Document:

exv10w57xby

Exhibit 10.57

EXECUTION VERSION

SMITH & WESSON HOLDING CORPORATION

AND

CERTAIN AFFILIATED ENTITIES

AMENDMENT NO. 2 TO CREDIT AGREEMENT 

     This Amendment No. 2 to Credit Agreement and Assignment and Acceptance of Collateral Documents
(this “Amendment No. 2”) dated as of March 12, 2009 (the “Amendment Date”), is
among Smith & Wesson Holding Corporation, a Nevada corporation (“Holdings”), Smith & Wesson
Corp., a Delaware corporation (“S&W Corp.”), Thompson/Center Arms Company, Inc., a New
Hampshire corporation (“TCAC”), Thompson Center Holding Corporation, a Delaware corporation
(“TCHC”), Fox Ridge Outfitters, Inc., a New Hampshire corporation (“Fox Ridge”),
Bear Lake Holdings, Inc., a Delaware corporation (“Bear Lake”), K.W. Thompson Tool Company,
Inc., a New Hampshire corporation (“K.W. Thompson”), and O.L. Development, Inc., a New
Hampshire corporation (“O.L. Development”) (Holdings, S&W Corp. and TCAC are hereinafter
referred to individually as a “Borrower”, and collectively as the “Borrowers”, and
the Borrowers, TCHC, Fox Ridge, Bear Lake, K.W. Thompson are O.L. Development are hereinafter
referred to individually as a “Credit Party,” and collectively as the “Credit
Parties”), the Lenders (as defined below), and TD Bank, N.A., a national banking association
(“TD Bank”), in its capacity as administrative agent (in such capacity, the
“Administrative Agent”) for itself and the other lenders party to the Credit Agreement (as
defined below) from time to time (the “Lenders”).

R E C I T A L S:

     WHEREAS, reference is made to a certain Credit Agreement dated as of November 30, 2007 by and
among the Borrowers, the Lenders and the Administrative Agent, as amended by that certain Amendment
No. 1 to Credit Agreement and Assignment and Acceptance of Collateral Documents dated as of October
31, 2008 (as amended from time to time, the “Credit Agreement”); and

     WHEREAS, the Borrowers, the Administrative Agent and the Lender desire to modify (i) the
definition of Applicable Margin and (ii) the Consolidated Leverage Ratio;

     NOW THEREFORE, for good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties hereto hereby agree as follows:

     1. Recitals. The foregoing recitals are hereby incorporated by reference herein.

     2. Definitions. Terms defined in the Credit Agreement and not otherwise defined
herein shall have the meanings given to such terms in the Credit Agreement.

 

 

     3. Amendments to Credit Agreement. The parties hereto hereby agree that, effective on
the Effective Date, the Credit Agreement is hereby amended as follows:

     3.1 The definition of “Applicable Margin” appearing in Section 1.01 of the Credit Agreement is
hereby deleted in its entirety and the following is hereby inserted in its stead:

     “‘Applicable Margin’ means:

     (a) (i) during the period commencing on the date hereof and ending on
the date of delivery of the Compliance Certificate for the fiscal quarter
ending January 31, 2008, the Applicable Margin for all Loans and unused line
fees shall be set at Level 2 on the grid below, and (ii) at all times during
each Interest Period thereafter the Applicable Margin as of any date of
determination shall be determined based upon the Consolidated Leverage Ratio
as of the Determination Date immediately preceding such date as indicated in
the following table:

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	Applicable Margin	 	Applicable Margin	 	 
	 	 	 	 	for Revolving Loan	 	for Revolving Loan	 	 
	 	 	Consolidated	 	(per annum rates)	 	(per annum rates)	 	 
	 	 	Leverage Ratio	 	for Base Rate Loans	 	for LIBOR Loans	 	Unused Revolver Fee
	Level 1

	 	Greater than 3.00:1.00
	 	 	1.00	%	 	 	3.00	%	 	 	0.75	%
	Level 2

	 	Greater than 2.50:1.00
but less than or
equal to
3.00:1.00
	 	 	0.50	%	 	 	2.50	%	 	 	0.50	%
	Level 3

	 	Greater than 2.00:1.00
but less than or
equal to
2.50:1.00
	 	 	0.50	%	 	 	2.25	%	 	 	0.50	%
	Level 4

	 	Greater than
1.50:1.00 but less
than or equal to
2.00:1.00
	 	 	0.50	%	 	 	2.00	%	 	 	0.25	%
	Level 5

	 	Equal to or less than
1.50:1.00
	 	 	0.50	%	 	 	1.75	%	 	 	0.25	%

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If any Compliance Certificate has not been delivered to the Administrative
Agent within the time periods specified in Section 6.01(c), then until the
Determination Date, the highest rate set forth above shall apply.”

