<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] No fee required.
[_] 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:
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Notes:
<PAGE>
MIRAGE RESORTS, INCORPORATED
----------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 21, 1998
----------------
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 21, 1998, 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 1998 Stock Option and Stock Appreciation Rights Plan;
3. To ratify the appointment of Arthur Andersen LLP as the Company's
independent accountants for 1998; and
4. 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, 1998.
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.
BRUCE A. LEVIN
Secretary
Las Vegas, Nevada
April 13, 1998
<PAGE>
MIRAGE RESORTS, INCORPORATED
3400 LAS VEGAS BOULEVARD SOUTH
LAS VEGAS, NEVADA 89109
APRIL 13, 1998
----------------
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 21,
1998, 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 1998 Stock Option and Stock
Appreciation Rights Plan (the "1998 Plan"), for ratification of the
appointment of Arthur Andersen LLP as the Company's independent accountants
for 1998 and, with discretion, on all 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 17, 1998.
All information contained in this Proxy Statement has been adjusted to
reflect the two-for-one split of the Company's common stock effective June 17,
1996.
VOTING RIGHTS
Holders of the Company's common stock, $.004 par value (the "Common Stock"),
of record as of the close of business on March 31, 1998, will be entitled to
one vote for each share held on all matters presented to the Meeting. On March
31, 1998, there were outstanding 179,490,025 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 1998 Plan and ratification of the appointment of
the independent accountants each requires the affirmative vote of the holders
of a majority of the shares of Common Stock represented at the Meeting and
actually voting on the matter (without giving effect to abstentions or broker
non-votes). Under the rules of the New York Stock Exchange (the "NYSE"), the
election of directors, approval of the 1998 Plan and ratification of the
appointment of the independent accountants 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, 1998 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
highest compensated executive officers of the Company during 1997
(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 26,212,164(1) 13.6%
FMR Corp.
82 Devonshire Street
Boston, MA 02109 22,569,851(2) 12.6%
Melvin B. Wolzinger 3,218,880(3) 1.8%
Daniel B. Wayson 518,750(4) *
Elaine P. Wynn 245,000(5) *
George J. Mason 177,500(6) *
Richard D. Bronson 850,000(7) *
Ronald M. Popeil 62,550(8) *
Barry A. Shier 750,290(9) *
Bruce A. Levin 147,500(10) *
Daniel R. Lee 893,700(11) *
Frank P. Visconti 320,000(12) *
All directors and executive officers
as a group (14 persons) 33,504,604(13) 17.2%
</TABLE>
- ---------------------
* Less than 1%.
(1) Includes 12,550,000 shares subject to options which are currently
exercisable or become exercisable within 60 days of March 31, 1998. Does
not include shares beneficially 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, 1997, based on a
Schedule 13G, dated February 14, 1998, filed with the Commission. Such
Schedule 13G states that FMR Corp. and certain related persons have sole
dispositive power as to all of such shares and sole voting power as to
1,060,851 of such shares.
(3) Includes 2,784,186 shares held by a family trust of which Mr. Wolzinger
and his wife serve as trustees and 351,664 shares held by a limited
partnership of which such trust is the general partner and a limited
partner. Mr. Wolzinger disclaims beneficial ownership of 189,196 shares
held by the limited partnership as to which he has no pecuniary interest.
Also includes 43,030 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 40,000 shares
subject to options which are currently exercisable or become exercisable
within 60 days of March 31, 1998.
(4) Includes 40,000 shares subject to options which are currently exercisable
or become exercisable within 60 days of March 31, 1998.
(5) Includes 40,000 shares subject to options which are currently exercisable
or become exercisable within 60 days of March 31, 1998. Does not include
shares reported as beneficially owned by Stephen A. Wynn, Mrs. Wynn's
husband.
2
<PAGE>
(6) Includes 70,000 shares held by a family trust of which Mr. Mason and his
wife serve as trustees and 40,000 shares subject to options which are
currently exercisable or become exercisable within 60 days of March 31,
1998.
(7) Represents shares subject to options which are currently exercisable or
become exercisable within 60 days of March 31, 1998.
(8) Includes 40,000 shares subject to options which are currently exercisable
or become exercisable within 60 days of March 31, 1998.
(9) Includes 750,000 shares subject to options which are currently
exercisable or become exercisable within 60 days of March 31, 1998 and
240 shares held by Mr. Shier as custodian for his minor children.
(10) Represents shares subject to options which are currently exercisable or
become exercisable within 60 days of March 31, 1998.
(11) Includes 889,200 shares subject to options which are currently
exercisable or become exercisable within 60 days of March 31, 1998 and
500 shares held by Mr. Lee as custodian for his minor niece who does not
share his household. Mr. Lee disclaims beneficial ownership of the shares
held as custodian.
