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                                                                    EXHIBIT 10.3
 
                     JOINT AND SEVERAL INDEMNITY AGREEMENT

          AGREEMENT dated as of June 15, 1998 by and between Metro-Goldwyn-Mayer
Inc., a Delaware corporation (the "Corporation") and Metro-Goldwyn-Mayer
                                   -----------                          
Studios, a Delaware corporation ("MGM Studios." and together with the
                                  ------------                       
Corporation, the "Indemnitors") on the one hand, and Daniel J. Taylor (the
                  -----------                                             
"Indemnitee"), on the other.
-----------                 

                                    RECITALS

          The Indemnitee is a director and/or officer of the Corporation, MGM
Studios and/or an Affiliate Indemnitee (as hereinafter defined).  Each of the
Indemnitors and the Indemnitee recognize the increased risk of litigation and
other claims being asserted against directors and officers in today's
environment.

          The Bylaws of the Corporation require the Corporation and the Bylaws
of MGM Studios require MGM Studios to indemnify their respective directors and
officers as currently provided therein, and the Indemnitee has been serving and
continues to serve as a director and/or officer of the Corporation and/or MGM
Studios in part in reliance on such provisions.  The Bylaws of each of the
Indemnitors permit such Indemnitor to purchase and maintain insurance or to
furnish similar protection or make other arrangements (any such insurance,
protection or arrangement, an "Indemnification Arrangement") on behalf of the
                               ---------------------------                   
Indemnitee against personal liability (including, but not limited to, providing
for Advanced Amounts as hereinafter defined) asserted against him or incurred by
or on behalf of him in such capacity as a director or officer of such Indemnitor
or as an Affiliate Indemnitee, or arising out of his status as such, whether or
not such Indemnitor would have the power to indemnify him against such liability
under the provisions of this Agreement or under the Delaware General Corporation
Law (the "DGCL"), as it may then be in effect.
          ----                                

          In part to provide the Indemnitee with specific contractual assurance
of substantial protection against personal liability (regardless of, among other
things, any amendment to or revocation of the aforementioned provisions of any
of the Indemnitor's Bylaws or any change in the composition of such Indemnitor's
Board of Directors or control of such Indemnitor), each of the Indemnitors
desires to enter into this Agreement.  DGCL Section 145(f) expressly recognizes
that the indemnification provisions of the DGCL are not exclusive of any other
rights to which a person seeking indemnification may be entitled under the
Certificate of Incorporation or Bylaws of any of the Indemnitors, or an
agreement providing for indemnification, or a resolution of stockholders or
directors, or otherwise, and the Bylaws of each of the Indemnitors expressly
recognizes that the indemnification provisions of the Bylaws of such Indemnitor
shall not be deemed exclusive of, and shall not affect, any other rights to
which a person seeking indemnification may be entitled under any agreement, and
this Agreement is being entered into pursuant to the Bylaws of each of the
Indemnitors, as permitted by the DGCL, and has been authorized by the
stockholders of the Indemnitors.

          In order to induce the Indemnitee to serve as a director and/or
officer of the Corporation and/or MGM Studios and in consideration of the
Indemnitee's so serving, each of the Indemnitors desires jointly and severally
to hold harmless and indemnify the Indemnitee and to make arrangements pursuant
to which the Indemnitee may be advanced or reimbursed expenses incurred by the
Indemnitee in certain proceedings, in every case to the fullest extent
authorized or permitted by the DGCL, or any other applicable law, or by any
amendment thereof or other statutory provisions authorizing or permitting such
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indemnification which are adopted after the date hereof (but, in the case of any
such amendment, only to the extent that such amendment permits the Indemnitor to
provide broader indemnification rights than the DGCL, or other applicable law,
permitted such Indemnitor to provide prior to such amendment).

          NOW, THEREFORE, in consideration of the foregoing recitals and of the
Indemnitee's continuing to serve the Corporation and/or MGM Studios as a
director and/or officer, the parties agree as follows:

