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EXHIBIT 10.5  

 
 

EMPLOYMENT AGREEMENT    
  

        This Employment Agreement ("Agreement") is entered into as of June 1, 2002, by and between MGM MIRAGE, a
Delaware corporation ("Employer"), and Gary N. Jacobs ("Employee") and, except as otherwise expressly provided herein, replaces in all respects the
prior employment agreement dated as of June 1, 2000 between Employer and Employee (the "Prior Agreement".) 

	1.
	Employment. Employer hereby employs Employee, and Employee hereby accepts employment by Employer, as Executive Vice President, General
Counsel and Secretary of Employer to perform such executive, managerial or administrative duties as Employer may specify from time to time. In construing the provisions of this Agreement, Employer
shall include all of Employer's subsidiary, parent and affiliated corporations and entities. Employee is presently a member of the Board of Directors of Employer and its Executive Committee. During
the Specified Term, Employer agrees to take all steps necessary to include Employee as a member of management's slate of nominees for election as a member of Employer's Board of Directors, and to use
all reasonable efforts to maintain Employee's position as a member of the Executive Committee.

	2.
	Term. This Agreement shall commence on the date hereof (the "Commencement Date"), and continue through and including July 3, 2006
(the "Specified Term").

	3.
	Compensation. Employee shall receive a minimum annual salary of $700,000 commencing on the Commencement Date. Employee shall also be
eligible to receive fringe benefits commensurate with Employer's other employees in comparable senior executive positions, and reimbursement for all reasonable business and travel expenses incurred by
Employer in performing the duties hereunder, payable in accordance with Employer's customary practices. Employee is eligible for consideration for a discretionary raise and/or promotion by Employer in
its sole and absolute discretion. Employee shall be entitled to an annual bonus ("Bonus") determined pursuant to Employer's Annual Performance-Based Incentive Plan for Executive Officers, or any
successor plan (the "Bonus Plan"), with Employee's
participation to be determined on a pro rata basis to the extent the termination date of this Agreement does not coincide with the end of a fiscal year of Employer (such Bonus shall be paid at such
time as Employer pays Bonuses under the Bonus Plan to its other senior executives with respect to such fiscal year, but not later than March 31 following the end of such fiscal year). Employee
shall also be eligible to receive additional bonuses as determined by Employer in its sole and absolute discretion.

	4.
	Extent of Services. The Employee agrees that the duties and services to be performed by Employee shall be performed exclusively for
Employer. Employee further agrees to perform such duties in an efficient, trustworthy and businesslike manner. The Employee agrees not to render to others any service of any kind whether or not for
compensation, or to engage in any other business activity whether or not for compensation, that is similar to or conflicts with the performance of Employee's duties under this Agreement, without the
approval of the Executive Committee of the Board of Directors of Employer. Subject to the above-referenced discretion of the Executive Committee, it is understood that Employee may continue to serve
in the capacities specified on Exhibit C hereto.

	5.
	Policies and Procedures. In addition to the terms herein, Employee agrees to be bound by Employer's policies and procedures as they may
be amended by Employer from time to time. In the event the terms in this Agreement conflict with Employer's policies and procedures, the terms herein shall take precedence. Employer recognizes that it
has a responsibility to see that its employees understand the adverse effects that problem gambling and underage gambling can have on individuals and the gaming industry as a whole. Employee
acknowledges having read 

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Employer's
policies, procedures and manuals and agrees to abide by the same, including but not limited to Employer's policy of prohibiting underage gaming and supporting programs to treat compulsive
gambling. 

	6.
	Licensing Requirements. Employee acknowledges that Employer is engaged in a business that is or may be subject to and exists because of
privileged licenses issued by governmental authorities in Nevada, Michigan, Mississippi, New Jersey, Australia and other jurisdictions in which Employer is engaged or has applied, or during the
Specified Term may apply, to engage in the gaming business. If requested to do so by Employer, Employee shall apply for and obtain any license, qualification, clearance or the like which shall be
requested or required of Employee by any regulatory authority having jurisdiction over Employer.

	7.
	Failure to Satisfy Licensing Requirements. If Employee fails to satisfy any licensing requirement referred to in Paragraph 6
above, or if Employer is directed to cease business with Employee by any governmental authority referred to in Paragraph 6 above, or if Employer shall determine, in Employer's reasonable
judgment, that Employee was, is or might be involved in, or is about to be involved in, any activity, relationship(s) or circumstances which could or does jeopardize Employer's business, reputation or
such licenses of Employer, or if any such license is threatened to be, or is, denied, curtailed, suspended or revoked as a result of Employer's continued employment of Employee, this Agreement may be
terminated by Employer and the parties' obligations and responsibilities shall be determined by the provisions of Paragraph 10(a).