(12) Represents shares subject to options which are currently exercisable or
become exercisable within 60 days of March 31, 1998.
(13) Includes 15,796,700 shares subject to options which are currently
exercisable or become exercisable within 60 days of March 31, 1998.
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.
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>
NAME YEAR FIRST ELECTED
- ---- ------------------
<S> <C>
Stephen A. Wynn, 56(2) 1973
Chairman of the Board of Directors, President and Chief
Executive Officer
Mr. Wynn has held his present positions for more than five
years. He is a Trustee of the University of Pennsylvania
and a member of the Governing Board of the Tahoe Regional
Planning Agency.
Ronald M. Popeil, 62 1980;
Director and Member of Audit, Stock Option and Bonus
Committees Appointed
Mr. Popeil has been the President of RONCO, Inc., the
principal business of September 19,
which is inventing, marketing and producing consumer 1979
products, since he co-founded that company in May 1984. He
is recognized as a pioneer in the field of direct response
television marketing.
</TABLE>
3
<PAGE>
INFORMATION CONCERNING DIRECTORS WHOSE TERMS OF OFFICE WILL CONTINUE AFTER THE
ANNUAL MEETING(1)
<TABLE>
<CAPTION>
EXPIRATION OF
TERM AS
NAME YEAR FIRST ELECTED DIRECTOR
- ---- ------------------ -------------
<S> <C> <C>
Melvin B. Wolzinger, 77 1973 2000
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. He has been a
principal owner of various restaurants and
casino gaming establishments in Las Vegas for
many years and a stockholder of the Company
for approximately 40 years.
Daniel B. Wayson, 45 1988; 2000
Director Appointed
Mr. Wayson is, and has been for more than March 19,
five years, a principal of Wayson Properties, 1987
Inc., a real estate development and holding
company, and other real estate and business
ventures. He served as President and Chief
Executive Officer of the Company's former
New Jersey gaming subsidiary from December
1984 through February 1987.
George J. Mason, 67 1973 2000
Director and Member of Audit, Stock Option
and Bonus Committees
Mr. Mason is a Senior Managing Director of
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 since
1973.
Elaine P. Wynn, 55(2) 1977 1999
Director
Mrs. Wynn has been active in civic and
philanthropic affairs in Las Vegas for many
years and has received numerous honors for
her charitable and community work. She is Co-
Chairperson of the Greater Las Vegas Inner-
City Games and a member of the National Board
of the Inner-City Games Foundation. Mrs. Wynn
is also Secretary, Treasurer and a Trustee of
Golden Nugget Scholarship Fund, Inc.
Richard D. Bronson, 53 1993; 1999
Director Appointed
Mr. Bronson has been President of New City August 3,
Development, a division of the Company which 1992
is responsible for certain corporate
development activities of the Company outside
of Nevada, or its predecessor, New City
Development, Inc., since February 1992.
</TABLE>
INFORMATION CONCERNING EXECUTIVE OFFICERS OTHER THAN DIRECTORS LISTED ABOVE(3)
<TABLE>
<CAPTION>
YEAR HIRED
NAME BY COMPANY
- ---- ----------
<S> <C>
Barry A. Shier, 43, Executive Vice President -- Marketing and Hotel 1984
Operations
Mr. Shier joined the Company as Executive Vice President -- Hotel
Operations in September 1984 and was appointed to his present
position in August 1987. He is also the Chairman and Chief
Executive Officer of the Company's subsidiaries which own and
operate the Golden Nugget hotel-casino in Las Vegas and will own
and operate the Beau Rivage hotel-casino in Biloxi, Mississippi.
</TABLE>
4
<PAGE>
INFORMATION CONCERNING EXECUTIVE OFFICERS OTHER THAN DIRECTORS LISTED ABOVE(3)
(CONTINUED)
<TABLE>
<CAPTION>
YEAR HIRED
NAME BY COMPANY
- ---- ----------
<S> <C>
Bruce A. Levin, 58, Vice President, General Counsel and Secretary 1979
Mr. Levin has been Vice President and General Counsel since
joining the Company in August 1979 and has also served as
Secretary or Assistant Secretary since that date.
Daniel R. Lee, 41, Senior Vice President -- Finance and 1992
Development, Chief Financial
Officer and 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. Prior thereto, he was a
securities analyst and Director -- Equity Research of CS First
Boston Corporation, an investment banking firm.
Frank P. Visconti, 44, President -- Retail Division 1992
Mr. Visconti joined the Company as Senior Vice President -- Retail
Operations in September 1992 and was appointed to his present
position in September 1997.