          3.2 Section 7.12(b) of the Credit Agreement is hereby deleted in its entirety and the
following is hereby substituted in its stead:

     “(b) Consolidated Leverage Ratio. The Companies will not permit the
Consolidated Leverage Ratio, determined for any Test Period ending on any date
during any period set forth below, to be more than the ratio set forth below
opposite such period:

	 	 	 	 	 
	Period	 	Ratio
	April 30,
2009, July 31, 2009, October 31, 2009, January 31, 2010, and April 30, 2010
	 	 	3.50:1.00	 
	 
	 	 	 	 
	July 31, 2010 and each fiscal quarter thereafter
	 	 	3.25:1.00	 

“.

          3.3 Schedule 6.12 (Depository Banks) to the Credit Agreement is hereby deleted in its
entirety and Schedule 6.12 (Depository Banks) attached hereto is hereby substituted in its
stead.

     4. Representations and Warranties. Each of the Credit Parties, by its execution
hereof, jointly and severally represents and warrants as follows:

          4.1. Legal Existence; Organization. Each Credit Party is duly organized and validly
existing and in good standing under the laws of the jurisdiction of its organization and under the
laws of each other jurisdiction in which it is qualified to do business, with all power and
authority (corporate or otherwise) necessary (a) to enter into this Amendment No. 2 (and the
attached acknowledgements and consents to which such Credit Party is a party) and the documents
executed in connection therewith and to perform all of its obligations hereunder and thereunder and
(b) to own its properties and carry on the business now conducted or proposed to be conducted by
it.

          4.2. Enforceability. Each Credit Party has taken all action (corporate or otherwise)
required to make the provisions of this Amendment No. 2 (and the attached acknowledgements and
consents to which such Credit Party is a party) and the documents executed in connection therewith
valid and enforceable obligations of such Credit Party, as they purport to be. Each Credit Party
has duly authorized, executed and delivered this Amendment No. 2 (and the attached

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acknowledgements and consents to which such Credit Party is a party) and the documents executed in connection
therewith. This Amendment No. 2 (and the attached acknowledgements and consents to which such
Credit Party is a party) and each document executed in connection therewith is the legal, valid and
binding obligations of such Credit Party and each is enforceable against such Credit Party in
accordance with its terms.

          4.3. No Legal Obstacle to Agreements. Neither the execution, delivery or performance
by any Credit Party of this Amendment No. 2 (or the attached acknowledgements and consents to which
such Credit Party is a party) or any document executed in connection therewith, nor the
consummation of any other transaction referred to or contemplated by this Amendment No. 2 (or the
attached acknowledgements and consents to which such Credit Party is a party) or any document
executed in connection therewith, nor the fulfillment of the terms hereof or thereof, has
constituted or resulted in or will constitute or result in:

          4.3.1 any breach or termination of any agreement, instrument, deed or lease to which
such Credit Party is a party or by which such Credit Party is bound, or of the charter,
by-laws or other organizational documents, as applicable, of such Credit Party;

          4.3.2 the violation of any law, judgment, decree or governmental order, rule or
regulation applicable to such Credit Party;

          4.3.3 the creation under any agreement, instrument, deed or lease of any Lien (other
than Liens on the Collateral which secure the Obligations) upon any of the assets of such
Credit Party; or

          4.3.4 any redemption, retirement or other repurchase obligation of such Credit Party
under any charter, by-law, organizational document, agreement, instrument, deed or lease to
which such Credit Party is a party.

Except such as have been obtained and are in full force and effect, no approval,
authorization or other action by, or declaration to or filing with, any governmental or
administrative authority or any other Person is required to be obtained or made by any
Credit Party in connection with the execution, delivery and performance by such Credit
Party of this Amendment No. 2 (and the attached acknowledgements and consents to which such
Credit Party is a party) or any document executed in connection therewith or the
consummation of the transactions contemplated hereby or thereby.

          4.4. Defaults. No Default exists or, immediately after giving effect to this
Amendment No. 2, will exist.

          4.5. Incorporation of Representations and Warranties. The representations and
warranties set forth in Article V of the Credit Agreement and in Section 10 of the Holdings/TCAC
Guaranty, Section 10 of the Holdings/S&W Corp. Guaranty, Section 10 of the Operating Companies
Guaranty and Section 10 of the Subsidiary Guaranty are each true and correct in all material
respects on the date hereof as if originally made on and as of the date hereof, except as the same
may expressly relate to an earlier date.

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     5. Conditions. The effectiveness of this Amendment No. 2 shall be subject to and
shall occur upon the satisfaction of the following conditions:

          5.1 Proper Proceedings. The execution and delivery by the Credit Parties of this
Amendment No. 2 (and the attached acknowledgements and consents to which each such Credit Party is
a party) and the documents executed in connection therewith and the performance of their respective
obligations hereunder and thereunder shall have been authorized by all necessary proceedings of
each of the Credit Parties. All necessary consents, approvals and authorizations of any
governmental or administrative agency or any other Person with respect to any of the transactions
contemplated by this Amendment No. 2 and the documents executed in connection therewith shall have
been obtained and shall be in full force and effect.

