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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
the Securities Exchange Act of 1934 (Amendment No. )
Filed by a Party other than the Registranto
o | Preliminary Proxy Statement | |
o | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) | |
þ | Definitive Proxy Statement | |
o | Definitive Additional Materials | |
o | Soliciting Material Pursuant to 240.14a-12 |
(Name of Registrant as Specified In Its Charter)
þ | No fee required | |
o | Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11 |
1 | ) | Title of each class of securities to which transaction applies: | ||||
2 | ) | Aggregate number of securities to which transaction applies: | ||||
3 | ) | Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): | ||||
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o | Fee paid previously with preliminary materials. | |
o | Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. |
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2 | ) | Form, Schedule or Registration Statement No.: | ||||
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4 | ) | Date Filed: | ||||
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1. To elect a Board of Directors; | |
2. To approve the Company’s Amended and Restated Annual Performance-Based Incentive Plan for Executive Officers; | |
3. To ratify the selection of the independent registered public accounting firm for the year ending December 31, 2006; and | |
4. To transact such other business as may properly come before the meeting or any adjournments thereof. |
By Order of the Board of Directors, | |
/s/ J. Terrence Lanni | |
J. Terrence Lanni | |
Chairman of the Board | |
and Chief Executive Officer |
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Amount | |||||||||
Beneficially | Percent of | ||||||||
Name and Address(1) | Owned(2) | Class | |||||||
Tracinda Corporation | 158,392,864 | (3) | 55.6% | ||||||
150 South Rodeo Drive, Suite 250 | |||||||||
Beverly Hills, California 90212 | |||||||||
Marisco Capital Management, LLC | 34,623,323 | (4) | 12.2% | ||||||
1200 17th Street, Suite 1600 | |||||||||
Denver, Colorado 80202 | |||||||||
Private Capital Management | 26,058,479 | (5) | 9.2% | ||||||
8889 Pelican Bay Boulevard | |||||||||
Naples, Florida 34108 | |||||||||
J. Terrence Lanni | 1,038,350 | (6) | (8) | ||||||
Robert H. Baldwin | 990,000 | (6) | (8) | ||||||
John T. Redmond | 446,662 | (6) | (8) | ||||||
James J. Murren | 2,338,662 | (6) | (8) | ||||||
Gary N. Jacobs | 983,533 | (6) | (8) | ||||||
All directors and executive officers as a group (24 persons) | 165,386,672 | (6)(7) | 56.9% |
(1) | Unless otherwise indicated, the address for the persons listed is 3600 Las Vegas Blvd. South, Las Vegas, Nevada 89109. |
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(2) | Except as otherwise indicated, and subject to applicable community property and similar laws, the persons listed as beneficial owners of the shares have sole voting and investment power with respect to such shares. |
(3) | Tracinda Corporation (“Tracinda”), a Nevada corporation, is wholly owned by Kirk Kerkorian. |
(4) | Based upon a Schedule 13G/A, dated February 13, 2006, filed with the Securities and Exchange Commission (the “SEC”) by Marisco Capital Management, LLC, an investment advisor under the Investment Advisors Act of 1940, as amended, which is deemed to be the beneficial owner of 34,623,323 shares of Common Stock as a result of acting as investment advisor to its clients, as to which shares it reported sole voting power as to 28,581,455 shares and sole dispositive power as to 34,623,323 shares. |
(5) | Based upon a Schedule 13G, dated February 14, 2006, filed with the SEC by Private Capital Management, L.P. (“PCM”), Bruce S. Sherman and Gregg J. Powers, collectively, an investment advisor under the Investment Advisors Act of 1940, as amended, which is deemed to be the beneficial owner of shares of Common Stock as a result of acting as investment advisor to its clients as follows: (i) PCM — 26,058,479 shares; (ii) Mr. Sherman — 26,062,479; and (iii) Mr. Powers — 26,058,479, as to which it reported shared voting and dispositive power as to 26,058,479 shares, and Mr. Sherman reported sole voting power as to 4,000 shares. Messrs. Sherman and Powers disclaim beneficial ownership for the shares held by PCM’s clients and disclaim the existence of a group. |