Thomas L. Sheer, 60, Senior Vice President -- Government and 1996
External Affairs
Mr. Sheer was appointed to his present position in January 1996.
From November 1990 to December 1995, he was Assistant to the
President of W. R. Grace & Co., a diversified chemicals company,
and he also served as Director of Business Intelligence of that
company from July 1993 to December 1995. Prior thereto, Mr. Sheer
was employed by the Federal Bureau of Investigation for 25 years,
rising to the position of an Assistant Director.
James E. Pettis, 46, 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, 69, Vice President -- Corporate Security 1980
Mr. Powers has held his present position since joining the Company
in January 1980.
</TABLE>
- ---------------------
(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.
(3) Officers serve at the pleasure of the Board of Directors.
5
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
--------------------------------------------- ---------------
SECURITIES
NAME AND PRINCIPAL OTHER ANNUAL UNDERLYING ALL OTHER
POSITION YEAR SALARY($) BONUS($) COMPENSATION($)(1) OPTIONS/SARS(#) COMPENSATION($)(2)
------------------ ---- ---------- ---------- ------------------ --------------- ------------------
<S> <C> <C> <C> <C> <C> <C>
Stephen A. Wynn 1997 $2,500,000 $1,250,000 $ 0 0 $4,160
Chairman of the Board, 1996 2,502,507 1,250,000 0 0 4,110
President and Chief 1995 2,500,422 1,250,000 0 2,000,000 4,260
Executive Officer
Barry A. Shier 1997 1,000,000 500,000 0 0 5,744
Executive Vice 1996 1,000,000 500,000 0 0 4,110
President -- Marketing 1995 1,000,000 375,000 0 2,000,000 4,260
and Hotel Operations
Bruce A. Levin 1997 656,000 200,000 0 0 4,160
Vice President, General 1996 553,308 150,000 0 150,000 4,110
Counsel and Secretary 1995 506,000 125,000 0 0 4,260
Daniel R. Lee 1997 533,846 300,000 0 1,200,000 3,968
Senior Vice 1996 400,000 250,000 0 0 3,888
President -- Finance 1995 400,000 200,000 0 0 4,008
and Development, Chief
Financial Officer and
Treasurer
Frank P. Visconti 1997 308,654 125,000 0 150,000 4,046
President -- Retail 1996 275,000 115,000 0 0 3,611
Division 1995 275,000 110,000 0 0 3,693
</TABLE>
- ---------------------
(1) The Company provides certain perquisites and other personal benefits to
some or all of the Named Officers, including (i) reimbursement for medical
expenses, including related travel expenses, (ii) personal use of Company
vehicles and aircraft, (iii) complimentary rooms, food, beverages and
entertainment (including such privileges at the Company's health spas and
golf course) and (iv) use of Company employees to furnish personal
services. The unreimbursed 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) Represents (i) Company-paid premiums for term life insurance on each of
the Named Officers, as follows: Stephen A. Wynn -- 1997: $960, 1996:
$1,110, 1995: $1,260; Barry A. Shier -- 1997: $960, 1996: $1,110, 1995:
$1,260; Bruce A. Levin -- 1997: $960, 1996: $1,110, 1995: $1,260; Daniel
R. Lee -- 1997: $768, 1996: $888, 1995: $1,008; and Frank P. Visconti --
1997: $608, 1996: $611, 1995: $693; (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"), which amount to $3,200 for
each of the Named Officers for 1997 and $3,000 for each of the Named
Officers for each of 1996 and 1995 and (iii) above-market earnings (as
defined in the Rules of the Commission) on compensation deferred during
1997 pursuant to the Company's Non-Qualified Deferred Compensation Plan,
as follows: Mr. Shier -- $1,584; and Mr. Visconti -- $238.
