Deferred Compensation Plan - MGM Mirage
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Deferred Compensation Plan
MASTER PLAN DOCUMENT
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EFFECTIVE JANUARY 1, 2001
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Deferred Compensation Plan
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TABLE OF CONTENTS
PAGE
PURPOSE ...............................................................................................1
ARTICLE 1 DEFINITIONS....................................................................................1
ARTICLE 2 SELECTION, ENROLLMENT, ELIGIBILITY.............................................................6
2.1 SELECTION BY COMMITTEE.........................................................................6
2.2 ENROLLMENT REQUIREMENTS........................................................................6
2.3 ELIGIBILITY; COMMENCEMENT OF PARTICIPATION.....................................................7
2.4 TERMINATION OF PARTICIPATION AND/OR DEFERRALS..................................................7
ARTICLE 3 DEFERRAL COMMITMENTS/COMPANY CONTRIBUTION/COMPANY MATCHING/CREDITING TAXES.....................7
3.1 MINIMUM DEFERRALS..............................................................................7
3.2 MAXIMUM DEFERRALS..............................................................................7
3.3 ELECTION TO DEFER; EFFECT OF ELECTION FORM.....................................................8
3.4 WITHHOLDING OF ANNUAL DEFERRAL AMOUNTS.........................................................8
3.5 TRANSFER AMOUNT...............................................................................8
3.6 ANNUAL COMPANY MATCHING AMOUNT.................................................................8
3.7 VESTING........................................................................................9
3.8 CREDITING/DEBITING OF ACCOUNT BALANCES........................................................10
3.9 ANNUAL COMPANY CONTRIBUTION AMOUNT............................................................11
3.10 FICA AND OTHER TAXES..........................................................................11
ARTICLE 4 SHORT-TERM PAYOUT; UNFORESEEABLE FINANCIAL EMERGENCIES; WITHDRAWAL ELECTION...................12
4.1 SHORT-TERM PAYOUT.............................................................................12
4.2 OTHER BENEFITS TAKE PRECEDENCE OVER SHORT-TERM................................................12
4.3 WITHDRAWAL PAYOUT/SUSPENSIONS FOR UNFORESEEABLE FINANCIAL EMERGENCIES.........................13
4.4 WITHDRAWAL ELECTION...........................................................................13
ARTICLE 5 RETIREMENT BENEFIT............................................................................13
5.1 RETIREMENT BENEFIT............................................................................13
5.2 PAYMENT OF RETIREMENT BENEFIT.................................................................13
5.3 DEATH PRIOR TO COMPLETION OF RETIREMENT BENEFIT...............................................14
ARTICLE 6 PRE-RETIREMENT SURVIVOR BENEFIT...............................................................14
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6.1 PRE-RETIREMENT SURVIVOR BENEFIT...............................................................14
6.2 PAYMENT OF PRE-RETIREMENT SURVIVOR BENEFIT....................................................14
ARTICLE 7 TERMINATION BENEFIT...........................................................................15
7.1 TERMINATION BENEFIT...........................................................................15
7.2 PAYMENT OF TERMINATION BENEFIT................................................................15
7.3 DEATH PRIOR TO COMPLETION OF RETIREMENT BENEFIT...............................................15
ARTICLE 8 DISABILITY WAIVER AND BENEFIT.................................................................15
8.1 DISABILITY WAIVER.............................................................................15
8.2 CONTINUED ELIGIBILITY; DISABILITY BENEFIT.....................................................16
ARTICLE 9 BENEFICIARY DESIGNATION.......................................................................16
9.1 BENEFICIARY...................................................................................16
9.2 BENEFICIARY DESIGNATION; CHANGE; SPOUSAL CONSENT..............................................16
9.3 ACKNOWLEDGEMENT...............................................................................16
9.4 NO BENEFICIARY DESIGNATION....................................................................17
9.5 DOUBT AS TO BENEFICIARY.......................................................................17
9.6 DISCHARGE OF OBLIGATIONS......................................................................17
ARTICLE 10 LEAVE OF ABSENCE..............................................................................17
10.1 PAID LEAVE OF ABSENCE.........................................................................17
10.2 UNPAID LEAVE OF ABSENCE.......................................................................17
ARTICLE 11 TERMINATION, AMENDMENT OR MODIFICATION........................................................17
11.1 TERMINATION...................................................................................17
11.2 AMENDMENT.....................................................................................18
11.3 PLAN AGREEMENT................................................................................18
11.4 EFFECT OF PAYMENT.............................................................................18
ARTICLE 12 ADMINISTRATION................................................................................18
12.1 COMMITTEE DUTIES..............................................................................18
12.2 AGENTS........................................................................................19
12.3 BINDING EFFECT OF DECISIONS...................................................................19
12.4 INDEMNITY OF COMMITTEE........................................................................19
12.5 EMPLOYER INFORMATION..........................................................................19
ARTICLE 13 OTHER BENEFITS AND AGREEMENTS.................................................................19
13.1 COORDINATION WITH OTHER BENEFITS..............................................................19
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ARTICLE 14 CLAIMS PROCEDURES.............................................................................20
14.1 PRESENTATION OF CLAIM.........................................................................20
14.2 NOTIFICATION OF DECISION......................................................................20
14.3 REVIEW OF A DENIED CLAIM......................................................................20
14.4 DECISION ON REVIEW............................................................................20
14.5 LEGAL ACTION..................................................................................21
ARTICLE 15 TRUST.........................................................................................21
15.1 ESTABLISHMENT OF THE TRUST....................................................................21
15.2 INTERRELATIONSHIP OF THE PLAN AND THE TRUST...................................................21
15.3 DISTRIBUTIONS FROM THE TRUST..................................................................21
15.4 INVESTMENT OF TRUST ASSETS....................................................................21
15.5 NO CLAIM ON TRUST ASSETS......................................................................21
ARTICLE 16 MISCELLANEOUS.................................................................................22
16.1 STATUS OF PLAN................................................................................22
16.2 UNSECURED GENERAL CREDITOR....................................................................22
16.3 EMPLOYER'S LIABILITY..........................................................................22
16.4 NONASSIGNABILITY..............................................................................22
16.5 NOT A CONTRACT OF EMPLOYMENT..................................................................22
16.6 FURNISHING INFORMATION........................................................................23
16.7 TERMS.........................................................................................23
16.8 CAPTIONS......................................................................................23
16.9 GOVERNING LAW.................................................................................23
16.10 NOTICE........................................................................................23
16.11 SUCCESSORS....................................................................................23
16.12 SPOUSE'S INTEREST.............................................................................23
16.13 VALIDITY......................................................................................23
16.14 INCOMPETENT...................................................................................24
16.15 COURT ORDER...................................................................................24
16.16 DISTRIBUTION IN THE EVENT OF TAXATION.........................................................24
16.17 LEGAL FEES TO ENFORCE RIGHTS AFTER CHANGE IN CONTROL..........................................24
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Deferred Compensation Plan
MASTER PLAN DOCUMENT
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MGM MIRAGE
DEFERRED COMPENSATION PLAN
Effective January 1, 2001
PURPOSE
The purpose of this Plan is to provide specified benefits to a select group
of management and highly compensated Employees who contribute materially to the
continued growth, development and future business success of MGM MIRAGE, a
Delaware corporation, and its subsidiaries that sponsor this Plan. This Plan
shall be unfunded for tax purposes and for purposes of Title I of ERISA.
ARTICLE 1
DEFINITIONS
For purposes of this Plan, unless otherwise clearly apparent from the
context, the following phrases or terms shall have the following indicated
meanings:
1.1 "Account Balance" shall mean, with respect to a Participant, a credit on
the records of the Employer equal to the sum of (i) the Deferral Account
balance, (ii) the Company Contribution Account balance, (iii) the Company
Matching Account balance and (iv) the Transfer Account balance. The Account
Balance, and each other specified account balance, shall be a bookkeeping
entry only and shall be utilized solely as a device for the measurement and
determination of the amounts to be paid to a Participant, or his or her
designated Beneficiary, pursuant to this Plan.
1.2 "Annual Company Contribution Amount" shall mean, for any one Plan Year, the
amount determined in accordance with Section 3.9.
1.3 "Annual Company Matching Amount" shall mean, for any one Plan Year, the
amount determined in accordance with Section 3.6.
1.4 "Annual Deferral Amount" shall mean that portion of a Participant's Base
Annual Salary and Bonus that a Participant elects to have, and is, deferred
in accordance with Article 3, for any one Plan Year. In the event of a
Participant's Retirement, Disability (if deferrals cease in accordance with
Section 8.1), death or a Termination of Employment prior to the end of a
Plan Year, such year's Annual Deferral Amount shall be the actual amount
withheld prior to such event.
