<PAGE>
As filed with the Securities and Exchange Commission on December 19, 1997
Registration No. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
MGM GRAND, INC.
(Exact name of registrant specified in its charter)
DELAWARE 88-0215232
-------- ----------
(State of Incorporation) (I.R.S. Employer Identification No.)
3799 Las Vegas Boulevard South
Las Vegas, Nevada 89109
(Address of Principal Executive Offices)
----------------------------
MGM GRAND, INC.
1997 NONQUALIFIED STOCK OPTION PLAN
MGM GRAND, INC.
1997 INCENTIVE STOCK OPTION PLAN
(FULL TITLE OF THE PLAN)
----------------------------
SCOTT LANGSNER
SECRETARY AND TREASURER
MGM GRAND, INC.
3799 LAS VEGAS BOULEVARD SOUTH
LAS VEGAS, NEVADA 89109
(702) 891-3333
(NAME, ADDRESS AND TELEPHONE NUMBER OF AGENT FOR SERVICE)
--------------------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
===========================================================================================================
Title of securities Amount to be Proposed Proposed Amount of
to be registered registered maximum offering maximum registration fee
price per share/(1)/ aggregate offering
price/(1)/
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, 1,500,000 shares $35.625 $53,437,500 $15,764.07
par value $.01
===========================================================================================================
</TABLE>
(1) Pursuant to Rule 416(a), also covers additional securities that may be
offered as a result of stock splits, stock dividends or similar transactions.
(2) Estimated solely for the purpose of calculating the registration fee. This
estimate has been calculated in accordance with Rule 457 under the Securities
Act of 1933 and is based on the average of the high and low price per share as
reported on the New York Stock Exchange on December 16, 1997.
The Exhibit Index is located on page 8 of this Registration Statement.
This Registration Statement consists of 22 pages.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents of MGM Grand, Inc. (the "Registrant")
heretofore filed with the Securities and Exchange Commission (the "Commission")
are hereby incorporated by reference into the Registration Statement:
(a) The Registrant's Annual Report on Form 10-K for the fiscal year
ended December 31, 1996.
(b) All other reports filed pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), since the end
of the fiscal year covered by the Annual Report referred to in (a) above.
(c) The description of Registrant's Common Stock which is contained
in the Registrant's registration statement filed under Section 12 of the
Exchange Act.
All reports and other documents subsequently filed by Registrant
pursuant to Sections 13(a) and (c), 14 and 15(d) of the Exchange Act, prior to
the filing of a post-effective amendment which indicates that all securities
offered hereby have been sold or which deregisters all securities then remaining
unsold, shall be deemed to be incorporated by reference in this Registration
Statement and to be a part hereof from the date of filing of such documents.
Any statement contained in a document incorporated by reference herein
shall be deemed to be modified or superseded for purposes of this Registration
Statement to the extent that a statement contained herein (or in any other
subsequently filed documents which also is incorporated by reference herein)
modifies or supersedes such statement. Any statement so modified or superseded
shall not be deemed to constitute a part hereof except as so modified or
superseded.
Item 4. DESCRIPTION OF SECURITIES.
Not Applicable.
Item 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Terry N. Christensen, a director of the Registrant and a partner of
Christensen, Miller, Fink, Jacobs, Glaser, Weil & Shapiro, LLP, which is
rendering an opinion in connection herewith as to the validity of the
Registrant's Common Stock, together with all other attorneys in such firm
participating in the preparation of this Registration Statement, own 2,100
shares of the Registrant's Common Stock.
-2-
<PAGE>
Item 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the General Corporation Law of the State of Delaware
provides that a Delaware corporation may indemnify any persons, including
directors and officers, who are, or are threatened to be made, parties to any
threatened, pending or completed legal action, suit or proceeding, whether
civil, criminal, administrative or investigative (other than an action by or in
the right of such corporation), if, in connection with the matters in issue,
they acted in good faith and in a manner they reasonably believed to be in, or
not opposed to, the best interest of the corporation, and in connection with any
criminal suit or proceeding, if in connection with the matters at issue, they
had no reasonable cause to believe their conduct was unlawful. Section 145 also
permits a Delaware corporation to indemnify its officers and directors in an
action by or in the right of the corporation under the same conditions against
expenses incurred by such persons in connection with the defends or settlement
of such action, except no such indemnification is permitted without judicial
approval if the officer or director is adjudged to be liable to the corporation.
Where an officer or director is successful and the merits are otherwise in the
defense of any action referred to above, the corporation must indemnify him or
her against the expenses which such officer or director actually and reasonably
incurred.
Article II, Section 12 of the Bylaws of MGM Grand, Inc. provides for
indemnification of persons to the extent permitted by the Delaware General
Corporation Law.
In accordance with Section 102(b)(7) of the Delaware Law, the
Certificate of Incorporation, as amended, of MGM Grand, Inc. limits the personal
liability of its directors for violations of their fiduciary duty. The
Certificate of Incorporation eliminates each director's liability to MGM Grand,
Inc. or its stockholders for monetary damages except (i) for any breach of the
director's duty of loyalty to MGM Grand, Inc. or its stockholders, (ii) for acts
or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) under the section of the Delaware law providing
for liability of directors for unlawful payment of dividends or unlawful stock
purchases or redemptions, or (iv) for any transaction from which a director
derived an improper personal benefit. The effect of this provision is to
eliminate the personal liability of directors for monetary damages for actions
involving a breach of their fiduciary duty of care, including any such actions
involving gross negligence. This provision will not, however, limit in any way
the liability of directors for violations of the Federal securities laws.