6
<PAGE>
OPTION GRANTS IN 1997
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE AT
ASSUMED ANNUAL RATES OF STOCK
PRICE APPRECIATION FOR OPTION
INDIVIDUAL GRANTS TERM
--------------------------------------------------------------- -----------------------------
NUMBER OF % OF TOTAL
SECURITIES OPTIONS
UNDERLYING GRANTED TO GRANT-DATE
OPTIONS EMPLOYEES EXERCISE MARKET PRICE EXPIRATION
NAME GRANTED(#)(1) IN 1997 PRICE($/SH)(2) ($/SH)(3) DATE(4) 0%($) 5%($) 10%($)
---- ------------- ---------- -------------- ------------ ---------- ------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Stephen A. Wynn 0 -- % $ -- $ -- -- $ -- $ -- $ --
Barry A. Shier 0 -- -- -- -- -- -- --
Bruce A. Levin 0 -- -- -- -- -- -- --
Daniel R. Lee 1,000,000 35.4 20.375 20.375 4/28/07 0 12,813,728 32,472,503
200,000 7.1 20.375 24.375 7/16/07 800,000 3,865,861 8,569,494
Frank P. Visconti 150,000 5.3 26.6875 28.75 8/13/07 309,375 2,988,491 7,082,096
</TABLE>
- ---------------------
(1) The 1,000,000 options granted to Mr. Lee become exercisable as to 200,000
shares annually commencing February 24, 2000. The 200,000 options granted
to Mr. Lee become exercisable on February 24, 2005. The options granted to
Mr. Visconti become exercisable as to 50,000 shares annually commencing
August 13, 2000. Exercisability of the options may be accelerated upon the
occurrence of certain fundamental corporate changes or at the discretion
of the Stock Option Committee. Exercisability of the options granted to
Mr. Lee also accelerates ratably in the event of termination of his
employment due to death or Permanent Disability (as defined).
(2) Under the terms of the Company's Stock Option and Stock Appreciation
Rights Plans, the Stock Option Committee retains discretion, subject to
plan limitations, to modify the terms of outstanding options and to
reprice options (although the Company has not repriced any options in the
last 10 years). The exercise price of the options may be paid in cash, by
delivery of shares of Common Stock or by offset of the underlying shares,
subject to certain conditions.
(3) The closing sale price of the Common Stock on the NYSE Composite Tape on
the date of grant.
(4) The options are subject to early termination in the event of termination
of employment.
AGGREGATED OPTION EXERCISES IN 1997 AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
SHARES OPTIONS AT FISCAL IN-THE-MONEY OPTIONS
ACQUIRED ON VALUE YEAR-END(#) AT FISCAL YEAR-END($)
NAME EXERCISE(#) REALIZED($)(1) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE(2)
---- ----------- -------------- ------------------------- ----------------------------
<S> <C> <C> <C> <C>
Stephen A. Wynn 0 $ -- 12,550,000/1,200,000 $204,162,500/$7,875,000
Barry A. Shier 0 -- 750,000/2,750,000 12,600,000/26,812,500
Bruce A. Levin 52,500 1,307,250 147,500/150,000 2,658,688/56,250
Daniel R. Lee 0 -- 889,200/1,200,000 15,916,680/2,850,000
Frank P. Visconti 30,000 592,000 320,000/150,000 5,768,000/0
</TABLE>
- ---------------------
(1) Represents the difference between the closing sale price of the Common
Stock on the NYSE Composite Tape on each 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 Composite Tape on December 31, 1997 and the exercise
price of the options.
EMPLOYMENT AGREEMENTS
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 reimbursement for medical expenses and coverage under the Company's life
insurance program.
7
<PAGE>
Effective July 16, 1997, the Company entered into an Employment Agreement
with Mr. Lee, which terminates on February 24, 2005, pursuant to which Mr. Lee
serves as Chief Financial Officer of the Company at an annual salary of
$600,000. Mr. Lee shall be entitled to such raises or bonuses as may be
determined in the discretion of the Board of Directors or the Bonus Committee.
The Company also provides Mr. Lee and his dependents with reimbursement for
medical expenses, coverage under the Company's life insurance program and such
other benefits as the Company from time to time makes available to its senior
executives of similar status. Pursuant to the Employment Agreement, on July
16, 1997 the Company granted Mr. Lee an option to purchase 200,000 shares of
Common Stock at an exercise price of $20.375 per share and amended the vesting
terms of the option to purchase 1,000,000 shares of Common Stock granted to
Mr. Lee on April 28, 1997. See "Option Grants in 1997." Mr. Lee has the right
to terminate the Employment Agreement following a Change of Control of the
Company (as defined in the Employment Agreement).
Effective September 6, 1997, the Company amended Mr. Visconti's Employment
Agreement and extended its term for five years, terminating on September 6,
2002. Pursuant to the amended Employment Agreement, Mr. Visconti serves as
President-Retail Division of the Company at an annual salary of $400,000. Mr.
Visconti shall continue to be entitled to such annual bonuses (approximating
25% to 30% of his annual salary) as may be determined in the discretion of the
Board of Directors, reimbursement for medical expenses and coverage under the
Company's life insurance program for himself and his dependents. On September
18, 1997, the Company granted Mr. Visconti an option to purchase 150,000
shares of Common Stock at an exercise price of $26.6875 per share. See "Option
Grants in 1997."
COMPENSATION OF DIRECTORS
Directors who are not employees of the Company or its subsidiaries (Messrs.
Popeil, Mason, Wolzinger and Wayson and Mrs. Wynn) were paid a monthly
retainer during 1997 of $4,000 for services as a director of the Company and
its subsidiaries, and continue to receive such retainer in 1998. Messrs.