1.5 "Base Annual Salary" shall mean the annual cash compensation relating to
services performed during any calendar year, whether or not paid in such
calendar year or included on the Federal Income Tax Form W-2 for such
calendar year, excluding bonuses, commissions, overtime, fringe benefits,
stock options, relocation expenses, incentive payments, non-monetary awards
and other fees, automobile and other allowances paid to a Participant for
employment services rendered (whether or not such allowances are included
in the Employee's gross income). Base Annual Salary shall be calculated
before reduction for compensation voluntarily deferred or contributed by
the Participant pursuant to all qualified or non-qualified plans of any
Employer and shall be calculated to include amounts not otherwise included
in the Participant's gross income under Code Section 125, 402(e)(3),
402(h), or 403(b) pursuant to plans established by any Employer;
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provided, however, that all such amounts will be included in compensation
only to the extent that, had there been no such plan, the amount would have
been payable in cash to the Employee.
1.6 "Beneficiary" shall mean one or more persons, trusts, estates or other
entities, designated in accordance with Article 9, that are entitled to
receive benefits under this Plan upon the death of a Participant or the
death of a predecessor Beneficiary receiving benefits under the Plan.
1.7 "Beneficiary Designation Form" shall mean the form established from time to
time by the Committee that a Participant completes, signs and returns to
the Committee to designate one or more Beneficiaries.
1.8 "Board" shall mean the board of directors of the Company.
1.9 "Bonus" shall mean any cash compensation, in addition to Base Annual
Salary, paid in a Plan Year to a Participant as an Employee under any
Employer's bonus or cash incentive plans or policies (whether written or
oral).
1.10 "Change in Control" shall mean the first to occur of any of the following
events:
(a) Any "person" or "group" of persons (as such terms are used in Section
13 and 14(d)(2) of the Securities Exchange Act of 1934, as amended
("Exchange Act")), other than Tracinda Corporation, Kirk Kerkorian,
members of the immediate family of Kirk Kerkorian, the heirs and
legatees of Kirk Kerkorian and trusts or other entities for the
benefit of such persons or affiliates of such persons (as such term
"affiliates" is defined in the rules promulgated by the Securities and
Exchange Commission), becomes the beneficial owner (as that term is
used in Section 13(d) of the Exchange Act), directly or indirectly, of
fifty percent (50%) or more of the Company's capital stock entitled to
vote generally in the election of directors. (For the avoidance of
doubt, as of the date of the adoption of this Plan, Tracinda
Corporation and its sole shareholder, Kirk Kerkorian, are the
beneficial owners of in excess of fifty percent (50%) of the Company's
capital stock);
(b) At any time, individuals who, at the date of the adoption of this
Plan, constitute the Board, and any new director (other than a
director designated by a person who has entered into an agreement with
the Company to effect a transaction described in clause (a), (c), (d)
or (e) of this Section 1.10) whose election by the Board or nomination
for election by the Company's shareholders was approved by a majority
vote of either (1) the directors then still in office who either were
directors at the beginning of the period or whose election or
nomination for election was previously so approved, or (2) the members
of the Company's Executive Committee then still in office who either
were members at the beginning of the period or whose election or
nomination for election to the Executive Committee was previously so
approved by the directors or the Executive Committee, cease for any
reason to constitute at least a majority of the Board;
(c) Any consolidation or merger of the Company, other than a consolidation
or merger of the Company in which the holders of the common stock of
the Company immediately prior to the consolidation or merger hold more
than fifty percent (50%) of the common stock of the surviving
corporation immediately after the consolidation or merger;
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(d) Any liquidation or dissolution of the Company; or
(e) The sale or transfer of all or substantially all of the assets of the
Company to parties that are not within a "controlled group of
corporations" (as defined in Code Section 1563) in which the Company
is a member.
1.11 "Claimant" shall have the meaning set forth in Section 14.1.
1.12 "Code" shall mean the Internal Revenue Code of 1986, as it may be amended
from time to time.
1.13 "Committee" shall mean the committee described in Article 12.
1.14 "Company" shall mean MGM MIRAGE, a Delaware corporation, and any successor
to all or substantially all of the Company's assets or business.
1.15 "Company Contribution Account" shall mean the sum of (a) and (b) less the
sum of (c), (d) and (e):
(a) All of the Participant's Annual Company Contribution Amounts.
(b) Amounts credited or debited in accordance with all applicable
crediting provisions of this Plan that relate to the Participant's
Company Contribution Account.
(c) Any forfeitures under Section 3.7.
(d) Any penalty under Section 4.4.
(e) All distributions made to the Participant or his or her Beneficiary
pursuant to this Plan that relate to the Participant's Company
Contribution Account.
1.16 "Company Matching Account" shall mean the sum of (a) and (b) less the sum
of (c), (d) and (e):
(a) All of the Participant's Annual Company Matching Amounts.
(b) Amounts credited or debited in accordance with all applicable
crediting provisions of this Plan that relate to the Participant's
Company Matching Account.
(c) Any forfeitures under Section 3.7.
(d) Any penalty under Section 4.4.
(e) All distributions made to the Participant or his or her Beneficiary
pursuant to this Plan that relate to the Participant's Company
Matching Account.
1.17 "Deduction Limitation" shall mean the following described limitation on a
benefit that may otherwise be distributable pursuant to the provisions of
this Plan. Except as otherwise provided, this limitation shall be applied
to all distributions that are "subject to the Deduction Limitation" under
this Plan. If an Employer determines in good faith prior to a Change in
Control that there is a reasonable likelihood that any compensation paid to
a Participant for a taxable year of the Employer would not be deductible by
the Employer solely by reason of the limitation under Code Section 162(m),
then to the extent deemed necessary by the Employer to ensure that the
entire amount of any distribution to the Participant pursuant to this Plan
prior to the Change in Control is deductible, the Employer may defer all or
any portion of a distribution under this Plan. Any
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amounts deferred pursuant to this limitation shall continue to be
credited/debited with additional amounts in accordance with Section 3.8,
even if such amount is being paid out in installments. The amounts so
deferred and amounts credited thereon shall be distributed to the
Participant or his or her Beneficiary (in the event of the Participant's
death) at the earliest possible date, as determined by the Employer in good
faith, on which the deductibility of compensation paid or payable to the
Participant for the taxable year of the Employer during which the
distribution is made will not be limited by Section 162(m).
1.18 "Deferral Account" shall mean the sum of (a) and (b) less the sum of (c)
and (d):
(a) The sum of all of a Participant's Annual Deferral Amounts.
(b) Amounts credited or debited in accordance with all applicable
crediting provisions of this Plan that relate to the Participant's
Deferral Account.
(c) Any penalty under Section 4.4.
(d) All distributions made to the Participant or his or her Beneficiary
pursuant to this Plan that relate to his or her Deferral Account.
1.19 "Disability shall mean incapacity for medical reasons certified by a
licensed physician that precludes a Participant from performing the
essential functions of the Participant's duties of employment for a
substantially consecutive period of six months or more, as such disability
is determined by the Committee in its sole discretion.
1.20 "Disability Benefit" shall mean the benefit set forth in Article 8.
1.21 "Election Form" shall mean the form established from time to time by the
Committee that a Participant completes, signs and returns to the Committee
to make an election under the Plan.
1.22 "Employee" shall mean a person who is an employee of any Employer.
1.23 "Employer(s)" shall mean the Company and/or any of its subsidiaries (now in
existence or hereafter formed or acquired) that have been selected by the
Board to participate in the Plan and have adopted the Plan as a sponsor.
1.24 "ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
it may be amended from time to time.
1.25 "401(k) Savings Plan" shall mean, collectively, the MGM Grand Hotel, Inc.
Employees 401(k) Savings Plan, as amended, and the Mirage Resorts,
Incorporated Retirement Savings Voluntary Participation Plan, as amended.
1.26 "Participant" shall mean any Employee (i) who is selected to participate in
the Plan, (ii) who elects to participate in the Plan, (iii) who signs a
Plan Agreement, an Election Form and a Beneficiary Designation Form, (iv)
whose signed Plan Agreement, Election Form and Beneficiary Designation Form
are accepted by the Committee, (v) who commences participation in the Plan,
and (vi) whose Plan Agreement has not terminated. A spouse or former spouse
of a Participant, as such, shall not be treated as a Participant in the
Plan or have an account balance under the Plan, even if he or she has an
interest in the Participant's benefits under the Plan in
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accordance with Article 5 or 6 of the Plan, or as a result of applicable
law or property settlements resulting from legal separation or divorce.
1.27 "Plan" shall mean the Company's Deferred Compensation Plan, which shall be
evidenced by this instrument and by each Plan Agreement, as they may be
amended from time to time.
