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                                                                    EXHIBIT 10.2
 
                    [LETTERHEAD OF METRO-GOLDWYN-MAYER INC.]



                              As of June 15, 1998



Daniel J. Taylor
c/o Metro-Goldwyn-Mayer Inc.
2500 Broadway Street
Santa Monica, CA 90404

Dear Mr. Taylor:

     Kindly refer to the Employment Agreement dated As of August 1, 1997 between
you ("Executive") and Metro-Goldwyn-Mayer Inc. ("the Company"), herein called
the "Employment Agreement."

     The Company and Executive mutually agree to amend the Employment Agreement,
effective as of June 15, 1998, as follows:

1.   Executive's title as set forth in Paragraph 1 of the Employment Agreement
     shall be Senior Executive Vice President and Chief Financial Officer.

2.   Paragraph 2(a) of the Employment Agreement shall be amended to read as
     follows:

     "During the Term, as defined in Paragraph 6 below, Executive shall be
     Senior Executive Vice President and Chief Financial Officer and shall have
     such duties and responsibilities as may be assigned to Executive by the
     Vice Chairman of the Company (the "VC") or the Chief Executive Officer of
     the Company (the "CEO"), which duties and responsibilities shall include
     responsibility for and authority over finance, accounting, information
     systems, tax and business planning functions."

3.   Paragraph 3 of the Employment Agreement shall be amended by deleting the
     words "the CFO" from line 4 thereof.

4.  Paragraph 4 of the Employment Agreement shall be amended to read as follows:

     "4.  Reporting.  Executive shall report jointly to the CEO and the VC."
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5.   The term of the Employment Agreement shall be extended so that it will now
     expire on June 14, 2003.  The period commencing June 15, 1998 and ending
     June 14, 2003 is herein referred to as the "New Term," and the word "Term"
     as used in the Employment Agreement shall be deemed to include the New
     Term.

6  (a)    During the New Term, notwithstanding the provisions of subparagraph
          7(a)(i) of the Employment Agreement, Executive's annualized base
          salary shall be $700,000 during the period commencing June 15, 1998
          and ending October 9, 1998, $750,000 during the twelve-month period
          commencing October 10, 1998, $800,000 during the twelve-month period
          commencing October 10, 1999,  $850,000 during the twelve-month period
          commencing October 10, 2000, $900,000 during the twelve-month period
          commencing October 10, 2001 and $950,000 during the period commencing
          October 10, 2002 until the end of the New Term (each amount less tax
          withholdings required by law and other voluntary deductions authorized
          by Executive), payable bi-weekly in arrears commencing on the first
          regular bi-weekly payment date.

     (b)  Subparagraph 7(a)(ii) of the Employment Agreement is hereby deleted in
          its entirety.  The Company agrees to pay Executive, and Executive
          shall accept, the sum of $45,333.33 (less tax withholdings required by
          law and other voluntary deductions authorized by Executive) in full
          satisfaction of any guaranteed bonus obligation accrued and unpaid as
          of June 15, 1998.

7.   Subject to approval by the Company's Board of Directors, in addition to the
     compensation provided in the Employment Agreement, as amended hereby,
     Executive shall be entitled to receive, in the event of a Designated Change
     in Control, a cash bonus (the "Cash Bonus") equal to the result obtained by
     calculating the difference between (a) the amount that would have been
     payable to Executive had he been granted as of August 1, 1997 an aggregate
     of 83,334 bonus interests pursuant to the Bonus Interest Agreement and (b)
     the amount payable to Executive  pursuant to bonus interests heretofore
     granted to him (the "Bonus Interests").  The Cash Bonus shall vest, and the
     amount thereof determined and paid, on the same respective dates as the
     Bonus Interests.

8.   The Company presently maintains the Stock Incentive Plan pursuant to which
     Executive presently holds 58,125 Series A Options and 58,125 Series B
     Options (collectively, the "Current Options") under the Executive Stock
     Option Agreement.  Subject to approval by the Company's Board of Directors,
     Executive shall be granted 62,918 additional Series A Options (the
     "Additional Options") at an exercise price which shall be the greater of
     $24 per share or the closing price of the Common Stock on the New York
     Stock Exchange on the date of grant.

     The Additional Options shall be governed by a new stock option agreement to
     be executed by Executive and the Company, applicable only to the Additional

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     Options, which shall be in the form of the Executive Stock Option
     Agreement, except that one-half of the Additional Options shall become
     exercisable, to the extent then vested, from and after December 31, 2001,
     except as otherwise provided in Section 5 of the Executive Stock Option
     Agreement.

     For the sake of clarity and the avoidance of doubt, the parties hereby
     agree that none of the Additional Options are intended to be "incentive
     stock options" within the meaning of Section 422 of the Internal Revenue
     Code of 1986, as amended.
 
9.   As used herein, certain terms shall have the meanings ascribed to them
     below:

     "Bonus Interest Agreement" means the form of Metro-Goldwyn-Mayer Inc. and
     Metro-Goldwyn-Mayer Studios Inc. Bonus Interest Agreement Pursuant to the
     Senior Management Bonus Plan.

     "Senior Management Bonus Plan" means the Metro-Goldwyn-Mayer Inc. and
     Metro-Goldwyn-Mayer Studios Inc. Senior Management Bonus Plan as adopted by
     the Board of Directors of such companies on November 7, 1997 and approved
     by the stockholders of the Company on May 12, 1998.

     "Designated Change in Control," has the meaning set forth in Schedule 1 to
     the Executive Stock Option Agreement.

     "Executive Stock Option Agreement" means the stock option agreement
     previously entered into between Executive and the Company as of August 1,
     1997.

     "Stock Incentive Plan" means the Amended and Restated 1996 Stock Incentive
     Plan adopted by the Board of Directors and stockholders of the Company on
     November 7, 1997.

10.  Paragraph 7(b) of the Employment Agreement is hereby amended to read as
     follows:

     "7 (b)  Other Benefits.  Executive shall be entitled to the following
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     additional benefits:  a car allowance and four (4) weeks vacation in
     accordance with the Company policy applicable to employees of Executive's
     seniority, salary and title; first-class air travel for Executive and
     Executive's spouse when accompanying Executive on travel to the extent, in
     Executive's reasonable judgment, the presence of Executive's spouse is
     required or advisable in the Company's interest in the discharge of
     Executive's duties."

11.  The first parenthetical on the third line of subparagraph (ii) of Paragraph
     11(d) shall be amended to read "(or, if applicable, the CEO or VC)."

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12.  Except as herein specifically provided, the Employment Agreement shall not
be amended in any respect whatsoever and shall continue in full force and
effect.

     If the foregoing is in accordance with your understanding and agreement,
please so indicate by signing in the place for your signature below.

                                      Very truly yours,                   
                                                                          
                                      METRO-GOLDWYN-MAYER INC.            
                                                                          
                                                                          
                                      By  /s/ William A. Jones            
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                                          William A. Jones                
                                          Senior Executive Vice President  


AGREED:



/s/  Daniel J. Taylor
-----------------------------            
Daniel J. Taylor

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