          1.  Indemnification.  To the fullest extent allowed by law, each of
              ---------------                                                
the Indemnitors, jointly and severally, shall hold harmless and indemnify the
Indemnitee, his executors, administrators or assigns against any and all
expenses, liabilities and losses (including, without limitation, investigation
expenses, expert witnesses' and attorneys' fees and expenses, judgments,
penalties, fines, amounts paid or to be paid in settlement any interest,
assessments, or other charges imposed thereon and any federal, state, local or
foreign taxes imposed as a result of actual or deemed receipt of any payment
hereunder) actually incurred by the Indemnitee (net of any related insurance
proceeds or other amounts received by the Indemnitee or paid by or on behalf of
an Indemnitor on the Indemnitee's behalf in compensation of such expenses,
liabilities or losses) in connection with any actual or threatened action, suit
or proceeding, whether civil, criminal, administrative or investigative or in
arbitration, to which the Indemnitee is a party or participant or is threatened
to be made a party or participant (a "Proceeding"), as a plaintiff, defendant,
                                      ----------                              
respondent, witness or otherwise, based upon, arising from, relating to or by
reason of the fact that the Indemnitee: (a) is, was, shall be or shall have been
a director and/or officer of the Corporation or (b) is or was serving, shall
serve, or shall have served at the request of the Corporation as a director,
officer, partner, trustee, fiduciary, employee or agent ("Affiliate Indemnitee")
                                                          --------------------  
of another foreign or domestic corporation or non-profit corporation,
cooperative, partnership, joint venture, trust, employee benefit plan, or other
incorporated or unincorporated enterprise (each, a "Company Affiliate"); or
                                                    -----------------      
arising from or relating to any action or omission to act taken by the
Indemnitee in any of the foregoing capacities; provided, however, that, except
as provided in Section 9(b) hereof, an Indemnitor shall indemnify the Indemnitee
in connection with a Proceeding initiated by the Indemnitee only if such
proceeding (or part thereof) was authorized by a two-thirds vote of the Board of
Directors of such Indemnitor.

          The Indemnitee shall be presumed to be entitled to such
indemnification under this Agreement upon submission of a written claim pursuant
to Section 4 hereof.  Thereafter, the Indemnitors shall have the burden of proof
to overcome the presumption that the Indemnitee is so entitled.  Such
presumption shall only be overcome by a judgment or other final adjudication,
after all appeals and all time for appeals has expired ("Final Determination"),
                                                         -------------------   
which is adverse to the Indemnitee and which establishes (i) that his acts were
committed in bad faith, or were the result of active and deliberate dishonesty,
and were material to the cause of action so adjudicated and (ii) that the
Indemnitee in fact personally gained a financial profit or other advantage to
which he was not legally entitled.  If the Indemnitee is not wholly successful
in any Proceeding but is successful on the merits or otherwise, as to one or
more but less than all claims, issues or matters in such Proceeding the
Indemnitors agree, jointly and severally, to indemnify the Indemnitee to the
maximum extent permitted by law against all losses and expenses incurred by the
Indemnitee in connection with each successfully resolved claim, issue or matter.
Neither the failure of any of the Indemnitors (including their respective Boards
of Directors, legal counsel or stockholders) to have made a determination prior
to the commencement of such Proceeding that indemnification of the Indemnitee is
proper in the circumstances because such person has met the applicable standard
of conduct set forth in the DGCL, nor an actual determination by such Indemnitor
(including its Board of Directors, its legal counsel or its stockholders) that
the Indemnitee has not met the applicable standard of conduct, shall be a
defense to the
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action or create a presumption that the Indemnitee has not met the applicable
standard of conduct.  The purchase, establishment or maintenance of any
Indemnification Arrangement shall not in any way diminish, restrict, limit or
adversely affect the rights and obligations of any of the Indemnitors or of the
Indemnitee under this Agreement, except as expressly provided herein, and the
execution and delivery of this Agreement by the Indemnitors and the Indemnitee
shall not in any way diminish, restrict, limit or adversely affect the
Indemnitee's right to indemnification from the Indemnitors or any other party or
parties under any other Indemnification Arrangement, the Certificate of
Incorporation or Bylaws of any of the Indemnitors, or the DGCL.

          2.  Period of Limitations.  No legal action shall be brought and no
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cause of action shall be asserted by or on behalf of an Indemnitor or any
affiliate of an Indemnitor against the Indemnitee, Indemnitee's spouse, heirs,
executors, or personal or legal representatives after the expiration of two
years from the date of accrual of such cause of action, or such longer period as
may be required by applicable law under the circumstances.  Any claim or cause
of action of the Indemnitor or its affiliate shall be extinguished and deemed
released unless asserted by the timely filing of a legal action within such
period; provided, however, that if any shorter period of limitations is
otherwise applicable to any such cause of action the shorter period shall
govern.

