<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
MIRAGE RESORTS, INCORPORATED
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / 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):
------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
5) Total fee paid:
------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / 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.
1) Amount Previously Paid:
------------------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
3) Filing Party:
------------------------------------------------------------------------
4) Date Filed:
------------------------------------------------------------------------
<PAGE>
MIRAGE RESORTS, INCORPORATED
--------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 25, 1995
----------------
The Annual Meeting of Stockholders (the "Meeting") of Mirage Resorts,
Incorporated (the "Company") will be held at The Mirage, 3400 Las Vegas
Boulevard South, Las Vegas, Nevada on Thursday, May 25, 1995, at 1:00 P.M., for
the following purposes:
1. To elect two directors for the term set forth in the accompanying Proxy
Statement;
2. To approve the 1995 Stock Option and Stock Appreciation Rights Plan; and
3. To transact such other business as may properly come before the Meeting
and any adjournments thereof.
Pursuant to the Bylaws of the Company, the Board of Directors has fixed the
time and date for the determination of stockholders entitled to notice of and to
vote at the Meeting as of the close of business on March 31, 1995. Accordingly,
only stockholders of record on such date and at such time will be entitled to
vote at the Meeting, notwithstanding any transfer of stock on the books of the
Company thereafter.
Whether or not you expect to attend the Meeting in person, please date and
sign the accompanying Proxy card and return it promptly to American Stock
Transfer & Trust Company in the envelope enclosed for that purpose.
KENNETH R. WYNN
SECRETARY
Las Vegas, Nevada
April 18, 1995
<PAGE>
MIRAGE RESORTS, INCORPORATED
3400 LAS VEGAS BOULEVARD SOUTH
LAS VEGAS, NEVADA 89109
APRIL 18, 1995
------------------
PROXY STATEMENT
The accompanying Proxy is solicited by and on behalf of the Board of
Directors of Mirage Resorts, Incorporated (the "Company") for use only at the
Company's Annual Meeting of Stockholders (the "Meeting") to be held on May 25,
1995, and at any and all adjournments thereof. Unless the accompanying Proxy has
been previously revoked, the shares represented by the Proxy will, unless
otherwise directed, be voted at the Meeting for the nominees for election as
directors named below, for approval of the 1995 Stock Option and Stock
Appreciation Rights Plan described below and, with discretion, on all such other
matters as may properly come before the Meeting. A stockholder may revoke the
Proxy at will at any time prior to the voting of shares by voting in person at
the Meeting or by filing with the Secretary of the Company a duly executed Proxy
bearing a later date or an instrument revoking the Proxy. The total cost of
solicitation of Proxies will be paid by the Company.
In addition to soliciting Proxies by mail, the Company's officers, directors
and other regular employees, without additional compensation, may solicit
Proxies personally or by other appropriate means. It is anticipated that banks,
brokerage firms, fiduciaries and other custodians and nominees will forward
Proxy soliciting material to their principals and that the Company will
reimburse such persons' out-of-pocket expenses.
It is anticipated that this Proxy Statement and accompanying Proxy will
first be mailed to stockholders on or about April 24, 1995.
VOTING RIGHTS
Holders of the Company's common stock, $.008 par value (the "Common Stock"),
of record as of the close of business on March 31, 1995, will be entitled to one
vote for each share held on all matters presented to the Meeting. On March 31,
1995, there were outstanding 91,113,942 shares of Common Stock, which
constituted all of the outstanding voting securities of the Company. A majority
of the outstanding shares of Common Stock represented in person or by proxy will
constitute a quorum for the transaction of business at the Meeting. Abstentions
and broker non-votes will be counted as shares that are present for purposes of
determining the presence of a quorum. There will be no cumulative voting for
members of the Board of Directors. The two nominees who receive the greatest
number of votes cast will be elected to the Board of Directors. Approval of the
1995 Stock Option and Stock Appreciation Rights Plan requires the affirmative
vote of the holders of a majority of the shares of Common Stock represented at
the Meeting (giving effect to abstentions but without giving effect to broker
non-votes). Under the rules of the New York Stock Exchange (the "NYSE"), the
election of directors and approval of the 1995 Stock Option and Stock
Appreciation Rights Plan are considered by the NYSE to be "routine" items upon
which brokerage firms may vote in their discretion on behalf of their customers
if such customers have not furnished voting instructions within a specified
period prior to the Meeting.
<PAGE>
STOCK OWNERSHIP OF MAJOR STOCKHOLDERS AND MANAGEMENT
The following table sets forth certain information as of March 31, 1995 with
respect to the "beneficial" ownership, as such term is defined in the Rules of
the Securities and Exchange Commission (the "Commission"), of the Common Stock
by (i) each person who, to the knowledge of the Company, beneficially owned more
than 5% of the outstanding Common Stock, (ii) each director of the Company,
(iii) the Company's Chief Executive Officer and the four other most highly
compensated executive officers of the Company during 1994 (collectively, the
"Named Officers") and (iv) all directors and executive officers of the Company
as a group.
<TABLE>
<CAPTION>
APPROXIMATE
PERCENTAGE OF
NUMBER OF OUTSTANDING
NAME SHARES COMMON STOCK
- ---------------------------------------- -------------- -------------
<S> <C> <C>
Stephen A. Wynn
P.O. Box 7777
Las Vegas, NV 89177 14,591,263(1) 15.0%
The Capital Group Companies, Inc.
333 South Hope Street
Los Angeles, CA 90071 4,685,250(2) 5.1%
Melvin B. Wolzinger 1,760,770(3) 1.9%
Daniel B. Wayson 259,375(4) *
Elaine P. Wynn 115,000(5) *
George J. Mason 96,250(6) *
Richard D. Bronson -- --
Ronald M. Popeil 23,500(7) *
Barry A. Shier 375,105(8) *
Bruce A. Levin 150,000(9) *
Daniel R. Lee 272,000(10) *
Kenneth R. Wynn 745,941(11) *
All directors and executive officers
as a group (15 persons) 18,523,639(12) 18.9%
<FN>
- ------------------------
* Less than 1%.
(1) Includes 5,875,000 shares subject to options which are currently
exercisable or become exercisable within 60 days of March 31, 1995. Does
not include (i) 219,487 shares held by a grantor retained annuity trust
established by Mr. Wynn for the benefit of his adult daughters, as to which
shares Mr. Wynn does not have voting or dispositive power, or (ii) shares
owned by Elaine P. Wynn, Mr. Wynn's wife, as separate property, as to which
shares Mr. Wynn disclaims beneficial ownership.
(2) Represents shares beneficially owned as of December 31, 1994, based on a
Schedule 13G, dated February 8, 1995, filed with the Commission. The
Schedule 13G states that certain subsidiaries of The Capital Group
Companies, Inc. have sole dispositive power as to all of such shares and
sole voting power as to 651,750 of such shares.
(3) Includes 1,546,093 shares held by a family trust of which Mr. Wolzinger and
his wife serve as trustees and 175,832 shares held by a limited partnership
of which such trust is the general partner and a limited partner. Mr.
Wolzinger disclaims beneficial ownership of 94,598 shares held by the
limited partnership as to which he has no pecuniary interest. Also includes
26,345 shares held by a trust of which Mr. Wolzinger serves as a trustee
but does not have any pecuniary interest, as to which shares Mr. Wolzinger
disclaims beneficial ownership. Also includes 12,500 shares subject to
options which are currently exercisable or become exercisable within 60
days of March 31, 1995.
</TABLE>
2
<PAGE>
<TABLE>
<S> <C>
(4) Includes 12,500 shares subject to options which are currently exercisable
or become exercisable within 60 days of March 31, 1995.
(5) Includes 12,500 shares subject to options which are currently exercisable
or become exercisable within 60 days of March 31, 1995. Does not include
shares reported as owned by Stephen A. Wynn, Mrs. Wynn's husband.
(6) Includes 50,000 shares held by a family trust of which Mr. Mason and his
wife serve as trustees and 12,500 shares subject to options which are
currently exercisable or become exercisable within 60 days of March 31,
1995.
(7) Includes 12,500 shares subject to options which are currently exercisable
or become exercisable within 60 days of March 31, 1995.
(8) Includes 375,000 shares subject to options which are currently exercisable
or become exercisable within 60 days of March 31, 1995 and 80 shares held
by Mr. Shier as custodian for his minor children.
(9) Includes 80,000 shares subject to options which are currently exercisable
or become exercisable within 60 days of March 31, 1995.
(10) Includes 270,000 shares subject to options which are currently exercisable
or become exercisable within 60 days of March 31, 1995.
(11) Includes 562,500 shares held by a family trust of which Mr. Wynn serves as
trustee and 1,250 shares held by Mr. Wynn as custodian for his minor
children. Mr. Wynn disclaims beneficial ownership of the shares held by him
as custodian. Also includes 182,191 shares subject to future vesting.
(12) Includes 6,786,500 shares subject to options which are currently
exercisable or become exercisable within 60 days of March 31, 1995.
</TABLE>
DIRECTORS AND EXECUTIVE OFFICERS
The Company's Articles of Incorporation and Bylaws provide for from three to
11 directors, the precise number to be determined from time to time by the Board
of Directors. Currently, the size of the Board is fixed at seven members. All of
the existing directors have been previously elected by the stockholders. The two
directors to be elected at the Meeting are to be elected to hold office for
three years each and until the election of their respective successors. All
Proxies received by the Board of Directors will be voted for the election, as
directors, of the nominees listed below if no direction to the contrary is
given. In the event that any nominee is unable or declines to serve, an event
that is not anticipated, the Proxies will be voted for the election of any
nominee who may be designated by the Board of Directors.
3
<PAGE>
The information set forth below is submitted with respect to the nominees to
the Board for whom it is intended that Proxies will be voted, for directors
whose terms of office will continue after the Meeting and for executive officers
who are not directors.