1.28 "Plan Agreement" shall mean a written agreement, as may be amended from
time to time, which is entered into by and between an Employer and a
Participant. Each Plan Agreement executed by a Participant and the
Participant's Employer shall provide for the entire benefit to which such
Participant is entitled under the Plan; should there be more than one Plan
Agreement, the Plan Agreement bearing the latest date of acceptance by the
Employer shall supersede all previous Plan Agreements in their entirety and
shall govern such entitlement. The terms of any Plan Agreement may be
different for any Participant, and any Plan Agreement may provide
additional benefits not set forth in the Plan or limit the benefits
otherwise provided under the Plan; provided, however, that any such
additional benefits or benefit limitations must be agreed to by both the
Employer and the Participant.
1.29 "Plan Year" shall mean, for the first Plan Year, a period beginning on the
effective date of this Plan and ending on December 31 of the calendar year.
For each subsequent Plan Year, a Plan Year shall mean a period beginning on
January 1 of each calendar year and continuing through December 31 of such
calendar year.
1.30 "Pre-Retirement Survivor Benefit" shall mean the benefit set forth in
Article 6.
1.31 "Quarterly Installment Method" shall mean quarterly installment payments
over the number of quarters selected by the Participant in accordance with
this Plan, calculated as follows: the vested Account Balance of the
Participant shall be calculated as of the close of business on the last
business day of the calendar quarter in which the Participant becomes
entitled to a quarterly installment payment under this Plan. The quarterly
installment shall be calculated by multiplying this balance by a fraction,
the numerator of which is one, and the denominator of which is the
remaining number of quarterly payments due the Participant. By way of
example, if the Participant elects 40 quarters, the first payment shall be
1/40 of the vested Account Balance, calculated as described in this
definition. For the following calendar quarter, the payment shall be 1/39
of the vested Account Balance, calculated as described in this definition.
1.32 "Retirement", "Retire(s)" or "Retired" shall mean, with respect to an
Employee, severance from employment from all Employers for any reason other
than an authorized leave of absence, death or Disability on or after the
earlier of the attainment of (a) age sixty-five (65) or (b) age fifty-five
(55) with ten (10) Years of Service.
1.33 "Retirement Benefit" shall mean the benefit set forth in Article 5.
1.34 "Short-Term Payout" shall mean the payout set forth in Section 4.1.
1.35 "Termination Benefit" shall mean the benefit set forth in Article 7.
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1.36 "Termination of Employment" shall mean the severing of employment with all
Employers, voluntarily or involuntarily, for any reason other than
Retirement, Disability, death or an authorized leave of absence.
1.37 "Transfer Account" shall mean the sum of (a) and (b) less the sum of (c)
and (d):
(a) The amount credited to this Plan pursuant to Section 3.5.
(b) Amounts credited or debited in accordance with all applicable
crediting provisions of this Plan that relate to the Participant's
Transfer Account.
(c) Any penalty under Section 4.4.
(d) All distributions made to the Participant or his or her Beneficiary
pursuant to this Plan that relate to his or her Transfer Account.
1.38 "Trust" shall mean one or more trusts established in accordance with
Section 15.1.
1.39 "Unforeseeable Financial Emergency" shall mean an unanticipated emergency
that is caused by an event beyond the control of the Participant that would
result in severe financial hardship to the Participant resulting from (i) a
sudden and unexpected illness or accident of the Participant or a dependent
of the Participant, (ii) a loss of the Participant's property due to
casualty, or (iii) such other extraordinary and unforeseeable circumstances
arising as a result of events beyond the control of the Participant, all as
determined in the sole discretion of the Committee.
1.40 "Years of Service" shall mean the total number of full years of employment
in which a Participant has been employed by one or more Employers. For
purposes of this definition, a year of employment shall be a 365 day period
(or 366 day period in the case of a leap year) that, for the first year of
employment, commences on the Employee's date of hiring and that, for any
subsequent year, commences on an anniversary of that hiring date. Any
partial year of employment shall not be counted.
1.41 "Year of Vesting Service" shall mean a full year of employment in which a
Participant has been employed by one or more Employers. For purposes of
this definition, a year of employment shall be a 365 day period (or 366 day
period in the case of a leap year).
ARTICLE 2
SELECTION, ENROLLMENT, ELIGIBILITY
2.1 SELECTION BY COMMITTEE. Participation in the Plan shall be limited to a
select group of management and highly compensated Employees, as determined
by the Committee in its sole discretion. From that group, the Committee
shall select, in its sole discretion, Employees to participate in the Plan.
Despite the foregoing, any selected Employee hired after December 31, 2000
shall not be eligible to participate in the Plan until he or she has been
employed with an Employer for at least 90 days.
2.2 ENROLLMENT REQUIREMENTS. As a condition to participation, each selected
Employee shall complete, execute and return to the Committee a Plan
Agreement, an Election Form and a
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Beneficiary Designation Form, all within 30 days after he or she is
selected to participate in the Plan. In addition, the Committee shall
establish from time to time such other enrollment requirements as it
determines in its sole discretion are necessary.
2.3 ELIGIBILITY; COMMENCEMENT OF PARTICIPATION. Provided an Employee selected
to participate in the Plan has met all enrollment requirements set forth in
this Plan and required by the Committee, including returning all required
documents to the Committee within the specified time period, that Employee
shall commence participation in the Plan on the first day of the month
following the month in which the Employee completes all enrollment
requirements. If an Employee fails to meet all such requirements within the
period required, in accordance with Section 2.2, that Employee shall not be
eligible to participate in the Plan until the first day of the Plan Year
following the delivery to and acceptance by the Committee of the required
documents (which may occur prior to the effective date of this Plan).
2.4 TERMINATION OF PARTICIPATION AND/OR DEFERRALS. If the Committee determines
in good faith that a Participant no longer qualifies as a member of a
select group of management or highly compensated employees, as membership
in such group is determined in accordance with Sections 201(2), 301(a)(3)
and 401(a)(1) of ERISA, the Committee shall have the right, in its sole
discretion, to (i) terminate any deferral election the Participant has made
for the remainder of the Plan Year in which the Participant's membership
status changes, (ii) prevent the Participant from making future deferral
elections and/or (iii) immediately distribute the Participant's then vested
Account Balance as a Termination Benefit and terminate the Participant's
participation in the Plan. The payment of any amount under this Section 2.4
shall be subject to the Deduction Limitation.
ARTICLE 3
DEFERRAL COMMITMENTS/COMPANY CONTRIBUTION/COMPANY MATCHING/CREDITING/TAXES
3.1 MINIMUM DEFERRALS. For each Plan Year, a Participant may elect to defer, as
his or her Annual Deferral Amount, Base Annual Salary and/or Bonus in the
following minimum percentages for each deferral elected:
DEFERRAL MINIMUM AMOUNT
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Base Annual Salary 2.5%
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Bonus 2.5%
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If an election is made for less than the stated minimum amounts, or if
no election is made, the amount deferred shall be zero.
3.2 MAXIMUM DEFERRALS. For each Plan Year, a Participant may elect to
defer, as his or her Annual Deferral Amount, Base Annual Salary and/or
Bonus up to the following maximum percentages for each deferral
elected:
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DEFERRAL MAXIMUM AMOUNT
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Base Annual Salary 50%
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Bonus 75%
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Notwithstanding the foregoing, if a Participant first becomes a
Participant after the first day of a Plan Year, the maximum Annual
Deferral Amount, with respect to Base Annual Salary and Bonus, shall
be limited to the amount of such compensation not yet earned by the
Participant as of the date the Participant submits a Plan Agreement
and Election Form to the Committee for acceptance.
3.3 ELECTION TO DEFER; EFFECT OF ELECTION FORM.
(a) FIRST PLAN YEAR. In connection with a Participant's commencement of
participation in the Plan, the Participant shall make an irrevocable
deferral election for the Plan Year in which the Participant commences
participation in the Plan, along with such other elections as the
Committee deems necessary or desirable under the Plan. For these
elections to be valid, the Election Form must be completed and signed
by the Participant, timely delivered to the Committee (in accordance
with Section 2.2) and accepted by the Committee.
(b) SUBSEQUENT PLAN YEARS. For each succeeding Plan Year, an irrevocable
deferral election for that Plan Year, and such other elections as the
Committee deems necessary or desirable under the Plan, shall be made
by timely delivering to the Committee, in accordance with its rules
and procedures, before the end of the Plan Year preceding the Plan
Year for which the election is made (or such earlier time as the
Committee may establish, in its sole discretion), a new Election Form.
If no such Election Form is timely delivered for a Plan Year, the
Annual Deferral Amount shall be zero for that Plan Year.
3.4 WITHHOLDING OF ANNUAL DEFERRAL AMOUNTS. For each Plan Year, the Base Annual
Salary portion of the Annual Deferral Amount shall be withheld from each
regularly scheduled Base Annual Salary payroll in the percentage elected by
the Participant. The Bonus portion of the Annual Deferral Amount shall be
withheld at the time the Bonus is paid to the Participant.
