EXHIBIT 99(D)(2)
MGM MIRAGE
FORM OF REPLACEMENT GRANT NONQUALIFIED STOCK OPTION AGREEMENT
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No. of shares subject to option: __________________ Option No. _________________
THIS AGREEMENT is made by and between MGM MIRAGE, a Delaware
Corporation (the "Company"), and _______________________________________________
(the "Participant") as of _____________________________________________________.
RECITALS
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A. The Board of Directors of the Company has adopted the MGM MIRAGE
Nonqualified Stock Option Plan, which provides for the granting of
Nonqualified Options (as that term is hereinafter defined) to selected
employees.
B. The Board of Directors of the Company believes that the grant of
Nonqualified Options will stimulate the interest of selected employees and
directors and strengthen their desire to remain with the Company or a
Subsidiary (as that term is hereinafter defined).
C. The Committee appointed to administer the Plan (as that term is hereinafter
defined) has authorized the grant of Nonqualified Options to Participant
pursuant to the terms of the Plan.
D. Participant submitted Cancelled Options (as hereinafter defined) pursuant
to and in accordance with the Company's Offer (as hereinafter defined), and
the Nonqualified Option evidenced hereby is being granted to replace such
Cancelled Options, which became void and of no force or effect on the
expiration of the offer.
Accordingly, in consideration of the foregoing and the mutual covenants
contained herein, the parties agree as follows:
1. Definitions.
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(a) "Board" shall mean the Board of Directors of the Company.
(b) "Cancelled Options" shall mean Nonqualified Options submitted for
exchange by certain employees and directors of the Company and
accepted by the Company pursuant to the Offer.
(c) "Code" shall mean the Internal Revenue Code of 1986, as amended.
(d) "Committee" shall mean the administrative committee appointed
pursuant to the Plan.
(e) "Nonqualified Option" shall mean an option to purchase that
number of shares of Stock (as that term is hereinafter defined)
set forth in this Agreement, subject to the terms and conditions
described in this Agreement and the Plan, which is not an
incentive stock option within meaning of Code Section 422A.
(f) "Offer" shall mean collectively the Company's offer to exchange
dated November 13, 2001 and the related cover letter and attached
summary of terms and exchange form.
(g) "Parent" shall mean a parent corporation as defined in Code
Section 425(e).
(h) "Plan" shall mean the MGM MIRAGE 1997 Nonqualified Stock Option
Plan.
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(g) "Stock" shall mean the company's $.01 par value common stock.
(h) "Subsidiary" shall mean a subsidiary corporation as defined in
Code Section 425(f) or any partnership or joint venture in which
the Company owns a 50 percent or greater ownership interest.
2. Grant to Participant. The company hereby grants to Participant,
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subject to the terms and conditions of the Plan and subject to the
terms and conditions herein set forth, a Nonqualified Option to
purchase from the Company all or part of an aggregate of ____ shares
of stock at the price of $ per share (the "Option Price")
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without commission or charge. Participant hereby acknowledges that the
option agreement with respect to the Cancelled Options ceased to be of
any force and effect, effective as of the expiration date of the
Offer.
3. Terms and Conditions. The Nonqualified Option evidenced hereby is
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subject to the following terms and conditions:
(a) Expiration Date. The Nonqualified Option shall expire at 5:00
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p.m., Pacific Standard Time on or such earlier time as may be
required by the Plan or this Agreement if Participant's
employment with the Company or a Parent or Subsidiary is
terminated.
(b) Exercise of Option. In order to exercise this Nonqualified
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Option, Participant or any other person or persons entitled to
exercise this Nonqualified Option shall give written notice to
the Committee specifying the number of shares to be purchased,
which notice shall be received while this Nonqualified Option
still is exercisable. The notice shall be accompanied by payment
for the shares as provided in paragraph 3 (c). [Vesting Schedule
to be specified in each agreement.]
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The unexercised portion of the Nonqualified Option may not be
exercised after Participant terminates employment with the Company,
its Parent and Subsidiaries, except as otherwise provided in paragraph
3 (d) below; provided, however that this Nonqualified Option may not
at any time be exercised in part with respect to fewer than the lesser
of (i) 50 shares or (ii) the number of shares which remain to be
purchased pursuant to the Nonqualified Option.
(c) Payment of Option Price. The Option Price of the Stock
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transferred to Participant pursuant to the exercise of the
Nonqualified Option shall be paid to the Company at the time of
exercise: (1) in cash; (2) with previously acquired Stock having
a fair market value equal to the Option Price; or (3) with cash
and previously acquired Stock having a fair market value which
together with the cash is equal to the Option Price.
(d) Exercise Upon Death or Termination of Employment. If
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Participant's employment with company, its Parent and
Subsidiaries shall be terminated because of death, or if
Participant shall die within three months of termination of
employment with the Company, its Parent and Subsidiaries, this
Nonqualified Option may be exercised, to the extent that
Participant was entitled to do so at the date of termination of
employment, by the person or persons to whom Participant's rights
under the Nonqualified Option pass by will or applicable law, or
if no such person has such rights, by his executors or
administrators, at any time, or from time to time, within one
year after the date of such termination of employment, but in no
event later than the expiration date specified in paragraph 3
(a). If participant's employment by the Company, its Parent and
Subsidiaries shall terminate for any reason other than death,
Participant may exercise this Nonqualified Option, to the extent
Participant was entitled to do so at the date of termination of
employment, at any time or from time to time, within [such period
after the date of termination of employment as determined by the
Committee], but in no event later than the expiration date
specified in paragraph 3 (a).