INFORMATION CONCERNING NOMINEES FOR ELECTION AS DIRECTORS(1)
<TABLE>
<CAPTION>
YEAR FIRST
NAME ELECTED
- ------------------------------------------------------------------------------ ----------------
<S> <C> <C>
Stephen A. Wynn, 53(2) 1973
Chairman of the Board of Directors, President and Chief Executive Officer
Mr. Wynn has held his present positions with the Company for more than five
years. He is also a director of International Cablecasting Technologies Inc.
("ICT").
Ronald M. Popeil, 59 1980; Appointed
Director and Member of Audit, Stock Option and Bonus Committees September 19,
Mr. Popeil has been the President of RONCO, Inc. (formerly known as 1979
Innovations 2000, Inc.), the principal business of which is the production
and marketing of consumer products, since he co-founded that company in May
1984.
</TABLE>
INFORMATION CONCERNING DIRECTORS WHOSE TERMS OF OFFICE WILL CONTINUE AFTER THE
ANNUAL MEETING(1)
<TABLE>
<CAPTION>
EXPIRATION
YEAR FIRST OF TERM AS
NAME ELECTED DIRECTOR
- ------------------------------------------------------------------------------ ---------------- ------------
<S> <C> <C>
Melvin B. Wolzinger, 74 1973 1997
Director and Member of Audit, Stock Option and Bonus Committees
Mr. Wolzinger is, and has been for more than five years, a general partner
in W.W. Investment Co., a real estate holding company in Las Vegas, Nevada,
and is a principal owner of various restaurants and casino gaming
establishments in Las Vegas.
Daniel B. Wayson, 42 1988; Appointed 1997
Director March 19, 1987
Mr. Wayson served as President and Chief Executive Officer of the Company's
then New Jersey gaming subsidiary from December 1984 until its sale on March
1, 1987. He is, and has been for more than five years, a principal of Wayson
Properties, Inc., a real estate development and holding company, and other
real estate and business ventures.
George J. Mason, 64 1973 1997
Director and Member of Audit, Stock Option and Bonus Committees
Mr. Mason is Senior Managing Director of, and Registered Representative for,
Bear, Stearns & Co. Inc., Los Angeles, California, an investment banking
firm which has provided certain services to the Company, and has been
employed by such firm for more than five years.
Elaine P. Wynn, 52(2) 1977 1996
Director
Mrs. Wynn is active in civic and philanthropic affairs in the Las Vegas
community and has been so involved for more than five years. She is
Secretary, Treasurer and a Trustee of Golden Nugget Scholarship Fund, Inc.
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
EXPIRATION
YEAR FIRST OF TERM AS
NAME ELECTED DIRECTOR
- ------------------------------------------------------------------------------ ---------------- ------------
<S> <C> <C>
Richard D. Bronson, 50 1993; 1996
Director Appointed August
Mr. Bronson has been President of New City Development, a division of the 3, 1992
Company which is responsible for certain corporate development activities of
the Company outside of Nevada, or its predecessor, New City Development,
Inc., since February 1992. He has also been President of Bronson Companies,
a real estate development and consulting firm in Hartford, Connecticut,
since October 1991, and from 1987 to July 1991 he was Co-Chairman of the
Board of Bronson & Hutensky, a real estate development firm in Hartford, and
Monitor Management Corporation ("Monitor"), a real estate management firm in
Hartford. On January 22, 1992, a creditor of Mr. Bronson and Monitor filed
an involuntary petition under Chapter 7 of the Bankruptcy Code against Mr.
Bronson. After attempts to negotiate an out-of-court settlement with Mr.
Bronson's creditors failed, the court entered an order for relief against
Mr. Bronson and customary discharge provisions on July 16, 1993.
</TABLE>
INFORMATION CONCERNING EXECUTIVE OFFICERS OTHER THAN DIRECTORS LISTED ABOVE(3)
<TABLE>
<CAPTION>
YEAR HIRED
NAME BY COMPANY
- ------------------------------------------------------------------------------------------------------ ----------
<S> <C>
Barry A. Shier, 40, Executive Vice President -- Marketing and Hotel Operations 1984
Mr. Shier joined the Company as Executive Vice President -- Hotel Operations in September 1984 and
was appointed to his present position in August 1987. Since March 1991, he has also been the
President and Chief Executive Officer of GNLV, CORP., a wholly owned gaming subsidiary of the
Company.
Bruce A. Levin, 55, Vice President, General Counsel and Assistant Secretary 1979
Mr. Levin has been Vice President and General Counsel of the Company since joining the Company in
August 1979. He has also been Assistant Secretary since August 1979, except for the period August
1993 through July 1994, when he served as Secretary.
Daniel R. Lee, 38, Senior Vice President -- Finance and Development, Chief Financial Officer and 1992
Treasurer
Mr. Lee joined the Company as Senior Vice President -- Finance and Development in March 1992 and was
appointed Chief Financial Officer and Treasurer in September 1992. From March 1990 to March 1992, he
was a securities analyst and Director -- Equity Research of The First Boston Corporation, an
investment banking firm which has provided certain services to the Company. From July 1980 to
February 1990, Mr. Lee was employed by Drexel Burnham Lambert Incorporated ("DBL"), an investment
banking firm, as a securities analyst, and was a Managing Director of DBL from November 1989 to
February 1990. In May 1990, DBL filed a petition for reorganization under Chapter 11 of the
Bankruptcy Code.
Kenneth R. Wynn, 42, Vice President -- Design and Construction and Secretary (2) 1973
Mr. Wynn has held his present positions with the Company since joining the Company in August 1973,
except for the period August 1993 through July 1994. He has also been the President of Atlandia
Design and Furnishings, Inc., a wholly owned subsidiary of the Company which provides architectural,
design, purchasing and construction supervision services to the Company, for more than five years,
and was a director of the Company from 1973 to August 1993.
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
YEAR HIRED
NAME BY COMPANY
- ------------------------------------------------------------------------------------------------------ ----------
<S> <C>
Frank P. Visconti, 41, Senior Vice President -- Retail Operations 1992
Mr. Visconti was appointed to his present position in September 1992. From June 1989 to September
1992, he was Vice President and General Manager of Neiman Marcus in San Francisco, California, a
retail specialty store.
Henry M. Applegate III, 48, Senior Vice President and Controller 1992
Mr. Applegate was appointed to his present position in September 1992. From January 1990 to July
1992, he was Senior Vice President and Chief Operating Officer of Bally's Reno hotel-casino in Reno,
Nevada. From March 1987 to January 1990, Mr. Applegate was Senior Vice President and Chief Operating
Officer of Bally's Grand hotel-casino in Atlantic City, New Jersey. In November 1991, Bally's Grand
Inc., the parent corporation of Bally's Reno, filed a petition for reorganization under Chapter 11
of the Bankruptcy Code.
James E. Pettis, 43, Vice President -- Risk Management 1980
Mr. Pettis was appointed to his present position in November 1984. He has been employed by the
Company since May 1980 with responsibility for various corporate risk management, safety and
employee benefit matters.
James M. Powers, 66, Vice President -- Corporate Security 1980
Mr. Powers has held his present position with the Company since joining the Company in January 1980.
<FN>
- ------------------------
(1) Only directorships of issuers with a class of securities registered
pursuant to Section 12 of the Securities Exchange Act of 1934, as amended
(the "1934 Act"), or subject to the requirements of Section 15(d) of the
1934 Act, or directorships of issuers registered as investment companies
under the Investment Company Act of 1940, as amended, are listed in the
table.
(2) Stephen A. Wynn and Elaine P. Wynn are husband and wife. Stephen A. Wynn
and Kenneth R. Wynn are brothers.
(3) Officers serve at the pleasure of the Board of Directors.
</TABLE>
6
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION AWARDS
COMPENSATION ------------------------------
------------------------------------------------ RESTRICTED SECURITIES
NAME AND PRINCIPAL OTHER ANNUAL STOCK UNDERLYING ALL OTHER
POSITION YEAR SALARY($) BONUS($) COMPENSATION($)(1) AWARDS($)(2) OPTIONS/SARS(#) COMPENSATION($)(3)
- ------------------------- ---- ---------- ---------- ------------------ ------------ --------------- ------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Stephen A. Wynn 1994 $2,501,701 $1,250,000 $ 0 $ 0 0 $ 4,260
Chairman of the Board, 1993 2,507,692 0 0 0 0 5,697
President and Chief 1992 1,504,836 0 0 0 3,375,000 5,564
Executive Officer
Barry A. Shier 1994 892,008 375,000 0 0 0 4,260
Executive Vice President 1993 750,000 250,000 0 0 0 5,697
-- Marketing and Hotel 1992 750,000 250,000 0 0 0 5,564
Operations
Bruce A. Levin 1994 437,250 100,000 0 0 0 4,260
Vice President, General 1993 406,000 0 0 0 0 5,457
Counsel and Assistant 1992 368,692 25,000 0 0 250,000 5,324
Secretary
Daniel R. Lee 1994 357,776 150,000 0 0 0 4,008
Senior Vice President -- 1993 302,692 100,000 0 0 0 5,217
Finance and Development, 1992 197,117 0 0 0 500,000 500
Chief Financial Officer
and Treasurer
Kenneth R. Wynn 1994 350,352 100,000 0 0 0 3,882
Vice President -- Design 1993 336,539 0 0 4,190,393 0 4,446
and Construction and 1992 336,539 0 0 0 0 326,971
Secretary
<FN>
- ------------------------
(1) The Company provides certain perquisites and other personal benefits to
some or all of the Named Officers, including (i) reimbursement for medical
expenses, (ii) amounts allocated for personal use of Company automobiles,
(iii) use of complimentary rooms, food, beverages and entertainment
(including privileges at the Company's Shadow Creek golf course) and (iv)
use of Company employees to furnish personal services. The incremental cost
to the Company of providing perquisites and other personal benefits did not
exceed, as to any Named Officer for any year, the lesser of $50,000 or 10%
of the total salary and bonus paid to such Named Officer for such year and,
accordingly, is omitted from the table.