          5.2 Consummation of this Amendment No. 2. The Administrative Agent shall have
received this Amendment No. 2 (with the attached acknowledgements and consents) fully executed by
the parties hereto and thereto.

          5.3 Certificates of Secretary. The Administrative Agent shall have received a
Certificate of each Credit Party dated as of the date hereof and executed by its Secretary or
Assistant Secretary, which shall (A) certify the resolutions of its Board of Directors, members or
other body authorizing the execution, delivery and performance of this Amendment No. 2 and other
documents to which it is a party, (B) identify by name and title and bear the signatures of the
Financial Officers and any other officers of such Credit Party authorized to sign this Amendment
No. 2 and such other documents, and (C) certify that there has been no change in the certificate or
articles of incorporation and by-laws of each Credit Party since November 30, 2007 and that such
certificate or articles of incorporation and by-laws are in full force and effect or, if any such
certificate or articles of incorporation or by-laws have been changed since November 30, 2007,
attach a copy of such certificate or articles of incorporation or by-laws and certify such copy of
being true and correct and in full force and effect.

          5.4 Amendment Fee. The Administrative Agent shall have received an amendment fee of
$50,000, which shall be non-refundable and deemed earned upon the execution and delivery of this
Amendment No. 2.

          5.5 Other Documents. The Administrative Agent shall have received duly executed
copies of such other certificates, documents, instruments and agreements as the Administrative
Agent shall reasonably request in connection with the transactions contemplated by this Amendment
No. 2, each in form and substance acceptable to the Administrative Agent.

          5.6 Legal Matters. All legal matters incident to the transactions contemplated hereby
shall be satisfactory to counsel for the Administrative Agent and the Lenders.

          5.7 Fees and Expenses. The Credit Parties shall have paid all fees and expenses of
the Administrative Agent and the Lender (including the reasonable fees and expenses of their legal
counsel) in connection with this Amendment No. 2 and the documents executed in connection therewith
and the transactions contemplated herein.

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     6. Further Assurances. Each of the Credit Parties will, promptly upon the request of
the Administrative Agent from time to time, execute, acknowledge, deliver, file and record all such
instruments and notices, and take all such other action, as the Administrative Agent deems
necessary or advisable to carry out the intent and purposes of this Amendment No. 2 (and the
attached acknowledgements and consents) and the documents executed in connection therewith.

     7. No Defenses/Release. Each Credit Party warrants and represents to the
Administrative Agent and Lender that such Credit Party has no claims, counterclaims, offsets or
defenses to the Loan Documents or the Obligations, or if any such Person does have any claims,
counterclaims, offsets or defenses to the Loan Documents or the Obligations, the same are hereby
waived, relinquished and released in consideration of the execution and delivery of this Amendment
by the Administrative Agent.

     8. General. The Credit Agreement, as amended hereby, and all of the Loan Documents
are each confirmed as being in full force and effect. The Credit Agreement, as amended hereby, and
the other Loan Documents constitute the entire understanding of the parties with respect to the
subject matter hereof and thereof and supersede all prior and current understandings and
agreements, whether written or oral. This Amendment No. 2 may be executed in any number of
counterparts, which together shall constitute one instrument, and shall bind and inure to the
benefit of the parties thereto and their respective successors and assigns, including as such
successors and assigns all holders of any Obligation. Delivery of an executed counterpart of a
signature page of this Amendment No. 2 by telecopy or in PDF format by electronic mail shall be
effective as delivery of a manually executed counterpart of this Amendment No. 2. This Amendment
No. 2 (and attached acknowledgments and consents) shall be governed by and construed in accordance
with the laws of the State of New York, including, but not limited to, Section 5-1401 of the New
York General Obligations Law.

[Signature pages follow]

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     Each of the undersigned has caused this Amendment No. 2 to Credit Agreement to be executed and
delivered by its duly authorized officer as of the date first above written.

	 	 	 	 	 
	 	 	Credit Parties:
	 
	 	 	 	 
	 	 	SMITH & WESSON HOLDING CORPORATION
	 
	 	 	 	 
	 

	 	By:
	 	/s/ William F. Spengler
	 

	 	 	 	 
	 

	 	 	 	William F. Spengler
	 

	 	 	 	Executive Vice President, Chief Financial
	 

	 	 	 	Officer and Treasurer
	 
	 	 	 	 
	 	 	SMITH & WESSON CORP.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ William F. Spengler
	 

	 	 	 	 
	 

	 	 	 	William F. Spengler
	 

	 	 	 	Vice President, Chief Financial Officer and
	 

	 	 	 	Treasurer
	 
	 	 	 	 
	 	 	THOMPSON/CENTER ARMS COMPANY, INC.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ William F. Spengler
	 