(6) | Included in these amounts are 800,000 shares, 840,000 shares, 320,000 shares, 2,190,000 shares and 927,800 shares underlying options that are exercisable as of March 14, 2006 or that become exercisable within 60 days thereafter held by Messrs. Lanni, Baldwin, Redmond, Murren, and Jacobs, respectively. Also included in these amounts are 150,000 shares of restricted stock held by Mr. Lanni, 75,000 shares of restricted stock held by each of Messrs. Baldwin, Redmond and Murren, and 25,000 shares of restricted stock held by Mr. Jacobs; the restrictions on all such shares are scheduled to lapse on June 3, 2006. |
(7) | Also included are 333,750 shares subject to stock options exercisable as of March 14, 2006 or that become exercisable within 60 days thereafter, held by non-employee directors. Additionally included are a total of 685,500 shares underlying options that are exercisable as of March 14, 2006 or that become exercisable within 60 days thereafter held by non-director executive officers. Additionally included are 34,000 shares of restricted stock held by non-director executive officers; the restriction on all such shares are scheduled to lapse in 2006. |
(8) | Less than one percent (1%). |
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Shares of | ||||||||||
First | Common Stock | |||||||||
Became a | Beneficially | |||||||||
Name (age) | Principal Occupation and Other Directorships | Director | Owned(1) | |||||||
James D. Aljian (73) | Executive of Tracinda since October 1987. Director of Chrysler Corporation from February 1996 to November 1998, and Member of Shareholder’s Committee of DaimlerChrysler AG from November 1998 to December 2000. | 1988 | 114,100 | (2)(3) | ||||||
Robert H. Baldwin (55) | President and Chief Executive Officer of Mirage Resorts, Incorporated (“Mirage Resorts”) since June 2000. President of Project CC, LLC (“CityCenter”) since March 2005. Chief Financial Officer and Treasurer of Mirage Resorts on an interim basis from September 1999 to June 2000. President and Chief Executive Officer of Bellagio, LLC or its predecessor from June 1996 to March 2005. President and Chief Executive Officer of The Mirage Casino-Hotel from August 1987 to April 1997. | 2000 | 990,000 | (2)(3) | ||||||
Willie D. Davis (71) | President and a Director of All-Pro Broadcasting, Inc., an AM and FM radio broadcasting company, for more than the past five years. Director of and member of the Audit Committee of Sara Lee Corporation, Johnson Controls, Inc., and Manpower, Inc. Also Director of Alliance Bancshares California, Dow Chemical Company, Checkers Drive-In Restaurants Inc., Fidelity National Financial, and Fidelity National Title Group, Inc. | 1989 | 57,896 | (2)(3) | ||||||
Alexander M. Haig, Jr. (81) | Chairman of Worldwide Associates, Inc., an international business advisory firm, for more than the past five years. Host of “World Business Review,” a weekly television program. Consultant to the Company since 1990. | 1990 | 73,300 | (2)(3) |
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Shares of | ||||||||||
First | Common Stock | |||||||||
Became a | Beneficially | |||||||||
Name (age) | Principal Occupation and Other Directorships | Director | Owned(1) | |||||||
Alexis Herman (58) | Chair and Chief Executive Officer of New Ventures. Director and member of the Audit Committee of Cummins Inc. Also Director of Presidential Life Insurance Corporation, Entergy Corp. and several non-profit organizations. Chairs diversity advisory boards for the Coca-Cola Company and Toyota. United States Secretary of Labor from 1997 to 2001. Prior to that, served for four years as Assistant to the President and Director of the White House Office of Public Liaison. | 2002 | 34,800 | (2)(3) | ||||||
Roland Hernandez (48) | Owner and manager of media holdings in Texas. Director and Chairman of the Audit Committee of Wal-Mart Stores, Inc. Director and member of the Audit Committee and Finance Committee of the Ryland Group. Director and member of the Audit Committee and Nominating Committee of Vail Resorts, Inc. Director and member of the Finance Committee of Lehman Brothers Holdings Inc. Chairman of the Board and Chief Executive Officer of Telemundo Group, Inc. from August 1998 to December 2000, and President and Chief Executive Officer of Telemundo Group, Inc. from March 1995 to July 1998. | 2002 | 32,500 | (2)(3) | ||||||
Gary N. Jacobs (60) | Executive Vice President and General Counsel of the Company since June 2000 and Secretary of the Company since January 2002. Prior to June 2000, partner, Christensen, Miller, Fink, Jacobs, Glaser, Weil & Shapiro, LLP. Mr. Jacobs is of counsel to that firm and is a Director and Secretary of The InterGroup Corporation. | 2000 | 983,533 | (2)(3) | ||||||
