exv4w1






Exhibit 4.1




AMENDMENT NO. 1 TO




EMPLOYMENT AGREEMENT




     THIS AMENDMENT NO. 1 is made and entered into as of December 31, 2008 (the “Amendment”), to
the EMPLOYMENT AGREEMENT made and entered into as of September 16, 2005 (the “Agreement”), by and
between MGM MIRAGE (“Employer”), and James J. Murren (“Employee”).



W I T N
E S S E T H:




     WHEREAS, the Employer and the Employee desire to amend the Agreement as required pursuant to
the final Treasury regulations under section 409A of the Internal Revenue Code of 1986, as amended.



     NOW, THEREFORE, in consideration of the mutual covenants set forth in this Amendment and in
the Agreement, the Employer and the Employee agree that the Agreement is hereby amended as follows,
effective January 1, 2009:



     1. Timing of Bonus Payment. The next to last sentence in Section 3, “Compensation,” is hereby
amended and restated to read as follows (revision is underlined):




     You shall be entitled to an annual bonus (“Bonus”) determined under our Annual
Performance-Based Incentive Plan for Executive Officers, or any successor plan (the
“Bonus Plan”), with your participation to be determined on a pro rata basis to the
extent the termination date of this Agreement does not coincide with the end of our
fiscal year (such Bonus shall be paid at such time as we pay Bonuses under the Bonus
Plan to our other senior executives with respect to such fiscal year, which
shall be between January 1 and March 15 after the end of the year).



     2. Timing of Bonus Payment upon Death. The last sentence of Section 10.1.1 is hereby amended
and restated to read as follows (revision is underlined):




     Such Bonuses shall be paid to your beneficiary at such time as we pay Bonuses
to our other senior executives with respect to such fiscal year (which shall be
between January 1 and March 15 after the end of the year).



     3. Timing of Bonus Payment due to Disability Termination. The last sentence of Section 10.1.2
is hereby amended and restated to read as follows (revision is underlined):




     Such Bonuses shall be paid at such time as we pay Bonuses to our other senior
executives with respect to the fiscal year in which your termination occurs
(which shall be between January 1 and March 15 after the end of the year).



 









 





     4. Timing of Bonus Payment in No Cause Termination. The second sentence of Section 10.2.3 is
hereby amended and restated to read as follows (revision is underlined):




     Such Bonuses shall be paid at such time as we pay Bonuses to our other senior
executives with respect to such fiscal year or years (which shall be between
January 1 and March 15 after the end of the year).



     5. Treatment of Equity Grants Upon a Change of Control. Sections 10.5.1, 10.5.2 and 10.5.3
are hereby amended and restated to read as follows (revisions are underlined) (no changes are made
to Section 10.5.4):




     10.5 Change of Control. In the event there is a Change of Control of
the Company (which term is defined in Section 23), then:




     10.5.1 All of your unvested stock options, stock appreciation rights,
and restricted stock (including restricted stock units) shall become fully
vested and exercisable without regard to any deferral of vesting of restricted stock
arising out of your status as a senior executive.




     10.5.2 If the Change of Control results from an exchange of outstanding common
stock as a result of which the common stock of MGM MIRAGE is no longer publicly
held, then all of your options to purchase common stock of MGM MIRAGE, stock
appreciation rights, and restricted stock units will vest or be
exercisable, as applicable, for the consideration (cash, stock or otherwise)
which the holders of MGM MIRAGE common stock received in such exchange. For
example, if immediately prior to the effective date of the transaction, you
had vested and exercisable options to acquire 5,000 shares of MGM MIRAGE’s common
stock and the exchange of stock is one share of common stock of MGM MIRAGE for two
shares of common stock of the acquiring entity, then your options will be converted
into options to acquire, upon payment of the exercise price, 10,000 shares of the
acquiring entity’s common stock. If, in addition, you had unvested stock options,
each option would become immediately vested and on exercise and payment of the
exercise price, entitle you to receive two shares of the acquiring company’s common
stock.




     10.5.3 If the Change of Control results from a sale of MGM MIRAGE’s outstanding
common stock for cash with the result that MGM MIRAGE’s common stock is no longer
publicly held, then upon the Change of Control, all of your options to purchase
common stock of MGM MIRAGE, stock appreciation rights, and restricted stock
units will become vested and cashed out for an amount of cash equal to
the difference between the purchase price and the exercise price (if
applicable), less any applicable withholding taxes. The cash-out payment
will be made on or within 30 days after the Change of Control. For example, if
immediately prior to the Change of Control, you have options to acquire 2,000 shares
of MGM MIRAGE’s common stock at an exercise price of $35, and the purchase price for
MGM MIRAGE’s common stock was $40, then upon the 



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Change of Control you would be entitled to receive $10,000 in full
satisfaction of such options (2,000 shares times $5 per share). If, in addition,
you had unvested stock options, those options would become vested and immediately
exercisable upon the Change of Control and you would be entitled to receive
$5, net of applicable taxes, for each option in full satisfaction of that option.
The foregoing applies to all options, stock appreciation rights, and restricted
stock units granted to you, notwithstanding the provisions of Section 10.7, to the
extent required to comply with Section 409A (as defined below).