(e) Nontransferability. This Nonqualified Option shall not be
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transferable other than by will or by the laws of descent and
distribution. No interest of Participant under the Plan shall be
subject to attachment, execution, garnishment, sequestration, the
laws of bankruptcy or any other legal or equitable process.
During the lifetime of Participant, this Nonqualified Option
shall be exercisable only by Participant.
(f) Adjustments. In the event of any change in the Stock by reason
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of any stock dividend, recapitalization, reorganization, merger,
consolidation, split-up, combination or exchange of shares, or of
any similar change affecting the Stock, the number and class of
securities subject to this Nonqualified Option, the Option Price
per share, and any other terms of this Agreement which in the
Committee's sole discretion require
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adjustment (including, without limitation, relating to the Stock,
other securities, cash or other consideration which may be
acquired upon exercise of this Nonqualified Option) shall be
appropriately adjusted consistent with such change in such manner
as the Committee may deem appropriate. Any adjustment so made
shall be final and binding upon Participant.
(g) No Rights as Stockholder. Participant shall have no rights as a
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stockholder with respect to any shares of Stock subject to this
Nonqualified Option prior to the date of issuance to Participant
of a certificate or certificates for such shares.
(h) No Right to Continued Performance of Services. This Nonqualified
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Option shall not confer upon participant any right with respect
to continuance of employment by the Company or any Parent or
Subsidiary nor shall it interfere in any way with the right of
the Company or any Parent or Subsidiary for which Participant
performs services to terminate Participant's employment at any
time.
(i) Compliance With Law and Regulations. This Nonqualified Option,
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its exercise and the obligation of the Company to transfer shares
hereunder shall be subject to all applicable federal and state
laws, rules and regulations, including those related to
disclosure of financial and other information to Participant and
to approvals by any government or regulatory agency as may be
required. The Company shall not be required to issue or deliver
any certificates for shares of Stock prior to (1) the listing of
such shares on any stock exchange on which the Stock may then be
listed and (2) the completion of any registration or
qualification of such shares under any federal or state law, or
any rule or regulation of any government body which the Company
shall, in its sole discretion, determine to be necessary or
advisable.
(j) Certain Corporation Transactions. Nothing in the Plan or this
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Agreement shall in any way prohibit the Company from merging with
or consolidating into another corporation or from selling or
transferring all or substantially all of its assets, or from
distributing all or substantially all of its assets to its
stockholders in liquidation, or from dissolving and terminating
its corporate existence, and in any such event (other than a
merger in which the Company is the surviving corporation and
under the terms of which the shares of Stock outstanding
immediately prior to the merger remain outstanding and
unchanged), Participant shall be entitled to receive, at the time
this Nonqualified Option or portion thereof would otherwise
become exercisable, subject to the terms of this Nonqualified
Option, and upon payment of the Option Price, the same shares of
stock, cash or other consideration received by shareholders of
the Company in accordance with
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such merger, consolidation, sale or transfer of assets,
liquidation or dissolution.
4. Investment Representation. Participant (or any person acting for
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Participant as permitted under Paragraph 3 (d) shall, upon demand by
the Company, furnish the Company, prior to the issuance of any shares
upon the exercise of all or any part of this Nonqualified Option, an
agreement (in such other person) represents that the shares acquired
upon exercise are being acquired for investment and not with a view to
the sale or distribution thereof. Upon such demand, delivery of such
representation prior to the delivery of any shares upon exercise of
this Nonqualified Option and prior to expiration of this Nonqualified
Option shall be a condition precedent to the right of the Participant
(or such other person) to acquire any shares. The Company shall have
the right, at its election, to place legends on the certificates
representing the shares so being issued with respect to limitations on
transferability imposed by federal and/or state laws, and the Company
shall have the right to issue "stop transfer" instructions to its
transfer agent.
5. Arrangement for Tax Payment. Participant shall make any arrangements
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required by the Committee to insure that the amount of tax required to
be withheld by the Company or a Parent or Subsidiary as a result of
the grant or exercise of this Nonqualified Option is available for
payment.
6. Participant Bound by Plan. Participant hereby acknowledges receipt of
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a copy of the Plan and agrees to be bound by all the terms and
provisions thereof. The Company hereby agrees to provide Participant
with any amendments to this Plan which may be adopted prior to the
expiration date specified in paragraph 3 (a).
7. Notices. Any notice hereunder to the Company shall be addressed to:
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MGM MIRAGE, c/o Bellagio, 3600 Las Vegas Boulevard South, Las Vegas,
Nevada 89109, Attention: Stock Option Plan Administrator, and any
notice hereunder to Participant shall be addressed to the Participant
at Participant's last address on the records of the Company, subject
to the right of either party to designate at any time hereafter in
writing some other address. Any notice shall be deemed to have been
duly given on personal delivery or three days after being sent in a
properly sealed envelope, addressed as set forth above, and deposited
(with first class postage prepaid) in the United States mail.
8. Counterparts. This Agreement may be executed in counterparts, each of
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which shall constitute one and the same instrument.
9. Governing Law. The parties hereto agree that the validity,
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construction and interpretation of this Agreement shall be governed by
the laws of the state of Nevada.
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10. Variation of Pronouns. All pronouns and any variations thereof
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contained herein shall be deemed to refer to masculine, feminine,
neuter, singular or plural, as the identity of the person or persons
may require.
IN WITNESS WHEREOF, the Company and Participant have executed this
Agreement as of the date first written above.
COMPANY:
MGM MIRAGE
By:______________________________________
PARTICIPANT:
_________________________________________
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