Kirk Kerkorian (88) | Chief Executive Officer, President and sole director and stockholder of Tracinda. | 1987 | 158,392,864 | (4) |
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Shares of | ||||||||||
First | Common Stock | |||||||||
Became a | Beneficially | |||||||||
Name (age) | Principal Occupation and Other Directorships | Director | Owned(1) | |||||||
J. Terrence Lanni (63) | Chairman of the Company since July 1995. Chairman of the Executive Committee since June 1995. Chief Executive Officer of the Company from June 1995 to December 1999, and since March 2001. President of the Company from June 1995 to July 1995. President and Chief Operating Officer of Caesars World, Inc. from April 1981 to February 1995, and a director from January 1982 to February 1991. Director of KB Home since August 2003. | 1995 | 1,038,350 | (2)(3) | ||||||
Rose McKinney-James (54) | Principal of Energy Works Consulting LLC since March 2002. President of Brown & Partners from August 2001 until February 2002. President of Government Affairs of Faiss Foley Merica from May 2000 until June 2001. President and Chief Executive Officer of the Corporation for Solar Technology and Renewable Resources from January 1996 until May 2000. Director of the Nevada Department of Business and Industry from October 1993 until December 1995. Member of the Nevada Public Service Commission from January 1989 until October 1993. Member of the Board of Directors of Mandalay Resort Group (“MRG”) from 1999 until April 2005. | 2005 | — | |||||||
James J. Murren (44) | President and Chief Financial Officer of the Company since December 1999, and Treasurer since November 2001. Executive Vice President and Chief Financial Officer of the Company from January 1998 to December 1999. Prior thereto, Managing Director and Co-Director of research for Deutsche Morgan Grenfell (“DMG”), having served DMG in various other capacities since 1984. | 1998 | 2,338,662 | (2)(3) |
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Shares of | ||||||||||
First | Common Stock | |||||||||
Became a | Beneficially | |||||||||
Name (age) | Principal Occupation and Other Directorships | Director | Owned(1) | |||||||
Ronald M. Popeil (70) | Founder of Ronco Inventions, LLC. Mr. Popeil was also a Director of Mirage Resorts from 1979 to May 2000. | 2000 | 72,500 | (2)(3) | ||||||
John T. Redmond (47) | President and Chief Executive Officer of MGM Grand Resorts, LLC (“MGM Grand Resorts”) since March 2001. Co-Chief Executive Officer of the Company from December 1999 to March 2001. President and Chief Operating Officer of Primm Valley Resorts from March 1999 to December 1999. Senior Vice President of MGM Grand Development, Inc. from August 1996 to February 1999. Director of MGM Grand Detroit, LLC since July 1997, Vice-Chairman from April 1998 to February 2000, and Chairman since February 2000. Prior to 1996, Senior Vice President and Chief Financial Officer of Caesars Palace and Desert Inn, having served in various other senior operational and development positions with Caesars World, Inc. | 1999 | 446,662 | (2)(3) | ||||||
Melvin B. Wolzinger (85) | A principal owner of various privately-held restaurants and casino gaming establishments in Las Vegas since 1991. Director of Mirage Resorts from 1973 to May 2000. Director of Colonial Bank, and Director of several non-profit organizations. Formerly, a general partner in W. W. Investment Co., a real estate holding company in Las Vegas, Nevada, from 1980 through 1998. Member of the Board of Trustees for the University of Nevada Las Vegas. | 2000 | 63,800 | (2)(3) |
(1) | Except as otherwise indicated and subject to applicable community property and similar laws, the persons listed as beneficial owners of the shares have sole voting and investment power with respect to such shares. |
(2) | The number of shares shown as beneficially owned represents less than 1% of the outstanding shares. |
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(3) | Included in these amounts are (a) shares underlying options that are exercisable as of March 14, 2006 or become exercisable within 60 days thereafter, and (b) shares of restricted stock, which restrictions are scheduled to lapse on June 3, 2006, held as follows: |
Shares | Shares of | |||||||
Underlying | Restricted | |||||||
Name | Options | Stock | ||||||
Mr. Aljian | 72,500 | — | ||||||
Mr. Baldwin | 840,000 | 75,000 | ||||||
Mr. Davis | 20,250 | — | ||||||
Mr. Haig | 72,500 | — | ||||||
Ms. Herman | 33,000 | — | ||||||
Mr. Hernandez | 30,500 | — | ||||||
Mr. Jacobs | 927,800 | 25,000 | ||||||
