<PAGE>

                                                                   EXHIBIT 10.3


                                EMPLOYMENT AGREEMENT

       This Employment Agreement (this "Agreement") is entered into as of
August 17, 1999, between Hard Rock Hotel, Inc., a Nevada corporation (the
"Company"), and Jonathan Swain, an individual ("Executive").

                               PRELIMINARY STATEMENTS

       A.     The Company currently operates that certain hotel/casino resort
known as the "Hard Rock Hotel" located at 4455 Paradise Road, Las Vegas, Nevada.

       B.     The Company desires to employ Executive, and Executive desires to
be so employed, on the terms and conditions herein contained.

                                     AGREEMENT

       NOW, THEREFORE, in consideration of the various covenants and agreements
hereinafter set forth, the parties hereto agree as follows:

       1.     TERM OF EMPLOYMENT.  The Company hereby employs Executive and
Executive accepts such employment commencing on the date of this Agreement (the
"Commencement Date") and terminating on the third anniversary of the
Commencement Date, unless sooner terminated as hereinafter provided; PROVIDED,
HOWEVER, that this Agreement may be extended for successive one (1) year terms
upon the mutual agreement of the parties hereto.

       2.     SERVICES TO BE RENDERED.

              2.1.   DUTIES OF EXECUTIVE.  Executive shall be employed to serve
in the capacity of Vice President and General Manager of the Company.  Executive
shall be responsible for the overall supervision, direction, and control of the
operations of the Hard Rock Hotel facility and shall direct the operating
departments with a view to the successful implementation of the business
policies and plans for the Hard Rock. Executive shall provide support in the
conceptual, strategic, and policy formulation functions of the Company and shall
direct and coordinate the activities of the Hard Rock to attempt to obtain
optimum efficiency and economy of operations in order to maximize profits.
Executive shall devote his full business time, attention and ability to the
affairs of the Company during the term of this Agreement; PROVIDED, HOWEVER,
that Employee shall not be precluded from involvement in charitable or civic
activities or his personal financial investments provided that the same do not
interfere with his time and attention to the affairs of the Company.  Executive
will report directly to the Chairman of the Board of Directors ("Chairman") or
such other person designated by the Chairman or Board of Directors of the
Company (the "Board").

       3.     COMPENSATION AND BENEFITS. The Company shall pay the following
compensation and benefits to Executive during the term hereof; and Executive
shall accept the same as payment in full for all services rendered by Executive
to or for the benefit of the Company:

                                     1


<PAGE>




              3.1.   BASE SALARY. Commencing on the Commencement Date, a base
salary (the "Base Salary") of $260,000 per annum. The Base Salary shall accrue
in equal bi-weekly installments in arrears and shall be payable in accordance
with the payroll practices of the Company in effect from time to time.

              3.2.   ANNUAL BONUS.  Executive shall be eligible to receive an
annual bonus (the "Annual Bonus") to be determined by the Chairman based upon
the achievement of the financial performance and other objectives of the Company
and Executive's contribution to such performance.

              3.3.   STOCK.  Executive shall be entitled to participate in any
stock option or phantom equity plans that the Company provides to its comparable
senior executive officers to the extent such plans are established by the
Company.

              3.4.   EXPENSES.  The Company shall reimburse Executive for
reasonable out-of-pocket expenses incurred in connection with the performance of
his duties hereunder, subject to (i) such policies as the Board may from time to
time establish and (ii) Executive furnishing the Company with evidence in the
form of receipts satisfactory to the Company substantiating the claimed
expenditures.

              3.5.   VACATION.  Executive shall be entitled to the number of
paid vacation days in each calendar year determined by the Company from time to
time for its comparable senior executive officers.  Executive shall also be
entitled to all paid holidays given to the Company's comparable senior executive
officers.

              3.6.   BENEFITS.  Executive shall be entitled to participate in
the Company's group insurance, hospitalization, and group health and benefit
plans and all other benefits and plans as the Company provides to its comparable
senior executive officers to the extent such plans are established by the
Company and to the extent that Executive is eligible to participate in such
plans.

              3.7.   WITHHOLDING AND OTHER DEDUCTIONS.  All compensation payable
to Executive hereunder shall be subject to such deductions as the Company is
from time to time required to make pursuant to law, governmental regulation or
order.

       4.     FACILITIES.  Executive shall be furnished with an office, supplies
and personnel which are necessary or appropriate for the adequate performance by
Executive of his duties as set forth in this Agreement.