	 	 	 	 
	 

	 	 	 	William F. Spengler
	 

	 	 	 	Vice President, Chief Financial Officer and
	 

	 	 	 	Treasurer
	 
	 	 	 	 
	 	 	THOMPSON CENTER HOLDING CORPORATION
	 
	 	 	 	 
	 

	 	By:
	 	/s/ William F. Spengler
	 

	 	 	 	 
	 

	 	 	 	William F. Spengler
	 

	 	 	 	Vice President, Chief Financial Officer and
	 

	 	 	 	Treasurer

[Signatures appear on following pages]

 

 

	 	 	 	 	 
	 	 	FOX RIDGE OUTFITTERS, INC.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ William F. Spengler
	 

	 	 	 	William F. Spengler
	 

	 	 	 	Vice President, Chief Financial Officer and
	 

	 	 	 	Treasurer
	 
	 	 	 	 
	 	 	BEAR LAKE HOLDINGS, INC.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ William F. Spengler
	 

	 	 	 	 
	 

	 	 	 	William F. Spengler
	 

	 	 	 	Vice President, Chief Financial Officer and
	 

	 	 	 	Treasurer
	 
	 	 	 	 
	 	 	K.W. THOMPSON TOOL COMPANY, INC.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ William F. Spengler
	 

	 	 	 	 
	 

	 	 	 	William F. Spengler
	 

	 	 	 	Vice President, Chief Financial Officer and
	 

	 	 	 	Treasurer
	 
	 	 	 	 
	 	 	O.L. DEVELOPMENT, INC.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ William F. Spengler
	 

	 	 	 	 
	 

	 	 	 	William F. Spengler
	 

	 	 	 	Vice President, Chief Financial Officer and
	 

	 	 	 	Treasurer

[Signatures appear on following page]

 

 

	 	 	 	 	 
	 	 	Administrative Agent:
	 
	 	 	 	 
	 	 	TD BANK, N.A.,
	 

	 	as Administrative Agent
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Maria P. Goncalves
	 

	 	 	 	 
	 

	 	 	 	Maria P. Goncalves, Senior Vice President
	 
	 	 	 	 
	 	 	Lender:
	 
	 	 	 	 
	 	 	TD BANK, N.A., as sole Lender
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Maria P. Goncalves
	 

	 	 	 	 
	 

	 	 	 	Maria P. Goncalves, Senior Vice Presidentexv10w3x15y

EXHIBIT 10.3 (15)

MGM MIRAGE

FREESTANDING STOCK APPRECIATION RIGHT AGREEMENT

	 	 	 
	No. of shares subject to the SAR:                     

	 	SAR No.                     

     This Agreement (this “Agreement”) is made by and between MGM MIRAGE, a Delaware corporation
(the “Company”), and                 (the “Participant”) as of                                         .

RECITALS

     A. The Board of Directors of the Company (the “Board”) has adopted the MGM MIRAGE 2005 Omnibus
Incentive Plan, which provides for the granting of awards, including SARs (as that term is defined
in Section 1 below) to selected employees.

     B. The Board believes that the grant of SARs will stimulate the interest of selected employees
in, and strengthen their desire to remain with, the Company or a Parent or Subsidiary (as those
terms are hereinafter defined).

     C. The Compensation Committee appointed to administer the Plan (the “Committee”) has
authorized the grant of an SAR to Participant pursuant to the terms of the Plan and this Agreement.

     Accordingly, in consideration of the mutual covenants contained herein, the parties agree as
follows:

     1. Definitions.

          1.1 “Code” means the Internal Revenue Code of 1986, as amended.

          1.2 “Parent” means a parent corporation as defined in Section 424(e) of the Code.

          1.3 “SAR” means a Stock Appreciation Right that is granted independently of any Option
pursuant to the Plan.

          1.4 “Stock” means the Company’s common stock, $.01 par value per
share.

          1.5 “Stock Appreciation Right” means an award pursuant to the Plan to be settled in Stock,
with the number of shares to be delivered based upon the increase in value of the underlying Stock,
granted in tandem with or independently of an option granted under the Plan.

 

 

          1.6 “Subsidiary” means a subsidiary corporation as defined in Section 424(f) of the Code or
corporation or other entity, whether domestic or foreign, in which the Company has or obtains a
proprietary interest of more than 50 percent by reason of stock ownership or otherwise.

     2. Grant to Participant.

          2.1 The Company hereby grants to Participant, subject to the terms and conditions of the Plan
and this Agreement, an SAR with respect to an aggregate of                      shares of Stock.
This SAR consists of the right to receive, upon exercise of the SAR (or any portion thereof),
shares of Stock in an amount whose Fair Market Value (as defined in the Plan) is equal to the
excess of (X) the Fair Market Value of the Stock on the date or dates upon which the Participant
exercises this SAR, or any portion thereof, over (Y) the Conversion Price (as that term is
hereinafter defined) of such shares. That number of shares shall be reduced by the number of
shares of Stock whose Fair Market Value is equal to the amount of tax required to be withheld by
the Company or a Parent or Subsidiary as a result of the grant or exercise of this SAR. No
fractional shares shall be issued pursuant to this SAR.