The Registrant carries directors and officers liability insurance
policies with a limit of $20,000,000. Such policies expire on October 31, 1998.
Item 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not Applicable.
-3-
<PAGE>
Item 8. EXHIBITS.
Each of the following exhibits is filed herewith:
4.1 MGM Grand, Inc. 1997 Nonqualified Stock Option Plan.
4.2 MGM Grand, Inc. 1997 Incentive Stock Option Plan.
5 Opinion of Christensen, Miller, Fink, Jacobs, Glaser, Weil & Shapiro,
LLP.
23.1 Consent of Christensen, Miller, Fink, Jacobs, Glaser, Weil & Shapiro,
LLP (set forth as part of Exhibit 5).
23.2 Consent of Arthur Andersen LLP.
Item 9. UNDERTAKINGS.
(1) The undersigned Registrant hereby undertakes:
(a) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) to include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;
(ii) to reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or the
most recent post-effective amendment thereof) which, individually
or in the aggregate, represent a fundamental change in the
information set forth in the Registration Statement;
(iii) to include any material information with respect to the
plan of distribution not previously disclosed in the Registration
Statement or any material change to such information in the
Registration Statement;
provided, however, that the undertakings set forth in paragraphs
(a)(1)(i) and (a)(1)(ii) of this Item 9 do not apply if the
information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed with or
furnished to the Commission by the Registrant pursuant to Section
13(a) or Section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the Registration Statement.
(b) That, for the purpose of determining any liability under the
Securities Act of 1933, as amended (the "Securities Act"), each such
post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering
of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
-4-
<PAGE>
(c) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold
at the termination of the offering.
(2) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of Registrant's
annual report pursuant to Section 13(a) or 15(d) of the Exchange Act (and,
where applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference
in the Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(3) Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, Registrant has
been advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by Registrant of expenses
incurred or paid by a director, officer or controlling person of Registrant in
the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, Registrant will, unless in the opinion of its counsel the matter has
been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication for such issue.
-5-
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the Securities Act of 1933, Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Las Vegas, State of Nevada on December 18, 1997.
MGM GRAND, INC.
Registrant
By: /s/J. TERRENCE LANNI
-------------------------
J. Terrence Lanni
Chairman of the Board of Directors
and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed below by the following persons in
the capacities and on the date indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/S/ J. TERRENCE LANNI Chairman of the Board December 18, 1997
- ------------------------- of Directors and Chief
J. Terrence Lanni Executive Officer
(Principal Executive Officer)
/S/ ALEX YEMENIDJIAN President, Chief Operating December 18, 1997
- ------------------------- Officer and Chief Financial Officer
Alex Yemenidjian and Director (Principal Financial and
Accounting Officer)
/S/ FRED BENNINGER Vice Chairman of the Board December 18, 1997
- ------------------------- of Directors
Fred Benninger
/S/ JAMES D. ALJIAN Director December 18, 1997
- -------------------------
James D. Aljian
/S/ TERRY N. CHRISTENSEN Director December 18, 1997
- -------------------------
Terry N. Christensen
</TABLE>
-6-
<PAGE>
<TABLE>
<S> <C> <C>
_________________________ Director December __, 1997
Glenn A. Cramer
_________________________ Director December __, 1997
Willie D. Davis
_________________________ Director December __, 1997
Alexander M. Haig, Jr.
_________________________ Director December __, 1997
Kirk Kerkorian
_________________________ Director December __, 1997
Frank G. Mancuso
/S/ WALTER M. SHARP Director December 18, 1997
- -------------------------
Walter M. Sharp
/S/ JEROME B. YORK Director December 18, 1997
- -------------------------
Jerome B. York
</TABLE>
-7-
<PAGE>
EXHIBIT INDEX
-------------
<TABLE>
<CAPTION>
PAGE NUMBER IN
EXHIBIT SEQUENTIALLY
NUMBER EXHIBIT DESCRIPTION NUMBERED COPY
- ------ ------------------- --------------
<C> <S> <C>
4.1 MGM Grand, Inc. 1997 Nonqualified Stock Option
Plan.
4.2 MGM Grand, Inc. 1997 Incentive Stock Option Plan.
5 Opinion of Christensen, Miller, Fink, Jacobs,
Glaser, Weil & Shapiro, LLP.
23.1 Consent of Christensen, Miller, Fink, Jacobs,
Glaser, Weil & Shapiro, LLP (set forth as part
of Exhibit 5).
23.2 Consent of Arthur Andersen LLP.
</TABLE>
<PAGE>
EXHIBIT 4.1
THE MGM GRAND, INC. 1997 NONQUALIFIED STOCK OPTION PLAN
1. Purpose. The purpose of the MGM Grand, Inc. 1997 Nonqualified Stock
Option Plan is to provide a means whereby MGM Grand, Inc. may attract and retain
persons of ability and motivate such persons to exert their best efforts on
behalf of the Company and its Subsidiaries.