(2) At December 31, 1994, Kenneth R. Wynn held 182,191 restricted shares of
Common Stock with an aggregate value (based on the closing sale price of
the Common Stock on the NYSE on December 30, 1994) of $3,734,916. To the
extent that the Company pays dividends on the Common Stock in the future,
Mr. Wynn will receive dividends on such restricted shares. None of the
other Named Officers held restricted stock awards at December 31, 1994.
(3) Represents (i) the cost of Company-paid premiums for term life insurance on
each of the Named Officers, as follows: Stephen A. Wynn -- 1994: $1,260,
1993: $1,200, 1992: $1,200; Barry A. Shier -- 1994: $1,260, 1993: $1,200,
1992: $1,200; Bruce A. Levin -- 1994: $1,260, 1993: $960, 1992: $960;
Daniel R. Lee -- 1994: $1,008, 1993: $720, 1992: $500; and Kenneth R. Wynn
-- 1994: $882, 1993: $840, 1992: $840 and (ii) 50% matching contributions
made by the Company for the Named Officers in accordance with the Company's
retirement savings plan adopted pursuant to Section 401(k) of the Internal
Revenue Code of 1986, as amended (the "Code"), as follows: Messrs. Stephen
A. Wynn, Shier and Levin -- 1994: $3,000, 1993: $4,497, 1992: $4,364;
Daniel R. Lee -- 1994: $3,000, 1993: $4,497; and Kenneth R. Wynn -- 1994:
$3,000, 1993: $3,606, 1992: $3,606. The 1992 amount for Kenneth R. Wynn
also includes $322,525 accrued with respect to the Company's then future
cash liability to Mr. Wynn pursuant to the Company's Executive Retirement
Plan (the "Executive Plan"), a deferred compensation plan. The Executive
Plan no longer covers Kenneth R. Wynn or any of the other Named Officers.
</TABLE>
7
<PAGE>
AGGREGATED OPTION EXERCISES IN 1994 AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES
UNDERLYING
UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT IN-THE-MONEY OPTIONS AT
SHARES FISCAL YEAR-END(#) FISCAL YEAR-END($)
ACQUIRED ON VALUE EXERCISABLE/ EXERCISABLE/UNEXERCISABLE
NAME EXERCISE(#) REALIZED($)(1) UNEXERCISABLE (2)
- -------------------------- ----------- -------------- ------------------ ---------------------------
<S> <C> <C> <C> <C> <C> <C>
Stephen A. Wynn 0 $ 0 5,875,000/ 0 $52,037,500/ 0
Barry A. Shier 0 0 375,000/ 375,000 3,225,000/ 4,312,500
Bruce A. Levin 20,000 331,000 80,000/ 150,000 884,000/ 1,657,500
Daniel R. Lee 30,000 485,250 170,000/ 300,000 1,836,000/ 3,240,000
Kenneth R. Wynn 0 0 0/ 0 0/ 0
<FN>
- ------------------------
(1) Represents the difference between the closing sale price of the Common
Stock on the NYSE on the date of exercise and the exercise price of the
options.
(2) Represents the difference between the closing sale price of the Common
Stock on the NYSE on December 30, 1994 and the exercise price of the
options.
</TABLE>
EMPLOYMENT AGREEMENT
On December 16, 1992, the Company entered into a 10-year Employment
Agreement with Stephen A. Wynn pursuant to which Mr. Wynn serves as President
and Chief Executive Officer of the Company at an annual salary of $2,500,000.
Mr. Wynn shall be entitled to such bonuses, stock options and other compensation
as may be determined from time to time by the Board of Directors. Pursuant to
the Employment Agreement, the Company also provides Mr. Wynn with the personal
use of an automobile for which the Company pays all insurance, gasoline and
maintenance expenses, and provides Mr. Wynn and his dependents with coverage
under the Company's executive medical and life insurance program.
COMPENSATION OF DIRECTORS
Directors who are not employees of the Company or its subsidiaries were paid
a monthly retainer during 1994 of $4,000, representing $2,000 for services as a
director of the Company and $1,000 for services as a director of each of the
Company's subsidiaries which own and operate The Mirage and the Golden Nugget
hotel-casinos, and continue to receive such retainer in 1995. Directors Ronald
M. Popeil, George J. Mason and Melvin B. Wolzinger serve on the Company's Audit,
Stock Option and Bonus Committees and received a monthly fee of $1,000 for
services as members of the Audit and Stock Option Committees during 1994, and
continue to receive such fees in 1995. Pursuant to the Company's 1992
Non-Employee Director Stock Option Plan (the "Director Plan"), each director who
is not an employee of the Company or its subsidiaries and who had served as a
director for at least three years was granted 12,500 stock options in 1992 at an
exercise price of $10.25 per share, 2,500 stock options in 1993 at an exercise
price of $16.45 per share, 2,500 stock options in 1994 at an exercise price of
$24 per share and 2,500 stock options in 1995 at an exercise price of $23 per
share, and will be granted an additional 2,500 stock options in each succeeding
year in which he or she remains a director. Stock options granted under the
Director Plan have an exercise price equal to the market value of the Common
Stock on each date of grant, and become exercisable three years thereafter. An
aggregate of up to 250,000 stock options may be granted under the Director Plan.
Directors who are employees of the Company or its subsidiaries do not receive
compensation for their services as directors.
COMPARATIVE STOCK PRICE PERFORMANCE GRAPH
The graph below compares the cumulative total stockholder return from
December 31, 1989 to December 31, 1994, assuming reinvestment of dividends, of
the Company, the NYSE Market Value Index (which consists of all common stocks
listed on the NYSE) and the Dow Jones Industry Group (Casinos). The
8
<PAGE>
graph assumes an investment of $100 on December 31, 1989 in each of the Common
Stock, the stocks comprising the NYSE Market Value Index and the stocks
comprising the Dow Jones Industry Group (Casinos).
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
MIRAGE RESORTS, DOW JONES INDUSTRY NYSE MARKET
INCORPORATED(1) GROUP (CASINOS)(1) VALUE INDEX(1)
---------------- -------------------- ----------------
<S> <C> <C> <C>
1989 100 100 100
1990 68.04 65.72 95.92
1991 101.37 99.00 124.12
1992 119.63 141.35 129.96
1993 218.04 168.95 147.56
1994 187.21 133.84 144.69
<FN>
- ------------------------
(1) The data points in this graph were calculated by Media General Financial
Services, Inc., Richmond, Virginia, based on market price and dividend
information supplied by the NYSE and Dow Jones & Company, Inc. The Dow
Jones Industry Group (Casinos) includes only those stocks comprising the
group which have been publicly traded since December 31, 1989.
</TABLE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Company has no compensation committee. Decisions concerning executive
officer compensation for 1994 were made by the full Board of Directors and, with
respect to the award of cash bonuses, by the Bonus Committee. The following
members of the Board of Directors are officers or former officers of the Company
or its subsidiaries: Stephen A. Wynn; Richard D. Bronson; and Daniel B. Wayson.
Director Elaine P. Wynn is the wife of Stephen A. Wynn.
ICT, a corporation of which Stephen A. Wynn is a director and owns
approximately 13.2% of the outstanding common stock, programs and distributes a
premium digital music service for the Company's four hotel-casinos pursuant to
an agreement with the Company. The Company expects to pay ICT approximately
$60,000 for such service during 1995.
REPORT ON EXECUTIVE COMPENSATION
COMPENSATION POLICIES AND BASE SALARIES
The Company has no formal compensation policies applicable to executive
officers. Decisions concerning executive officers' base salaries for 1994 were
made by the full Board of Directors, based upon the recommendations of the
Company's Chief Executive Officer. In 1994, four executive officers, including
Messrs. Shier, Levin and Lee, received salary increases. Decisions concerning
the grant of stock options and the award of cash bonuses to executive officers
were made by the Stock Option Committee and the Bonus Committee, respectively,
and were similarly based upon the recommendations of the Chief Executive
Officer. The Chief Executive Officer's recommendations in each case were based
on his subjective evaluation of each officer's (including his own) contribution
to the Company and the level of compensation necessary to adequately motivate
and reward the officer. The composition and amount of each item of executive
compensation for 1994 did not bear a specific relationship to any particular
measure of the Company's performance.
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In addition to the Chief Executive Officer's Employment Agreement discussed
below, two other executive officers (neither of whom is a Named Officer) are
parties to employment agreements with the Company which were entered into in
1992. Compensation paid to such executive officers for 1994 was consistent with
the terms of such employment agreements.
STOCK OPTIONS
The Company's Stock Option and Stock Appreciation Rights Plans are an
important component of the Company's compensation program for executive officers
and other employees. The stock option plans are intended to advance the
interests of the Company and its stockholders by encouraging and enabling
executive officers and other employees, upon whose judgment, initiative and
effort the Company is largely dependent for the successful conduct of its
business, to acquire and retain a proprietary interest in the Company by
ownership of its stock. Through stock option grants, the long-range interests of
management and employees are aligned with those of stockholders as the stock
option recipients accumulate (through the vesting of stock options) meaningful
stakes in the Company. The Company's stock option plans are administered by the
Stock Option Committee, which is composed of three non-employee members of the
Board of Directors who also serve as the members of the Audit and Bonus
Committees. Decisions concerning the grant of stock options, including the
individuals to whom options were granted and the respective exercise prices and
vesting periods, were made by the Stock Option Committee based upon the
recommendations of the Chief Executive Officer. Such recommendations and
decisions were made on a subjective basis and did not bear a specific
relationship to any particular measure of the Company's performance. None of the
executive officers received stock option grants in 1994.