Popeil, Mason and Wolzinger received an additional monthly fee of $1,000 for
services as members of the Company's Audit and Stock Option Committees during
1997, and continue to receive such fee in 1998. Directors also receive
reimbursement for medical expenses and coverage under the Company's life
insurance program. Directors who are employees of the Company or its
subsidiaries do not receive compensation for their services as directors.
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 was granted 10,000 stock options in January 1997 at an exercise
price of $23.375 per share and 10,000 stock options in January 1998 at an
exercise price of $23.00 per share. 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 500,000 stock options may be granted under the Director Plan, of
which 350,000 have been granted. On February 24, 1998, each non-employee
director was granted 5,000 additional stock options under the Company's 1995
Stock Option and Stock Appreciation Rights Plan at an exercise price of $23.25
per share, the market value of the Common Stock on the date of grant, which
become exercisable three years from the date of grant. Commencing in 1999,
each non-employee director will be granted a total of 15,000 stock options
each year (10,000 under the Director Plan and 5,000 under one of the Company's
Stock Option and Stock Appreciation Rights Plans).
Non-employee directors of the Company are eligible to participate in the
Company's Directors' Deferred Fee Plan (the "Deferred Fee Plan"), a non-
qualified deferred compensation plan. In 1997, Messrs. Popeil, Mason and
Wolzinger each deferred 25% of their Board of Directors' and Committee fees
under the Deferred Fee Plan and will be credited with earnings on such
deferred fees at the rate of 10% per annum, compounded monthly, until such
amounts are distributed to them from the Deferred Fee Plan.
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COMPARATIVE STOCK PRICE PERFORMANCE GRAPH
The graph below compares the cumulative total stockholder return from
December 31, 1992 to December 31, 1997, assuming reinvestment of dividends, of
the Common Stock, the NYSE Market Index (which consists of all common stocks
listed on the NYSE), the Standard & Poor's 500 Stock Index (the "S&P 500
Index") and the Media General Industry Group 241 -- Hotels, Motels, Resorts
(the "MG Index"). The graph assumes an investment of $100 on December 31, 1992
in each of the Common Stock and the stocks comprising the NYSE Market Index,
the S&P 500 Index and the MG Index.
In 1997, the Common Stock was added to the S&P 500 Index and, in accordance
with the Rules of the Commission, the Company is now required to compare the
return of its Common Stock with that of the S&P 500 Index rather than the NYSE
Market Index. Both indices are included in this Proxy Statement for
comparative purposes.
PERFORMANCE GRAPH APPEARS HERE
<TABLE>
<CAPTION>
NYSE
Measurement Period Mirage Market MG S&P
(Fiscal Year Covered) Resorts Index Index 500 Index
- ------------------- --------- --------- --------- ---------
<S> <C> <C> <C> <C>
Measurement Pt-
1992 $100 $100 $100 $100
1993 $182.25 $113.54 $159.45 $110.08
1994 $156.49 $111.33 $132.71 $111.54
1995 $263.36 $144.36 $148.67 $153.45
1996 $330.15 $173.90 $190.17 $188.69
1997 $347.33 $228.78 $209.90 $251.64
</TABLE>
(1) The data points in this graph were calculated by Media
General Financial Services, Inc., Richmond, Virginia.
9
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COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Decisions concerning executive officer compensation for 1997 were made by
the full Board of Directors and by the Stock Option Committee and the Bonus
Committee. Directors Stephen A. Wynn, Richard D. Bronson and Daniel B. Wayson
are officers or former officers of the Company or its subsidiaries. Director
Elaine P. Wynn is the wife of Stephen A. Wynn.
On January 14, 1998, Bellagio, a wholly owned subsidiary of the Company,
entered into an agreement with Mr. Wynn pursuant to which Bellagio sold four
works of fine art (collectively, the "Purchased Works") to Mr. Wynn for
$25,562,812. The sale price was equal to the amount paid by Bellagio when it
purchased the Purchased Works from unaffiliated parties in October through
December 1997 and the fair market value of the Purchased Works as determined
by David Nash, an independent expert in fine art valuation. Pursuant to the
agreement, Bellagio is renting three of the four Purchased Works, and another
work of fine art purchased by Mr. Wynn from an unaffiliated party in December
1997 (collectively, the "Rented Works"), from Mr. Wynn for public display at
any of the Company's hotel-casinos. The monthly rent payable by Bellagio for
the Rented Works is a percentage of the purchase price of the Rented Works
equal to one-twelfth of the sum of the most recent 30-day London Interbank
Offered Rate plus 30 basis points per annum. Either Bellagio or Mr. Wynn may
terminate the rental as to one or more of the Rented Works on 30 days' notice,
in which event the monthly rent shall be reduced proportionately. Bellagio is
responsible for insuring and maintaining the security of the Rented Works and
for sales and personal property taxes applicable to the rental. On March 12,
1998, the rental agreement was amended to include seven additional works of
fine art purchased by Mr. Wynn from an unaffiliated party in March 1998 for an
aggregate of $50,000,000 (the "March Rented Works"). The aggregate monthly
rent payable by Bellagio for the March Rented Works is $50,000. The total
monthly rent for the Rented Works and the March Rented Works in effect at
March 31, 1998 was $406,320.