Mr. Lanni | 800,000 | 150,000 | ||||||
Mr. Murren | 2,190,000 | 75,000 | ||||||
Mr. Popeil | 52,500 | — | ||||||
Mr. Redmond | 320,000 | 75,000 | ||||||
Mr. Wolzinger | 52,500 | — |
(4) | Shares are owned by Tracinda, which is wholly-owned by Mr. Kerkorian. As of March 14, 2006, Tracinda owned 55.6% of the outstanding Common Stock (see “Principal Stockholders”). |
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• | No Material Relationship. The director does not haveanymaterial relationship with the Company. | |
• | Employment. The director is not, and has not been at any time in the past three years, an employee of the Company. In addition, no member of the director’s immediate family is, or has been in the past three years, an executive officer of the Company. | |
• | Other Compensation. The director or immediate family member has not received more than $100,000 in direct compensation from the Company during any12-month period within the past three years, other than in the form of director fees, pension or other forms of deferred compensation for prior service, provided such compensation is not contingent in any way on continued service. Compensation received by a director for former service as an interim Chairman, CEO or other executive officer or compensation received by an immediate family member for services as an employee (other than an executive officer) of the Company need not be considered in determining independence under this standard. | |
• | Auditor Affiliation. The director is not a current partner or employee of the Company’s internal or external auditors; no member of the director’s immediate family is a current partner of the Company’s internal or external auditors or a current employee of such auditors who participates in such firm’s audit, assurance or tax compliance (but not tax planning) practice; and the director or an immediate family member has not been within the past three years a partner or employee of the Company’s internal or external auditors and has not personally worked on the Company’s audit within that time. | |
• | Interlocking Directorships. The director or an immediate family member is not, and has not been within the past three years, employed as an executive officer by another entity where any of the Company’s present executive officers at the same time serves or served on that entity’s compensation committee. | |
• | Business Transactions. The director is not an employee, or an immediate family member is not an executive officer, of another entity that, during any one of the past three fiscal years, received payments from the Company, or made payments to the Company, for property or services that exceed the greater of $1 million or 2% of the other entity’s annual consolidated gross revenues. |
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Long-Term | |||||||||||||||||||||||||||||
Compensation Awards | |||||||||||||||||||||||||||||
Annual Compensation | |||||||||||||||||||||||||||||
Restricted | Shares | ||||||||||||||||||||||||||||
Other | Stock | Underlying | All Other | ||||||||||||||||||||||||||
Salary | Bonus | Annual | Awards | Options | Compensation | ||||||||||||||||||||||||
Name and Principal Position | Year | (A) | (B) | (C) | (D) | (E) | (F) | ||||||||||||||||||||||
J. Terrence Lanni | 2005 | $ | 2,000,000 | $ | 6,089,729 | $ | 661,857 | — | 1,200,000 | $ | 849,036 | ||||||||||||||||||
Chairman and Chief Executive Officer | 2004 | 2,000,000 | 3,393,553 | 612,114 | — | — | 817,162 | ||||||||||||||||||||||
2003 | 2,000,000 | 1,989,345 | 504,921 | — | 1,400,000 | 812,350 | |||||||||||||||||||||||
Robert H. Baldwin | 2005 | $ | 1,500,000 | $ | 4,562,205 | $ | — | — | 600,000 | $ | 461,793 | ||||||||||||||||||
President and Chief Executive Officer — | 2004 | 1,500,000 | 2,542,327 | 25,225 | — | — | 473,554 | ||||||||||||||||||||||
Mirage Resorts, Incorporated | 2003 | 1,500,000 | 1,490,345 | 11,345 | — | 1,200,000 | 500,081 | ||||||||||||||||||||||
John T. Redmond | 2005 | $ | 1,422,308 | $ | 4,562,205 | $ | — | — | 600,000 | $ | 329,607 | ||||||||||||||||||
President and Chief Executive Officer — | 2004 | 1,300,000 | 2,201,837 | — | — | — | 282,219 | ||||||||||||||||||||||
MGM Grand Resorts, LLC | 2003 | 1,300,000 | 1,290,745 | 4,981 | — | 1,000,000 | 300,123 | ||||||||||||||||||||||
James J. Murren | 2005 | $ | 1,315,385 | $ | 4,562,205 | $ | 100,747 | — | 700,000 | $ | 375,432 | ||||||||||||||||||
President, Chief Financial Officer and | 2004 | 1,200,000 | 2,031,592 | 54,865 | — | — | 274,830 | ||||||||||||||||||||||
Treasurer | 2003 | 1,200,000 | 1,190,946 | 62,807 | — | 1,000,000 | 259,160 | ||||||||||||||||||||||