3.5 TRANSFER ACCOUNT. If at the time of a Participant's commencement of
Participation in this Plan, he or she had an "Account" under that certain
MGM Grand Hotel, Inc. Nonqualified Deferred Retirement Plan, restated
effective January 1, 1999 (the "NDRP"), the Participant's balance in that
Account shall automatically be transferred to this Plan and shall be
credited to the Participant's Transfer Account as of the first day of his
or her participation in this Plan. Upon such transfer, this Plan, rather
than the NDRP, shall govern the amount so transferred.
3.6 ANNUAL COMPANY MATCHING AMOUNT. A Participant's Annual Company Matching
Amount for any Plan Year shall be equal to 100% of the sum of (i) the
Participant's Annual Deferral Amount for such Plan Year and (ii) the
Participant's deferrals under the 401(k) Savings Plan for such Plan Year,
up to a combined amount that does not exceed 4% of the Participant's Base
Annual Salary, reduced by the amount of any matching contributions made to
the 401(k) Savings Plan on his or her behalf for the plan year of the
401(k) Savings Plan that corresponds to the Plan Year. This amount shall be
credited to the Participant's Company Matching Account as of the last day
of the Plan Year. If a Participant is not employed by an Employer as of the
last day of a Plan Year
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other than by reason of his or her Retirement, Disability or death, the
Annual Company Matching Amount for such Plan Year shall be zero. In the
event of Retirement, Disability or death, a Participant shall be credited
with the Annual Company Matching Amount for the Plan Year in which he or
she Retires, suffers a Disability or dies at the time of his or her
Retirement, Disability or death.
3.7 VESTING.
(a) A Participant shall at all times be 100% vested in his or her Deferral
Account and Transfer Account.
(b) A Participant shall vest in each Annual Company Matching Amount, plus
earnings thereon, over the applicable vesting period. The applicable
vesting periods are as follows:
(i) For the Participant's first Plan Year of participation in the
Plan, the applicable vesting period for the Annual Company
Matching Amount for that Plan Year shall start on the
Participant's Plan Entry Date and shall continue for three (3)
consecutive Years of Vesting Service, with the Participant
vesting 33 1/3% at the completion of each Year of Vesting
Service.
(ii) For any other Plan Year of the Participant's participation in the
Plan, the applicable vesting period for the Annual Company
Matching Amount for that Plan Year shall start on the first day
of the Plan Year and shall continue for three (3) consecutive
Years of Vesting Service, with the Participant vesting 33 1/3% at
the completion of each Year of Vesting Service.
(c) If applicable, a Participant shall be vested in his or her Annual
Bonus Contribution in accordance with the vesting rules under the
401(k) Savings Plan.
(d) Notwithstanding anything to the contrary contained in this Section
3.7, in the event of a Change in Control or a Participant's death,
Disability or Retirement, a Participant's Company Contribution Account
and Company Matching Account shall immediately become 100% vested (if
it is not already vested in accordance with the above vesting
schedules).
(e) Notwithstanding subsection (d), the vesting schedule for a
Participant's Company Contribution Account and Company Matching
Account shall not be accelerated to the extent that the Committee
determines that such acceleration would cause the deduction
limitations of Section 280G of the Code to become effective. In the
event that all of a Participant's Company Contribution Account and/or
Company Matching Account are not vested pursuant to such a
determination, the Participant may request independent verification of
the Committee's calculations with respect to the application of
Section 280G. In such case, the Committee must provide to the
Participant within 15 business
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days of such a request an opinion from a nationally recognized
accounting firm selected by the Participant (the "Accounting Firm").
The opinion shall state the Accounting Firm's opinion that any
limitation on the vested percentage hereunder is necessary to avoid
the limits of Section 280G and contain supporting calculations. The
reasonable cost of such opinion shall be paid for by the Company.
(f) Any amount not vested under this Section 3.7 when a Participant first
becomes entitled to the payment of a benefit under this Plan shall be
forfeited and debited against the applicable Account Balance.
3.8 CREDITING/DEBITING OF ACCOUNT BALANCES. In accordance with, and subject to,
the rules and procedures that are established from time to time by the
Committee, in its sole discretion, amounts shall be credited or debited to
a Participant's Account Balance in accordance with the following rules:
(a) ELECTION OF MEASUREMENT FUNDS. A Participant, in connection with his
or her initial deferral election in accordance with Section 3.3(a),
shall elect, on the Election Form, one or more Measurement Fund(s) (as
described in Section 3.8(c)) to be used to determine the additional
amounts to be credited or debited to his or her Account Balance. A
Participant may (but is not required to) elect to add or delete one or
more available Measurement Fund(s) to be used to determine the
additional amounts to be credited or debited to his or her Account
Balance, or to change the portion of his or her Account Balance
allocated to each previously or newly elected Measurement Fund. A
Participant may elect to make such a change by submitting an Election
Form, whether written or electronic (as determined by the Committee
from time to time and in its sole discretion), to the Committee. Any
election so made and accepted by the Committee shall apply no later
than the third business day following the Committee's acceptance of
the election. Any such election shall continue to apply, unless
subsequently changed in accordance with this Section 3.3(a).
(b) PROPORTIONATE ALLOCATION. In making any election described in Section
3.8(a), the Participant shall specify on the Election Form, in
increments of five percentage points (5%), the percentage of his or
her Account Balance to be allocated to a Measurement Fund (as if the
Participant were making an investment in that Measurement Fund with
that portion of his or her Account Balance).
(c) MEASUREMENT FUNDS. A Participant may elect one or more measurement
funds (the "Measurement Funds") from among those selected by the
Committee for the purpose of crediting or debiting additional amounts
to his or her Account Balance. As necessary, the Committee may, in its
sole discretion, discontinue, substitute or add Measurement Funds.
Each such action will take effect as of the first day of the calendar
quarter that follows by thirty (30) days or more the day on which the
Committee gives Participants advance written notice of such change. In
selecting the Measurement Funds that are available from time to time,
neither the Committee nor any Employer shall be liable to any
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Participant for such selection or adding, deleting or continuing any
available Measurement Fund.
(d) CREDITING OR DEBITING METHOD. The performance of each elected
Measurement Fund (either positive or negative) will be reasonably
determined by the Committee. A Participant's Account Balance shall be
credited or debited on a daily basis based on the performance of each
Measurement Fund selected by the Participant.
(e) NO ACTUAL INVESTMENT. Notwithstanding any other provision of this Plan
that may be interpreted to the contrary, the Measurement Funds are to
be used for measurement purposes only, and a Participant's election of
any such Measurement Fund, the allocation to his or her Account
Balance thereof, the calculation of additional amounts and the
crediting or debiting of such amounts to a Participant's Account
Balance SHALL NOT be considered or construed in any manner as an
actual investment of his or her Account Balance in any such
Measurement Fund. In the event that the Company or the Trustee (as
that term is defined in the Trust), in its sole discretion, decides to
invest funds in any or all of the Measurement Funds, no Participant
shall have any rights in or to such investments themselves. Without
limiting the foregoing, a Participant's Account Balance shall at all
times be a bookkeeping entry only and shall not represent any
investment made on his or her behalf by the Company or the Trust; and
the Participant shall at all times remain an unsecured creditor of the
Company.
(f) EMPLOYER DISCRETION. Notwithstanding the foregoing provisions of this
Section 3.8, the Committee shall retain the overriding discretion
regarding the Participant's designation of Measurement Funds under
this Section 3.8. If a Participant fails to designate any Measurement
Fund under this Section 3.8, the Participant shall be deemed to have
elected the money market fund, or such other fund as determined from
time to time by the Committee in its sole discretion.
(g) SELECTION RESULTS. The Participant shall bear full responsibility for
all results associated with his or her selection of Measurement Funds
under this Section 3.8, and the Employers shall have no responsibility
or liability with respect to the Participant's selection of such
Measurement Funds.
3.9 ANNUAL COMPANY CONTRIBUTION AMOUNT. For a Participant who is an employee of
any Employer, at the time in which the "Annual Bonus Contribution" (if
applicable to such Participant) is made to the 401(k) Savings Plan, the
Committee shall credit the Participant's Company Contribution Account with
an amount equal to the Annual Company Contribution Amount. For any one Plan
Year, the Annual Company Contribution Amount shall be equal to the amount
of the "Annual Bonus Contribution", as defined under the 401(k) Savings
Plan, that would have been allocated to a Participant under the 401(k)
Savings Plan if not for the application of the nondiscrimination rules of
Sections 410(b) and 401(a)(4) of the Code. If a Participant is not entitled
to an Annual Bonus Contribution under the 401(k) Savings Plan, he or she
shall not be entitled to an Annual Company Contribution Amount under this
Plan.
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3.10 FICA AND OTHER TAXES.