       5.     REPRESENTATIONS AND WARRANTIES OF EXECUTIVE. Executive represents
and warrants to the Company that (i) Executive is under no contractual or other
restriction or obligation which is inconsistent with the execution of this
Agreement, the performance of his duties hereunder, or the other rights of the
Company hereunder and (ii) Executive is under no physical or mental disability
that would hinder the performance of his duties under this Agreement.

                                     2

<PAGE>


       6.     NON-DISCLOSURE; NON-SOLICITATION.  During the term of this
Agreement and thereafter, Executive shall hold in a fiduciary capacity for the
benefit of the Company all secret or confidential information, knowledge or data
relating to the Company or its affiliates, and their respective businesses,
which shall not be public knowledge (other than information which becomes public
as a result of acts of Executive or his representatives in violation of this
Agreement), including, without limitation, customer/ client lists, matters
subject to litigation, and technology or financial information of the Company or
its subsidiaries, without the prior written consent of the Company.  In
addition, during the term of this Agreement and for a two (2) year period
thereafter, Executive shall not, directly or indirectly, solicit or contact any
employee of the Company or any affiliate of the Company, with a view to inducing
or encouraging such employee to leave the employ of the Company or its
affiliates, for the purpose of being employed by Executive, an employer
affiliated with Executive or any competitor of the Company or any affiliate
thereof.  Executive acknowledges that the provisions of this Article 6 are
reasonable and necessary for the protection of the Company and that the Company
will be irrevocably damaged if such provisions are not specifically enforced.
Accordingly, Executive agrees that, in addition to any other relief to which the
Company may be entitled in the form of actual or punitive damages, the Company
shall be entitled to seek and obtain injunctive relief from a court of competent
jurisdiction (without posting a bond therefor) for the purpose of restraining
Executive from any actual or threatened breach of such provisions.

       7.     TERMINATION.

              7.1.   DEATH OR TOTAL DISABILITY OF EXECUTIVE. If Executive dies
or becomes totally disabled during the term of this Agreement, Executive's
employment hereunder shall automatically terminate. For these purposes Executive
shall be deemed totally disabled if Executive shall become physically or
mentally incapacitated or disabled or otherwise unable fully to discharge
Executive's essential duties hereunder for a period of ninety (90) consecutive
calendar days or for one hundred twenty (120) calendar days in any one hundred
eighty (180) calendar-day period.

              7.2.   TERMINATION FOR GOOD CAUSE. Executive's employment
hereunder may be terminated by the Company for "good cause." The term "good
cause is defined as any one or more of the following occurrences:

                     (a)    Executive's breach of any of the covenants contained
in Article 6 of this Agreement;

                     (b)    Executive's conviction by, or entry of a plea of
guilty or nolo contendere in, a court of competent and final jurisdiction for
any crime involving moral turpitude or punishable by imprisonment in the
jurisdiction involved;

                     (c)    Executive's commission of an act of criminal fraud
that affects the Company, whether prior to or subsequent to the date hereof upon
the Company;

                                     3

<PAGE>

                     (d)    Executive's continuing repeated willful failure or
refusal to perform Executive's duties as required by this Agreement (including,
without limitation, Executive's inability to perform Executive's duties
hereunder as a result of drug or alcohol related misconduct and/or as a result
of any failure to comply with any laws, rules or regulations of any governmental
entity with respect to Executive's employment by the Company);

                     (e)    Executive's gross negligence, misappropriation of
Company assets, or any other material misconduct on the part of Executive;

                     (f)    the failure of Executive to obtain any requisite
license, permit or approval based on suitability from any state, county, or
other governmental authority having jurisdiction over the gaming operations of
the Company (the "Gaming Authorities") which would preclude Executive from
carrying out his duties as set forth in this Agreement;

                     (g)    if, after the initial receipt by Executive of any
requisite license, permit or approval from the Gaming Authorities, the execution
of Executive's duties as set forth in this Agreement will, as evidenced by
communications from any senior official of any of the Gaming Authorities,
materially preclude or unduly delay the issuance of, or result in the imposition
of unduly burdensome terms and conditions on, or revocation of, any liquor,
gaming or other license, permit or approval, necessary or appropriate to the
proposed, contemplated or actual operations of the Company; PROVIDED, HOWEVER,
that this Section 7.2(h) shall not be applicable if Executive shall, within a
reasonable period of time after receipt of written notice from the Board
specifying the nature of the issues involved hereunder, remedy the situation to
the satisfaction of the applicable Gaming Authorities; or

                     (h)    Executive's breach of any other provision of this
Agreement, provided that termination of Executive's employment pursuant to this
subsection (i) shall not constitute valid termination for good cause unless
Executive shall have first received written notice from the Board stating with
specificity the nature of such breach and affording Executive at least fifteen
(15) days to correct the breach alleged.