     6. Definition of “Change of Control.” The definition of “Change of Control” in Section 23 is
hereby amended by adding the following as the last paragraph thereof:




     Notwithstanding the foregoing, accelerated vesting of restricted stock units
under Section 10.5.1, and the payments under Section 10.5.4, to the extent that they
are “deferred compensation” (as defined under Treasury Regulation Section
1.409A-1(b)(1), after giving effect to the exemptions in Treasury Regulation
Sections 1.409A-1(b)(3) through (b)(12)), may occur only upon or as a result of a
“Change of Control,” as described above, that is also a “change in control event” as
described in Section 409A (as defined in Section 25).




     Under Section 409A, a “change in control event” means: a (i) Change in
Ownership of the Company, (ii) Change in Effective Control of the Company, or (iii)
Change in the Ownership of Assets of the Company, as described herein and construed
in accordance Section 409A.




     (i) A Change in Ownership of the Company shall occur on the date that any one
Person acquires, or Persons Acting as a Group acquire, ownership of the capital
stock of the Company that, together with the stock held by such Person or Group,
constitutes more than 50% of the total fair market value or total voting power of
the capital stock of the Company. However, if any one Person is, or Persons Acting
as a Group are, considered to own more than 50% of the total fair market value or
total voting power of the capital stock of the Company, the acquisition of
additional stock by the same Person or Persons Acting as a Group is not considered
to cause a Change in Ownership of the Company or to cause a Change in Effective
Control of the Company (as described below). An increase in the percentage of
capital stock owned by any one Person, or Persons Acting as a Group, as a result of
a transaction in which the Company acquires its stock in exchange for property will
be treated as an acquisition of stock.




     (ii) A Change in Effective Control of the Company shall occur on the date
either (A) a majority of members of the Company’s Board is replaced during any
12-month period by directors whose appointment or election is not endorsed by a
majority of the members of the Company’s Board before the date of the appointment or
election, or (B) any one Person, or Persons Acting as a Group, acquires (or has
acquired during the 12-month period ending on the date of the most recent
acquisition by such Person or Persons) ownership of stock of the
Company possessing 30% or more of the total voting power of the stock of the
Company.



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     (iii) A Change in the Ownership of Assets of the Company shall occur on the
date that any one Person acquires, or Persons Acting as a Group acquire (or has or
have acquired during the 12-month period ending on the date of the most recent
acquisition by such Person or Persons), assets from the Company that have a total
gross fair market value equal to or more than 40% of the total gross fair market
value of all of the assets of the Company immediately before such acquisition or
acquisitions. For this purpose, gross fair market value means the value of the
assets of the Company, or the value of the assets being disposed of, determined
without regard to any liabilities associated with such assets.




     The following rules of construction apply in interpreting the definition of
“change in control event”:




          (A) A Person means any individual, entity or group within the meaning of
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended,
other than employee benefit plans sponsored or maintained by the Company and by
entities controlled by the Company or an underwriter of the capital stock of the
Company in a registered public offering.




          (B) Persons will be considered to be Persons Acting as a Group (or Group) if
they are owners of a corporation that enters into a merger, consolidation, purchase
or acquisition of stock, or similar business transaction with the corporation. If a
Person owns stock in both corporations that enter into a merger, consolidation,
purchase or acquisition of stock, or similar transaction, such shareholder is
considered to be acting as a Group with other shareholders only with respect to the
ownership in that corporation before the transaction giving rise to the change and
not with respect to the ownership interest in the other corporation. Persons will
not be considered to be acting as a Group solely because they purchase assets of the
same corporation at the same time or purchase or own stock of the same corporation
at the same time, or as a result of the same public offering.




          (C) For purposes of this definition of “change in control event,” fair market
value shall be determined by Board.




          (D) A “change in control event” shall not include a transfer to a related
person as described in Section 409A.




          (E) For purposes of this definition of “change in control event,” section
318(a) of the Internal Revenue Code of 1986, as amended (the “Code”) applies to
determine stock ownership. Stock underlying a vested option is considered owned by
the individual who holds the vested option (and the stock underlying an unvested
option is not considered owned by the individual who



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holds the unvested option). For purposes of the preceding sentence, however, if a
vested option is exercisable for stock that is not substantially vested (as defined
by Treasury Regulation §1.83-3(b) and (j)), the stock underlying the option is not
treated as owned by the individual who holds the option.