2. Definitions.
(a) "Board" shall mean the Board of Directors of the Company.
(b) "Code" shall mean the Internal Revenue Code of 1986, as amended
from time to time. Reference to any section of the Code shall include any
provision successor thereto.
(c) "Committee" shall mean the administrative committee appointed
pursuant to Section 3.
(d) "Company" shall mean MGM Grand, Inc., a Delaware corporation.
(e) "Employee" shall mean an employee of the Company or any of its
Subsidiaries, as defined in Instruction 1(a) to Form S-8 under the Securities
Act of 1933, as amended.
(f) "Nonqualified Option" shall mean an option to purchase shares of
Stock, subject to the terms and conditions described in the Nonqualified Plan,
which is not an incentive stock option within the meaning of Code Section 422.
(g) "Nonqualifed Plan" shall mean the MGM Grand, Inc. 1997
Nonqualified Stock Option Plan.
(h) "Participant" shall mean an Employee of the Company or any
Subsidiary who is designated to receive Nonqualified Options pursuant to Section
3.
(i) "Stock" shall mean the Company's $.01 par value common stock.
(j) "Subsidiary" shall mean a subsidiary corporation as defined in
Code Section 424(f) or any partnership or joint venture in which the Company
owns a 50 percent or greater ownership interest.
3. Administration. The Nonqualified Plan shall be administered by the
Committee, consisting of at least two members, who shall be members of the
Board, appointed by and holding office as Committee members at the pleasure of
the Board. Subject to the provisions of the Nonqualified Plan,
<PAGE>
the Committee shall have the power to: (a) determine and designate from time to
time those Employees who perform services for the Company or for any Subsidiary
who shall be Participants in the Nonqualified Plan and the number of shares to
be subject to the Nonqualified Options to be granted to each Participant;
provided, however, that no Nonqualified Option shall be granted after the
expiration of ten years from the effective date of the Nonqualified Plan
specified in Section 8; (b) authorize the granting of Nonqualified Options to
Participants; and (c) determine the time or times and the manner when each
Nonqualified Option shall be exercisable and the duration of the exercise
period.
For all purposes of the Nonqualified Plan, the fair market value of the
Stock shall be determined in good faith by the Committee by applying the rules
and principles of valuation set forth in Treasury Regulations (S)20.2031-2,
relating to the valuation of stocks and bonds for purposes of Code (S)2031.
The Committee may interpret the Nonqualified Plan, prescribe, amend, and
rescind any rules and regulations necessary or appropriate for the
administration of the Nonqualified Plan, and make such other determinations and
take such other action as it deems necessary or advisable. Without limiting the
generality of the foregoing sentence, the Committee may, in its discretion,
treat all or any portion of any period during which a Participant is on military
or on an approved leave of absence from the Company or a Subsidiary as a period
of service of such Participant with the Company or a Subsidiary, as the case may
be, for purposes of accrual of such Participant's rights under the Nonqualified
Options. Any interpretation, determination, or other action made or taken by
the Committee shall be final, binding, and conclusive. Any action reduced to
writing and signed by all members of the Committee shall be as fully effective
as if it had been taken by vote at a meeting duly called and held. No member of
the Committee shall be personally liable for any action, determination or
interpretation made in good faith with respect to the Nonqualified Plan or the
Nonqualified Options.
4. Benefits Available Under the Nonqualified Plan. The benefits provided
by the Nonqualified Plan to Participants are Nonqualified Options. Nonqualified
Options may be granted by the Company from time to time for all Participants to
acquire up to an aggregate of 1,500,000 shares of Stock, subject to adjustment
as provided in Paragraph 5(h) and reduced by the number of shares subject to
options which are granted under the MGM Grand, Inc. 1997 Incentive Stock Option
Plan. However, no Participant in the Nonqualified Plan shall be entitled to
receive options to purchase more than 1,000,000 shares in any calendar year.
The shares to be delivered upon exercise of Nonqualified Options shall be made
available, at the discretion of the Board, either from authorized but unissued
shares of Stock or from Stock reacquired by the Company, including shares
purchase in the open market. If any Nonqualified Option terminates, expires or
is canceled with respect to any shares of Stock, new Nonqualified Options may
thereafter be granted covering such shares.
5. Terms and Conditions. Each Nonqualified Option shall be evidenced by
an agreement (the "Agreement"), in a form approved by the Committee, which shall
be signed by an officer of the Company and the Participant receiving the
Nonqualified Option, and which shall be subject to the following express terms
and conditions and to such other terms and conditions as the Committee may deem
appropriate:
(a) Period. Each Agreement shall specify that the Nonqualified Option
thereunder is for a period not to exceed ten years (the "Option Period") and
shall provide that the Nonqualified Option shall expire at the end of such
period.
<PAGE>
(b) Option Price. The price per share at which a Nonqualified Option
may be exercised (the "Option Price") shall be determined by the Committee at or
prior to the time the Nonqualified Option is granted, but shall be at least
equal to the fair market value per share at the time the Nonqualified Option is
granted.