(a) ANNUAL DEFERRAL AMOUNTS. For each Plan Year in which an Annual
Deferral Amount is being withheld from a Participant, the
Participant's Employer(s) shall withhold from that portion of the
Participant's Base Annual Salary and Bonus that is not being deferred,
in a manner determined by the Employer(s), the Participant's share of
FICA and other employment taxes on such Annual Deferral Amount. If
necessary, the Committee may reduce the Annual Deferral Amount in
order to comply with this Section 3.10.
(b) COMPANY CONTRIBUTION AMOUNTS AND COMPANY MATCHING AMOUNTS. When a
Participant becomes vested in any Annual Company Contribution Amount
and/or Annual Company Matching Amount, plus earnings thereon, the
Participant's Employer(s) shall withhold from the Participant's Base
Annual Salary and/or Bonus that is not deferred, in a manner
determined by the Employer(s), the Participant's share of FICA and
other employment taxes. If necessary, the Committee may reduce the
vested portion of the Participant's Company Contribution Account
and/or Company Matching Account in order to comply with this Section
3.10.
(c) DISTRIBUTIONS. The Participant's Employer(s), or the Trustee of the
Trust, shall withhold from any payments made to a Participant under
this Plan all federal, state and local income, employment and other
taxes required to be withheld by the Employer(s), or the Trustee of
the Trust, in connection with such payments, in amounts and in a
manner to be determined in good faith in the sole discretion of the
Employer(s) and the Trustee of the Trust.
ARTICLE 4
SHORT-TERM PAYOUT; UNFORESEEABLE FINANCIAL EMERGENCIES;
WITHDRAWAL ELECTION
4.1 SHORT-TERM PAYOUT. In connection with each election to defer an Annual
Deferral Amount, a Participant may irrevocably elect to receive a future
"Short-Term Payout" from the Plan with respect to such Annual Deferral
Amount. Subject to the Deduction Limitation, the Short-Term Payout shall be
a lump sum payment in an amount that is equal to the Annual Deferral Amount
plus amounts credited or debited in the manner provided in Section 3.8
above on that amount, determined at the time that the Short-Term Payout
becomes payable. Subject to the Deduction Limitation and the other terms
and conditions of this Plan, each Short-Term Payout elected shall be paid
out during a 60 day period commencing immediately after the last day of any
Plan Year designated by the Participant that is at least five Plan Years
after the Plan Year in which the Annual Deferral Amount is actually
deferred. By way of example, if a five-year Short-Term Payout is elected
for Annual Deferral Amounts that are deferred in the Plan Year commencing
January 1, 2002, the five-year Short-Term Payout would become payable
during a 60 day period commencing January 1, 2008.
4.2 OTHER BENEFITS TAKE PRECEDENCE OVER SHORT-TERM. Should an event occur that
triggers a benefit under Article 5, 6, 7 or 8, any Annual Deferral Amount,
plus amounts credited or debited
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thereon, that is subject to a Short-Term Payout election under Section 4.1
shall not be paid in accordance with Section 4.1 but shall be paid in
accordance with the other applicable Article.
4.3 WITHDRAWAL PAYOUT/SUSPENSIONS FOR UNFORESEEABLE FINANCIAL EMERGENCIES. If
the Participant experiences an Unforeseeable Financial Emergency, the
Participant may petition the Committee to (i) suspend any deferrals
required to be made by a Participant during the remaining portion of the
Plan Year and/or (ii) receive a partial or full payout from the Plan. The
payout shall not exceed the lesser of the Participant's vested Account
Balance, calculated as if such Participant were receiving a Termination
Benefit, or the amount reasonably needed to satisfy the Unforeseeable
Financial Emergency. If, in the sole discretion of the Committee, the
petition for a suspension and/or payout is approved, suspension shall take
effect upon the date of approval and any payout shall be made within 60
days of the date of approval. The payment of any amount under this Section
4.3 shall be subject to the Deduction Limitation.
4.4 WITHDRAWAL ELECTION. A Participant (or, after a Participant's death, his or
her Beneficiary) may elect, at any time, to withdraw all or any portion of
his or her vested Account Balance less a withdrawal penalty equal to 10% of
the amount elected to be withdrawn (the net amount shall be referred to as
the "Withdrawal Amount"). This election can be made at any time, before or
after Retirement, Disability, death or Termination of Employment, and
whether or not the Participant (or Beneficiary) is in the process of being
paid pursuant to an installment payment schedule. If made before
Retirement, Disability or death, a Participant's Withdrawal Amount shall
not exceed his or her vested Account Balance calculated as if there had
occurred a Termination of Employment as of the day of the election. The
Participant (or his or her Beneficiary) shall make this election by giving
the Committee advance written notice of the election in a form determined
from time to time by the Committee. The Participant (or his or her
Beneficiary) shall be paid the Withdrawal Amount within 60 days of his or
her election. Once the Withdrawal Amount is paid, the Participant shall not
(i) have additional deferrals withheld pursuant to a current deferral
election (ii) be eligible to elect new deferrals, or (iii) have credited to
his or her a Account Balance any contributions under Section 3.6 or 3.9,
all for the remaining portion of the Plan Year in which the Withdrawal
Amount is paid and for the next two Plan Years. The payment of this
Withdrawal Amount shall be subject to the Deduction Limitation.
ARTICLE 5
RETIREMENT BENEFIT
5.1 RETIREMENT BENEFIT. Subject to the Deduction Limitation, a Participant who
Retires shall receive, as a Retirement Benefit, his or her vested Account
Balance.
5.2 PAYMENT OF RETIREMENT BENEFIT. A Participant, in connection with his or her
commencement of participation in the Plan, may elect on an Election Form to
receive the Retirement Benefit in a lump sum or in installments of up to 60
quarters pursuant to the Quarterly Installment Method. The Participant may
annually change his or her election to an allowable alternative payout
period by submitting a new Election Form to the Committee, provided that
any such Election Form is submitted at least 1 year prior to the
Participant's Retirement and is accepted by the Committee in
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its sole discretion. Subject to the prior sentence, the Election Form most
recently accepted by the Committee shall govern the payout of the
Retirement Benefit. If a Participant does not make any election with
respect to the payment of the Retirement Benefit, then such benefit shall
be payable in a lump sum. The lump sum payment shall be made, or
installment payments shall commence, no later than 60 days after the last
day of the calendar quarter in which the Participant Retires. Any payment
made shall be subject to the Deduction Limitation.
5.3 DEATH PRIOR TO COMPLETION OF RETIREMENT BENEFIT. If a Participant dies
after Retirement but before the Retirement Benefit is paid in full, the
Participant's unpaid Retirement Benefit payments shall continue and shall
be paid to the Participant's Beneficiary (a) over the remaining number of
quarters and in the same amounts as that benefit would have been paid to
the Participant had the Participant survived, or (b) in a lump sum, if
requested by the Beneficiary and allowed in the sole discretion of the
Committee, that is equal to the Participant's unpaid remaining vested
Account Balance.
ARTICLE 6
PRE-RETIREMENT SURVIVOR BENEFIT
6.1 PRE-RETIREMENT SURVIVOR BENEFIT. Subject to the Deduction Limitation, the
Participant's Beneficiary shall receive a Pre-Retirement Survivor Benefit
equal to the Participant's vested Account Balance if the Participant dies
before he or she Retires, experiences a Termination of Employment or
suffers a Disability.
6.2 PAYMENT OF PRE-RETIREMENT SURVIVOR BENEFIT. A Participant, in connection
with his or her commencement of participation in the Plan, may elect on an
Election Form whether the Pre-Retirement Survivor Benefit shall be received
by his or her Beneficiary in a lump sum or in installments of up to 60
quarters pursuant to the Quarterly Installment Method. The Participant may
annually change this election to an allowable alternative payout period by
submitting a new Election Form to the Committee, which form may be accepted
or rejected by the Committee in its sole discretion. Subject to the prior
sentence, the Election Form most recently accepted by the Committee prior
to the Participant's death shall govern the payout of the Participant's
Pre-Retirement Survivor Benefit. If a Participant does not make any
election with respect to the payment of the Pre-Retirement Survivor
Benefit, then such benefit shall be paid in a lump sum. Despite the
foregoing, if the Participant's vested Account Balance at the time of his
or her death is less than $25,000, payment of the Pre-Retirement Survivor
Benefit may be made, in the sole discretion of the Committee, in a lump sum
or in installments of up to 20 quarters pursuant to the Quarterly
Installment Method. The lump sum payment shall be made, or installment
payments shall commence, no later than 60 days after the last day of the
calendar quarter in which the Committee is provided with proof that is
satisfactory to the Committee of the Participant's death. Any payment made
shall be subject to the Deduction Limitation.
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ARTICLE 7
TERMINATION BENEFIT
7.1 TERMINATION BENEFIT. Subject to the Deduction Limitation, the Participant
shall receive a Termination Benefit, which shall be equal to the
Participant's vested Account Balance if a Participant experiences a
Termination of Employment prior to his or her Retirement, death or
Disability.
