Exhibit 10.45

 

METRO-GOLDWYN-MAYER INC.

 

AMENDED AND RESTATED

2000 EMPLOYEE INCENTIVE PLAN

 

ARTICLE 1

 

PURPOSE

 

The 2000 Employee Incentive Plan (the “Plan”) is a short-term incentive plan
designed to (i) promote the continued growth, development and financial success
of the Company with the ultimate objective of enhancing stockholder value; (ii)
enable the Company to be more effective in attracting, motivating and retaining
employees; (iii) provide to employees who participate in the Plan an opportunity
to receive bonus incentives tied to the achievement of certain pre-established
performance goals; and (iv) meet the requirements for performance-based
compensation within the meaning of Section 162(m) of the Code (as defined
below).

 

ARTICLE 2

 

DEFINITIONS

 

For the purposes of the Plan, unless the context requires otherwise, the
following terms shall have the meanings indicated:

 

2.1 “Annual Incentive Award” or “Award” means the compensation payable under
this Plan to a Participant pursuant to the terms, conditions, restrictions, and
limitations established by the Committee and this Plan.

 

2.2 “Board” means the Board of Directors of the Company.

 

2.3 “Bonus Target” means the percentage of base compensation (as determined by
the Committee or the Subcommittee) to be awarded as an Annual Incentive Award if
the Performance Goal for the applicable Performance Measure is met.

 

2.4 “Code” means the Internal Revenue Code of 1986, as amended, together with
the published rulings, regulations, and interpretations promulgated thereunder.

 

2.5 “Committee” means the Compensation Committee appointed or designated by the
Board to administer the Plan in accordance with Article 3 of this Plan.

 

2.6 “Company” means Metro-Goldwyn-Mayer Inc., a Delaware corporation, and any
successor entity, whether by merger, ownership of all or substantially all of
the assets thereof, or otherwise.

 

2.7 “Named Executive Officer” means a Participant who is a “covered employee” as
defined in Section 162(m) of the Code or who the Committee believes will be such
a covered employee during a Performance Period.

 

2.8 “Participant” means an eligible employee who is selected to participate in
the Plan.

 

2.9 “Performance Goal” means one or more objective goals pre-established by the
Committee or the Subcommittee for the purpose of determining Awards under the
Plan.

 

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2.10 “Performance Measure” means one or more business and/or financial criteria
as the Committee or the Subcommittee shall determine for the purpose of setting
Performance Goals for each Performance Period.

 

2.11 “Performance Period” means the consecutive 12-month period that constitutes
the Company’s fiscal year.

 

2.12 “Plan” means the Metro-Goldwyn-Mayer Inc. 2000 Employee Incentive Plan,
effective as of January 1, 2000, as amended from time to time.

 

2.13 “Section 162(m)” means Section 162(m) of the Code and the rules and
regulations promulgated thereunder.

 

2.14 “Subcommittee” means the Performance-Based Compensation Subcommittee
appointed by the Board to review and approve, with respect to the Named
Executive Officers, any compensation that may qualify as performance-based
compensation within the meaning of Section 162(m).

 

ARTICLE 3

 

ADMINISTRATION

 

3.1 Composition of Committee and Subcommittee. The Plan shall be administered by
the Committee or (with respect to the Named Executive Officers) by the
Subcommittee. The Committee shall consist of at least three members of the Board
who are not eligible to participate in the Plan. The Subcommittee shall consist
of at least two members of the Committee who are “outside directors” within the
meaning of Section 162(m).

 

3.2 Interpretation of Plan. The Committee or the Subcommittee, as the case may
be, shall (i) interpret the Plan; (ii) prescribe, amend, and rescind any rules
and regulations necessary or appropriate for the administration of the Plan; and
(iii) make such other determinations and take such other action as it deems
necessary or advisable in the administration of the Plan. Any interpretation,
determination, or other action made or taken by the Committee or the
Subcommittee shall be final, binding, and conclusive on all interested parties.