(c) Exercise of Option. In order to exercise Nonqualified Options,
the person or persons entitled to exercise them shall give written notice to the
Company specifying the number of shares to be purchased pursuant to the exercise
of Nonqualified Options. This notice shall be accompanied by payment for the
shares as provided in Paragraph 5(d). Options may be exercised at such time or
times as may be determined by the Committee at the time of grant, subject to the
provisions of this Section 5, including the following limitation: no part of any
Nonqualified Option may be exercised until the Participant holding the
Nonqualified Option shall have performed services for the Company or for a
Subsidiary for such period after the date on which the Nonqualified Option is
granted as the Committee may specify in the Agreement; provided, however, that,
although a Nonqualified Option may provide for earlier exercise, the
Nonqualified Option shall be exercisable with respect to at least 20 percent of
the shares subject thereto no later than the first anniversary of the grant of
the Nonqualified Option, 40 percent of such shares no later than the second such
anniversary, 60 percent of such shares no later than the third such anniversary,
80 percent of such shares no later than the fourth such anniversary and 100
percent of such shares no later than the fifth such anniversary; and provided,
further, that no Nonqualified Option may at any time be exercised in part with
respect to fewer than the lesser of (i) fifty shares, or (ii) the number of
shares which remain to be purchased pursuant to the Nonqualified Option.
(d) Payment of Option Price. The Option Price of the Stock
transferred to a Participant pursuant to the exercise of a Nonqualified Option
shall be paid to the Company at the time of delivery of notice of exercise: (1)
in cash; (2) with previously acquired Stock having a fair market value equal to
the Option Price; or (3) with cash and previously acquired Stock having a fair
market value which together with the cash is equal to the Option Price.
(e) Exercise in the Event of Death or Termination of Employment. If a
Participant holding Nonqualified Options shall terminate employment by the
Company and its Subsidiaries because of death, or shall die within three months
of termination of employment by the Company and its Subsidiaries, the
Nonqualified Options held by the Participant may be exercised, to the extent
that the Participant was entitled to do so at the date of termination of
employment, by the person or persons to whom the Participant's rights under the
Nonqualified Options pass by will or applicable law, or if no such person has
such rights, by the Participant's executors or administrators, at any time, or
from time to time, within one year after the date of such termination of
employment, but in no event later than the expiration date determined pursuant
to Paragraph 5(a). If a Participant's employment by the Company, its parent and
Subsidiaries shall terminate for any reason other than death, Nonqualified
Options held by such Participant may be exercised, to the extent the Participant
was entitled to do so at the date of termination of employment at any time, or
from time to time, within three months after the date of termination of
employment, but in no event later than the expiration date determined pursuant
to Paragraph 5(a). Notwithstanding the foregoing, the Committee may, in its sole
discretion, vary the foregoing provisions with respect to a particular
Participant or particular Nonqualified Options granted to such Participant to
make the termination provisions applicable to such Participant more favorable to
such Participant so long as such variation does not extend the expiration date
of such Nonqualified Options. Any such variation
<PAGE>
shall be set forth in the applicable Agreement or amendment thereto.
(f) Nontransferability. No Nonqualified Option under the Nonqualified
Plan shall be transferable other than by will or by the laws of descent and
distritbution. No interest of any Participant under the Plan shall be subject to
attachment, execution, garnishment, sequestration, the laws of bankruptcy or any
other legal or equitable process. During the lifetime of the Participant,
Nonqualified Options shall be exercisable only by the Participant who received
them.
(g) Investment Representation. Each Agreement shall contain a
provision that, upon demand by the Company for such a representation, the
Participant holding the Nonqualified Options (or any person acting under
Paragraph 5(e)) shall deliver to the Company at the time of any exercise of any
Nonqualified Options a written representation that the shares to be acquired
upon such exercise are to be acquired for investment and not for resale or with
a view to the distribution thereof. Upon such demand, delivery of such
representation prior to the delivery of any shares issued upon exercise of
Nonqualified Options and prior to the expiration of the Option Period shall be a
condition precedent to the right of the Participant or such other person to
acquire any shares.
(h) Adjustments in Event of Change in Stock. In the event of any
change in the Stock by reason of any stock dividend, recapitalization,
reorganization, merger, consolidation, split-up, combination, or exchange of
shares, or of any similar change affecting the Stock, the number and class of
shares which thereafter may be acquired under the Nonqualified Plan, the number
and class of shares subject to outstanding Agreements, the Option Price per
share thereof, and any other terms of the Nonqualified Plan or the Agreements
which in the Committee's sole discretion require adjustment (including, without
limitation, relating to the Stock, other securities, cash or other consideration
which may be acquired upon exercise of the Nonqualified Options) shall be
appropriately adjusted consistent with such change in such manner as the
Committee may deem appropriate.
(i) No Rights as Stockholder. No Participant shall have any rights as
a stockholder with respect to any shares subject to Nonqualified Options prior
to the date of issuance to such Participant of a certificate or certificates for
such shares.
