will have to continue to pay rent at fair market value until the end of the lease. His health care coverage will end Dec. 31 and the administrative support he receives will terminate May 31.
Wynn remains the largest shareholder of the company. The agreement filed with the Securities and Exchange Commission Thursday states that in the event that he “is permitted to and elects to” sell any shares he owns, the company has agreed to enter into a so-called separation of rights agreement with Wynn to list the shares publicly.
That agreement would restrict him to selling no more than one-third of the shares in the company in a given quarter. Wynn would have to reimburse the company for expenses.
Joe Schmitt, an employment attorney with Minneapolis-based firm Nilan Johnson Lewis, said the termination agreement is “very unusual” because it does not include severance pay, its benefits like health care are quite limited, and it creates ongoing obligations for the billionaire to the company. He said a reason for the restrictive agreement is that the company probably foresees more lawsuits.
“I would be surprised if we didn’t see more lawsuits in the weeks to come,” Schmitt said. MDT/Agencies
Company moving to cut ties to its founder
The filing shows Wynn Resorts is moving to cut ties to its founder, whose name remains on its properties and whose voice still welcomes callers seeking reservations. Wynn had long lived in a villa at the Wynn Las Vegas, often greeting guests and chatting with staff.
“We found the language in the release to be straightforward and stern,” Deutsche Bank analyst Carlo Santarelli said in a research note Friday.
The company also said Friday it may have to pay bondholders USD10 million to amend change- of-control provisions in its 4.25 percent notes due in 2023.
Executives of public companies are typically entitled to severance and accelerated vesting of equity awards if they’re dismissed before their contracts expire, or if they leave for reasons including a pay cut or a reduction in responsibilities.
Wynn’s employment agreement entitled him to as much as $330 million if he was fired without cause, a regulatory filing shows. But if the termination was based on a failure to follow policy or comply with the “lawful directions of the company,” the board had the right to give him nothing.
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