CASH BONUSES
In addition to base salary and stock options, the other principal part of
the Company's executive compensation program consists of cash bonuses awarded
pursuant to the Company's Amended and Restated 1994 Cash Bonus Plan (the "Bonus
Plan"), which was approved by the Company's stockholders in May 1994. The Bonus
Plan provides for an annual bonus pool equal to 5% of the Company's consolidated
earnings before depreciation, interest and taxes in excess of $250,000,000. Out
of the bonus pool, each executive officer is eligible to receive a bonus of up
to 50% of his annual base salary in effect on March 31, 1994, the effective date
of the Bonus Plan. The Bonus Plan is administered by the Bonus Committee, which
is composed of three non-employee members of the Board of Directors. Decisions
concerning the award of bonuses pursuant to the Bonus Plan (within the
above-described limitations) were made by the Bonus Committee upon the
recommendations of the Chief Executive Officer. Such recommendations and
decisions were made on a subjective basis and did not bear specific relationship
to any particular measure of the Company's performance. In 1994, bonuses were
awarded to each executive officer in amounts ranging from approximately 11% to
50% of annual base salary. See "Executive Compensation -- Summary Compensation
Table" for information concerning bonuses awarded to the Named Officers.
OTHER COMPENSATION
The Company also provides certain perquisites and other personal benefits to
executive officers, which constitute a small percentage of their total
compensation. See footnote (1) to "Executive Compensation -- Summary
Compensation Table."
INTERNAL REVENUE CODE SECTION 162(M)
In 1993, legislation was enacted which added Section 162(m) to the Code.
Commencing in 1994, Section 162(m) eliminates the federal income tax
deductibility of most compensation exceeding $1,000,000 paid to the chief
executive officer and the four other most highly compensated executive officers
of publicly held corporations. Certain types of compensation are not affected by
the deduction limitation, including compensation paid pursuant to a binding
agreement entered into on or before February 17, 1993 and compensation paid
pursuant to a qualifying performance-based plan such as the Bonus Plan. The
Bonus Plan was adopted in 1994 in response to the enactment of Section 162(m) in
order to permit the Company to continue deducting bonuses paid to the Chief
Executive Officer and other executive officers whose annual compensation exceeds
$1,000,000. In making future compensation decisions, the Board of Directors
intends to take into account the effect of Section 162(m), although in
appropriate circumstances it may determine to award compensation to covered
executive officers which is not fully deductible by the Company by virtue of
Section 162(m).
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COMPENSATION OF CHIEF EXECUTIVE OFFICER
In 1994, the Chief Executive Officer received a salary of $2,500,000
pursuant to a 10-year Employment Agreement approved by the Board of Directors in
December 1992. See "Executive Compensation -- Employment Agreement." The amount
of such salary was determined by the Board of Directors based upon the Chief
Executive Officer's recommendation. Such recommendation and determination were
made on a subjective basis and did not bear a specific relationship to any
particular measure of the Company's performance during 1994 or any prior period.
In adopting the Chief Executive Officer's recommendation, the Board of Directors
considered a large number of factors, including (1) the record of leadership and
service provided by the Chief Executive Officer since joining the Company in
1973, (2) the identification of the Company with the Chief Executive Officer by
the financial community and the general public, and the recognition by the Board
of Directors and others in the gaming industry of the importance of his
leadership, creativity and other personal attributes to the Company's continued
success, (3) the total stockholder return obtained by the Company during the
past five years, which significantly surpassed that of both the broad market and
the Company's principal industry competitors as a group (see "Comparative Stock
Price Performance Graph"), (4) the achievements recorded by the Company since
the Chief Executive Officer's annual salary was last increased in March 1990,
including the successful financial performance of The Mirage, the Company's
flagship hotel-casino, since opening in November 1989, the restructuring of a
significant portion of the Company's long-term debt and the successful
completion of equity offerings in 1991 and 1992, resulting in a reduction of the
Company's average cost of capital, the development and construction of Treasure
Island at The Mirage, the Company's newest hotel-casino, which opened on
schedule in October 1993, and the purchase, for future development, of the
164-acre site of the former Dunes Hotel, Casino and Country Club on the Las
Vegas Strip, which was consummated in January 1993, (5) the fact that the Chief
Executive Officer is the Company's principal stockholder and thereby holds a
significant stake in the Company's future and (6) the fact that the Chief
Executive Officer's annual salary had not been increased in almost three years,
and that he was not awarded a cash bonus in 1991 or 1992. No specific weight was
assigned to any particular factor.
In 1994, the Chief Executive Officer was awarded a cash bonus of $1,250,000
(50% of his annual base salary) pursuant to the Bonus Plan. The amount of such
bonus was determined by the Bonus Committee based upon the recommendation of the
Chief Executive Officer. Such recommendation and determination were made on a
subjective basis, taking into account the Chief Executive Officer's contribution
to the Company and the amount necessary to adequately reward the Chief Executive
Officer, and did not bear a specific relationship to any particular measure of
the Company's performance during 1994.
BY THE BOARD OF DIRECTORS
Stephen A. Wynn, Chairman
Melvin B. Wolzinger
George J. Mason
Ronald M. Popeil
Elaine P. Wynn
Daniel B. Wayson
Richard D. Bronson
BY THE STOCK OPTION COMMITTEE
Ronald M. Popeil, Chairman
Melvin B. Wolzinger
George J. Mason
BY THE BONUS COMMITTEE
Ronald M. Popeil, Chairman
Melvin B. Wolzinger
George J. Mason
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CERTAIN TRANSACTIONS
In October 1992, the Company lent Mr. Visconti and his wife $91,000 in
connection with Mr. Visconti's relocation from San Francisco, California to Las
Vegas to accept employment with the Company. The loan was evidenced by a
promissory note which bore interest at the rate of 3.78% per annum and was due
on the earlier of October 15, 1994 or the date of sale of the Viscontis' San
Francisco home. The note was secured by a deed of trust on the Viscontis' Las
Vegas residence. Mr. Visconti repaid the note in full in February 1994.
See also "Compensation Committee Interlocks and Insider Participation."
THE 1995 STOCK OPTION AND STOCK APPRECIATION RIGHTS PLAN PROPOSAL
SUMMARY OF THE 1995 PLAN
The Company's Board of Directors adopted the 1995 Stock Option and Stock
Appreciation Rights Plan (the "1995 Plan") on March 31, 1995, subject to
stockholder approval at the Meeting. A copy of the 1995 Plan is attached to this
Proxy Statement as Exhibit A. The following is a brief summary of the 1995 Plan,
which is qualified in its entirety by reference to Exhibit A.
Options granted under the 1995 Plan may be either non-qualified stock
options ("Non-Qualified Options") or options intended to qualify as incentive
stock options under Section 422 of the Code ("Incentive Options"). In contrast
to options, where the holder must pay the exercise price before being entitled
to receive his shares (which exercise price may be paid in cash or using shares
of Common Stock), holders of stock appreciation rights ("SARs") will be entitled
to receive from the Company either Common Stock or cash, at the election of the
holder (as to certain holders a cash election may only be made at certain
times), in an amount equal to the excess, if any, of the market price of the
Common Stock on the date of exercise over the SAR price (the "Spread").
PURPOSE OF THE 1995 PLAN
The purpose of the 1995 Plan is to advance the interests of the Company, its
stockholders and its subsidiaries by encouraging and enabling selected officers,
directors, employees, independent contractors or agents, upon whose judgment,
initiative and effort the Company is largely dependent for the successful
conduct of its business, to acquire and retain a proprietary interest in the
Company by ownership of its stock through the exercise of stock options and to
acquire certain benefits of equity participation in the Company through the
grant of SARs.
AMOUNT OF COMMON STOCK SUBJECT TO OPTIONS AND SARS UNDER THE 1995 PLAN
The 1995 Plan provides for the grant of stock options and SARs covering an
aggregate of 3,000,000 shares of Common Stock, and further provides that no
single participant may be granted stock options and SARs under the 1995 Plan
covering an aggregate of more than 1,000,000 shares of Common Stock. The number
of shares of Common Stock subject to options and SARs is subject to equitable
adjustments for any stock dividends, stock splits, recapitalizations,
reclassifications or any other similar changes which may be required in order to
prevent dilution. Any option or SAR which is not exercised prior to expiration
or which otherwise terminates will thereafter be available for further grant
under the 1995 Plan. As of March 31, 1995, no options or SARs had been granted
under the 1995 Plan.
ADMINISTRATION OF THE 1995 PLAN
Although the 1995 Plan may be administered by the Board of Directors if all
of its members are disinterested (as defined), the Board of Directors has
appointed the Stock Option Committee, consisting of Messrs. Mason, Popeil and
Wolzinger, to administer the 1995 Plan. Options and SARs may not be granted
under the 1995 Plan to members of the Stock Option Committee or to others
designated by the Board of Directors or the Stock Option Committee. Subject to
the conditions set forth in the 1995 Plan, the Board of Directors or the Stock
Option Committee has full and final authority to determine the number of options
or SARs, the individuals to whom and the time or times at which such options or
SARs shall be granted and be exercisable, their exercise prices and the terms
and provisions of the respective agreements to be entered
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into at the time of grant, which may vary. The 1995 Plan is intended to be
flexible, and a significant amount of discretion is vested in the Board of
Directors or Stock Option Committee with respect to all aspects of the options
and SARs to be granted under the 1995 Plan.
PARTICIPANTS
Non-Qualified Options and SARs may be granted under the 1995 Plan to any
person who is or who agrees to become an officer, director, employee,
independent contractor or agent of the Company or any of its subsidiaries.
Incentive Options may be granted only to persons who are employees of the
Company or any of its subsidiaries. As of March 1, 1995, the Company and its
subsidiaries had approximately 16,800 employees.