(j) No Right to Continued Employment. Neither the Nonqualified Plan
nor any Nonqualified Options granted under the Nonqualified Plan shall confer
upon any Employee any right with respect to continuance of employment by the
Company or any Subsidiary, nor shall they interfere in any way with the right of
the Company or any Subsidiary for which a Participant performs services to
terminate such employment at any time.
(k) Arrangement for Tax Payment. Each Agreement shall contain a
provision that the Participant shall agree to make any arrangements required by
the Committee to insure that the amount of tax required to be withheld by the
Company or a Subsidiary as a result of the exercise of Nonqualified Options is
available for payment.
(l) Certain Corporate Transactions. Each Agreement shall provide that
nothing in the Nonqualified Plan or the Agreement shall in any way prohibit the
Company from merging with or consolidating into another corporation, or from
selling or transferring all or substantially all of its
<PAGE>
assets, or from distributing all or substantially all of its assets to its
stockholders in liquidation, or from dissolving and terminating its corporate
existence, and in any such event (other than a merger in which the Company is
the surviving corporation and under the terms of which the shares of Stock
outstanding immediately prior to the merger remain outstanding and unchanged),
the Participant shall be entitled to receive, at the time the Nonqualified
Option or portion thereof would otherwise become exercisable and upon payment of
the Option Price, the same shares of stock, cash or other consideration received
by stockholders of the Company in accordance with such merger, consolidation,
sale or transfer of assets, liquidation or dissolution.
6. Compliance With Other Laws and Regulations. The Nonqualified Plan, the
grant and exercise of Nonqualified Options under the Nonqualified Plan, and the
obligation of the Company to transfer shares under these Nonqualified Options
shall be subject to all applicable federal and state laws, rules and
regulations, including those related to disclosure of financial and other
information to Participants, and to any approvals by any government or
regulatory agency as may be required. The Company shall not be required to issue
or deliver any certificates for shares of Stock prior to (a) the listing of such
shares on any stock exchange on which the Stock may then be listed, where such
listing is required under the rules or regulations of such exchange, and (b)
compliance with applicable federal and state securities laws and regulations
relating to the issuance and delivery of such certificates; provided, however,
that the Company shall make all reasonable efforts to so list such shares and to
comply with such laws and regulations.
7. Amendment and Discontinuance. The Board may from time to time amend,
suspend or discontinue the Nonqualified Plan; provided, however, that, subject
to the provisions of Paragraph 5(h), no action of the Board, or any committee
thereof, may (a) increase the number of shares reserved for options pursuant to
Section 4 without approval of the stockholders of the Company, (b) permit the
granting of any Nonqualified Option at an Option Price less than that determined
in accordance with Paragraph 5(b), (c) permit the granting of Nonqualified
Options which expire beyond the period provided for in Paragraph 5(a), or (d)
make any material change in the class of eligible Employees as defined in the
Nonqualified Plan.
8. Compliance with Rule 16(b)(3) under the Securities Exchange Act of
1934. (a) The Nonqualified Plan is intended to comply with all applicable
conditions of Rule 16(b)(3) under the Securities Exchange Act of 1934, as
amended, or any successor rule; (b) all transactions involving insider
Participants are subject to such conditions, regardless of whether the
conditions are expressly set forth in the Nonqualified Plan; and (c) any
provision of the Nonqualified Plan or action by the Committee that is contrary
to a condition of Rule 16(b)(3) shall not apply to insider-participants.
9. Effective Date. The effective date of the Nonqualified Plan shall be
the earlier of the date the Nonqualified Plan is adopted by the Board or the
date it is approved by the stockholders of the Company.
<PAGE>
EXHIBIT 4.2
THE MGM GRAND, INC. 1997 INCENTIVE STOCK OPTION PLAN
1. Purpose. The purpose of the MGM Grand, Inc. 1997 Incentive Stock
Option Plan is to provide a means whereby MGM Grand, Inc. may attract and retain
persons of ability and motivate such persons to exert their best efforts on
behalf of the Company and its Subsidiaries.
2. Definitions.
(a) "Board" shall mean the Board of Directors of the Company.
(b) "Code" shall mean the Internal Revenue Code of 1986, as amended
from time to time. Reference to any section of the Code shall include any
provision successor thereto.
(c) "Committee" shall mean the administrative committee appointed
pursuant to Section 3.
(d) "Company" shall mean MGM Grand, Inc., a Delaware corporation.
(e) "Employee" shall mean an employee as defined in accordance with
Treasury Regulation (S)1.421-7(h)(1).
(f) "Incentive Option" shall mean an option to purchase shares of
Stock, subject to the terms and conditions described in the Incentive Plan,
which is an incentive stock option within the meaning of Code Section 422.
(g) "Incentive Plan" shall mean the MGM Grand, Inc. 1997 Incentive
Stock Option Plan.
(h) "Participant" shall mean an employee of the Company or any
Subsidiary who is designated to receive Incentive Options pursuant to Section 3.
(i) "Stock" shall mean the Company's $.01 par value common stock.
(j) "Subsidiary" shall mean a subsidiary corporation as defined in
Code Section 424(f).