          2.2 The conversion price per share for this SAR shall be: $                    , the Fair Market Value on
the date of grant (the “Conversion Price”).

     3. Terms and Conditions.

          3.1 Exercisability. The SAR evidenced hereby is subject to the terms and conditions
of any existing employment agreement between the Company and the Participant (including extensions,
renewals, amendments and successors thereto if the provisions relating to SARs are not modified
(and if modified, such modifications shall only apply to SARs granted concurrently with or after
the date of such modification, and the existing agreement shall govern the SAR evidenced hereby))
as it relates to all terms except: the Conversion Price; the number of shares determined in
paragraph 2.1 above; and the expiration date defined in this section. In the absence of an
existing employment agreement or if the employment agreement is silent as to the terms and
conditions in this Section 3, the SAR evidenced hereby is subject to the following terms and
conditions:

               A. Expiration Date. The SAR shall expire at 5:00 p.m., Pacific Standard Time on                      or
such earlier time as may be required by the Plan or this Agreement if the Participant’s employment
with the Company or a Parent or Subsidiary is terminated.

               B. Exercise of SAR. In order to exercise this SAR, the Participant or any other
person or persons entitled to exercise this SAR shall give written notice to the Committee
specifying the number of shares with respect to which the SAR is being exercised, which notice must
be received while this SAR is still exercisable. This SAR is not exercisable until Participant has
performed services for the Company or for a Parent or Subsidiary for a period ending on the date
specified in clause (i) below. Thereafter, the SAR shall be exercisable in cumulative installments
as follows:

2

 

                         (i) The first installment shall consist of 25 percent of the shares subject to this SAR and
shall become exercisable on                      (the “Initial Exercise Date”).

                         (ii) The second installment shall consist of 25 percent of the shares subject to this SAR and
shall become exercisable on the first anniversary of the Initial Exercise Date.

                         (iii) The third installment shall consist of 25 percent of the shares subject to this SAR and
shall become exercisable on the second anniversary of the Initial Exercise Date.

                         (iv) The fourth installment shall consist of 20 percent of the shares subject to this SAR and
shall become exercisable on the third anniversary of the Initial Exercise Date.

     3.2 Unexercised Portion of SAR. The unexercised portion of this SAR may not be
exercised after Participant terminates employment with the Company, its Parent and Subsidiaries,
except as otherwise provided in paragraph 3.3 below; provided, however that this SAR may not at any
time be exercised in part with respect to fewer than the lesser of (i) 50 shares or (ii) the number
of shares which remain to be purchased pursuant to this SAR.

     3.3 Exercise Upon Death or Termination of Employment. If Participant’s employment
with the Company, its Parent and Subsidiaries are terminated because of death, or if Participant
dies within three months of termination of employment with the Company, its Parent and
Subsidiaries, this SAR may be exercised, to the extent that Participant was entitled to do so at
the date of termination of employment, by the person or persons to whom Participant’s rights under
this SAR pass by will or applicable law, or if no such person has such rights, by his executors or
administrators, at any time, or from time to time, within one year after the date of such
termination of employment, but in no event later than the expiration date specified in paragraph
3.1. If Participant’s employment by the Company, its Parent and Subsidiaries terminates for any
reason other than death, Participant may exercise this SAR, to the extent Participant was entitled
to do so at the date of termination of employment, at any time or from time to time, within three
months after the date of termination of employment, but in no event later than the expiration date
specified in paragraph 3.1.

     3.4 Committee Discretion. The Committee, in its discretion, may accelerate the
exerciseability of the balance, or some lesser portion, of the Participant’s unexercisable SAR at
any time, subject to the terms of the Plan and in accordance with any written agreement between the
Participant and the Company. Is so accelerated, the SAR will be considered as exercisable as of
the date specified by the Committee or an applicable written agreement.

     3.5 Limits on Transferabilty. This SAR may be transferred to a trust in which the
Participant or the Participant’s spouse control the management of the assets. With respect to a
SAR, if any that has been transferred to a trust, references in this Agreement to exercisability
related to such SAR shall be deemed to include such trust. No interest of Participant under the
Plan shall be subject to attachment, execution, garnishment, sequestration, the laws of bankruptcy
or any other legal or equitable process.

3

 

     3.6 Adjustments. If there is any change in the Stock by reason of any stock dividend,
recapitalization, reorganization, merger, consolidation, split-up, combination or exchange of
shares of Stock, or of any similar change affecting the Stock, the number and class of securities
subject to this SAR, the Conversion Price per share, and any other terms of this Agreement then the
Committee will make appropriate and proportionate adjustments (including relating to the Stock,
other securities, cash or other consideration which may be acquired upon exercise of this SAR) that
it deems necessary. Any adjustment so made shall be final and binding upon the Participant.