 

3.3 Powers of Committee and Subcommittee. The Committee or (with respect to the
Named Executive Officers) the Subcommittee shall have the sole authority to (i)
establish and administer the Performance Goals; (ii) determine the Performance
Measures to be used in establishing the Performance Goals; (iii) set the Bonus
Targets and the Percentage Allocation (as defined below) for each class of
Participants; (iv) certify to the Board that one or more Performance Goals have
been met; and (v) determine the amount of any Awards made to the Named Executive
Officers.

 

3.4 Section 162(m) Conditions. It is the intention of the Committee that the
Awards qualify as “performance-based compensation” within the meaning of Section
162(m). With respect to restrictions in the Plan that are based on the
requirements of Section 162(m) or any other applicable law, rule or regulation,
to the extent that any such restrictions are no longer required thereby, the
Committee or the Subcommittee, as the case may be, shall have the discretion and
authority to make Awards hereunder that are no longer subject to such
restrictions.

 

3.5 Requisite Action. A majority (but not fewer than two) of the members of the
Committee or the Subcommittee, as the case may be, shall constitute a quorum.
The vote of a majority of those present at a meeting at which a quorum is
present or the unanimous written consent of the members thereof shall constitute
action by the Committee or the Subcommittee.

 

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ARTICLE 4

 

ELIGIBILITY

 

Any regular employee (including an employee who is also a director of the
Company) is eligible to participate in the Plan. Notwithstanding the foregoing,
it is the intention of the Committee that Awards generally not be made to any
employee who is a participant in any sales incentive or other cash bonus plan of
the Company or who receives a guaranteed bonus pursuant to his or her employment
agreement with the Company. The Committee shall determine, on the recommendation
of management, which employees shall participate in the Plan during any
Performance Period, and such determination may be made selectively among
eligible employees. An employee must be a Participant in the Plan for a minimum
of six months during the Performance Period to be eligible for an Award for such
Performance Period.

 

ARTICLE 5

 

PERFORMANCE GOALS AND MEASUREMENT

 

5.1 Performance Goals. Performance Goals shall be established in writing by the
Committee or the Subcommittee, as the case may be, not later than 90 days after
commencement of the applicable Performance Period (provided that the outcome
thereof is substantially uncertain at such time) and shall be based on such
Performance Measures as the Committee or the Subcommittee shall determine.

 

5.2 Bonus Targets. Bonus Targets shall be established by the Committee or the
Subcommittee in writing for each class of Participants (determined principally
by title and level of responsibility) at the same time as the Performance Goals
are established and shall be allocated to one or more Performance Measures in
such proportion (the “Percentage Allocation”) as the Committee or the
Subcommittee shall determine.

 

5.3 Performance Measures. For each Performance Period, the Committee or the
Subcommittee, as the case may be, shall select the business and/or financial
criteria to be used in establishing the Performance Goals. Such criteria may
include (without limitation) one or more of the following:

 

(a) Film performance

 

(b) Earnings before interest, taxes, depreciation and amortization (EBITDA)

 

(c) Net profit contribution by division

 

(d) Pre-tax or after-tax profit levels, including: net income, earnings per
share, earnings before interest and taxes, and operating income

 

(e) Cash flow return on investment and return on equity

 

(f) Levels of operating expense or other expense items as reported on the income
statement

 

The Performance Measures for a Performance Period may be identical for all
Participants or, at the discretion of the Committee or the Subcommittee, may be
different to reflect more appropriate measures of performance in individual
cases.

 

5.4 Adjustments for Extraordinary Items. Subject to any express limitations of
the Plan and the requirements of Section 162(m), the Committee shall be
authorized to make adjustments in the method of calculating attainment of
Performance Goals in recognition of: (i) extraordinary or non-recurring items;
(ii) changes in tax laws; (iii) changes in generally accepted accounting
principles or changes in accounting policies; (iv) charges related to
restructured or discontinued operations; (v) restatement of prior period
financial results; and (vi) any other unusual, non-recurring gain or loss that
is separately identified and quantified in the Company’s financial statements.