              7.3.   RESIGNATION OF EXECUTIVE.  The Company shall have the right
to terminate this Agreement and Executive's employment hereunder due to the
voluntary resignation of Executive, provided that Executive shall deliver no
less than sixty (60) days prior written notice of such resignation to the Board,
which notice may be waived by the Company in its sole discretion.

              7.4.   SEVERANCE COMPENSATION. Notwithstanding anything contained
in this Agreement, upon a termination of this Agreement and Executive's
employment hereunder due to the occurrence of any of the events referred to in
Section 7.1, 7.2 or 7.3 of this Agreement, Executive (or Executive's heirs or
representatives) shall be entitled to receive only such portion (if any) of the
Base Salary as may theretofore have accrued but be unpaid on the date on which
the termination shall take effect.

              7.5.   TERMINATION FOR NO CAUSE.  In addition to the right to
terminate this Agreement pursuant to Sections 7.1, 7.2 and 7.3 of this
Agreement, the Company shall have the right to

                                     4


<PAGE>

terminate this Agreement and Executive's employment hereunder for any other
reason or for no reason prior to the expiration of the term of this
Agreement.  In the event that the Company terminates this Agreement and
Executive's employment hereunder pursuant to this Section 7.5, the Company
shall give ten (10) days prior written notice to Executive and pay a
termination fee to Executive in an amount equal to (i) one hundred percent
(100%) if such termination occurs within twelve months of the Commencement
Date of this Agreement or (ii) fifty percent (50%) if such termination occurs
thereafter, of the remainder of the Base Salary which would otherwise be due
Executive pursuant to this Agreement but for such termination, to be paid in
the manner and at the rate Executive had received immediately prior to such
termination pursuant to Section 3.1 of this Agreement and the Company shall
have no further obligation to Executive under this Agreement.

              7.6.   TERMINATION OBLIGATIONS OF EXECUTIVE.  In the event that
this Agreement and Executive's employment hereunder is terminated, Executive, or
his legal representative in case of termination by death or Executive's physical
or mental incapacity to serve, shall:

                     (a)    by the close of the effective date of termination,
resign from all corporate positions held in the Company and any of its
subsidiary and affiliated companies;

                     (b)    promptly return to a representative designated by
the Company all property, including but not limited to, keys, identification
cards and credit cards of the Company or any of its subsidiaries or affiliated
companies; and

                     (c)    incur no further expenses or obligations on behalf
of the Company, or any of its subsidiaries and affiliated companies.

       8.     CHANGE OF CONTROL. In the event of a "Change of Control" (as
defined below) which results in the material change in the Executive's duties as
described in Article 2.1 of the Agreement, Executive shall have a period of ten
(10) days after such material change to notify the Company of his resignation.
Such resignation shall conform to Article 7.3 of the Agreement but the Executive
will be due severance compensation as if Executive was terminated for no cause.
For purposes of this Article 8 "Change of Control" shall mean that Peter Morton
and/or his affiliates no longer, directly or indirectly, beneficially own(s) in
the aggregate shares of capital stock of the Company having twenty-five percent
(25%) or more of the aggregate voting power of all shares of capital stock of
the Company at the time outstanding. The term "affiliate" as used in this
Article 8 shall have the same meaning as ascribed to such term in Section 12b-2
of the Securities Exchange Act of 1934, as amended.

       9.     ARBITRATION. Any claim or controversy arising out of or relating
to this Agreement shall be settled by arbitration in Las Vegas. Nevada, in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association, and judgment on the award rendered by the arbitrators may be
entered in any court having jurisdiction. There shall be three arbitrators, one
to be chosen directly by each party at will, and the third arbitrator to be
selected by the two arbitrators so chosen. Each party shall pay the fees of the
arbitrator it

                                     5

<PAGE>

selects and of its own attorneys, the expenses of its witnesses
and all other expenses connected with presenting its case. Other costs of the
arbitration, including the cost of any record or transcripts of the arbitration,
administrative fees, the fee of the third arbitrator, and all other fees and
costs, shall be borne equally by the parties hereto.

       10.    GENERAL RELATIONSHIP. Executive shall be considered an employee of
the Company within the meaning of all federal, state and local laws and
regulations including, but not limited to, laws and regulations governing
unemployment insurance, workers' compensation, industrial accident, labor and
taxes.