7.2 PAYMENT OF TERMINATION BENEFIT. A Participant, in connection with his or
her commencement of participation in the Plan, may elect on an Election
Form to receive the Termination Benefit in a lump sum or in installments of
up to 20 quarters pursuant to the Quarterly Installment Method. The
Participant may annually change his or her election to an allowable
alternative payout period by submitting a new Election Form to the
Committee, provided that any such Election Form is submitted at least 1
year prior to the Participant's Termination of Employment and is accepted
by the Committee in its sole discretion. Subject to the prior sentence, the
Election Form most recently accepted by the Committee shall govern the
payout of the Termination Benefit. If a Participant does not make any
election with respect to the payment of the Termination Benefit, then such
benefit shall be payable in a lump sum. The lump sum payment shall be made,
or installment payments shall commence, no later than 60 days after the
last day of the calendar quarter in which the Participant experiences a
Termination of Employment. Any payment made shall be subject to the
Deduction Limitation.
7.3 DEATH PRIOR TO COMPLETION OF TERMINATION BENEFIT. If a Participant dies
after Termination of Employment but before the Termination Benefit is paid
in full, the Participant's unpaid Termination Benefit payments shall
continue and shall be paid to the Participant's Beneficiary (a) over the
remaining number of quarters and in the same amounts as that benefit would
have been paid to the Participant had the Participant survived, or (b) in a
lump sum, if requested by the Beneficiary and allowed in the sole
discretion of the Committee, that is equal to the Participant's unpaid
remaining vested Account Balance.
ARTICLE 8
DISABILITY WAIVER AND BENEFIT
8.1 DISABILITY WAIVER.
(a) WAIVER OF DEFERRAL. A Participant who is determined by the Committee
to be suffering from a Disability shall be excused from fulfilling
that portion of the Annual Deferral Amount commitment that would
otherwise have been withheld from a Participant's Base Annual Salary
and/or Bonus for the Plan Year during which the Participant first
suffers a Disability. During the period of Disability, the Participant
shall not be allowed to make any additional deferral elections, but
will continue to be considered a Participant for all other purposes of
this Plan.
(b) RETURN TO WORK. If a Participant returns to employment with an
Employer after a Disability ceases, the Participant may elect to defer
an Annual Deferral Amount for the
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Plan Year following his or her return to employment or service and for
every Plan Year thereafter while a Participant in the Plan; provided
such deferral elections are otherwise allowed and an Election Form is
delivered to and accepted by the Committee for each such election in
accordance with Section 3.3.
8.2 CONTINUED ELIGIBILITY; DISABILITY BENEFIT. A Participant suffering a
Disability shall, for benefit purposes under this Plan, continue to be
considered to be employed and shall be eligible for the benefits provided
for in Article 4, 5, 6 or 7 in accordance with the provisions of those
Articles. Notwithstanding the above, the Committee shall have the right to,
in its sole and absolute discretion and for purposes of this Plan only, and
must in the case of a Participant who is otherwise eligible to Retire, deem
the Participant to have experienced a Termination of Employment, or in the
case of a Participant who is eligible to Retire, to have Retired, at any
time (or in the case of a Participant who is eligible to Retire, as soon as
practicable) after such Participant is determined to be suffering a
Disability, in which case the Participant shall receive a Disability
Benefit equal to his or her vested Account Balance at the time of the
Committee's determination; provided, however, that should the Participant
otherwise have been eligible to Retire, he or she shall be paid in
accordance with Article 5. The Disability Benefit shall be paid in a lump
sum within 60 days of the Committee's exercise of such right. Any payment
made shall be subject to the Deduction Limitation.
ARTICLE 9
BENEFICIARY DESIGNATION
9.1 BENEFICIARY. Each Participant shall have the right, at any time, to
designate his or her Beneficiary(ies) (both primary as well as contingent)
to receive any benefits payable under the Plan to a beneficiary upon the
death of a Participant or the death of a predecessor Beneficiary receiving
benefits under the Plan. The Beneficiary designated under this Plan may be
the same as or different from the Beneficiary designation under any other
plan of an Employer in which the Participant participates.
9.2 BENEFICIARY DESIGNATION; CHANGE; SPOUSAL CONSENT. A Participant shall
designate his or her Beneficiary by completing and signing the Beneficiary
Designation Form, and returning it to the Committee or its designated
agent. A Participant shall have the right to change a Beneficiary by
completing, signing and otherwise complying with the terms of the
Beneficiary Designation Form and the Committee's rules and procedures, as
in effect from time to time. If a married Participant names someone other
than his or her spouse as a primary Beneficiary, a spousal consent, in the
form designated by the Committee, must be signed by that Participant's
spouse and returned to the Committee. Upon the acceptance by the Committee
of a new Beneficiary Designation Form, all Beneficiary designations
previously filed shall be canceled. The Committee shall be entitled to rely
on the last Beneficiary Designation Form filed by the Participant and
accepted by the Committee prior to his or her death.
9.3 ACKNOWLEDGMENT. No designation or change in designation of a Beneficiary
shall be effective until received and acknowledged in writing by the
Committee or its designated agent.
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9.4 NO BENEFICIARY DESIGNATION. If a Participant fails to designate a
Beneficiary as provided in Sections 9.1, 9.2 and 9.3 or, if all designated
Beneficiaries predecease the Participant or die prior to complete
distribution of the Participant's benefits, then the Participant's
designated Beneficiary shall be deemed to be his or her surviving spouse.
If the Participant has no surviving spouse, the benefits remaining under
the Plan to be paid to a Beneficiary shall be payable to the executor or
personal representative of the Participant's estate.
9.5 DOUBT AS TO BENEFICIARY. If the Committee has any doubt as to the proper
Beneficiary to receive payments pursuant to this Plan, the Committee shall
have the right, exercisable in its discretion, to cause the Participant's
Employer to withhold such payments until this matter is resolved to the
Committee's satisfaction.
9.6 DISCHARGE OF OBLIGATIONS. The payment of benefits under the Plan to a
Beneficiary shall fully and completely discharge all Employers and the
Committee from all further obligations under this Plan with respect to the
Participant, and that Participant's Plan Agreement shall terminate upon
such full payment of benefits.
ARTICLE 10
LEAVE OF ABSENCE
10.1 PAID LEAVE OF ABSENCE. If a Participant is authorized by the Participant's
Employer for any reason to take a paid leave of absence from the employment
of the Employer, the Participant shall continue to be considered employed
by the Employer and the Annual Deferral Amount shall continue to be
withheld during such paid leave of absence in accordance with Section 3.3.
10.2 UNPAID LEAVE OF ABSENCE. If a Participant is authorized by the
Participant's Employer for any reason to take an unpaid leave of absence
from the employment of the Employer, the Participant shall continue to be
considered employed by the Employer and the Participant shall be excused
from making deferrals until the Participant returns to a paid employment
status. Upon such return, deferrals shall resume for the remaining portion
of the Plan Year in which the return occurs, based on the deferral
election, if any, made for that Plan Year. If no election was made for that
Plan Year, no deferral shall be withheld.
ARTICLE 11
TERMINATION, AMENDMENT OR MODIFICATION
11.1 TERMINATION. Although each Employer anticipates that it will continue the
Plan for an indefinite period of time, there is no guarantee that any
Employer will continue the Plan or will not terminate the Plan at any time
in the future. Accordingly, each Employer reserves the right, in its sole
discretion, to discontinue its sponsorship of the Plan and/or to terminate
the Plan at any time with respect to any or all of its participating
Employees by action of its board of directors. Upon the termination of the
Plan with respect to any Employer, the Plan Agreements of the affected
Participants who are employed by that Employer shall terminate and their
vested Account Balances, determined as if they had experienced a
Termination of Employment on the date of
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Plan termination or, if Plan termination occurs after the date upon
which a Participant was eligible to Retire, then with respect to that
Participant as if he or she had Retired on the date of Plan termination,
shall be paid to the Participants as follows: Prior to a Change in
Control, if the Plan is terminated with respect to all of its
Participants, an Employer shall have the right, in its sole discretion,
and notwithstanding any elections made by the Participant, to pay such
benefits in a lump sum or in installments of up to 60 quarters pursuant
to the Quarterly Installment Method, with amounts credited and debited
during the installment period as provided herein. If the Plan is
terminated with respect to less than all of its Participants, an
Employer shall be required to pay such benefits in a lump sum. After a
Change in Control, the Employer shall be required to pay such benefits
in a lump sum. The termination of the Plan shall not adversely affect
any Participant or Beneficiary who has become entitled to the payment of
any benefits under the Plan as of the date of termination; provided
however, that the Employer shall have the right to accelerate
installment payments without a premium or prepayment penalty by paying
the vested Account Balance in a lump sum or in installments using fewer
quarters pursuant to the Quarterly Installment Method.