EXERCISE PRICE
The exercise price of each Non-Qualified Option and SAR granted under the
1995 Plan shall be determined by the Board of Directors or the Stock Option
Committee and shall in no event be less than either (i) the par value or (ii)
50% of the fair market value of the shares on the date of grant. The exercise
price of each Incentive Option granted under the 1995 Plan shall be determined
by the Board of Directors or the Stock Option Committee and shall in no event be
less than either (i) the par value or (ii) 100% (110% in the case of a person
who owns directly or indirectly more than 10% of the Common Stock) of the fair
market value of the shares on the date of grant. The payment of the exercise
price of an option may be made in cash or shares of Common Stock, as more fully
described under "Exercise of Options and SARs."
Fair market value shall be determined by the Board of Directors or the Stock
Option Committee in accordance with the 1995 Plan and such determination shall
be binding upon the Company and upon the holder. The closing sale price of the
Common Stock on the NYSE on April 12, 1995 was $27.75 per share.
TERM OF OPTIONS AND SARS
Options and SARs may be granted for a term of up to 10 years (five years in
the case of Incentive Options granted to a person who owns directly or
indirectly more than 10% of the Common Stock), which may extend beyond the term
of the 1995 Plan.
EXERCISE OF OPTIONS AND SARS
The terms governing exercise of options and SARs granted under the 1995 Plan
shall be determined by the Board of Directors or the Stock Option Committee,
which may limit the number of options or SARs exercisable in any period;
provided, however, that no grantee who is an officer or director or who owns
more than 10% of any class of equity security of the Company (a "10% Holder")
may exercise for cash any SAR granted within the preceding six months. Under the
terms of the 1995 Plan, each SAR shall be exercisable for cash, for shares of
Common Stock or for either, in the discretion of the optionee; provided,
however, that no SAR shall be exercisable for cash by an officer or director of
the Company or by a 10% Holder at any time other than during the period
beginning on the third and ending on the twelfth business day following the date
of release for publication of quarterly or annual summary statements of revenues
and earnings of the Company. Subject to the foregoing, upon exercise of an SAR,
the optionee shall be entitled to receive, within 10 days after exercise, in the
discretion of the optionee, either (i) a cash payment equal to the Spread, if
any, with respect to such exercised SAR or (ii) a number of whole shares of
Common Stock equal to (A) the Spread with respect to such exercised SAR, divided
by (B) the fair market value of a share of Common Stock as of the date of
exercise, plus the amount of cash representing the fair market value of any
fractional share. Under the 1995 Plan, if an SAR is not exercised prior to its
expiration or termination, and is then exercisable and has a positive Spread, it
shall be automatically exercised for cash on the date of such expiration or
termination.
Payment of the exercise price upon exercise of an option may be made in any
combination of cash and shares of Common Stock, including the automatic
application of shares of Common Stock received upon exercise of an option to
satisfy the exercise price of additional options (unless the Board of Directors
or the Stock Option Committee provides otherwise). Where payment is made in
Common Stock, such Common
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Stock shall be valued for such purpose at the fair market value of such shares
on the date of exercise. In no event shall an option or SAR granted under the
1995 Plan be exercisable prior to the date of stockholder approval of the 1995
Plan.
NON-TRANSFERABILITY
Options and SARs granted under the 1995 Plan are not transferable or
assignable, otherwise than by will or the laws of descent and distribution and,
during the lifetime of the holder, options and SARs are exercisable only by the
holder.
TERMINATION OF RELATIONSHIP
Except as the Stock Option Committee or the Board of Directors may expressly
determine otherwise, if the holder of an option or SAR ceases to be employed by
or to have another qualifying relationship (such as that of director,
independent contractor or agent) with the Company or any of its subsidiaries
other than by reason of the holder's death or Permanent Disability (as defined),
all options and SARs granted to such holder under the 1995 Plan shall terminate
immediately, except for options and SARs which were exercisable on the date of
such termination of relationship, which options and SARs shall terminate three
months after the date of such termination of relationship unless such options
and SARs expire or terminate earlier. However, if a new qualifying relationship
is established before the end of such three-month period, such exercisable
options and SARs shall continue until their expiration or earlier termination.
In the event of the death or Permanent Disability of the holder of an option or
SAR, except as the Stock Option Committee or the Board of Directors may
expressly determine otherwise, options and SARs may be exercised to the extent
that the holder might have exercised the options and SARs on the date of death
or Permanent Disability for a period of one year following the date of death or
Permanent Disability, unless by their terms the options or SARs expire before
the end of such one-year period.
AMENDMENT AND TERMINATION OF THE 1995 PLAN
The Board of Directors may at any time and from time to time amend, suspend
or terminate the 1995 Plan, but may not, without the approval of the
stockholders of the Company representing a majority of the voting power,
increase the maximum number of shares of Common Stock subject to options and
SARs which may be granted under the 1995 Plan, change the provisions concerning
the exercise price of options and SARs granted, increase the term during which
options and SARs may be exercised, change the class of eligible participants,
materially increase the benefits to participants under the 1995 Plan or extend
the term of the 1995 Plan. No amendment, suspension or termination of the 1995
Plan by the Board of Directors may alter or impair any of the rights under any
option or SAR granted under the 1995 Plan without the holder's consent.
The 1995 Plan makes it clear that the Board of Directors or the Stock Option
Committee may amend any grant (except in a manner unfavorable to the holder) to
include any provision which, at the time of such amendment, is authorized under
the 1995 Plan.
EFFECTIVE DATE AND TERM OF THE 1995 PLAN
Options and SARs may be granted under the 1995 Plan during its 10-year term,
which commenced on March 31, 1995.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
INCENTIVE OPTIONS. The Company believes that with respect to Incentive
Options granted under the 1995 Plan, no income generally will be recognized by
an optionee for federal income tax purposes at the time such an option is
granted or at the time it is exercised. If the optionee makes no disposition of
the shares so received within two years from the date the Incentive Option was
granted and one year from the receipt of the shares pursuant to the exercise of
the Incentive Option, he will generally recognize long-term capital gain or loss
upon disposition of the shares.
If the optionee disposes of shares acquired by exercise of an Incentive
Option before the expiration of the applicable holding period, any amount
realized from such a disqualifying disposition will be taxable as ordinary
income in the year of disposition generally to the extent that the lesser of the
fair market value of
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the shares on the date the option was exercised or the fair market value at the
time of such disposition exceeds the exercise price. Any amount realized upon
such a disposition in excess of the fair market value of the shares on the date
of exercise generally will be treated as long-term or short-term capital gain,
depending on the holding period of the shares. A disqualifying disposition will
include the use of shares acquired upon exercise of an Incentive Option in
satisfaction of the exercise price of another option prior to the satisfaction
of the applicable holding period.
The Company will not be allowed a deduction for federal income tax purposes
at the time of the grant or exercise of an Incentive Option. At the time of a
disqualifying disposition by an optionee, the Company generally will be entitled
to a deduction for federal income tax purposes equal to the amount taxable to
the optionee as ordinary income in connection with such disqualifying
disposition (assuming that such amount constitutes reasonable compensation).
NON-QUALIFIED OPTIONS AND SARS. The Company believes that the grant of a
Non-Qualified Option under the 1995 Plan will not be subject to federal income
tax. Upon exercise, the optionee generally will recognize ordinary income in an
amount equal to the excess of the fair market value of the shares on the date of
exercise over the exercise price. Gain or loss on the subsequent sale of shares
received on exercise of a Non-Qualified Option generally will be long-term or
short-term capital gain or loss, depending on the holding period of the shares.
The Company believes that the grant of an SAR under the 1995 Plan will not
be subject to federal income tax. Upon the exercise of an SAR, the grantee
generally will recognize ordinary income in an amount equal to the Spread with
respect to such SAR.
Upon exercise of a Non-Qualified Option or an SAR, the Company generally
will be entitled to a compensation deduction for federal income tax purposes in
the year and in the same amount as the optionee or grantee is considered to have
recognized ordinary income (assuming that such compensation is reasonable and
that provision is made for withholding of federal income taxes, where
applicable). In general, no deduction is allowed for remuneration in excess of
$1,000,000 paid by the Company during any taxable year to any of the Chief
Executive Officer or the four highest compensated executive officers (other than
the Chief Executive Officer). Remuneration for this purpose excludes certain
performance-based compensation. The 1995 Plan is intended to qualify for the
performance-based compensation exception to the deduction limitation.
ACCOUNTING CONSEQUENCES
There is a significant difference in the accounting treatment afforded to
SARs as compared with options. In the case of options, no amount is accrued as
compensation and thus charged against earnings unless the options were granted
at below the market price. In the latter circumstance, the excess of such market
price over the exercise price is fixed at the date of grant and is amortized,
through a charge against earnings, over the period to which the compensation
represented by the options is deemed attributable. This is typically the vesting
period of the options.
In contrast, with an SAR, whether the SAR price is lower than or equal to
the market price of the Common Stock on the date of grant, the Spread (which
must be estimated until the date of exercise) is amortized, through a charge
against earnings, over the period to which the compensation is deemed
attributable. Again, this is typically the vesting period. The Spread must be
estimated utilizing interim stock prices, and the amount expensed is subject to
adjustment as the market price (and therefore the estimate of the Spread)
changes. Subsequent to vesting, assuming that the vesting period is utilized,
and until exercise of the SAR, the amount accrued as compensation expense during
the vesting period continues to be adjusted (as contrasted with options), and
additional amounts may be expensed (or credited to income), as changing market
prices affect the estimate of the Spread. The final adjustment is made upon
exercise of the SAR.
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RECOMMENDATION AND REQUIRED VOTE
The Board of Directors recommends a vote FOR approval of the 1995 Plan.
Approval of the 1995 Plan requires the affirmative vote of the holders of a
majority of the shares of Common Stock represented at the Meeting. If the 1995
Plan is not approved, no options will be granted under the 1995 Plan, and the
1995 Plan will terminate.
INFORMATION CONCERNING THE BOARD OF DIRECTORS
AND ITS COMMITTEES
The committees created by the Board of Directors are the Audit Committee,
the Stock Option Committee and the Bonus Committee. The Board of Directors has
not designated a nominating committee or a compensation committee.