          3.  Insurance.  Subject only to the provisions of this Section 3, as
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long as the Indemnitee shall continue to serve as a director and/or officer of
an Indemnitor (or shall continue at the request of an Indemnitor to serve as an
Affiliate Indemnitee) and, thereafter, as long as the Indemnitee shall be
subject to any possible Proceeding by reason of the fact that the Indemnitee was
a director and/or officer of the Corporation and/or MGM Studios (or served in
any of said other capacities), the Indemnitors shall, unless no such policies
are available in any market, purchase and maintain in effect for the benefit of
the Indemnitee one or more valid, binding and enforceable policies (the
"Insurance Policies") of directors' and officers' liability insurance ("D&O
-------------------                                                     ---
Insurance") providing adequate liability coverage for the Indemnitee's acts as a
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director and/or officer of the Indemnitors or as an Affiliate Indemnitee.  Each
Indemnitor shall promptly notify the Indemnitee of any lapse, amendment or
failure to renew said policy or policies or any provision thereof relating to
the extent or nature of coverage provided thereunder.  In the event any
Indemnitor does not purchase and maintain in effect said policy or policies of
D&O Insurance pursuant to the provisions of this Section 3, such Indemnitor
shall, in addition to and not in limitation of the other rights granted the
Indemnitee under this Agreement, hold harmless and indemnify the Indemnitee to
the full extent of coverage which would otherwise have been provided for the
benefit of the Indemnitee pursuant to the Insurance Policies.

          4.  Claims for Payments.  The Indemnitee shall have the right to
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receive from the Indemnitors on demand or, at his option, to have any of the
Indemnitors pay promptly on his behalf, in advance of a Final Determination of a
Proceeding, all amounts payable by the Indemnitors pursuant to the terms of this
Agreement as corresponding amounts are expended or incurred by the Indemnitee in
connection with any Proceeding or otherwise (such amounts so expended or
incurred being referred to as "Advanced Amounts").  In making any claim for
                               ----------------                            
payment by the Indemnitors of any amount, including any Advanced Amount,
pursuant to this Agreement, the Indemnitee shall submit to the Indemnitors a
written request for payment (a "Claim") which includes a schedule setting forth
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in reasonable detail the dollar amount expended (or incurred or expected to be
expended or incurred).  Each item on such schedule shall be supported by the
bill, agreement, or other documentation relating thereto, a copy of which shall
be appended to the schedule as an exhibit.
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          Where the Indemnitee is requesting Advanced Amounts, the Indemnitee
must also provide an undertaking to repay such Advanced Amounts if a Final
Determination is made that the Indemnitee is not entitled to indemnification
hereunder.

          5.  Section 16(b) Liability.  No Indemnitor shall be liable under this
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Agreement to make any payment in connection with any claim made against the
Indemnitee for an accounting of profits made from the purchase or sale by the
Indemnitee of securities of an Indemnitor within the meaning of Section 16(b) of
the Securities Exchange Act of 1934, and amendments thereto, or similar
provisions of any state statutory law or common law.

          6.  Continuation of Indemnity.  All agreements and obligations of the
              -------------------------                                        
Indemnitors contained herein shall continue during the period the Indemnitee is
a director and/or officer of such Indemnitor (or is serving at the request of an
Indemnitor as an Affiliate Indemnitee) and shall continue thereafter so long as
the Indemnitee shall be subject to any possible Proceeding by reason of the fact
that the Indemnitee was a director or officer of such Indemnitor or served as
such an Affiliate Indemnitee.

          7.  Successors:  Binding Agreement.  This Agreement shall be binding
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on, and shall inure to the benefit of and be enforceable by, each of the
Indemnitor's successors and assigns and by the Indemnitee's personal or legal
representatives, executors, administrators, successors, heirs, distributees,
divisees and legatees.  Each Indemnitor shall require any successor or assignee
(whether direct or indirect, by purchase, merger, consolidation or otherwise) to
all or substantially all of the business and/or assets of such Indemnitor, by
written agreement in form and substance reasonably satisfactory to such
Indemnitor and to the Indemnitee, expressly to assume and agree to perform this
Agreement in the same manner and to the same extent that such Indemnitor would
be required to perform if no such succession or assignment had taken place.

          8.  Notification and Defense of Claim.  Promptly after receipt by the
              ---------------------------------                                
Indemnitee of notice of the commencement of any Proceeding, the Indemnitee
shall, if a claim in respect thereof is to be made against an Indemnitor under
this Agreement, notify such Indemnitor of the commencement thereof, but the
failure to so notify such Indemnitor will not relieve the Indemnitors from any
liability which it may have to the Indemnitee.  With respect to any such
Proceeding:

          (i)   Each Indemnitor shall be entitled to participate therein at its
     own expense;

          (ii)  Except with prior written consent of the Indemnitee, the
     Indemnitors shall not be entitled to assume the defense of any Proceeding;
     and

          (iii) No Indemnitor shall settle any Proceeding in any manner which
     would impose any penalty or limitation on the Indemnitee without the
     Indemnitee's prior written consent.

The Indemnitee shall not settle any Proceeding with respect to which the
Indemnitee has received indemnified amounts or Advanced Amounts without the
Indemnitors' prior written consent, nor will the Indemnitee unreasonably
withhold consent to any proposed settlement.