REPORT ON EXECUTIVE COMPENSATION
COMPENSATION POLICIES AND BASE SALARIES
Decisions concerning executive officers' base salaries and the award of
certain cash bonuses for 1997 were made by the full Board of Directors, based
upon the recommendations of the Company's Chief Executive Officer. Decisions
concerning the grant of stock options and the award of cash bonuses pursuant
to the Company's Amended and Restated 1994 Cash Bonus Plan (the "Bonus Plan")
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 Company otherwise has no formal compensation
policies applicable to executive officers. 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 1997 (except
for compensation pursuant to the Bonus Plan discussed below) did not bear a
specific relationship to any particular measure of the Company's performance.
In addition to the Chief Executive Officer's Employment Agreement discussed
below, during 1997 four other executive officers were parties to employment
agreements with the Company, including Messrs. Lee and Visconti. See
"Executive Compensation--Employment Agreements." Compensation paid to such
executive officers for 1997 was consistent with the terms of such employment
agreements.
STOCK OPTIONS
The Company's Stock Option and Stock Appreciation Rights Plans (the "Stock
Option 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
10
<PAGE>
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 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, taking into consideration the
recommendations of other members of senior management. 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. In 1997,
stock options were granted to two executive officers, Messrs. Lee and
Visconti. See "Executive Compensation -- Option Grants in 1997" for
information concerning such stock options.
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 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 based upon the recommendations of the Chief Executive
Officer. Such recommendations and decisions were made on a subjective basis
and, except as noted above, did not bear a specific relationship to any
particular measure of the Company's performance. The Board of Directors, in
its discretion, may award cash bonuses in addition to those awarded by the
Bonus Committee under the Bonus Plan. Cash bonuses so awarded by the Board of
Directors to executive officers for 1997 were based upon the recommendations
of the Chief Executive Officer, which recommendations were made on a
subjective basis and did not bear a specific relationship to any particular
measure of the Company's performance. For 1997, bonuses were awarded to each
executive officer in amounts ranging from approximately 15% to 50% of current
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)
Section 162(m) of the Code eliminates the federal income tax deductibility
of most compensation exceeding $1,000,000 paid to the chief executive officer
or any of the four highest compensated executive officers (other than the
chief executive officer) 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 and the Stock Option Plans. 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 compensation decisions, the Board of Directors takes
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). The $125,000 bonus awarded by the Board of Directors to Mr. Shier for
1997 outside the Bonus Plan was not deductible by the Company as a result of
such limitation.
11
<PAGE>
COMPENSATION OF CHIEF EXECUTIVE OFFICER
In 1997, 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 Agreements." 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
1997 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 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 1997, the Chief Executive Officer was awarded a cash bonus of $1,250,000
(50% of his 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
contributions 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 1997.
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
Melvin B. Wolzinger
George J. Mason
BY THE BONUS COMMITTEE
Ronald M. Popeil
Melvin B. Wolzinger
George J. Mason
12
<PAGE>
THE 1998 STOCK OPTION AND STOCK APPRECIATION RIGHTS PLAN PROPOSAL
SUMMARY OF THE 1998 PLAN
The Company's Board of Directors adopted the 1998 Plan on February 24, 1998,
subject to stockholder approval at the Meeting. A copy of the 1998 Plan is
attached to this Proxy Statement as Exhibit A. The following is a brief
summary of the 1998 Plan, which is qualified in its entirety by reference to
Exhibit A.
Options granted under the 1998 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, 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 1998 PLAN
The purpose of the 1998 Plan is to advance the interests of the Company, its
stockholders and its subsidiaries by encouraging and enabling selected
officers, directors, employees, independent contractors and 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.