Gary N. Jacobs | 2005 | $ | 700,000 | $ | 2,468,167 | $ | 24,972 | — | 400,000 | $ | 357,345 | ||||||||||||||||||
Executive Vice President, General | 2004 | 700,000 | 1,180,366 | 24,924 | — | — | 274,590 | ||||||||||||||||||||||
Counsel and Secretary | 2003 | 700,000 | 691,946 | 11,883 | — | 600,000 | 243,094 |
(A) | On September 16, 2005, the Company entered into new Employment Agreements with the Named Executive Officers, which new employment agreements extended the term of the employment contracts of each of the Named Executives from July 3, 2006 to January 4, 2010. The employment agreements provide for the following minimum salaries: Mr. Lanni, $2,000,000; Mr. Baldwin, $1,500,000; Mr. Redmond from $1,300,000 to $1,500,000 effective May 10, 2005; Mr. Murren, from $1,200,000 to $1,500,000 effective August 1, 2005; and Mr. Jacobs, $700,000. | |
(B) | In 2006, the Named Executives received bonuses for the 2005 fiscal year pursuant to the Company’s Annual Performance-Based Incentive Plan for executive officers as follows: Mr. Lanni, $5,000,000; Mr. Baldwin, $4,562,205; Mr. Redmond, $3,951,196; Mr. Murren, $3,645,691; and Mr. Jacobs, $2,118,167. In addition, the Committee determined to award additional bonuses for 2005 outside of the Performance-Based Incentive Plan to certain of the senior executives as follows: Mr. Lanni, $1,089,729; Mr. Redmond, $611,009; Mr. Murren, $916,514; and Mr. Jacobs, $350,000. In 2005, the Named Executives received bonuses for the 2004 fiscal year pursuant to the Company’s Annual Performance-Based Incentive Plan for executive officers as follows: Mr. Lanni, $3,393,553; Mr. Baldwin, $2,542,327; Mr. Redmond, $2,201,837; Mr. Murren, $2,031,592; and Mr. Jacobs, $1,180,366. In 2004, the Named Executives received bonuses for the 2003 fiscal year pursuant to the Company’s Annual Performance-Based Incentive Plan for executive officers as follows: Mr. Lanni, $1,989,345; Mr. Baldwin, $1,490,345; Mr. Redmond, $1,290,745; Mr. Murren, $1,190,946; and Mr. Jacobs, $691,946. | |
(C) | Other annual compensation consists of the value of personal use of Company aircraft, which was determined based on incremental cost to the Company. Incremental cost for all years shown was calculated based on average variable operating cost per flight hour multiplied by flight hours for each Named Executive Officer, less any amounts reimbursed by such Named Executive Officer based on Standard Industrial Fare Level (SIFL) rates. The average variable operating cost per hour was calculated based on aggregate variable costs for each year, including fuel, engine reserves, repair and maintenance costs, travel expenses for flight crew, landing costs, related catering and miscellaneous |
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handling charges, divided by aggregate hours flown. Fixed costs, such as flight crew salaries, wages and other employment costs, training, depreciation, hanger rent, utilities, insurance and taxes, are not included in incremental cost since these expenses are incurred by the Company irrespective of personal use of aircraft. The amounts reported above reflect a change in the valuation methodology from prior years in which the cost of personal use of Company aircraft had been calculated using the SIFL tables found in tax regulations, and amounts reported for 2003 and 2004 have been restated to reflect this change. | ||
(D) | At December 31, 2005, the Named Executive Officers held shares of restricted stock valued (based upon the market price of the Common Stock of $36.67 on December 30, 2005, which was the closing price of our common stock on the last trading day of 2005), as follows: Mr. Lanni: 150,000 shares valued at $5,500,500; each of Messrs. Baldwin, Redmond and Murren: 75,000 shares valued at $2,750,250; and Mr. Jacobs: 25,000 shares valued at $916,750. Dividends, if any, are paid on the restricted shares at the same rate as paid to holders of the Company’s Common Stock. No dividends were paid in 2005. The restrictions on all such shares are scheduled to lapse on June 3, 2006. | |
(E) | During 2005, the only long-term compensation issued to Named Executives was nonqualified stock options issued pursuant to the Company’s 2005 Omnibus Incentive Plan. No grants were made under either the Nonqualified Stock Option Plan or the Incentive Stock Option Plan in 2004. During 2003, the only long-term compensation issued to Named Executives was nonqualified stock options issued pursuant to the Company’s Nonqualified Stock Option Plan. | |