The Audit Committee consists of Messrs. Mason, Popeil and Wolzinger. The
Audit Committee held nine meetings during 1994. The functions of the Audit
Committee include reviewing and making recommendations to the Board of Directors
with respect to: the engagement or re-engagement of an independent accounting
firm to audit the Company's financial statements for the then current fiscal
year, and the terms of the engagement; the policies and procedures of the
Company with respect to maintaining the Company's books and records and
furnishing any necessary information to the independent auditors; the procedures
to encourage access to the Audit Committee and to facilitate the timely
reporting during the year by authorized representatives of the Company's
independent auditors to the Audit Committee of their recommendations and advice;
the implementation by the Company's management of such recommendations and
advice; the implementation by management of the recommendations made by the
independent auditors in their management letters, the adequacy and
implementation of the Company's internal audit controls and the adequacy and
competency of the related personnel; and such other matters relating to the
Company's financial affairs and accounts as the Audit Committee may in its
discretion deem desirable. The Audit Committee also has certain other
responsibilities, including the responsibility to oversee the employment and
marketing practices of the Company and its gaming subsidiaries and their
compliance with gaming regulations.
The Stock Option Committee consists of Messrs. Mason, Popeil and Wolzinger.
The Stock Option Committee took action by written consent on two occasions
during 1994. The Stock Option Committee administers the Company's various Stock
Option and Stock Appreciation Rights Plans. Subject to the conditions set forth
in the plans, the Stock Option Committee has full and final authority to
determine the number of stock options or SARs to be granted, the individuals to
whom and the time or times at which such options or SARs shall be granted or be
exercisable, their exercise prices and the terms and provisions of the
respective agreements to be entered into at the time of grant, which may vary.
The Bonus Committee, which was appointed by the Board of Directors in March
1994, consists of Messrs. Mason, Popeil and Wolzinger. The Bonus Committee took
action by written consent on two occasions during 1994. The Bonus Committee
adopted and administers the Bonus Plan. Subject to the conditions set forth in
the Bonus Plan, the Bonus Committee has full and final authority to award cash
bonuses pursuant to the Bonus Plan, to construe and interpret the Bonus Plan, to
adopt amendments to the Bonus Plan (subject to stockholder approval in certain
cases) and to make all other determinations and take all other action deemed
necessary or advisable for the proper administration of the Bonus Plan.
The Board of Directors held nine meetings, and took action by unanimous
written consent on two occasions, during 1994. Each director attended at least
75% of the aggregate number of meetings of the Board of Directors and the
committees on which he or she served.
INDEPENDENT ACCOUNTANTS
The Company's independent accountants for 1994 were Arthur Andersen LLP
("AA"), which firm has been appointed to serve in such capacity for the current
year. A representative of AA is expected to be present at the Meeting with the
opportunity to make a statement if he or she so desires and to respond to
appropriate questions.
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On April 29, 1994, the Company dismissed its former independent accountants,
Coopers & Lybrand ("C&L"), and replaced C&L with AA. The decision to change
independent accountants was made following a review of competitive proposals
submitted by C&L, AA and other major public accounting firms, and was approved
by the Company's Audit Committee.
C&L's reports on the Company's consolidated financial statements for 1992
and 1993 did not contain an adverse opinion or a disclaimer of opinion, and were
not qualified or modified as to uncertainty, audit scope or accounting
principles. During 1992 and 1993 and the period from January 1, 1994 through
April 29, 1994, there were no disagreements between the Company and C&L on any
matter of accounting principles or practices, financial statement disclosure or
auditing scope or procedure, which disagreements, if not resolved to the
satisfaction of C&L, would have caused C&L to make a reference to the subject
matter of the disagreement in connection with its reports.
C&L submitted the following statement in a letter to the Commission dated
May 19, 1994, which was previously filed by the Company pursuant to the 1934
Act, and has requested the Company to reprint the statement in this Proxy
Statement:
"We have read the statements made by Mirage Resorts, Incorporated
. . . , which we understand was filed with the Commission, pursuant to Item
4 of Form 8-K, as part of the Company's Form 8-K report dated April 29,
1994. We do not agree with the statements concerning our Firm in such Form
8-K. Disagreements with the Company relating to matters that would have led
to reference thereto in our report on the financial statements for the year
ended December 31, 1993, if such matters had not been resolved to our
satisfaction follow:
Coopers & Lybrand and Company management had a disagreement
concerning the need to contact the staff of the Securities and
Exchange Commission (SEC) in order to ensure that its accounting
treatment for preopening costs was not in violation of guidance
previously provided to the Company by the staff.
On April 1, 1994, prior to filing its Form 10-K, the Company, at
our insistence, contacted the SEC staff. This resulted in
acceptance of the Company's proposed treatment. As such, the
disagreement was resolved to Coopers & Lybrand's satisfaction.
This matter was discussed with the Company's Audit Committee."
FUTURE PROPOSALS OF STOCKHOLDERS
Any stockholder intending to submit to the Company a proposal for inclusion
in the Company's Proxy Statement and form of Proxy for the 1996 Annual Meeting
of Stockholders must submit such proposal sufficiently far in advance so that it
is received by the Company not later than December 21, 1995.
DISCRETIONARY AUTHORITY
While the Notice of Annual Meeting of Stockholders calls for the transaction
of such other business as may properly come before the Meeting, the Board of
Directors has no knowledge of any matters to be presented for action by the
stockholders at the Meeting, other than as set forth above. The enclosed Proxy
gives discretionary authority, however, in the event that any additional matters
should be presented.
STOCKHOLDERS ARE URGED IMMEDIATELY TO MARK, DATE AND SIGN THE ENCLOSED PROXY
AND RETURN IT IN THE ENVELOPE PROVIDED, TO WHICH NO POSTAGE NEED BE AFFIXED IF
MAILED IN THE UNITED STATES.
By the Board of Directors
KENNETH R. WYNN
SECRETARY
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EXHIBIT A
MIRAGE RESORTS, INCORPORATED
1995 STOCK OPTION AND STOCK APPRECIATION RIGHTS PLAN
1. PURPOSE.
This 1995 Stock Option and Stock Appreciation Rights Plan (the "Plan") is
intended to advance the interests of Mirage Resorts, Incorporated (the
"Company"), its stockholders and its Subsidiaries by encouraging and enabling
selected officers, directors, employees, independent contractors or agents, upon
whose judgment, initiative and effort the Company is largely dependent for the
successful conduct of its business, to acquire and retain a proprietary interest
in the Company by ownership of its stock through the exercise of stock options
and to acquire certain benefits of equity participation in the Company through
the grant of stock appreciation rights.
2. DEFINITIONS.
(a)"Board" means the Board of Directors of the Company.
(b)"Code" means the Internal Revenue Code of 1986, as amended.
(c)"Committee" means the committee of the Board administering the Plan or
the Board if a Committee has not been appointed and unless the context
otherwise requires.
(d)"Common Stock" means the Company's Common Stock, $.008 par value.
(e)"Date of Grant" means the date on which an Option or SAR is granted under
the Plan.
(f)"Effective Date" means the Effective Date of the Plan as specified in
Paragraph 12.
(g)"Fair Market Value" of the Common Stock on any day shall be deemed to be
(i) if the Common Stock is traded on a national securities exchange, the
closing price (or, if no reported sale takes place on such day, the mean of the
reported bid and asked prices) of the Common Stock on such day on the principal
such exchange, or, if the stock is included on the composite tape, the composite
tape, or (ii) if the Common Stock is traded in the over-the-counter market and
not on any national securities exchange, the mean between the closing bid and
asked prices (or, if no closing prices are reported, the mean between the high
bid and low asked prices) on such day as reported by the National Association of
Securities Dealers Automated Quotation System, or, if not so reported, by a
generally accepted reporting service. In each case, the Committee's
determination of Fair Market Value shall be conclusive.
(h)"Incentive Option" means an option granted under the Plan which is
designated as an incentive stock option and which is intended to qualify
as such within the meaning of Section 422 of the Code.
(i)"Non-Qualified Option" means an option granted under the Plan which is
designated as a non-qualified stock option and which is not intended to
qualify as an incentive stock option within the meaning of Section 422 of the
Code.
(j)"Option" means any stock option granted under the Plan.
(k)"Optionee" means a person to whom an Option or an SAR, which has not
expired, has been granted under the Plan.
(l)"Option Price" means the exercise price of an Option or the base price of
an SAR.
(m)"Parent Corporation" shall have the meaning set forth in Section 424(e)
of the Code.
(n)"Permanent Disability" shall have the meaning set forth in Subparagraph
6(h).
(o)"Relationship" means that the Optionee is or has agreed to become an
officer, director, employee, independent contractor or agent of the
Company or any of its Subsidiaries.
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(p)"Reorganization" shall have the meaning set forth in Subparagraph 7(c).
(q)"Reorganization Agreement" shall have the meaning set forth in
Subparagraph 7(c)(i).
(r)"Rule 16b-3" means Rule 16b-3 promulgated under the Securities Exchange
Act of 1934, as amended, or any successor rule.
(s)"SAR" means a stock appreciation right granted under the Plan.
(t)"Section 16(b)" means Section 16(b) of the Securities Exchange Act of
1934, as amended.
(u)"Spread" means, with respect to each SAR, an amount equal to the excess,
if any, of the Fair Market Value of the Common Stock on the date of
exercise over the Option Price.
(v)"Subsidiary" or "Subsidiaries" means a subsidiary or affiliated
corporation or corporations of the Company; provided, however, that with
respect to Incentive Options it has the meaning set forth in Section 424(f) of
the Code.
(w)"Successor" means the legal representative of the estate of a deceased
Optionee or the person or persons who acquire the right to exercise an
Option or SAR by bequest or inheritance or by reason of the death of the
Optionee.