     3.7 No Rights as Stockholder. Participant shall have no rights as a stockholder with
respect to any shares of Stock subject to this SAR until the SAR has been exercised and shares of
Stock relating thereto have been issued and recorded on the records of the Company or its transfer
agent or registrars.

     3.8 No Right to Continued Performance of Services. This SAR shall not confer upon the
Participant any right to continue to be employed by the Company or any Parent or Subsidiary nor may
it interfere in any way with the right of the Company or any Parent or Subsidiary for which
Participant performs services to terminate Participant’s employment at any time.

     3.9 Compliance With Law and Regulations. This SAR, its exercise and the obligation of
the Company to issue shares of Stock under this Agreement are subject to all applicable federal and
state laws, rules and regulations, including those related to disclosure of financial and other
information to the Participant and to approvals by any government or regulatory agency as may be
required. The Company shall not be required to issue or deliver any certificates for shares of
Stock prior to (A) the listing of such shares on any stock exchange on which the Stock may then be
listed and (B) the completion of any registration or qualification of such shares under any federal
or state law, or any rule or regulation of any government body which the Company shall, in its sole
discretion, determine to be necessary or advisable.

     3.10 Certain Corporation Transactions. Nothing in the Plan or this Agreement will in
any way prohibit the Company from merging with or consolidating into another corporation or from
selling or transferring all or substantially all of its assets, or from distributing all or
substantially all of its assets to its stockholders in liquidation, or from dissolving and
terminating its corporate existence, and in any such event (other than a merger in which the
Company is the surviving corporation and under the terms of which the shares of Stock outstanding
immediately prior to the merger remain outstanding and unchanged), the Participant will be entitled
to receive, at the time this SAR or portion thereof would otherwise become exercisable, subject to
the terms of this SAR, the same shares of stock, cash or other consideration received by
stockholders of the Company in accordance with such merger, consolidation, sale or transfer of
assets, liquidation or dissolution.

     4. Investment Representation. The Participant must, upon demand by the Company,
promptly furnish the Company, prior to the issuance of any shares of Stock upon the exercise of all
or any part of this SAR, an agreement in which the Participant represents that the shares of
Stock acquired upon exercise are being acquired for investment and not with a view to the sale or
distribution thereof. Upon such demand, delivery of such representation prior to the delivery of
any shares of Stock upon exercise of this SAR is a condition precedent to the right of the
Participant to acquire any shares of Stock. The Company will have the right, at its election, to

4

 

place legends on the certificates representing the shares so being issued with respect to
limitations on transferability imposed by federal and/or state laws, and the Company will have the
right to issue “stop transfer” instructions to its transfer agent.

     5. Participant Bound by Plan. Participant acknowledges receipt of a copy of the Plan
and agrees to be bound by all the terms and provisions thereof. The Company hereby agrees to
provide the Participant with any amendments to this Plan which may be adopted prior to the
expiration date specified in Section 3.1.

     6. Notices. Any notice hereunder to the Company must be addressed to: MGM MIRAGE,
3600 Las Vegas Boulevard South, Las Vegas, Nevada 89109, Attention: 2005 Omnibus Incentive Plan
Administrator, and any notice hereunder to Participant must be addressed to the Participant at
Participant’s last address on the records of the Company, subject to the right of either party to
designate at any time hereafter in writing some other address. Any notice shall be deemed to have
been duly given on personal delivery or three days after being sent in a properly sealed envelope,
addressed as set forth above, and deposited (with first class postage prepaid) in the United States
mail.

     7. Counterparts. This Agreement may be executed in counterparts, each of which shall
be deemed to be an original, and all of such counterparts together shall constitute one and the
same instrument. Each party further agrees that an electronic, facsimile or digital signature or
an online acceptance or acknowledgment will be accorded the full legal force and effect of a
handwritten signature under Nevada law.

     8. Governing Law. The parties hereto agree that the validity, construction and
interpretation of this Agreement shall be governed by the laws of the state of Nevada.

     9. Arbitration. Except as otherwise provided in Exhibit A to this Agreement (which
constitutes a material provision of this Agreement), disputes relating to this Agreement shall be
resolved by arbitration pursuant to Exhibit A hereto.

     10. Variation of Pronouns. All pronouns and any variations thereof contained herein
shall be deemed to refer to masculine, feminine, neuter, singular or plural, as the identity of the
person or persons may require.

     11. Severability. Any portion of this Agreement that is declared contrary to any law,
regulation or is otherwise invalid, shall be deemed stricken without impairing the validity of the
remainder this Agreement.