(F) | The amounts in this column represent the Company match under its 401(k) plan, the Company match under its Deferred Compensation Plan (the “DCP”), the Company contribution under its Supplemental Executive Retirement Plan (the “SERP”), group life insurance premiums paid for the benefit of the Named Executives, reimbursement of medical expenses and associated taxes, and premiums for long term disability insurance for the benefit of the Named Executives as reflected in the following table: |
Insurance | ||||||||||||||||||||
401(k) | DCP | SERP | Premiums and | |||||||||||||||||
Name | Match | Match(1) | Contribution(2) | Benefits | Total | |||||||||||||||
Mr. Lanni | $ | 4,200 | $ | 75,800 | $ | 716,956 | $ | 52,080 | $ | 849,036 | ||||||||||
Mr. Baldwin | 4,200 | 55,800 | 374,904 | 26,889 | 461,793 | |||||||||||||||
Mr. Redmond | 4,200 | 55,800 | 258,733 | 10,874 | 329,607 | |||||||||||||||
Mr. Murren | 4,200 | 55,800 | 207,112 | 108,320 | 375,432 | |||||||||||||||
Mr. Jacobs | 4,200 | 23,800 | 151,018 | 178,327 | 357,345 |
(1) | The Company implemented the DCP, which is a nonqualified deferred retirement plan effective January 1, 2001 for certain key employees. The plan allows participants to defer, on a pre-tax basis, a portion of their salary and bonus and accumulate tax deferred earnings, plus investment earnings on the deferred balances, as a retirement fund. Participants receive a Company match of up to 4% of salary, net of any Company match received under the Company’s 401(k) plan. All employee deferrals vest immediately. The Company matching contributions vest ratably over a three-year period. | |
(2) | The Company implemented the SERP effective January 1, 2001 for certain key employees. The SERP is a nonqualified plan under which the Company makes quarterly contributions that are intended to provide a retirement benefit that is a fixed percentage of a participant’s estimated final five-year average annual salary, up to a maximum of 65%. Company contributions and investment earnings on the contributions are tax- deferred and accumulate as a retirement fund. Employees do not make contributions under this plan. A portion of the Company contributions and investment earnings thereon vests after three years of SERP participation and the remaining portion vests after both five years of SERP participation and 10 years of continuous service. The plan provides for defined contributions and the amount of the benefit is not guaranteed. |
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Individual Grants | ||||||||||||||||||||||||
Percentage of | Assumed Annual Rate of Stock | |||||||||||||||||||||||
Total Options | Exercise | Price Appreciation for | ||||||||||||||||||||||
Number of Securities | Granted to | Price | Option Term (B) | |||||||||||||||||||||
Underlying Options | Employees in | Per | Expiration | |||||||||||||||||||||
Name | Granted (A) | Fiscal Year | Share | Date | 5% | 10% | ||||||||||||||||||
J. Terrence Lanni | 1,100,000 | 7.5 | % | $ | 34.05 | 05/03/12 | $ | 15,247,946 | $ | 35,534,199 | ||||||||||||||
J. Terrence Lanni | 100,000 | 0.7 | % | 34.36 | 05/10/12 | 1,398,797 | 3,259,792 | |||||||||||||||||
Robert H. Baldwin | 600,000 | 4.1 | % | 34.05 | 05/03/12 | 8,317,062 | 19,382,290 | |||||||||||||||||
John T. Redmond | 600,000 | 4.1 | % | 34.05 | 05/03/12 | 8,317,062 | 19,382,290 | |||||||||||||||||
James J. Murren | 600,000 | 4.1 | % | 34.05 | 05/03/12 | 8,317,062 | 19,382,290 | |||||||||||||||||
James J. Murren | 100,000 | 0.7 | % | 34.36 | 05/10/12 | 1,398,797 | 3,259,792 | |||||||||||||||||
Gary N. Jacobs | 400,000 | 2.7 | % | 34.05 | 05/03/12 | 5,544,708 | 12,921,527 |
(A) | The options have a seven-year term, with 20% of the options becoming exercisable on each of the first through fifth anniversary dates of the grant. | |
(B) | These amounts represent the stated assumed rates of appreciation only. Actual gains, if any, on the stock option exercises and Common Stock holdings are dependent on the future performance of the Common Stock. |
Number of Shares | ||||||||||||||||||||||||
Underlying Unexercised | Value of Unexercised | |||||||||||||||||||||||
Options at | In-the-Money Options | |||||||||||||||||||||||
Shares | December 31, 2005 | at December 31, 2005 (A) | ||||||||||||||||||||||
Acquired | Value | |||||||||||||||||||||||
on Exercise | Realized | Exercisable | Unexercisable | Exercisable | Unexercisable | |||||||||||||||||||
Name | (#) | ($) | (#) | (#) | ($) | ($) | ||||||||||||||||||
J. Terrence Lanni | 820,000 | $ | 21,938,199 | 280,000 | 2,040,000 | $ | 6,700,400 | $ | 23,214,200 | |||||||||||||||