       11.    GENERAL PROVISIONS.

              11.1.  BINDING EFFECT.  This Agreement shall be binding upon and
inure to the benefit of the Company and its successors and assigns and
Executive, his assignees, and his estate.  Neither Executive, his designees, nor
his estate shall commute, pledge, encumber, sell or otherwise dispose of the
rights to receive the payments provided in this Agreement, which payments and
the rights thereto are expressly declared to be nontransferable and
nonassignable (except by death or otherwise by operation of law).

              11.2.  GOVERNING LAW.  This Agreement shall be governed by the
laws of the State of Nevada from time to time in effect.

              11.3.  COUNTERPARTS.  This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which
taken together shall constitute one and the same Agreement.

              11.4.  NO WAIVER.  Except as otherwise expressly set forth herein,
no failure on the part of either party hereto to exercise and no delay in
exercising any right, power or remedy hereunder shall operate as a waiver hereof
nor shall any single or partial exercise of any right, power or remedy hereunder
preclude any other or further exercise thereof or the exercise of any other
right, power or remedy.

              11.5.  HEADINGS.  The headings of the Articles and Sections of
this Agreement have been inserted for convenience of reference only and shall in
no way restrict any of the terms or provisions hereof.

              11.6.  NOTICES.  Any notice under this Agreement shall be given in
writing and delivered in person or mailed by certified or registered mail,
addressed to the respective party at the address as set out below, or at such
other address as either party may elect to provide in advance in writing, to the
other party:

              EXECUTIVE:

              Jonathan Swain
              8104 Moonstone Circle
              Las Vegas, Nevada 89128

                                     6


<PAGE>

              COMPANY:

              Hard Rock Hotel, Inc.
              510 North Robertson Boulevard
              Los Angeles, California 90048
              Attn:  Peter Morton

              WITH A COPY TO:

              Schreck Morris
              1200 Bank of America Plaza
              300 S Fourth Street
              Las Vegas, Nevada 89101
              Attn:  Frank Schreck

              11.7.  SEVERABILITY.  If any provision of this Agreement is held
by a court of competent jurisdiction to be invalid, illegal, or unenforceable by
reason of any rule of law or public policy, all other provisions of this
Agreement shall nevertheless remain in effect.  No provision of this Agreement
shall be deemed dependent on any other provision unless so expressed herein.

              11.8.  COMPLIANCE WITH LAWS; GAMING AUTHORITIES APPROVAL.  Nothing
contained in this Agreement shall be construed to require the commencement of
any act contrary to law, and when there is any conflict between any provision of
this Agreement and any statute, law, ordinance, or regulation, contrary to which
the parties have no legal right to contract, then the latter shall prevail; but
in such an event, the provisions of this Agreement so affected shall be
curtailed and limited only to the extent necessary to bring it within the legal
requirements.  Notwithstanding anything contained in this Agreement to the
contrary, this Agreement and the terms and conditions contained herein shall be
contingent upon receipt of all requisite approvals of the applicable Gaming
Authorities.

              11.9.  NO WAIVER.  The several rights and remedies provided for in
this Agreement shall be construed as being cumulative, and no one of them shall
be deemed to be exclusive of the others or of any right or remedy allowed by
law.  No waiver by the Company or Executive any failure of Executive or the
Company, respectively, to keep or perform any provision of this Agreement shall
be deemed to be a waiver of any preceding or succeeding breach of the same or
other provision.

              11.10. MERGER.  This Agreement supersedes any and all other
agreements, either oral or in writing, between the parties hereto with respect
to the employment of Executive by the Company.

              11.11. NO REPRESENTATIONS.  Each party to this Agreement
acknowledges that no representations, inducements, promises or other agreements,
oral or otherwise, have been made by any party, anyone acting on behalf of any
party, which are not embodied herein

                                     7


<PAGE>

and that no other agreement, statement or promise not contained in this
Agreement shall be valid or binding.  Any addendum to or modification of this
Agreement shall be effective only if it is in writing and signed by the
parties to be charged.

              11.12. DRAFTING AMBIGUITIES.  Each party to this Agreement has
been afforded an opportunity to have this Agreement reviewed by his or its
respective counsel. The normal rule of construction to the effect that any
ambiguities are to be resolved against the drafting party shall not be employed
in the interpretation of this Agreement or of any amendments or exhibits to this
Agreement.

              11.13. SURVIVAL.  The terms and conditions of Article 6 and
Section 10.6 of this Agreement shall survive the termination of this Agreement.

       IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date hereinabove set forth.

COMPANY:                                              EXECUTIVE:
Hard Rock Hotel, Inc., a Nevada corporation


By:
   Peter A. Morton, President                         Jonathan Swain


                                     8