 

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ARTICLE 6

 

ANNUAL INCENTIVE AWARDS

 

6.1 Timing of Awards. As soon as practicable following the completion of the
Performance Period, the Committee shall review the prior year’s performance in
relation to the Performance Goals and determine whether and to what extent
Awards will be granted under the Plan. Notwithstanding the attainment of one or
more Performance Goals, the Board may determine that no Awards be made with
respect to a Performance Period if it determines that the making of such Awards
is not in the best interests of the Company.

 

6.2 Determination of Awards. The payment of any Award shall be contingent upon
the attainment of one or more Performance Goals as certified to the Board in
writing by the Committee and the Subcommittee. The Subcommittee shall calculate
the amount of each Award to be made to the Named Executive Officers based upon
the applicable Performance Goals, Performance Measures, Bonus Targets and
Percentage Allocation established pursuant to Article 5 above. The Subcommittee
may not exercise any discretion to increase any Award to a Named Executive
Officer, but may exercise discretion to reduce an Award by up to 25 percent so
long as such reduction does not result in an increase in the amount of the Award
of any other Participant. The amount of individual Awards made to all other
Participants shall be determined by management based upon the attainment of the
Performance Goals and in accordance with the Performance Measures, Bonus
Targets, Percentage Allocation and discretionary elements approved in advance by
the Committee. Notwithstanding anything to the contrary contained herein,
commencing with the 2001 Performance Period and for any Performance Period
thereafter, any Award otherwise payable under this Plan to a Participant who
also holds Bonus Interests under the Senior Management Bonus Plan shall be
offset, in whole or in part, by any cash amount paid or payable to such
Participant in respect of such Bonus Interests by virtue of a Determination Date
(as such term is defined in the related Bonus Interest Agreement) having
occurred during such Performance Period. The term ‘Senior Management Bonus Plan’
as used herein shall mean and refer to the Metro-Goldwyn-Mayer Inc. and
Metro-Goldwyn-Mayer Studios Inc. Senior Management Bonus Plan as adopted by the
Boards of Directors of such companies on November 7, 1997 and approved by the
stockholders of Metro-Goldwyn-Mayer Inc. on May 12, 1998.” The term ‘Bonus
Interest Agreement’ as used herein shall mean and refer to the form of
Metro-Goldwyn-Mayer Inc. and Metro-Goldwyn-Mayer Studios Inc. Bonus Interest
Agreement Pursuant to the Senior Management Bonus Plan entered into between such
companies and each holder of Bonus Interests.

 

6.3 Range of Awards. Provided the relevant Performance Goal shall have been
attained, as determined by the Committee or the Subcommittee, as the case may
be, and certified to the Board, the range of Awards as to each Performance
Measure shall be based on percentages of base salary as determined by the
Committee or the Subcommittee, as the case may be.

 

6.4 Maximum Individual Award. Notwithstanding any other provision hereof, the
maximum Award that may be made to any Participant under the Plan for any
Performance Period shall be $5 million.

 

6.5 Form of Payment. With respect to the 2000 Performance Period, the entire
amount of any Award shall be payable in cash. Commencing with the 2001
Performance Period and for each Performance Period thereafter, such portion of
an Award as shall be equal to or less than the Bonus Target amount shall be
payable in cash and the amount, if any, in excess of the Bonus Target amount
(the “Excess Amount”) may be payable either in cash or in shares of the
Company’s common stock, $.01 par value per share (the “Common Stock”), as the
Committee shall determine in its discretion. In the event the Committee shall
determine that the Excess Amount shall be payable in shares of Common Stock, the
precise number of shares payable to a Participant shall be the result (rounded
up to the nearest whole share) obtained by dividing the Excess Amount by the
closing price of the Common Stock on the New York Stock Exchange on the day the
Committee certifies to the Board that one or more of the Performance Goals for
such Performance Period have been attained.