3. Administration. The Incentive Plan shall be administered by the
Committee, consisting of at least two members, who shall be members of the
Board, appointed by and holding office as Committee members at the pleasure of
the Board. Subject to the provisions of the Incentive Plan, the Committee
shall have the power to (a) determine and designate from time to time those
Employees who
<PAGE>
perform services for the Company or for any Subsidiary who shall be Participants
in the Incentive Plan and the number of shares of Stock to be subject to the
Incentive Options to be granted to each Participant; provided, however, that no
Incentive Option shall be granted after the expiration of the period of ten
years from the effective date of the Incentive Plan specified in Section 9; (b)
authorize the granting of Incentive Options to Participants; and (c) determine
the time or times and the manner when each Incentive Option shall be exercisable
and the duration of the exercise period.
For all purposes of the Incentive Plan, the fair market value of the Stock
shall be determined in good faith by the Committee by applying the rules and
principles of valuation set forth in Treasury Regulations (S)20.2031-2, relating
to the valuation of stocks and bonds for purposes of Code (S)2031.
The Committee may interpret the Incentive Plan, prescribe, amend, and
rescind any rules and regulations necessary or appropriate for the
administration of the Incentive Plan, and make such other determinations and
take such other action as it deems necessary or advisable. Without limiting the
generality of the foregoing sentence, the Committee may, in its discretion,
treat all or any portion of any period during which a Participant is on military
or on an approved leave of absence from the Company or a Subsidiary as a period
of service of such Participant with the Company or a Subsidiary, as the case
may be, for purposes of accrual of such Participant's rights under the Incentive
Options. Any interpretation, determination, or other action made or taken by
the Committee shall be final, binding, and conclusive. Any action reduced to
writing and signed by all members of the Committee shall be as fully effective
as if it had been taken by vote at a meeting duly called and held. No member of
the Committee shall be personally liable for any action, determination or
interpretation made in good faith with respect to the Incentive Plan or the
Incentive Options.
4. Benefits Available Under the Incentive Plan. The benefits provided by
the Incentive Plan to Participants are Incentive Options. Incentive Options may
be granted by the Company from time to time for all Participants to acquire up
to an aggregate of 1,500,000 shares of Stock, subject to adjustment as provided
in Paragraph 5(i), and reduced by the number of shares subject to options which
are granted under the MGM Grand, Inc. 1997 Nonqualified Stock Option Plan. The
shares to be delivered upon exercise of Incentive Options shall be made
available, at the discretion of the Board, either from authorized but unissued
shares of Stock or from Stock reacquired by the Company, including shares
purchased in the open market. If any Incentive Option terminates, expires or is
canceled with respect to any shares of Stock, new Incentive Options may
thereafter be granted covering such shares.
5. Terms and Conditions. Each Incentive Option shall be evidenced by an
agreement (the "Agreement"), in a form approved by the Committee, which shall be
signed by an officer of the Company and the Participant receiving the Incentive
Option, and which shall be subject to the following express terms and conditions
and to such other terms and conditions as the Committee may deem appropriate:
(a) Period. Each Agreement shall specify that the Incentive Option
thereunder is granted for a period not to exceed ten years (the "Option Period")
and shall provide that the Incentive Option shall expire at the end of such
period.
(b) Option Price. The price per share at which an Incentive Option
may be exercised (the "Option Price") shall be determined by the Committee at or
prior to the time the
<PAGE>
Incentive Option is granted, but shall be at least equal to the fair market
value per share at the time the Incentive Option is granted.
(c) Exercise of Option. In order to exercise Incentive Options, the
person or persons entitled to exercise them shall give written notice to the
Company specifying the number of shares to be purchased pursuant to the exercise
of Incentive Options. This notice shall be accompanied by payment for the shares
as provided in Paragraph 5(e). Options may be exercised at such time or times as
may be determined by the Committee at the time of grant, subject to the
provisions of this Section 5, including the following limitations: no part of
any Incentive Option may be exercised until the Participant holding the
Incentive Option shall have performed services for the Company or for a parent
or Subsidiary for such period after the date on which the Incentive Option is
granted as the Committee may specify in the Agreement; provided, however, that,
although an Incentive Option may provide for earlier exercise, the Incentive
Option shall be exercisable with respect to at least 20 percent of the shares
subject thereto no later than the first anniversary of the grant of the
Incentive Option, 40 percent of such shares no later than the second such
anniversary, 60 percent of such shares no later than the third such anniversary,
80 percent of such shares no later than the fourth such anniversary, and 100
percent of such shares no later than the fifth such anniversary; and provided,
further, that no Incentive Option may at any time be exercised in part with
respect to fewer than the lesser of (i) fifty shares, or (ii) the number of
shares which remain to be purchased pursuant to the Incentive Option.
(d) Ten-percent Owners. Notwithstanding the provisions of Paragraphs
5(b) and 5(c), the following terms and conditions shall apply to Incentive
Options granted to a "ten-percent owner." For this purpose, a "ten-percent
owner" shall mean a Participant who, at the time the Incentive Option is
granted, owns stock possessing more than ten percent of the total combined
voting power of all classes of stock of the Company or of any Subsidiary. With
respect to a ten-percent owner: (1) the price at which shares of stock may be
purchased under the Incentive Option shall not be less than 110 percent of the
fair market value thereof, said fair market value determined in the manner
described in Paragraph 5(b); and (2) the period during which the Incentive
Option may be exercised shall expire not later than five years from the date the
Incentive Option is granted.