11.2 AMENDMENT. Any Employer may, at any time in its sole discretion, amend or
modify the Plan in whole or in part with respect to that Employer by the
action of its board of directors; provided, however, that: (i) no amendment
or modification shall be effective to decrease or restrict the value of a
Participant's vested Account Balance in existence at the time the amendment
or modification is made, calculated as if the Participant had experienced a
Termination of Employment as of the effective date of the amendment or
modification or, if the amendment or modification occurs after the date
upon which the Participant was eligible to Retire, the Participant had
Retired as of the effective date of the amendment or modification, and (ii)
no amendment or modification of this Section 11.2 shall be effective. The
amendment or modification of the Plan shall not affect any Participant or
Beneficiary who has become entitled to the payment of benefits under the
Plan as of the date of the amendment or modification; provided, however,
that the Employer shall have the right to accelerate installment payments
by paying the vested Account Balance in a lump sum or in installments using
fewer quarters pursuant to the Quarterly Installment Method.
11.3 PLAN AGREEMENT. Despite the provisions of Section 11.1 and 11.2, if a
Participant's Plan Agreement contains benefits or limitations that are not
in this Plan document, the Employer may only amend or terminate such
provisions with the consent of the Participant.
11.4 EFFECT OF PAYMENT. The full payment of the applicable benefit under Article
4, 5, 6, 7 or 8 of the Plan shall completely discharge all obligations to a
Participant and his or her designated Beneficiary under this Plan and the
Participant's Plan Agreement shall terminate.
ARTICLE 12
ADMINISTRATION
12.1 COMMITTEE DUTIES. Except as otherwise provided in this Article 12, this
Plan shall be administered by a Committee which shall consist of the Board,
or such committee as the Board
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shall appoint from time to time. Members of the Committee may be
Participants under this Plan and need not be members of the Board. The
Committee shall also have the discretion and authority to (i) make, amend,
interpret, and enforce all appropriate rules and regulations for the
administration of this Plan and the governance of the Committee and (ii)
decide or resolve any and all questions, including interpretations of this
Plan, as may arise in connection with the Plan. Any individual serving on
the Committee who is a Participant shall not vote or act on any matter
relating solely to himself or herself. When making a determination or
calculation, the Committee shall be entitled to rely on information
furnished by a Participant or the Company.
12.2 AGENTS. In the administration of this Plan, the Committee may, from time to
time, employ agents and delegate to them such administrative duties as it
sees fit (including acting through a duly appointed representative) and may
from time to time consult with counsel who may be counsel to any Employer.
The Company shall pay all expenses of such agents.
12.3 BINDING EFFECT OF DECISIONS. The decision or action of the Committee with
respect to any question arising out of or in connection with the
administration, interpretation or application of the Plan and the rules and
regulations promulgated hereunder shall be final and conclusive and binding
upon all persons having any interest in the Plan.
12.4 INDEMNITY OF COMMITTEE. All Employers shall indemnify, defend and hold
harmless each member of the Committee, and any Employee to whom the duties
of the Committee may be delegated, against any and all claims, losses,
damages, expenses or liabilities, including reasonable attorneys' fees and
court costs, arising from any action or failure to act with respect to this
Plan, except in the case of willful misconduct by such member of the
Committee or such Employee.
12.5 EMPLOYER INFORMATION. To enable the Committee to perform its functions, the
Company and each Employer shall supply full and timely information to the
Committee on all matters relating to the compensation of its Participants,
the date and circumstances of the Retirement, Disability, death or
Termination of Employment of its Participants, and such other pertinent
information as the Committee may reasonably require.
ARTICLE 13
OTHER BENEFITS AND AGREEMENTS
13.1 COORDINATION WITH OTHER BENEFITS. The benefits provided for a Participant
and Participant's Beneficiary under the Plan are in addition to any other
benefits available to such Participant under any other plan or program for
employees of the Participant's Employer. The Plan shall supplement and
shall not supersede, modify or amend any other such plan or program except
as may otherwise be expressly provided.
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ARTICLE 14
CLAIMS PROCEDURES
14.1 PRESENTATION OF CLAIM. Any Participant or Beneficiary of a deceased
Participant (such Participant or Beneficiary being referred to below as a
"Claimant") may deliver to the Committee a written claim for a
determination with respect to the amounts distributable to such Claimant
from the Plan. If such a claim relates to the contents of a notice received
by the Claimant, the claim must be made within 60 days after such notice
was received by the Claimant. All other claims must be made within 180 days
of the date on which the event that caused the claim to arise occurred. The
claim must state with particularity the determination desired by the
Claimant.
14.2 NOTIFICATION OF DECISION. The Committee shall consider a Claimant's claim
within a reasonable time, and shall notify the Claimant in writing:
(a) that the Claimant's requested determination has been made, and that
the claim has been allowed in full; or
(b) that the Committee has reached a conclusion contrary, in whole or in
part, to the Claimant's requested determination, and such notice must
set forth in a manner calculated to be understood by the Claimant:
(i) the specific reason(s) for the denial of the claim, or any part
of it;
(ii) specific reference(s) to pertinent provisions of the Plan upon
which such denial was based;
(iii) a description of any additional material or information
necessary for the Claimant to perfect the claim, and an
explanation of why such material or information is necessary; and
(iv) an explanation of the claim review procedure set forth in Section
14.3.
14.3 REVIEW OF A DENIED CLAIM. Within 60 days after receiving a notice from the
Committee that a claim has been denied, in whole or in part, a Claimant (or
the Claimant's duly authorized representative) may file with the Committee
a written request for a review of the denial of the claim. Thereafter, but
not later than 30 days after the review procedure began, the Claimant (or
the Claimant's duly authorized representative):
(a) may review pertinent documents;
(b) may submit written comments or other documents; and/or
(c) may request a hearing, which the Committee, in its sole discretion,
may grant.
14.4 DECISION ON REVIEW. The Committee shall render its decision on review
promptly, and not later than 60 days after the filing of a written request
for review of the denial, unless a hearing is held or other special
circumstances require additional time, in which case the Committee's
decision must be rendered within 120 days after such date. Such decision
must be written in a manner calculated to be understood by the Claimant,
and it must contain:
(a) specific reasons for the decision;
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(b) specific reference(s) to the pertinent Plan provisions upon which the
decision was based; and
(c) such other matters as the Committee deems relevant.
14.5 LEGAL ACTION. A Claimant's compliance with the foregoing provisions of this
Article 14 is a mandatory prerequisite to a Claimant's right to commence
any legal action with respect to any claim for benefits under this Plan.
ARTICLE 15
TRUST
15.1 ESTABLISHMENT OF THE TRUST. The Company shall establish the Trust, with
sub-trusts for each Employer. Each Employer shall at least annually
transfer over to the Trust such assets as the Employer determines, in its
sole discretion, are necessary to provide, on a present value basis, for
its respective future liabilities created with respect to the Annual
Deferral Amounts, Annual Company Contribution Amounts and Annual Company
Matching Amounts for such Employer's Participants for all periods prior to
the transfer, as well as any debits and credits to the Participants'
Account Balances for all periods prior to the transfer, taking into
consideration the value of the assets in the trust at the time of the
transfer. Such assets shall be allocated to the respective sub-trust of
each contributing Employer.
15.2 INTERRELATIONSHIP OF THE PLAN AND THE TRUST. The provisions of the Plan and
the Plan Agreement shall govern the rights of a Participant to receive
distributions pursuant to the Plan. The provisions of the Trust shall
govern the rights of the Employers, Participants and the creditors of the
Employers to the assets transferred to the Trust. Each Employer shall at
all times remain liable to carry out its obligations under the Plan with
respect to its Participants. In this regard, if a Participant has been
employed by only one Employer, such Employer shall be responsible for the
total amounts credited to such Participant's Account Balance under this
Plan. If a Participant has been employed by more than one Employer, each
Employer shall be responsible only for the amounts credited to the
Participant's Account Balance by such Employer.
15.3 DISTRIBUTIONS FROM THE TRUST. Each Employer's obligations under the Plan
may be satisfied with Trust assets distributed pursuant to the terms of the
Trust, and any such distribution shall reduce the Employer's obligations
under this Plan.
15.4 INVESTMENT OF TRUST ASSETS. The Trustee of the Trust shall be authorized,
upon written instructions received from the Committee or investment manager
appointed by the Committee, to invest and reinvest the assets of the Trust
in accordance with the applicable Trust Agreement.
15.5 NO CLAIM ON TRUST ASSETS. A Participant shall have no preferred claim on,
or any beneficial interest in, any assets of the Trust. Any assets held by
the Trust shall be subject to the claims of general creditors of each
Employer that is the grantor of the Trust under federal and state law in
the event of the Employer's "insolvency" (i.e., the Employer is unable to
pay its debts as they
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become due or is subject to a pending proceeding as a debtor under the
United States Bankruptcy Code), but only with respect to the assets of the
Trust held for the benefit of Participants employed or formerly employed by
such Employer.