     7. Section 409A. A new Section 25 is added as follows:




     25. Section 409A.




          (a) This Agreement is intended to comply with, or otherwise be exempt from,
Section 409A of the Code and any regulations and Treasury guidance promulgated
thereunder (“Section 409A”). If we determine in good faith that any provision of
this Agreement would cause you to incur an additional tax, penalty, or interest
under Section 409A, the Compensation Committee and you shall use reasonable efforts
to reform such provision, if possible, in a mutually agreeable fashion to maintain
to the maximum extent practicable the original intent of the applicable provision
without violating the provisions of Section 409A or causing the imposition of such
additional tax, penalty, or interest under Section 409A. The preceding provisions,
however, shall not be construed as a guarantee by us of any particular tax effect to
you under this Agreement.




          (b) “Termination of employment,” or words of similar import, as used in this
Agreement means, for purposes of any payments under this Agreement that are payments
of deferred compensation subject to Section 409A, your “separation from service” as
defined in Section 409A.




          (c) For purposes of Section 409A, the right to a series of installment payments
under this Agreement shall be treated as a right to a series of separate payments.




          (d) With respect to any reimbursement of your expenses, or any provision of
in-kind benefits to you, as specified under this Agreement, such reimbursement of
expenses or provision of in-kind benefits shall be subject to the following
conditions: (1) the expenses eligible for reimbursement or the amount of in-kind
benefits provided in one taxable year shall not affect the expenses eligible for
reimbursement or the amount of in-kind benefits provided in any other taxable year,
except for any medical reimbursement arrangement providing for the reimbursement of
expenses referred to in Section 105(b) of the Code; (2) the reimbursement of an
eligible expense shall be made no later than the end of the year after the year in
which such expense was incurred; and (3) the right to reimbursement or in-kind
benefits shall not be subject to liquidation or exchange for another benefit.




          (e) Any payment of “deferred compensation” (as defined under Treasury
Regulation Section 1.409A-1(b)(1), after giving effect to the exemptions in Treasury
Regulation Sections 1.409A-1(b)(3) through (b)(12)) that arises under



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Section 10.1.2 (termination due to Disability), Section 10.2.1 (Employer’s no
cause termination), Section 10.3 (Employee’s Good Cause termination), and Section
10.5.4 (termination after a Change of Control), and any other provision of this
Agreement, on account of your separation from service while you are a “specified
employee” (as defined under Section 409A), and is scheduled to be paid or provided
within six months after such separation from service (the aggregate of such
scheduled payments, the “Delayed Payment”) shall, in lieu thereof, be paid or
provided, as adjusted for interest, within 15 days after the end of the six-month
period beginning on the date of such separation from service or, if earlier, within
15 days after the appointment of the personal representative or executor of your
estate following your death. For purposes of the foregoing, interest shall accrue
at the prime rate of interest published in the northeast edition of The Wall Street
Journal on the date of your separation from service.




          (f) In the event that the provisions of Section 25(e) shall apply to any
payment obligation under this Agreement, we will, within five (5) business days
after your separation from service, make an irrevocable contribution of an amount
equal to the Delayed Payment to a grantor trust established consistent with the
terms of Revenue Procedure 92-64, 33 I.R.B. 11 (Aug. 17, 1992) with a financial
institution approved by you, which approval will not be withheld unreasonably,
serving as the third-party trustee thereof, under the terms of which the assets of
the trust may be used, in the absence of our insolvency, solely for purposes of
fulfilling our obligation to pay the Delayed Payment to you in compliance with
Section 409A(a)(2)(B)(i) of the Code. In addition, in the event that you must incur
legal fees or costs to enforce payment of any amounts subject to the six-month delay
of payment under this Agreement, we will pay all reasonable attorney’s fees
associated with such action.



     IN WITNESS WHEREOF, the Employer and Employee have entered into this Amendment in Las Vegas,
Nevada, effective as of January 1, 2009.



	 	 	 	 	 	 	 	 	 
	 	 	 	 	MGM MIRAGE	 	 
	 
	 	 	 	 	 	 	 	 
	Date:

	 	December 31, 2008	 	By:	 	/s/ Cathryn Santoro	 	 
	 

	 	 

	 	 	 	 

	 	 
	 

	 	 	 	Name:	 	Cathryn Santoro	 	 
	 

	 	 	 	Title:	 	Senior Vice President and Treasurer	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	EMPLOYEE	 	 
	 
	 	 	 	 	 	 	 	 
	Date:

	 	December 19, 2008	 	By:	 	/s/ James J. Murren	 	 
	 

	 	 

	 	 	 	 

James J. Murren
	 	 







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