The 1998 Plan does not prescribe a minimum vesting period for stock options,
leaving such decision to the discretion of the Stock Option Committee on a
case-by-case basis. The Stock Option Committee has generally granted stock
options to the Company's most senior executives (excluding the Chief Executive
Officer) which become exercisable over substantially longer periods than is
believed to be the case for most publicly held companies. The Company believes
that the relatively long vesting periods are a major factor in the low
turnover of the Company's senior executive staff and more closely align
management's interests with the long-term interests of the Company's
stockholders. Because of the relatively long vesting periods, the Company
believes that the total number of stock options outstanding at any time tends
to be higher than would be the case if the vesting periods were shorter.
During the three years ended December 31, 1997, the Company granted a total
of 15,167,500 stock options under the Company's various Stock Option Plans and
the Director Plan with a weighted average vesting period of 6.4 years,
including a total of 7,000,000 options granted in 1995 to certain senior
executives with a vesting period of almost 10 years from the date of grant.
The Company has not granted any SARs since 1988. In most cases, outstanding
options granted under the Stock Option Plans become exercisable either on a
single date between three and five years from the date of grant or ratably
over a period of three to five years from the date of grant. Substantially all
of the outstanding stock options have an exercise price equal to the market
value of the Common Stock on the date of grant, and the Company has not
repriced any stock options in the last 10 years. The Company believes that the
Stock Option Plans have been and continue to be an important factor in
enabling the Company to attract and retain superior management and key
employees.
AMOUNT OF COMMON STOCK SUBJECT TO OPTIONS AND SARS UNDER THE 1998 PLAN
The 1998 Plan provides for the grant of stock options and SARs covering an
aggregate of 5,000,000 shares of Common Stock, and further provides that no
single participant may be granted stock options and SARs under the 1998 Plan
covering an aggregate of more than 2,000,000 shares of Common Stock. The
number of shares of Common Stock subject to options and SARs is subject to
equitable adjustment for any stock dividends, stock
13
<PAGE>
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. As of March 31, 1998, no options or
SARs had been granted under the 1998 Plan.
ADMINISTRATION OF THE 1998 PLAN
Although the 1998 Plan may be administered by the Board of Directors, the
Board of Directors has appointed the Stock Option Committee to administer the
1998 Plan. Subject to the conditions set forth in the 1998 Plan, the Stock
Option Committee has full and final authority to determine the number of
options or SARs to be granted, 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 into at the time of grant, which may vary. The 1998 Plan is
intended to be flexible, and a significant amount of discretion is vested in
the Stock Option Committee with respect to all aspects of the options and SARs
to be granted under the 1998 Plan.
PARTICIPANTS
Non-Qualified Options and SARs may be granted under the 1998 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 15, 1998, the Company and its
subsidiaries had approximately 17,000 employees. The Company has not granted
any options or SARs to non-employees during the past five years, other than
the options granted to non-employee directors under the Director Plan and as
discussed under "Executive Compensation--Compensation of Directors."
EXERCISE PRICE
The exercise price of each Non-Qualified Option and SAR granted under the
1998 Plan shall be determined by the Stock Option Committee and shall in no
event be less than 50% of the fair market value of the shares on the date of
grant. The exercise price of each Incentive Option granted under the 1998 Plan
shall be determined by the Stock Option Committee and shall in no event be
less than 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 Stock Option Committee in
accordance with the 1998 Plan and such determination shall be binding upon the
Company and the holder. The closing sale price of the Common Stock on the NYSE
Composite Tape on April 8, 1998 was $22.6875 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 1998 Plan.
EXERCISE OF OPTIONS AND SARS
The terms governing exercise of options and SARs granted under the 1998 Plan
shall be determined by the Stock Option Committee. 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
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<PAGE>
exercise, plus the amount of cash representing the fair market value of any
fractional share. 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 Stock Option
Committee provides otherwise). Where payment is made in Common Stock, such
Common 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 1998 Plan be exercisable prior to the date of stockholder approval
of the 1998 Plan.
NON-TRANSFERABILITY
Options and SARs granted under the 1998 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 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 1998 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 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 1998 PLAN
The Board of Directors may at any time and from time to time amend, suspend
or terminate the 1998 Plan, but may not, without the approval of the
stockholders of the Company representing a majority of the shares represented
and voting on the matter, increase the maximum number of shares of Common
Stock subject to options and SARs which may be granted, change the provisions
concerning the exercise price of options and SARs granted, increase the term
during which options and SARs may be exercised, extend the term of the 1998
Plan or make any other change in the 1998 Plan that, pursuant to any
applicable law, regulation or stock exchange rule, may not be made without
stockholder approval. No amendment, suspension or termination of the 1998 Plan
by the Board of Directors may alter or impair in a manner unfavorable to the
holder any of the rights under any option or SAR granted under the 1998 Plan
without such holder's consent.
The 1998 Plan makes it clear that 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 1998 Plan.