[signature page follows]

5

 

     IN WITNESS WHEREOF, the Company and Participant have executed this Agreement as of the date
first written above.

	 	 	 	 	 
	 	 	MGM MIRAGE
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	Title:	 	 
	 
	 	 	 	 
	 	 	PARTICIPANT:
	 
	 
	 	 	 	 
	 	 	 

6

 

EXHIBIT A 

ARBITRATION

This Exhibit A sets forth the methods for resolving disputes should any arise under the Agreement,
and accordingly, this Exhibit A shall be considered to be a part of the Agreement.

	1.	 	Except for a claim by either Participant or the Company for injunctive relief where such
would be otherwise authorized by law, any controversy or claim arising out of or relating to
the Agreement or the breach hereof including without limitation any claim involving the
interpretation or application of the Agreement or the Plan, shall be submitted to binding
arbitration in accordance with the employment arbitration rules then in effect of the Judicial
Arbitration and Mediation Service (“JAMS”), to the extent not inconsistent with this
paragraph. [This Exhibit A covers any claim Participant might have against any officer,
director, employee, or agent of the Company, or any of the Company’s subsidiaries, divisions,
and affiliates, and all successors and assigns of any of them.] The promises by the Company
and Participant to arbitrate differences, rather than litigate them before courts or other
bodies, provide consideration for each other, in addition to other consideration provided
under the Agreement.
	 
	2.	 	Claims Subject to Arbitration. This Exhibit A contemplates mandatory arbitration to
the fullest extent permitted by law. Only claims that are justiciable under applicable state
or federal law are covered by this Exhibit A. Such claims include any and all alleged
violations of any state or federal law whether common law, statutory, arising under regulation
or ordinance, or any other law, brought by any current or former employees.
	 
	3.	 	Non-Waiver of Substantive Rights. This Exhibit A does not waive any rights or
remedies available under applicable statutes or common law. However, it does waive
Participant’s right to pursue those rights and remedies in a judicial forum. By signing the
Agreement and the acknowledgment at the end of this Exhibit A, the undersigned Participant
voluntarily agrees to arbitrate his or her claims covered by this Exhibit A.
	 
	4.	 	Time Limit to Pursue Arbitration; Initiation: To ensure timely resolution of
disputes, Participant and the Company must initiate arbitration within the statute of
limitations (deadline for filing) provided for by applicable law pertaining to the claim. The
failure to initiate arbitration within this time limit will bar any such claim. The parties
understand that the Company and Participant are waiving any longer statutes of limitations
that would otherwise apply, and any aggrieved party is encouraged to give written notice of
any claim as soon as possible after the event(s) in dispute so that arbitration of any
differences may take place promptly. The parties agree that the aggrieved party must, within
the time frame provided by this Exhibit A, give written notice of a claim pursuant to Section
6 of the Agreement. In the event such notice is to be provided to the Company, the
Participant shall provide a copy of such notice of claim to the Company’s Executive Vice
President and General Counsel. Written notice shall identify and describe the nature of the
claim, the supporting facts and the relief or remedy sought.

7

 

	5.	 	Selecting an Arbitrator: This Exhibit A mandates Arbitration under the then current
rules of the Judicial Arbitration and Mediation Service (JAMS) regarding employment disputes.
The arbitrator shall be either a retired judge or an attorney experienced in employment law
and licensed to practice in the state in which arbitration is convened. The parties shall
select one arbitrator from among a list of three qualified neutral arbitrators provided by
JAMS. If the parties are unable to agree on the arbitrator, each party shall strike one name
and the remaining named arbitrator shall be selected.
	 
	6.	 	Representation/Arbitration Rights and Procedures:

	 	a.	 	Participant may be represented by an attorney of his/her choice at
his/her own expense.
	 
	 	b.	 	The arbitrator shall apply the substantive law (and the law of
remedies, if applicable) of Nevada (without regard to its choice of law provisions)
and/or federal law when applicable. In all cases, this Exhibit A shall provide for
the broadest level of arbitration of claims between the Company and Participant
under Nevada or applicable federal law. The arbitrator is without jurisdiction to
apply any different substantive law or law of remedies.
	 
	 	c.	 	The arbitrator shall have no authority to award non-economic damages or
punitive damages except where such relief is specifically authorized by an
applicable state or federal statute or common law. In such a situation, the
arbitrator shall specify in the award the specific statute or other basis under
which such relief is granted.
	 
	 	d.	 	The applicable law with respect to privilege, including attorney-client
privilege, work product, and offers to compromise must be followed.
	 
	 	e.	 	The parties shall have the right to conduct reasonable discovery,
including written and oral (deposition) discovery and to subpoena and/or request
copies of records, documents and other relevant discoverable information consistent
with the procedural rules of JAMS. The arbitrator shall decide disputes regarding
the scope of discovery and shall have authority to regulate the conduct of any
hearing and/or trial proceeding. The arbitrator shall have the right to entertain
a motion to dismiss and/or motion for summary judgment.
	 
	 	f.	 	The parties shall exchange witness lists at least 30 days prior to the
trial/hearing procedure. The arbitrator shall have subpoena power so that either
Participant or the Company may summon witnesses. The arbitrator shall use the
Federal Rules of Evidence. Both parties have the right to file a post hearing
brief. Any party, at its own expense, may arrange for and pay the cost of a court
reporter to provide a stenographic record of the proceedings.
	 
	 	g.	 	Any arbitration hearing or proceeding shall take place in private, not
open to the public, in Las Vegas, Nevada.