(e) Payment of Option Price. The Option Price of the Stock
transferred to a Participant pursuant to the exercise of an Incentive Option
shall be paid to the Company at the time of delivery of notice of exercise: (1)
in cash; (2) with previously acquired Stock having a fair market value equal to
the Option Price; or (3) with cash and previously acquired Stock having a fair
market value which together with the cash is equal to the Option Price.
(f) Limitation on the Value of Incentive Options. The aggregate fair
market value (determined at the time an option is granted) of the Stock with
respect to which Incentive Options described in Code Section 422(b) are
exercisable for the first time by any Participant during any calendar year
(under all plans of the Company and any parent and any Subsidiary) shall not
exceed $100,000.
(g) Exercise in the Event of Death or Termination of Employment.
<PAGE>
If a Participant holding Incentive Options shall terminate employment by the
Company and its Subsidiaries because of death, or shall die within three months
of termination of employment by the Company and its Subsidiaries, the Incentive
Options held by the Participant may be exercised, to the extent that the
Participant was entitled to do so at the date of termination of employment, by
the person or persons to whom the Participant's rights under the Incentive
Options pass by will or applicable law, or if no such person has such rights, by
the Participant's executors or administrators, at any time, or from time to
time, within one year after the date of such termination of employment, but in
no event later than the expiration date determined pursuant to Paragraph 5(a).
If a Participant's employment by the Company, its Parent and Subsidiaries shall
terminate for any reason other than death, Incentive Options held by such
Participant may be exercised, to the extent the Participant was entitled to do
so at the date of termination of employment, at any time, or from time to time,
within three months after the date of termination of employment, but in no event
later than the expiration date determined pursuant to Paragraph 5(a).
(h) Nontransferability. No Incentive Option granted under the
Incentive Plan shall be transferable other than by will or by the laws of
descent and distribution. No interest of any Participant under the Incentive
Plan shall be subject to attachment, execution, garnishment, sequestration, the
laws of bankruptcy or any other legal or equitable process. During the lifetime
of the Participant, Incentive Options shall be exercisable only by the
Participant who received them.
(i) Investment Representation. Each Agreement shall contain a
provision that, upon demand by the Company for such a representation, the
Participant holding the Incentive Options (or any person acting under Paragraph
5(g)) shall deliver to the Company at the time of any exercise of any Incentive
Options a written representation that the shares to be acquired upon such
exercise are to be acquired for investment and not for resale or with a view to
the distribution thereof. Upon such demand, delivery of such representation
prior to the delivery of any shares issued upon exercise of Incentive Options
and prior to the expiration of the Option Period shall be a condition precedent
to the right of the Participant or such other person to acquire any shares.
(j) Adjustments in Event of Change in Stock. In the event of any
change in the stock by reason of any stock dividend, recapitalization,
reorganization, merger, consolidation, split-up, combination, or exchange of
shares, or of any similar change affecting the stock, the number and class of
shares which thereafter may be acquired under the Incentive Plan, the number and
class of shares subject to outstanding Agreements, the Option Price per share
thereof, and any other terms of the Incentive Plan or the Agreements which in
the Committee's sole discretion require adjustment (including, without
limitation, relating to the Stock, other securities, cash or other consideration
which may be acquired upon exercise of the Incentive Options) shall be
appropriately adjusted consistent with such change in such manner as the
Committee may deem appropriate.
(k) No Rights as Stockholder. No Participant shall have any rights as
a stockholder with respect to any shares subject to Incentive Options prior to
the date of issuance to the Participant of a certificate or certificates for
such shares.
(l) No Rights to Continued Employment. Neither the Incentive Plan nor
any Incentive Options granted under the Incentive Plan shall not confer upon any
Employee any right with respect to continuance of employment by the Company or
any parent or Subsidiary, nor shall they interfere in any way with the right of
the Company or any parent or Subsidiary for which a Participant
<PAGE>
performs services to terminate such employment at any time.
(m) Arrangement for Tax Payment. Each Agreement shall contain a
provision that the Participant shall agree to make any arrangements required by
the Committee to insure that the amount of tax required to be withheld by the
Company or a Subsidiary as a result of the exercise of Nonqualified Options is
available for payment.
(n) Certain Corporate Transactions. Each Agreement shall provide that
nothing in the Incentive Plan or the Agreement shall in any way prohibit the
Company from merging with or consolidating into another corporation, or from
selling or transferring all or substantially all of its assets, or from
distributing all or substantially all of its assets to its stockholders in
liquidation, or from dissolving and terminating its corporate existence, and in
any such event (other than a merger in which the Company is the surviving
corporation and under the terms of which the shares of Stock outstanding
immediately prior to the merger remain outstanding and unchanged), the
Participant shall be entitled to receive, at the time the Incentive Option or
portion thereof would otherwise become exercisable and upon payment of the
Option Price, the same shares of stock, cash or other consideration received by
stockholders of the Company in accordance with such merger, consolidation, sale
or transfer of assets, liquidation or dissolution.