Robert H. Baldwin | 1,440,000 | 32,013,837 | 480,000 | 1,320,000 | 11,486,400 | 18,801,600 | ||||||||||||||||||
John T. Redmond | 816,676 | 23,304,475 | — | 1,200,000 | — | 15,930,000 | ||||||||||||||||||
James J. Murren | 150,000 | 5,166,293 | 1,850,000 | 1,300,000 | 47,573,155 | 16,161,000 | ||||||||||||||||||
Gary N. Jacobs | 250,000 | 6,691,629 | 727,800 | 760,000 | 14,565,971 | 9,662,800 |
(A) | Amount represents the difference between the aggregated option price of unexercisedin-the-money options and a $36.67 market price on December 30, 2005, which was the closing price of our common stock on the last trading day of 2005. |
Number of Securities | Number of Securities | |||||||||||
to Be Issued Upon | Weighted-Average | Remaining Available | ||||||||||
Exercise of Outstanding | Exercise Price of | for Future Issuance | ||||||||||
Options, Warrants | Outstanding Options, | Under Equity | ||||||||||
Plan Category | and Rights | Warrants and Rights | Compensation Plans | |||||||||
Equity compensation plans approved by security holders | 34,607,000 | $ | 22.85 | 6,540,000 | ||||||||
Equity compensation plans not approved by security holders(a) | — | — | — |
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(a) | In May 2002, the Board of Directors approved a restricted stock plan, not approved by security holders, under which 1,806,000 shares were issued. In November 2002, the Board of Directors determined that no more restricted stock awards would be granted under such plan. At December 31, 2005, there were 834,000 restricted shares outstanding, all of which will become unrestricted in 2006. |
1. The Company’s compensation programs should be effective in attracting, motivating and retaining key executives; | |
2. There should be a correlation between the compensation awarded to an executive, the performance of the Company as a whole, and the executive’s individual performance; and | |
3. The Company’s compensation programs should provide the executives with a financial interest in the Company similar to the interests of the Company’s stockholders. |
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JAMES D. ALJIAN, Chairman | |
WILLIE D. DAVIS | |
ROSE MCKINNEY-JAMES | |
RONALD M. POPEIL | |
MELVIN B. WOLZINGER |
1. The adequacy of the Company’s internal controls and financial reporting process and the reliability of the Company’s financial statements; | |
2. The independence and performance of the Company’s internal auditors and independent accountants; and | |
3. The Company’s compliance with legal and regulatory requirements. |
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ROLAND HERNANDEZ, Chairman | |
ALEXIS HERMAN | |
ROSE MCKINNEY-JAMES |
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![(LINE GRAPH)](https://capedge.com/proxy/DEF 14A/0000950153-06-000908/p72095p7209501.gif)
* | $100 invested on 12/31/00 in stock or index-including reinvestment of dividends. Fiscal year ending December 31. |
Cumulative Total Return | ||||||||||||||||||||||||
12/00 | 12/01 | 12/02 | 12/03 | 12/04 | 12/05 | |||||||||||||||||||
MGM MIRAGE | 100.00 | 102.42 | 116.97 | 133.43 | 258.06 | 260.19 | ||||||||||||||||||
DOW JONES US EQUITY MARKET | 100.00 | 88.08 | 68.64 | 89.74 | 100.52 | 106.88 | ||||||||||||||||||
DOW JONES US GAMBLING | 100.00 | 110.20 | 121.27 | 187.53 | 249.58 | 253.18 |
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2005 | 2004 | |||||||
Audit Fees | $ | 2,400,000 | $ | 1,664,000 | ||||
Audit-Related Fees | 60,000 | 54,000 | ||||||
Tax Fees | 236,000 | 376,000 | ||||||
All other fees | 29,000 | — | ||||||
Total | $ | 2,725,000 | $ | 2,094,000 | ||||
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By Order of the Board of Directors, | |
/s/ J. Terrence Lanni | |
Chairman of the Board | |
and Chief Executive Officer |
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A-2
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This Proxy will be voted as specified herein; if no specification is made, this Proxy will be voted for Items 1, 2 and 3. | Please Mark Here for Address Change or Comments SEE REVERSE SIDE | o |
1. | Election of Directors |
FORall nominees | WITHHOLD | |
named (except as | AUTHORITY | |
marked to the | for all nominee(s) | |
contrary) | named | |
o | o |
Names of Nominees: 01 James D. Aljian, 02 Robert H. Baldwin, 03 Willie D. Davis, 04 Alexander M. Haig, Jr., 05 Alexis M. Herman, 06 Roland Hernandez, 07 Gary N. Jacobs, 08 Kirk Kerkorian, 09 J. Terrence Lanni, 10 Rose McKinney-James, 11 James J. Murren, 12 Ronald M. Popeil, 13 John T. Redmond and 14 Melvin B. Wolzinger.