8

 

	7.	 	Arbitrator’s Award: The arbitrator shall issue a written decision containing the
specific issues raised by the parties, the specific findings of fact, and the specific
conclusions of law. The award shall be rendered promptly, typically within 30 days after
conclusion of the arbitration hearing, or the submission of post-hearing briefs if requested.
The arbitrator may not award any relief or remedy in excess of what a court could grant under
applicable law. The arbitrator’s decision is final and binding on both parties. Judgment
upon an award rendered by the arbitrator may be entered in any court having competent
jurisdiction.

	 	a.	 	Either party may bring an action in any court of competent jurisdiction
to compel arbitration under this Exhibit A and to enforce an arbitration award.
	 
	 	b.	 	In the event of any administrative or judicial action by any agency or
third party to adjudicate a claim on behalf of Participant which is subject to
arbitration under this Exhibit A, Participant hereby waives the right to
participate in any monetary or other recovery obtained by such agency or third
party in any such action, and Participant’s sole remedy with respect to any such
claim shall be any award decreed by an arbitrator pursuant to the provisions of
this Exhibit A.

	8.	 	Fees and Expenses: The Company shall be responsible for paying any filing fee and the
fees and costs of the arbitrator; provided, however, that if Participant is the party
initiating the claim, Participant will contribute an amount equal to the filing fee to
initiate a claim in the court of general jurisdiction in the state in which Participant is (or
was last) employed by the Company. Participant and the Company shall each pay for their own
expenses, attorney’s fees (a party’s responsibility for his/her/its own attorney’s fees is
only limited by any applicable statute specifically providing that attorney’s fees may be
awarded as a remedy), and costs and fees regarding witness, photocopying and other preparation
expenses. If any party prevails on a statutory claim that affords the prevailing party
attorney’s fees and costs, or if there is a written agreement providing for attorney’s fees
and/or costs, the arbitrator may award reasonable attorney’s fees and/or costs to the
prevailing party, applying the same standards a court would apply under the law applicable to
the claim(s).

	9.	 	The arbitration provisions of this Exhibit A shall survive the termination of Participant’s
employment with the Company and the expiration of the Agreement. These arbitration provisions
can only be modified or revoked in a writing signed by both parties and which expressly states
an intent to modify or revoke the provisions of this Exhibit A.

	10.	 	The arbitration provisions of this Exhibit A do not alter or affect the termination
provisions of this Agreement.

	11.	 	Capitalized terms not defined in this Exhibit A shall have the same definition as in the
Agreement to which this is Exhibit A.

	12.	 	If any provision of this Exhibit A is adjudged to be void or otherwise unenforceable, in
whole or in part, such adjudication shall not affect the validity of the remainder of Exhibit
A. All other provisions shall remain in full force and effect.

9

 

ACKNOWLEDGMENT

BOTH PARTIES ACKNOWLEDGE THAT: THEY HAVE CAREFULLY READ THIS EXHIBIT A IN ITS ENTIRETY, THEY
UNDERSTAND ITS TERMS, EXHIBIT A CONSTITUTES A MATERIAL TERM AND CONDITION OF THE RESTRICTED STOCK
UNITS AGREEMENT BETWEEN THE PARTIES TO WHICH IT IS EXHIBIT A, AND THEY AGREE TO ABIDE BY ITS TERMS.

The parties also specifically acknowledge that by agreeing to the terms of this Exhibit A, they are
waiving the right to pursue claims covered by this Exhibit A in a judicial forum and instead agree
to arbitrate all such claims before an arbitrator without a court or jury. It is specifically
understood that this Exhibit A does not waive any rights or remedies which are available under
applicable state and federal statutes or common law. Both parties enter into this Exhibit A
voluntarily and not in reliance on any promises or representation by the other party other than
those contained in the Agreement or in this Exhibit A.

Participant further acknowledges that Participant has been given the opportunity to discuss this
Exhibit A with Participant’s private legal counsel and that Participant has availed himself/herself
of that opportunity to the extent Participant wishes to do so.

	 	 	 	 	 	 	 
	PARTICIPANT

	 	 	 	THE COMPANY
	 	 
	 
	 	 	 	 	 	 
	 
	 

	 	 	 	 	 	 
	 

	 	 	 	By:	 	 

10

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