 

6.6 Discretionary Authority. Notwithstanding any other provision of the Plan,
the Committee shall have the discretion, commencing with the 2004 Performance
Period, to authorize bonus awards to Participants (including

 

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the Named Executive Officers) at the target level of performance for such
Performance Period, whether or not the Performance Goals for such Performance
Period are achieved, and at above-target levels of performance to the extent
Performance Goals for such Performance Period are exceeded; provided, however,
that during any Performance Period in which a Change in Control occurs, bonus
awards otherwise payable in accordance with this Section 6.6 with respect to
such Performance Period shall be prorated to the date of the consummation of the
Change in Control.

 

ARTICLE 7

 

WITHHOLDING TAXES AND DEDUCTIONS

 

The Company shall have the right to deduct from any payment to be made pursuant
to the Plan (i) the amount of any taxes required by law to be withheld with
respect to such payments and (ii) any amounts owed by Participant to the Company
or any or its subsidiaries.

 

ARTICLE 8

 

NO RIGHT TO CONTINUED EMPLOYMENT OR AWARDS

 

No employee shall have any claim or right to receive an Award, and the making of
an Award shall not be construed as giving a Participant the right to be retained
in the employ of the Company or any of its subsidiaries. Further, the Company
and its subsidiaries expressly reserve the right at any time to terminate the
employment of any Participant free from any liability under the Plan; except
that a Participant who meets or exceeds the Performance Goals for the
Performance Period and was actively employed for the full term of the
Performance Period, will be eligible for an Award even though the Participant is
not an active employee of the Company at the time Awards are made.

 

ARTICLE 9

 

NO FUNDING OF PLAN

 

The Plan shall constitute an “unfunded” plan of the Company, and nothing
contained herein shall require the Company to fund or otherwise aggregate any
cash or other assets for payment to Participants under the Plan. The Company
shall not be deemed by any provision of the Plan to be a trustee of any
property.

 

ARTICLE 10

 

NONTRANSFERABILITY

 

Except as otherwise provided by law or by the Committee or Subcommittee, no
Award shall be subject in any manner to anticipation, alienation, sale,
transfer, assignment, pledge, encumbrance, charge, garnishment, execution or
levy of any kind, either voluntary or involuntary. Awards under the Plan shall
be payable from the general assets of the Company, and no Participant shall have
any claim with respect to any specific assets of the Company.

 

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ARTICLE 11

 

AMENDMENT, MODIFICATION, SUSPENSION, OR TERMINATION

 

The Board may at any time and from time to time, without the consent of the
Participants, alter, amend, revise, suspend, or discontinue the Plan in whole or
in part; provided, however, that no amendment which requires stockholder
approval in order for the Plan and Awards under the Plan to continue to comply
with Section 162(m) shall be effective unless such amendment shall be approved
by the requisite vote of the stockholders of the Company entitled to vote
thereon.

 

ARTICLE 12

 

GOVERNING LAW

 

The place of administration of the Plan shall be the State of California.
Notwithstanding the foregoing, the validity, construction and effect of the Plan
and actions taken with respect thereto, as well as any rights relating thereto
or arising therefrom, shall be determined solely in accordance with the laws of
the State of Delaware and applicable federal law.

 

 

ARTICLE 13

 

EFFECTIVE DATE

 

This Plan shall be effective as of January 1, 2000. Notwithstanding the
foregoing, the adoption of this Plan is expressly conditioned upon approval by
the Company’s stockholders at the annual meeting of the Company’s stockholders
held in 2000. Subject to earlier termination pursuant to Article 11 hereof, the
Plan shall have a term of five years from its effective date.

 

ARTICLE 14

 

INDEMNIFICATION

 

No member of the Board or the Committee, nor any officer or employee of the
Company acting on behalf of the Board or the Committee, shall be personally
liable for any action, determination, or interpretation taken or made in good
faith with respect to the Plan, and all members of the Board or the Committee
and each officer or employee of the Company acting on their behalf shall, to the
extent permitted by law, be fully indemnified and protected by the Company in
respect of any such action, determination, or interpretation.

 

ARTICLE 15

 

INTERPRETATION

 

The Plan is designed to comply with Section 162(m), and all provisions hereof
shall be construed in a manner consistent with that intent.

 

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