(INSTRUCTION: To withhold authority to vote for any individual nominee(s), write that nominee’s name on the following lines.)
FOR | AGAINST | ABSTAIN | ||||||
2. | Approval of the Company’s Amended and Restated Annual Performance-Based Incentive Plan for Executive Officers, including approval of an amendment to increase the cap on a participant’s bonus for any fiscal year. | o | o | o |
FOR | AGAINST | ABSTAIN | ||||||
3. | Ratification of the selection of the independent registered public accounting firm for the year ending December 31, 2006. | o | o | o |
Consenting to receive all future annual meeting materials and shareholder communications electronically is simple and fast!Enroll today at www.melloninvestor.com/ISD for secure online access to your proxy materials, statements, tax documents and other important shareholder correspondence.
I plan to attend the meeting | o |
Signature | Signature | Date | ||||||||
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Please sign your name exactly as it appears hereon. In the case of joint owners, each should sign. If signing as executor, trustee, guardian or in any other representative capacity or as an officer of a corporation, please indicate your full title as such.
Vote by Internet or Telephone or Mail
24 Hours a Day, 7 Days a Week
Internet and telephone voting is available through 11:59 PM Eastern Time
the day prior to annual meeting day.
Your Internet or telephone vote authorizes the named proxies to vote your
shares in the same manner
as if you marked, signed and returned your proxy card.
Internet http://www.eproxy.com/mgg Use the Internet to vote your proxy. Have your proxy card in hand when you access the web site | OR | Telephone 1-866-540-5760 Use any touch-tone telephone to vote your proxy. Have your proxy card in hand when you call. | OR | Mail Mark, sign and date your proxy card and return it in the enclosed postage-paid envelope. |
If you vote your proxy by Internet or by telephone,
you do NOT need to mail back your proxy card.
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MGM MIRAGE
Proxy for Annual Meeting of Stockholders
May 9, 2006
Solicited on Behalf of the Board of Directors
The undersigned hereby appoints WILLIE D. DAVIS, ALEXANDER M. HAIG, JR. and ROLAND HERNANDEZ and each of them, Proxies, with full power of substitution, to represent and vote all shares of common stock which the undersigned would be entitled to vote if personally present at the Annual Meeting of Stockholders of MGM MIRAGE (the “Company”) to be held at Mandalay Bay Resort and Casino in the Mandalay Bay Events Center, 3950 Las Vegas Boulevard South, Las Vegas, NV 89119 on May 9, 2006, at 10:00 a.m., and at any adjournments thereof, upon any and all matters which may properly be brought before said meeting or any adjournments thereof. The undersigned hereby revokes any and all proxies heretofore given with respect to such meeting.
The Board of Directors recommends a vote FOR Items 1, 2 and 3.
(Continued and to be SIGNED on the other side)
Address Change/Comments (Mark the corresponding box on the reverse side)
Admission Ticket
Annual Meeting
of
MGM MIRAGE
May 9, 2006
10:00 a.m. (Pacific Time)
MANDALAY BAY RESORT AND CASINO
3950 LAS VEGAS BOULEVARD SOUTH
LAS VEGAS, NV 89119
This ticket must be presented at the door for entrance to the meeting.
Stockholder Name: | ||
oWITHSPOUSE/SIGNIFICANT OTHER | oWITHOUTSPOUSE/SIGNIFICANT OTHER |
Stockholder Address: | |
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Agenda
1: To elect a Board of Directors;
2: To approve the Company’s Amended and Restated Annual Performance-Based Incentive Plan for Executive Officers;
3: To ratify the selection of the independent registered public accounting firm for the year ending December 31, 2006; and
4: To transact such other business as may properly come before the meeting or any adjournments thereof.