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August 17, 2018

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Wynn gets no money in termination deal with casino company

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Charles Krupa / AP

This March 15, 2016, file photo, shows casino mogul Steve Wynn at a news conference in Medford, Mass.

Updated Friday, Feb. 16, 2018 | 5:40 p.m.

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 last week amid sexual misconduct allegations. As part of the agreement, he 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 $7.5 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, the Chinese enclave where the company operates two casinos, are also inquiring about the accusations.

In addition, two shareholder groups have filed lawsuits in state court in Las Vegas in the wake of the scandal. Massachusetts-based Norfolk County Retirement System and 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 most recent 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.

Matt Maddox, the company's president since 2013, was named CEO following Wynn's resignation.

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.