ARTICLE 16
MISCELLANEOUS
16.1 STATUS OF PLAN. The Plan is intended to be a plan that is not qualified
within the meaning of Code Section 401(a) and that "is unfunded and is
maintained by an employer primarily for the purpose of providing deferred
compensation for a select group of management or highly compensated
employees" within the meaning of ERISA Sections 201(2), 301(a)(3) and
401(a)(1). The Plan shall be administered and interpreted to the extent
possible in a manner consistent with that intent.
16.2 UNSECURED GENERAL CREDITOR. Participants and their Beneficiaries, heirs,
successors and assigns shall have no legal or equitable rights, interests
or claims in any property or assets of an Employer. For purposes of the
payment of benefits under this Plan, any and all of an Employer's assets
shall be, and remain, the general, unpledged unrestricted assets of the
Employer. An Employer's obligation under the Plan shall be merely that of
an unfunded and unsecured promise to pay money in the future.
16.3 EMPLOYER'S LIABILITY. An Employer's liability for the payment of benefits
shall be defined only by the Plan and the Plan Agreement, as entered into
between the Employer and a Participant. An Employer shall have no
obligation to a Participant under the Plan except as expressly provided in
the Plan and his or her Plan Agreement.
16.4 NONASSIGNABILITY. Neither a Participant nor any other person shall have any
right to commute, sell, assign, transfer, pledge, anticipate, mortgage or
otherwise encumber, transfer, hypothecate, alienate or convey in advance of
actual receipt, the amounts, if any, payable hereunder, or any part
thereof, which are, and all rights to which are expressly declared to be,
unassignable and non-transferable. No part of the amounts payable shall,
prior to actual payment, be subject to seizure, attachment, garnishment or
sequestration for the payment of any debts, judgments, alimony or separate
maintenance owed by a Participant or any other person, be transferable by
operation of law in the event of a Participant's or any other person's
bankruptcy or insolvency or be transferable to a spouse as a result of a
property settlement or otherwise.
16.5 NOT A CONTRACT OF EMPLOYMENT. The terms and conditions of this Plan shall
not be deemed to constitute a contract of employment between any Employer
and the Participant. Such employment is hereby acknowledged to be an "at
will" employment relationship that can be terminated at any time for any
reason, or no reason, with or without cause, and with or without notice,
unless otherwise expressly provided in a written employment agreement.
Nothing in this Plan shall be deemed to give a Participant the right to be
retained in the service of any Employer or to interfere with the right of
any Employer to discipline or discharge the Participant at any time.
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16.6 FURNISHING INFORMATION. A Participant or his or her Beneficiary will
cooperate with the Committee by furnishing any and all information
requested by the Committee and take such other actions as may be requested
in order to facilitate the administration of the Plan and the payments of
benefits hereunder, including but not limited to taking such physical
examinations as the Committee may deem necessary.
16.7 TERMS. Whenever any words are used herein in the masculine, they shall be
construed as though they were in the feminine in all cases where they would
so apply; and whenever any words are used herein in the singular or in the
plural, they shall be construed as though they were used in the plural or
the singular, as the case may be, in all cases where they would so apply.
16.8 CAPTIONS. The captions of the articles, sections and paragraphs of this
Plan are for convenience only and shall not control or affect the meaning
or construction of any of its provisions.
16.9 GOVERNING LAW. Subject to ERISA, the provisions of this Plan shall be
construed and interpreted according to the internal laws of the State of
Nevada, without regard to its conflicts of laws principles.
16.10 NOTICE. Any notice or filing required or permitted to be given to the
Committee under this Plan shall be sufficient if in writing and
hand-delivered, or sent by registered or certified mail, to the address
below:
Secretary of the MGM MIRAGE Deferred Compensation Plan
Committee 3600 Las Vegas Blvd So.
Las Vegas, NV 89109
Such notice shall be deemed given as of the date of delivery or, if
delivery is made by mail, as of the date shown on the postmark on the
receipt for registration or certification.
Any notice or filing required or permitted to be given to a Participant
under this Plan shall be sufficient if in writing and hand-delivered, or
sent by mail, to the last known address of the Participant.
16.11 SUCCESSORS. The provisions of this Plan shall bind and inure to the
benefit of the Participant's Employer and its successors and assigns and
the Participant and the Participant's designated Beneficiaries. No other
person shall be a third-party beneficiary or acquire any rights under this
Plan.
16.12 SPOUSE'S INTEREST. The interest in the benefits hereunder of a spouse of a
Participant who has predeceased the Participant shall automatically pass
to the Participant and shall not be transferable by such spouse in any
manner, including but not limited to such spouse's will, nor shall such
interest pass under the laws of intestate succession.
16.13 VALIDITY. In case any provision of this Plan shall be illegal or invalid
for any reason, said illegality or invalidity shall not affect the
remaining parts hereof, but this Plan shall be construed and enforced as
if such illegal or invalid provision had never been inserted herein.
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16.14 INCOMPETENT. If the Committee determines in its discretion that a benefit
under this Plan is to be paid to a minor, a person declared incompetent
or a person incapable of handling the disposition of that person's
property, the Committee may direct payment of such benefit to the
guardian, legal representative or person having the care and custody of
such minor, incompetent or incapable person. The Committee may require
proof of minority, incompetence, incapacity or guardianship, as it may
deem appropriate prior to distribution of the benefit. Any payment of a
benefit shall be a payment for the account of the Participant and the
Participant's Beneficiary, as the case may be, and shall be a complete
discharge of any liability under the Plan for such payment amount.
16.15 COURT ORDER. The Committee is authorized to make any payments directed by
court order in any action in which the Plan or the Committee has been
named as a party. In addition, if a court determines that a spouse or
former spouse of a Participant has an interest in the Participant's
benefits under the Plan in connection with a property settlement or
otherwise, the Committee, in its sole discretion, shall have the right,
notwithstanding any election made by a Participant, to immediately
distribute the spouse's or former spouse's interest in the
Participant's benefits under the Plan to that spouse or former spouse.
16.16 DISTRIBUTION IN THE EVENT OF TAXATION.
(a) IN GENERAL. If, for any reason, all or any portion of a Participant's
benefits under this Plan becomes taxable to the Participant prior to
receipt, a Participant may petition the Committee before a Change in
Control, or the Trustee of the Trust after a Change in Control, for a
distribution of that portion of his or her benefit that has become
taxable. Upon the grant of such a petition, which grant shall not be
unreasonably withheld (and, after a Change in Control, shall be
granted), a Participant's Employer shall distribute to the Participant
immediately available funds in an amount equal to the taxable portion
of his or her benefit (which amount shall not exceed a Participant's
unpaid vested Account Balance under the Plan). If the petition is
granted, the tax liability distribution shall be made within 90 days
of the date when the Participant's petition is granted. Such a
distribution shall affect and reduce the benefits to be paid under
this Plan.
(b) TRUST. If the Trust terminates in accordance with its terms and
benefits are distributed from the Trust to a Participant in accordance
therewith, the Participant's benefits under this Plan shall be reduced
to the extent of such distributions.
16.17 LEGAL FEES TO ENFORCE RIGHTS AFTER CHANGE IN CONTROL. The Company and each
Employer is aware that upon the occurrence of a Change in Control, the
Board or the board of directors of a Participant's Employer (which
might then be composed of new members) or a shareholder of the Company
or the Participant's Employer, or of any successor corporation, might
cause or attempt to cause, the Company, the Participant's Employer or
such successor to refuse to comply with its obligations under the Plan
and might cause or attempt to cause the Company or the Participant's
Employer to institute, or may institute, litigation seeking to deny
Participants the benefits intended under the Plan. In these
circumstances, the purpose of the Plan could be frustrated.
Accordingly, if, following a Change in Control, it should appear to any
Participant that the
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Company, the Participant's Employer or any successor corporation has failed
to comply with any of its obligations under the Plan or any agreement
thereunder or, if the Company, such Employer or any other person takes any
action to declare the Plan void or unenforceable or institutes any
litigation or other legal action designed to deny, diminish or to recover
from any Participant the benefits intended to be provided (collectively,
the "Dispute"), then the Company and the Participant's Employer shall pay,
if the Participant prevails in the Dispute, the Participant's reasonable
legal fees and court costs actually incurred by the Participant in the
initiation or defense of the Dispute, whether by or against the Company or
the Participant's Employer or any director, officer, shareholder or other
person affiliated with the Company, the Participant's Employer or any
successor thereto.
IN WITNESS WHEREOF, the Company has signed this Plan document effective as of
January 1, 2001.
"Company"
MGM MIRAGE, a Delaware corporation
By: /s/ SCOTT LANGSNER
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Title: Sr VP, Secretary and Treasurer
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