3. ADMINISTRATION OF THE PLAN.
The Plan shall be administered by the Board or by a Committee, consisting of
not less than two "disinterested" directors as defined in Rule 16b-3, appointed
by the Board to administer the Plan; provided, however, that if all members of
the Board are not disinterested persons within the meaning of such definition,
the Board shall appoint such a Committee. The Board may from time to time remove
members from the Committee, fill all vacancies in the Committee, however caused,
and may select one of the members of the Committee as its Chairman.
The Committee shall hold its meetings at such times and places as it may
determine, shall keep minutes of its meetings and shall adopt, amend and revoke
such rules or procedures as it may deem proper; provided, however, that it may
take action only upon the agreement of a majority of the whole Committee. Any
action which the Committee shall take through a written instrument signed by a
majority of its members shall be as effective as though it had been taken at a
meeting duly called and held. The Committee shall report all actions taken by it
to the Board.
The Committee shall have full and final authority in its discretion, subject
to the provisions of the Plan, to grant Options and SARs, to determine the
number of shares and the Option Price with respect to each Option and SAR, the
individuals to whom and the time or times at which Options and SARs shall be
granted, to determine the terms and provisions of the respective agreements
covering Options and SARs, which need not be identical (including, but without
limitation, terms covering the payment of the Option Price with respect to
Options), to construe and interpret the Plan and to make all other
determinations and take all other actions deemed necessary or advisable for the
proper administration of the Plan. All such actions and determinations shall be
conclusively binding for all purposes and upon all persons.
4. COMMON STOCK SUBJECT TO OPTIONS AND SARS.
The aggregate number of shares of Common Stock subject to Options and SARs
which may be granted under the Plan shall not exceed 3,000,000. The aggregate
number of shares of Common Stock subject to Options and SARs which may be
granted under the Plan to any single participant shall not exceed 1,000,000. The
shares of Common Stock to be issued upon the exercise of Options or SARs, to the
extent exercised for shares of the Common Stock, may be authorized but unissued
shares, shares issued and reacquired by the Company or shares purchased by the
Company on the open market. In the event any Option or SAR shall, for any
reason, terminate or expire or be surrendered without having been exercised in
full, such Option or SAR shall again be available for grant under the Plan.
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5. PARTICIPANTS.
Non-Qualified Options or SARs may be granted under the Plan to any person
who is or who agrees to become an officer, director, employee, independent
contractor or agent of the Company or any of its Subsidiaries. Incentive Options
may be granted under the Plan to any person who is an employee of the Company or
any of its Subsidiaries. An employee may be granted Non-Qualified Options or
Incentive Options or both under the Plan; provided, however, that the grant of
Non-Qualified Options and Incentive Options to an Optionee shall be the grant of
separate Options and each Non-Qualified Option and each Incentive Option shall
be specifically designated as such in accordance with applicable provisions of
Treasury regulations.
6. TERMS AND CONDITIONS OF OPTIONS AND SARS.
Each Option or SAR granted under the Plan shall be evidenced by an agreement
executed by the Company and the Optionee and shall contain such terms and be in
such form as the Committee may from time to time approve, subject to the
following limitations and conditions:
(a) OPTION PRICE. The Option Price per share with respect to each
Non-Qualified Option and SAR shall be determined by the Committee and
shall in no instance be less than either (i) the par value or (ii) 50% of
the Fair Market Value of a share of Common Stock on the Date of Grant. The
Option Price per share with respect to each Incentive Option shall be
determined by the Committee and shall in no instance be less than either (i)
the par value or (ii) 100% of the Fair Market Value of a share of Common
Stock on the Date of Grant; provided, however, that if at the time an
Incentive Option is granted the Optionee owns or would be considered to own
by reason of Section 424(d) of the Code more than 10% of the total combined
voting power of all classes of stock of the Company or any Subsidiary or
Parent Corporation of the Company, the Option Price of the shares covered by
such Incentive Option shall not be less than 110% of the Fair Market Value
of a share of Common Stock on the Date of Grant.
(b) PERIOD OF OPTION OR SAR. The expiration date of each Option and SAR
shall be fixed by the Committee but, notwithstanding any provision of the
Plan to the contrary, the expiration date of any Option or SAR shall not be
more than 10 years from the Date of Grant; provided, however, that if at the
time an Incentive Option is granted the Optionee owns or would be considered
to own by reason of Section 424(d) of the Code more than 10% of the total
combined voting power of all classes of stock of the Company or any
Subsidiary or Parent Corporation of the Company, such Incentive Option shall
expire not more than five years from the Date of Grant. An Option or SAR may
terminate before its expiration date, as provided in Subparagraphs 6(g) and
6(h) and 7(b) and 7(c).
(c) VESTING OF STOCKHOLDER RIGHTS. Neither an Optionee nor his
Successor shall have any of the rights of a stockholder of the Company
until the certificates evidencing the shares purchased are properly
delivered to such Optionee or his Successor.
(d) EXERCISE. Each Option and SAR shall be exercisable in whole or in
part from time to time over a period commencing on the Date of Grant and
ending upon its expiration or termination; provided, however, the Committee
may, by the provisions of any agreement, limit the extent to which such
Option or SAR is exercisable during such period or periods of time. No
Option or SAR granted under the Plan shall be exercisable in whole or in
part prior to the date of stockholder approval of the Plan.
Payment of the exercise price of an Option may be made in any
combination of cash and Common Stock, including (unless the Committee
provides otherwise) the automatic application of shares of Common Stock
received upon exercise of an Option to satisfy the exercise price for
additional Options. Where payment is made in Common Stock, such stock shall
be valued at the Fair Market Value of such shares.
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<PAGE>
Each SAR shall be exercisable for cash, for shares of Common stock or
for either, in the discretion of the Optionee; provided, however, that:
(i)
no SAR shall be exercisable for cash (and any attempted exercise
for cash will be deemed null and void) by a person subject to
Section 16(b) at any time other than during the period beginning on the
third and ending on the twelfth business day following the date of
release for publication of quarterly or annual summary statements of
revenues and earnings of the Company;
(ii)
no Optionee who is subject to Section 16(b) shall be entitled to
exercise for cash and SAR granted under the Plan within the
six-month period following the Date of Grant unless the death of the
Optionee or the termination of a Relationship by reason of the Permanent
Disability of the Optionee (as determined by the Committee) occurs during
such period; and
(iii)
the Committee shall have sole discretion to consent to or
disapprove the election of any Optionee who is subject to Section
16(b) to receive cash in full or partial settlement of any SAR, provided
that:
(1) the discretion of the Committee to consent to any such
election shall be subject to the limitations set forth in
clauses (i) and (ii) above;
(2) such right to consent to or disapprove an election may be
exercised by the adoption by the Committee of general rules
regulating participant elections or by action taken by the Committee
on a case-by-case basis;
(3) any such general rules adopted by the Committee may be
amended or repealed at any time by the Committee;
(4) in the absence of a general rule disapproving an election,
the Committee shall be deemed to have consented to such
election unless it acts to disapprove the election within two days of
the exercise date;
(5) any disapproval of an election shall be evidenced by the
Committee through a written notice given to the Optionee
within two days of the exercise date, specifying the reason or
reasons for such disapproval; and
(6) in the event of any such disapproval by the Committee, the
Optionee shall be deemed to have exercised the SAR for shares
of Common Stock unless the Optionee shall give written notice of
rescission of the exercise of such SAR within two days of receipt of
the notice of disapproval.
Subject to the foregoing, upon exercise of an SAR, the Optionee shall be
entitled to receive, within 10 days after exercise, either (i) a cash
payment equal to the Spread, if any, with respect to such exercised SAR, or
(ii) a number of whole shares of Common Stock equal to (A) the Spread with
respect to such exercised SAR, divided by (B) the Fair Market Value of a
share of Common Stock as of the date of exercise, plus an amount of cash
representing the Fair Market Value of any fractional share. In the event
that an SAR has not been exercised prior to its expiration, and the SAR
shall then be exercisable, if such SAR has a positive Spread it shall be
automatically exercised for cash on such expiration date.
(e) LIMITATION ON GRANT OF INCENTIVE OPTIONS. The aggregate fair market
value (determined as of the time the option is granted) of stock with
respect to which incentive stock options are exercisable for the first time
by an option holder in any calendar year (under the Plan and all other plans
of the Company or any Parent Corporation or Subsidiary of the Company) shall
not exceed $100,000.
(f) NON-TRANSFERABILITY OF OPTIONS AND SARS. No Option or SAR shall be
transferable or assignable by an Optionee, otherwise than by will or the
laws of descent of distribution, and each Option and SAR shall be
exercisable during the Optionee's lifetime only by him. No Option or SAR
shall be pledged or hypothecated in any way nor shall it be subject to
execution, attachment or similar process.
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<PAGE>
(g) TERMINATION. Except as the Committee may expressly determine
otherwise, upon termination of an Optionee's Relationship with the
Company or with any of its Subsidiaries, for any reason other than death or
Permanent Disability (as defined in Subparagraph 6(h)), the Optionee's
Options and SARs shall terminate three months after the date of such
termination of Relationship, unless such Optionee has resumed or initiated a
Relationship with the Company or with any of its Subsidiaries and has a
Relationship on such date. During such three-month period, the Optionee may
exercise an Option or SAR granted to him to the extent such Option or SAR
was exercisable on the date of termination of his Relationship and provided
that such Option or SAR has not expired or otherwise terminated. In the
event that an SAR has not been exercised prior to its termination or earlier
expiration date, and the SAR shall then be exercisable, if such SAR has a
positive Spread it shall be automatically exercised for cash on its
termination or earlier expiration date.