EFFECTIVE DATE AND TERM OF THE 1998 PLAN
Options and SARs may be granted under the 1998 Plan during its 10-year term,
which commenced on February 24, 1998.
15
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CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The Company believes that the federal income tax consequences of the 1998
Plan are as follows.
Incentive Options. With respect to Incentive Options granted under the 1998
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 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 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 capital gain. 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 grant of a Non-Qualified Option under
the 1998 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 capital gain or loss.
The grant of an SAR under the 1998 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 recognizes
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 the Chief Executive Officer or
any of the four highest compensated executive officers (other than the Chief
Executive Officer). Remuneration for this purpose excludes certain
performance-based compensation. The 1998 Plan is intended to qualify for the
performance-based compensation exception to the deduction limitation with
respect to options and SARs granted at fair market value.
BOARD OF DIRECTORS' RECOMMENDATION
The Board of Directors recommends that stockholders vote FOR approval of the
1998 Plan. If the 1998 Plan is not approved, no options or SARs will be
granted under the 1998 Plan, and the 1998 Plan will terminate.
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RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS
The Company's independent accountants for 1997 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.
The Board of Directors recommends that stockholders vote FOR ratification of
the appointment of AA as independent accountants for 1998. If the appointment
of AA is not ratified, the Board of Directors will take this into account when
it considers the appointment of independent accountants for 1999.
INFORMATION CONCERNING THE BOARD OF DIRECTORS
AND ITS COMMITTEES
The committees of 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 held 11 meetings during 1997. 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 took action by written consent on 33 occasions
during 1997. The Stock Option Committee administers the Stock Option Plans.
Subject to the conditions set forth in the Stock Option 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 took action by written consent on two occasions during
1997. The Bonus Committee 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 11 meetings and took action by written consent
on two occasions during 1997. 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.
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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 1999 Annual Meeting
of Stockholders must submit such proposal sufficiently far in advance so that
it is received by the Company not later than December 14, 1998.
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
BRUCE A. LEVIN
Secretary
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EXHIBIT A
MIRAGE RESORTS, INCORPORATED
1998 STOCK OPTION AND STOCK APPRECIATION RIGHTS PLAN
1.PURPOSE.
This 1998 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 and 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, $.004 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 or terminated, 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.
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(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.
(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) "SAR" means a stock appreciation right granted under the Plan.
(s) "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.
(t) "Subsidiary" means a corporation or other entity, a majority of the
voting power in which is owned directly or indirectly by the Company;
provided, however, that with respect to Incentive Options it has the meaning
set forth in Section 424(f) of the Code.
(u) "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
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
solely of two or more directors, appointed by the Board to administer the
Plan. 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 5,000,000. 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 2,000,000.
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), 6(h), 7(b) and 7(c).
(c) Vesting of Stockholder Rights. Neither an Optionee nor his Successor
shall, by virtue thereof, 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.
Each SAR shall be exercisable for cash, for shares of Common Stock or for
either, in the discretion of the Optionee.
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
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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 and 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.
(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: (i) the effective
date of termination set forth in a written notice from the Company or 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, 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.
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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 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.
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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.
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 shares represented
and voting on the matter, 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) change the provisions of the
second sentence of this Paragraph 10 relating to the term of the Plan or (e)
effect any other change that, pursuant to any applicable law, regulation or
stock exchange rule, may not be effected without stockholder approval. 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 written consent, alter or impair in a manner unfavorable to such
Optionee 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 February 24, 1998, the date of its
adoption by the Board, subject however to its approval by the stockholders of
the Company representing a majority of the shares represented and voting on
the matter 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 AND SARS GRANTED PRIOR TO AMENDMENTS TO THE PLAN.
Options and SARS 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
agreement.
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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, 1998, at the Annual Meeting
of Stockholders to be held on May 21, 1998 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 BOX 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
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<PAGE>
PLEASE DATE, SIGN AND MAIL YOUR
PROXY CARD BACK AS SOON AS POSSIBLE!
ANNUAL MEETING OF STOCKHOLDERS
MIRAGE RESORTS, INCORPORATED
MAY 21, 1998
PLEASE DETACH AND MAIL IN THE ENVELOPE PROVIDED
- --------------------------------------------------------------------------------
[X] Please mark your
votes as in this
example using
dark ink only
FOR WITHHELD
1. Election of [_] [_]
Directors
For, except vote withheld from the following nominee(s):
- ---------------------------------------------------------------
FOR AGAINST ABSTAIN
2. Proposal to approve the 1998 Stock [_] [_] [_]
Option and Stock Appreciation Rights
Plan.
3. Proposal to ratify the appointment of [_] [_] [_]
Arthur Andersen LLP as independent
accountants for 1998.
4. 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.