          9.  Enforcement.  (a)  Each Indemnitor has entered into this Agreement
              -----------                                                       
and assumed the obligations imposed on such Indemnitor hereby in order to induce
the Indemnitee to act as a director and/or officer of the Corporation and/or MGM
Studios or as an Affiliate Indemnitee and acknowledges that the Indemnitee is
relying upon this Agreement in continuing in such capacity.
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          (b)  All expenses incurred by the Indemnitee in connection with the
preparation and submission of the Indemnitee's request for indemnification
hereunder shall be borne, jointly and severally,  by the Indemnitors.  In the
event the Indemnitee has requested payment of any amount under this Agreement
and has not received payment thereof within thirty (30) days of such request,
the Indemnitee may bring any action to enforce rights or collect moneys due
under this Agreement, and, if the Indemnitee is successful in such action, the
Indemnitors shall reimburse the Indemnitee for all of the Indemnitee's fees and
expenses in bringing and pursuing such action.  If it is determined that the
Indemnitee is entitled to indemnification for part (but not all) of the
indemnification so requested, expenses incurred in seeking enforcement of such
partial indemnification shall be reasonably prorated among the claims, issues or
matters for which the Indemnitee is entitled to indemnification for claims,
issues or matter for which the Indemnitee is not so entitled.  The Indemnitee
shall be entitled to the advancement of such amounts to the full extent
contemplated by Section 4 hereof in connection with such Proceeding.

          10.  Separability.  If any provision or provisions of this Agreement
               ------------                                                   
shall be held to be invalid, illegal or unenforceable for any reason whatsoever,
(i) the validity, legality and enforceability of the remaining provisions of
this Agreement (including, without limitation, all portions of any sections or
subsections of this Agreement containing any such provision held to be invalid,
illegal or unenforceable, that are not by themselves invalid, illegal or
unenforceable) shall not in any way be affected or impaired thereby, and (ii) to
the fullest extent possible, the provisions of any section or subsections of
this Agreement containing any such provisions held to be invalid, illegal or
unenforceable shall be construed so as to give effect to the intent of the
parties that the Indemnitors (or any of them) provide protection to the
Indemnitee to the fullest extent enforceable.

          11.  Miscellaneous.  No provision of this Agreement may be modified,
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waived or discharged unless such modification, waiver or discharge is agreed to
in writing signed by the Indemnitee and an officer of each of the Indemnitors
designated by the Board of Directors of such Indemnitor.  No waiver by either
party at any time of any breach by the other party of, or of compliance with,
any condition or provision of this Agreement to be performed by such other party
shall be deemed a waiver of similar or dissimilar provisions or conditions at
the same time or at any prior or subsequent time.  The validity, interpretation,
construction and performance of this Agreement shall be governed by the laws of
the State of Delaware, without giving effect to the principles of conflicts of
laws thereof.  The Indemnitee may bring an action seeking resolution of disputes
or controversies arising under, or in any way related to, this Agreement in the
state or federal court jurisdiction in which the Indemnitee resides or in which
his place of business is located and in any related appellate courts, and each
of the Indemnitors hereby consents to the jurisdiction of such courts and to
such venue.

          12.  Notices.  For the purposes of this Agreement, notices and all
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other communications provided for in the Agreement shall be in writing and shall
be deemed to have been duly given when delivered or mailed by United States
registered mail, return receipt requested, postage prepaid, as follows:

     If to the Indemnitee:      Daniel J. Taylor
                                Fifth Floor
                                2500 Broadway Street
                                Santa Monica, CA  90404
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     If to the Corporation:      Metro-Goldwyn-Mayer Inc.
                                 Fifth Floor             
                                 2500 Broadway Street    
                                 Santa Monica, CA  90404 
                                 Attn:  General Counsel   
                                         

     If to MGM Studios:          Metro-Goldwyn-Mayer Studios   
                                 Fifth Floor                   
                                 2500 Broadway Street          
                                 Santa Monica, CA  90404       
                                 Attn:  General Counsel         

or to such other address as either party may have furnished to the other in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.

          13.  Counterparts.  This Agreement may be executed in one or more
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counterparts, each of which shall be deemed to be an original but all of which
together shall constitute one and the same instrument.

          13.  Effectiveness.  This Agreement shall be effective as of the day
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and year first above written.

          IN WITNESS WHEREOF, the undersigned have caused this Agreement to be
executed as of the day and year first above written.

                              METRO-GOLDWYN-MAYER INC.


                              By: ________________________________ 
                                  Name:
                                  Title:

                              METRO-GOLDWYN-MAYER STUDIOS


                              By: ________________________________ 
                                  Name:
                                  Title:

                              INDEMNITEE

 
                              ____________________________________ 
                              Daniel J. Taylor