A leave of absence approved in writing by the Committee shall not be
deemed a termination of Relationship for purposes of this Paragraph 6, but
no Option or SAR may be exercised during any such leave of absence, except
during the first three months thereof. The granting of an Option or SAR to
an Optionee does not alter in any way the Company's or any Subsidiary's
right to terminate such person's Relationship at any time for any reason,
nor does it confer upon such person any rights or privileges except as
specifically provided for in the Plan.
For purposes of this Paragraph 6, termination of an Optionee's
Relationship shall be deemed to occur on the earliest of: (1) the effective
date of termination set forth in a written notice from the Company of the
Optionee; (ii) the date an Optionee ceases to render the services which he
was employed or engaged to render to the Company or Subsidiary, and
representing the basis of the Relationship, and assuming no other services
are being rendered which would represent the basis of a new Relationship
(but shall not include any leave of absence approved by the Committee or any
temporary absence or vacation approved by the Optionee's supervisor); or
(iii) the date an Optionee retires or completes his employment or engagement
with the Company or any Subsidiary, in accordance with any agreement between
the Optionee and the Company or any Subsidiary, or in accordance with the
normal retirement policies of the Company or any Subsidiary.
(h) DEATH OR PERMANENT DISABILITY OF OPTIONEE. Except as the Committee
may expressly determine otherwise, if an Optionee dies or suffers a
Permanent Disability while in a Relationship with the Company or any of its
Subsidiaries, the Optionee's Options and SARs shall terminate one year after
the date of the Optionee's death or termination of Relationship due to
Permanent Disability unless by its terms the Option or SAR shall expire
before such date, and shall only be exercisable to the extent exercisable on
the date of death or termination of Relationship. In the event that an SAR
has not been exercised prior to its termination or earlier expiration date,
and the SAR shall then be exercisable, if such SAR has a positive Spread it
shall be automatically exercised for cash on its termination or earlier
expiration date.
For purposes of this Paragraph 6, "Permanent Disability" shall mean that
the Optionee is unable to engage in any substantial gainful activity by
reason of any medically determinable physical or mental impairment which can
be expected to result in death or which has lasted or can be expected to
last for a continuous period of not less than 12 months. The Committee may
require such proof of Permanent Disability as it, in its sole judgment,
deems necessary or appropriate.
7. ADJUSTMENTS.
(a)In the event that the outstanding shares of Common Stock are hereafter
increased or decreased or changed into or exchanged for a different
number or kind of shares or other securities of the Company, by reason of a
recapitalization, reclassification, stock split-up, combination of shares or
dividend or any other distribution payable in capital stock, the Committee shall
make appropriate adjustment in the number and kind of Options and SARs that may
be granted under the Plan. In addition, the Committee shall make appropriate
adjustment in the number and kind of outstanding Options and SARs to the end
that the proportionate interest of the holder of the Options and SARs shall be
maintained as before the occurrence
A-5
<PAGE>
of such event. Such adjustment shall be made without change in the total price
applicable to the unexercised portion of outstanding Options and SARs and with a
corresponding adjustment in the Option Price per share with respect to the
Options and SARs.
(b)In the event of the dissolution or liquidation of the Company:
(i)
any Option granted under the Plan shall terminate as of a date to be
fixed by the Committee, provided that not less than 30 days' written
notice of the date so fixed shall be given to each Optionee and each such
Optionee shall have the right during such period (unless such Option shall
have previously expired) to exercise any Option, including any Option that
would not otherwise be exercisable by reason of an insufficient lapse of
time; and
(ii)
any SAR granted under the Plan shall terminate (and, if not
previously exercised, shall be automatically exercised for cash on
the date of such termination) 30 days after stockholder approval of the
dissolution or liquidation and each Optionee shall have the right during
such period (unless such SAR shall have previously expired) to exercise any
SAR, including any SAR that would not otherwise be exercisable by reason of
an insufficient lapse of time.
(c)In the event of a Reorganization (as defined below) in which the Company
is not the surviving or acquiring company, or in which the Company is or
becomes a subsidiary of another company after the effective date of the
Reorganization, then:
(i)
if there is no plan or agreement respecting the Reorganization
("Reorganization Agreement") or if the Reorganization Agreement does
not specifically provide for the change, conversion or exchange of the
outstanding Options and SARs for options or stock appreciation rights of
another corporation, then exercise and termination provisions equivalent to
those of Subparagraph 7(b) shall apply; or
(ii)
if there is a Reorganization Agreement and if the Reorganization
Agreement specifically provides for the change, conversion or
exchange of the outstanding Options and SARs for options and stock
appreciation rights of another corporation, then the Committee shall adjust
the outstanding unexercised Options and SARs (and shall adjust the Options
and SARs remaining under the Plan which have not yet been granted if the
Reorganization Agreement makes specific provision for such an adjustment) in
a manner consistent with the applicable provisions of the Reorganization
Agreement.
The term "Reorganization" as used in this Subparagraph 7(c) shall mean any
statutory merger, statutory consolidation, sale of all or substantially all of
the assets of the Company or a sale of the Common Stock pursuant to which the
Company is or becomes a subsidiary of another company after the effective date
of the Reorganization.
(d)Adjustments and determinations under this Section 7 shall be made by the
Committee, whose decisions as to such adjustments or determinations shall
be final, binding and conclusive.
8. RESTRICTIONS ON ISSUING SHARES.
The exercise of each Option and SAR shall be subject to the condition that
if at any time the Company shall determine in its discretion that the
satisfaction of withholding tax or other withholding liabilities, or the
listing, registration or qualification of any shares otherwise deliverable upon
such exercise upon any securities exchange or under any state or federal law, or
the consent or approval of any regulatory body, is necessary or desirable as a
condition of, or in connection with, such exercise or the delivery or purchase
of shares, then such exercise shall not be effective unless such withholding,
listing, registration, qualification, consent or approval shall have been
effected or obtained free of any condition not acceptable to the Company.
9. USE OF PROCEEDS.
The proceeds received by the Company from the issuance of its Common Stock
pursuant to the exercise of Options granted under the Plan, if in the form of
cash, shall be added to the Company's general funds and used for general
corporate purposes.
A-6
<PAGE>
10. AMENDMENT, SUSPENSION AND TERMINATION OF THE PLAN.
The Board may at any time suspend or terminate the Plan or may amend it from
time to time in such respects as the Board may deem advisable in order that the
Options and SARs granted under the Plan may conform to any changes in the law or
in any other respect which the Board may deem to be in the best interests of the
Company; provided, however, that without approval by the stockholders of the
Company representing a majority of the voting power no such amendment shall (a)
except as specified in Paragraph 7, increase the maximum number of shares of
Common Stock subject to Options and SARs which may be granted under the Plan,
(b) change the provisions of Subparagraph 6(a) relating to the establishment of
the Option Price, (c) change the provisions of Subparagraph 6(b) relating to the
expiration date of each Option and SAR, (d) materially increase the benefits
accruing to participants under the Plan, (e) change the class of eligible
participants or (f) change the provisions of the second sentence of this
Paragraph 10 relating to the term of the Plan. Unless the Plan shall previously
have been terminated by the Board or as provided in Paragraph 12, the Plan shall
terminate 10 years after the Effective Date. No Option or SAR may be granted
during any suspension or after the termination of the Plan. No amendment,
suspension or termination of the Plan shall, without an Optionee's consent,
alter or impair any of the rights or obligations under any Option or SAR
previously granted to such Optionee under the Plan.
11. AMENDMENT OF GRANTS.
The Committee shall have the authority to amend any grant to include any
provision which, at the time of such amendment, is authorized under the terms of
the Plan; however, no outstanding award may be revoked or altered in a manner
unfavorable to the Optionee without the written consent of the Optionee.
12. EFFECTIVE DATE OF THE PLAN AND STOCKHOLDER APPROVAL.
The Effective Date of the Plan shall be March 31, 1995, the date of its
adoption by the Board, subject however to its approval by the stockholders of
the Company representing a majority of the voting power at the next
stockholders' meeting. Options and SARs may be granted under the Plan from and
after the Effective Date, subject to such approval.
13. OPTIONS GRANTED PRIOR TO AMENDMENTS TO THE PLAN.
Options granted pursuant to the Plan shall be governed exclusively by the
terms of the Plan as they existed on the Date of Grant, without giving effect to
amendments adopted subsequent to the Date of Grant, unless specifically provided
otherwise in such amendments or in the applicable Option agreement.
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<PAGE>
MIRAGE RESORTS, INCORPORATED
Proxy Solicited on Behalf of the Board of Directors
P
R The undersigned appoints George J. Mason and Melvin B. Wolzinger, and each
O of them, as Proxies, each with the power to appoint his substitute, and
X authorizes each of them to represent and to vote, as designated on the
Y reverse, all the shares of Common Stock of Mirage Resorts, Incorporated
held of record by the undersigned on March 31, 1995, at the Annual Meeting
of Stockholders to be held on May 25, 1995 or any adjournment thereof.
(Change of Address/Comments)
_______________________________________
Election of Directors, Nominees:
_______________________________________
Stephen A. Wynn, Ronald M. Popeil
_______________________________________
_______________________________________
You are encouraged to specify your choices by marking the appropriate boxes, SEE
REVERSE SIDE, but you need not mark any boxes if you wish to vote in accordance
with the Board of Directors' recommendations.
The Proxies cannot vote your shares unless you sign and return this card.
SEE REVERSE SIDE
<PAGE>
/X / Please mark your votes as in this example.
FOR WITHHELD
1. Election of / / / /
Directors
For, except vote withheld from the following nominee(s):
- ---------------------------------------------------------
2. Proposal to approve the 1995 FOR AGAINST ABSTAIN
Stock Option and Stock Appreciation / / / / / /
Rights Plan
3. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
SIGNATURE(S)_________________________________________ DATE __________________
Note: Please sign exactly as name appears hereon. Joint owners should each
sign. When signing as attorney, executor, administrator, trustee or guardian,
please give full title as such.