6. Compliance With Other Laws and Regulations. The Incentive Plan, the
grant and exercise of Incentive Options under the Incentive Plan, and the
obligation of the Company to transfer shares under these Incentive Options shall
be subject to all applicable federal and state laws, rules and regulations,
including those related to disclosure of financial and other information to
Participants, and to any approvals by any government or regulatory agency as may
be required. The Company shall not be required to issue or deliver any
certificates for shares of Stock prior to (a) the listing of such shares on any
stock exchange on which the Stock may then be listed, where such listing is
required under the rules or regulations of such exchange, and (b) the compliance
with applicable federal and state securities laws and regulations relating to
the issuance and delivery of such certificates; provided, however, that the
Company shall make all reasonable efforts to so list such shares and to comply
with such laws and regulations.
7. Certain Dispositions. All Incentive Options shall provide that if
the Participant makes a disposition, within the meaning of Code Section 424(c),
of any shares of Stock transferred upon exercise of an Incentive Option within
two years from the date of the granting of the Incentive Option or within one
year after the transfer of the shares of Stock to the Participant pursuant to
the exercise of the Incentive Option, the Participant shall notify the Company
within ten days of the disposition. The Company may cause an appropriate legend
to be affixed to any stock certificates representing the shares of Stock issued
under the Plan to enable it to receive notice of the disposition.
8. Amendment and Discontinuance. The Board may from time to time amend,
suspend or discontinue the Incentive Plan; provided, however, that, subject to
the provisions of Paragraph 5(i), no action of the Board, or any committee
thereof, may (a) increase the number of shares reserved for options pursuant
to Section 4 without approval of the stockholders of the Company, (b) permit
the granting of any Incentive Option at an Option Price less than that
determined in accordance with Paragraph 5(b), (c) permit the granting of
Incentive Options which expire beyond the period provided for in
<PAGE>
Paragraph 5(a), or (d) make any material change in the class of eligible
Employees as defined in the Incentive Plan.
9. Compliance with Rule 16(b)(3) of the Securities Exchange Act of 1934.
(a) The Incentive Plan is intended to comply with all applicable conditions of
Rule 16(b)(3) under the Securities Exchange Act of 1934, as amended, or any
successor rule; (b) all transactions involving insider Participants are subject
to such conditions, regardless of whether the conditions are expressly set forth
in the Incentive Plan; and (c) any provision of the Incentive Plan or action by
the Committee that is contrary to a condition of Rule 16(b)(3) shall not apply
to insider-participants.
10. Effective Date. The effective date of the Incentive Plan shall be the
earlier of the date the Incentive Plan is adopted by the Board or the date it is
approved by the stockholders of the Company.
<PAGE>
EXHIBIT 5
[LETTERHEAD OF CHRISTENSEN, MILLER, FINK, JACOBS, GLASER, WEIL & SHAPIRO, LLP]
DIRECT DIAL NUMBER
(310) 553-3000
December 16, 1997
MGM Grand, Inc.
3799 Las Vegas Blvd. South
Las Vegas, NV 89109
Re: Registration Statement on Form S-8
----------------------------------
Gentlemen:
You have requested our opinion, as counsel for MGM Grand, Inc., a Delaware
corporation (the "Company"), in connection with the registration under the
Securities Act of 1933, as amended, of 1,500,000 shares (the "Shares") of the
Company's common stock, $.01 par value per share (the "Common Stock"), issuable
pursuant to the Company's 1997 Nonqualified Stock Option Plan and the 1997 Stock
Incentive Plan (collectively, the "Options Plans"). The Shares are the subject
of the Company's Registration Statement on Form S-8 to be filed with the
Securities and Exchange Commission in December 1997 (the "Registration
Statement").
In rendering our opinion herein, we have assumed the satisfaction of the
following conditions: the issuance of the Shares to be issued under the Option
Plans in accordance with the terms thereof; the issuance by any applicable
regulatory agencies of all appropriate permits, consents, approvals,
authorizations and orders relating to the issuance and sale of the Shares in
their respective jurisdictions; the Registration Statement becoming effective;
the offering and sale of the Shares in the manner set forth in the Option Plans
and pursuant to said permits, consents, approvals, authorizations and orders;
and the reservation by the Company of a sufficient number of shares of Common
Stock for issuance under the Option Plans.
Based upon the foregoing, it is our opinion that the Shares, when issued,
will be legally issued, fully paid and nonassessable.
<PAGE>
MGM Grand, Inc.
December 16, 1997
Page 2
The undersigned hereby consents to the filing of this opinion as an exhibit
to the Registration Statement and to all references to the undersigned in the
Registration Statement.
Very truly yours,
/s/ CHRISTENSEN, MILLER, FINK, JACOBS, GLASER, WEIL & SHAPIRO, LLP
CHRISTENSEN, MILLER, FINK, JACOBS
GLASER, WEIL & SHAPIRO, LLP
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
by reference in this Registration Statement on Form S-8 of our reports dated
January 30, 1997 included or incorporated by reference in MGM Grand, Inc.'s
Annual Report on Form 10-K for the year ended December 31, 1996 and to all
references to our Firm included in this Registration Statement.
ARTHUR ANDERSEN LLP
Las Vegas, Nevada
December 18, 1997
