UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): September 16, 2005
MGM MIRAGE
(Exact name of registrant as specified in its charter)
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| DELAWARE
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0-16760
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88-0215232 |
(State or other jurisdiction
of incorporation or organization)
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(Commission File Number)
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(I.R.S. Employer
Identification No.) |
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| 3600 Las Vegas Boulevard South, Las Vegas, Nevada
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89109 |
| (Address of Principal Executive Offices)
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(Zip Code) |
(702) 693-7120
(Registrant’s telephone number, including area code)
N/A
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c)) |
TABLE OF CONTENTS
Item 1.01 Entry into a Material Definitive Agreement
On September 16, 2005, MGM MIRAGE (“Company”) entered into new employment agreements with J.
Terrence Lanni, Robert H. Baldwin, John T. Redmond, James J. Murren and Gary N. Jacobs, which
engage each of them through January 4, 2010. Pursuant to each respective employment agreement, Mr.
Lanni has agreed to serve as Chairman of the Board and Chief Executive Officer of the Company, Mr.
Baldwin has agreed to serve as President and Chief Executive Officer of Mirage Resorts,
Incorporated, Mr. Redmond has agreed to serve as President and Chief Executive Officer of MGM Grand
Resorts, Mr. Murren has agreed to serve as President, Chief Financial Officer and Treasurer of the
Company and Mr. Jacobs has agreed to serve as Executive Vice President, General Counsel and
Secretary of the Company.
Each employment agreement provides for an annual base salary for each executive officer as
follows: $2,000,000 for Mr. Lanni, $1,500,000 for Mr. Baldwin, $1,500,000 for Mr. Redmond,
$1,500,000 for Mr. Murren and $700,000 for Mr. Jacobs. Each executive officer is also entitled to
an annual bonus, and for calendar year 2005, Mr. Redmond and Mr. Murren each will receive an
additional special bonus. The executive officers are entitled to certain other benefits and
perquisites, which are discussed in detail in each of the employment agreements.
The Company may terminate any of the employment agreements for good cause. In such event, the
executive officer will be entitled to exercise his vested stock options in accordance with their
terms as of the date of termination. If the agreement is terminated as a result of death or
disability, the executive officer (or his beneficiary) will be entitled to receive his salary for a
12-month period following such termination and a prorated portion of any bonus attributable to the
fiscal year in which the death or disability occurs. Additionally, the executive officer (or his
beneficiary) will be entitled to exercise those of his unexercised options that would have vested
as of the first anniversary of the date of termination, and all shares of restricted stock will
immediately vest.
If the Company terminates any of the employment agreements for other than good cause, the
Company will pay the executive officer’s salary for the remaining term of the agreement and his
bonus during the 12 month period (or shorter period if the termination occurs within the last year
of the term) during which he is restricted from working for or otherwise providing services to a
competitor of the Company (“Restrictive Period”). Additionally, each of the Agreements provide that
for the remainder of the term, (i) all unvested stock options and unvested restricted stock held
will vest in accordance with their terms, (ii) the Company will provide contributions, on the
executive officer’s behalf, to the supplemental executive retirement plans (“SERPs”) and deferred
compensation plans (“DCPs”) and (iii) certain other employee benefits, such as health and life
insurance will continue. Notwithstanding the foregoing, all compensation and benefits are subject
to mitigation if an executive officer works for or otherwise provides services to a third party.
If an executive officer seeks to terminate his employment agreement for good cause, he must
give the Company 30 days notice to cure the breach. If such breach is not cured (and the Company
does not invoke its right to arbitration), the termination will be treated as a termination for
other than good cause by the Company as described in the preceding paragraph. However, if the
Company invokes its arbitration right, the executive officer must continue to work until the matter
is resolved, otherwise it becomes a termination by him without cause. In such event, the executive
officer will be entitled to exercise his vested stock options in accordance with their terms and to
receive all other vested benefits and compensation, provided, however, that the executive officer
will be restricted from working for or otherwise providing services to a competitor of the Company
during the Restrictive Period.
If there is a change of control of the Company, all of the executive officer’s unvested stock
options and unvested restricted stock will fully vest. Furthermore, the executive officer may
terminate his employment agreement upon delivery of 30 days prior notice to the Company, no later
than 90 days following the date of the change of control. In such event, the Company will pay the
executive officer a lump sum payment equal to the sum of (x) his unpaid salary through the end of
the term of the agreement, and (y) an amount in lieu of his bonus (the calculation of which is
further described therein). Additionally, through the end of the term, the Company will provide
contributions, on his behalf, to the SERPs and DCPs in accordance with their terms and certain
employee benefits, such as health and life insurance.
The
description set forth above is qualified by the employment agreements filed herewith as
exhibits.