	8.
	Restrictive Covenants.

	(a)
	Competition. Employee acknowledges that, in the course of Employee's responsibilities hereunder, Employee will form relationships and
become acquainted with certain confidential and proprietary information as further defined in Paragraph 8(b). Employee further acknowledges that such relationships and information are valuable
to the Employer and that the restrictions on future employment, if any, are reasonably necessary in order for Employer to remain competitive in the gaming industry. In consideration for the
Compensation hereunder, and in recognition of Employer's heightened need for protection from abuse of relationships formed or information obtained before and during the Specified Term of the
Employee's employment hereunder, Employee covenants and agrees that, except as otherwise provided herein, in the event Employee is not employed by Employer for the entire Specified Term, then for the
twelve (12) month period immediately following separation from active employment, or for such shorter period remaining in the Specified Term should Employee separate from active employment with
less than twelve (12) months remaining in the Specified Term (the "Restrictive Period"), Employee shall not directly or indirectly be employed by, provide consultation or other services to,
engage in, participate in or otherwise be connected in any way (other than through passive ownership of 1% or less of the outstanding voting securities) with any firm, person, corporation or other
entity which is either directly, indirectly or through an affiliated company, engaged in, or proposes to engage in, non-restricted gaming in the State of Nevada, or in or within a 150 mile
radius of any other jurisdiction in which Employer during the Restrictive Period is engaged in, or proposes to engage in, non-restricted gaming ("Competitor"). The covenants under this
Paragraph include but are not limited to Employee's covenant not to:

	(i)
	Make
known to any third party the names and addresses of any of the customers of the Employer, or any other information pertaining to those customers.

	(ii)
	Call
on, solicit and/or take away, or attempt to call on, solicit and/or take away, any of the customers of the Employer, either for Employee's own
account or for any third party. 

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	(iii)
	Call
on, solicit and/or take away, any potential or prospective customer of the Employer, on whom the Employee called or with whom Employee became
acquainted during employment (either before or during the Specified Term) by the Employer, either for Employee's own account or for any third party).

	(iv)
	Approach
or solicit any employee of the Employer with a view towards enticing such employee to leave the employ of the Employer to work for the
Employee or for any third party, or hire any employee of the Employer, without the prior written consent of the Employer, such consent to be within Employer's sole discretion. 

	(b)
	Confidentiality. Employee further covenants and agrees that Employee shall not at any time during the Specified Term or thereafter,
without Employer's prior written consent, disclose to any other person or business entities any trade secret (as that term is defined on Exhibit A attached hereto) or proprietary or other
confidential information concerning Employer, including without limitation, Employer's customers and its casino, hotel and marketing practices, procedures, management policies or any other information
regarding the Employer which is not already and generally known to the public or to Competitors or available to interested persons. Employee further covenants and agrees that Employee shall not at any
time during the Specified Term, or thereafter, without the Employer's prior written consent, utilize any such trade secrets or proprietary or confidential information in any way, other than in
connection with employment hereunder. Not by way of limitation but by way of illustration, Employee agrees that such trade secrets and proprietary or confidential information specifically include but
are not limited to those documents and reports described on Exhibit B.

	(c)
	Employer's Property. Employee hereby confirms that such trade secrets, proprietary or confidential information and all information
concerning customers who utilize the goods, services or facilities of Employer and any hotel and/or casino owned, operated or managed by Employer constitute Employer's exclusive property (regardless
of whether Employee possessed or claims to have possessed such information prior to the date hereof). Employee agrees that upon termination of active employment under this Agreement, Employee shall
promptly return to the Employer all notes, notebooks, memoranda, computer disks, and any other similar repositories of information (regardless of whether Employee possessed such information prior to
the date hereof) containing or relating in any to the trade or business secrets or proprietary and confidential information of the Employer, including but not limited to the documents referred to in
Paragraph 8(b). Such repositories of information also include but are not limited to any so-called personal files or other personal data compilations in any form, which in any
manner contain any trade secrets or proprietary or confidential information of the Employer.

	(d)
	Notice to Employer. Employee agrees to notify Employer immediately of any employers for whom Employee works during the Specified Term
or within the Restrictive Period. Employee further agrees to promptly notify Employer, during Employee's employment with Employer, of any contacts made by any gaming licensee or prospective licensee
which concern or relate to an offer of future employment (or consulting services) to Employee. 

	9.
	Representations. Employee hereby represents, warrants and agrees with Employer that:

	(a)
	The
covenants and agreements contained in Paragraphs 4 and 8 above are reasonable in their geographic scope, duration and content; the Employer's agreement to employ the Employee and
a portion of the compensation and other consideration to be paid to Employee under Paragraph 3 hereof, is in partial consideration for such covenants; the Employee shall not raise any issue of
the reasonableness of the geographic scope, duration or content of such covenants in any proceeding to enforce such covenants; and such covenants shall survive the termination of this Agreement, in
accordance with its terms; 

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	(b)
	The
enforcement of any remedy under this Agreement will not prevent Employee from earning a livelihood, because Employee's past work history and abilities are such that Employee can
reasonably expect to find work in other areas and lines of business;

	(c)
	The
covenants and undertakings stated in Paragraphs 4, 6, 7 and 8 above are essential for the Employer's reasonable protection; and

	(d)
	Employer
has reasonably relied on these representations, warranties and agreements by Employee. 

Additionally,
the Employee agrees that in the event of Employee's breach of any covenants set forth in Paragraphs 4 and 8 above, the Employer may seek to enforce such covenants through any equitable
remedy, including specific performance or injunction, without out waiving any claim for damages. In any such event, the Employee waives any claim that the Employer has an adequate remedy at law. 

	10.
	Termination.

	(a)
	This
Agreement may be terminated by Employer at any time during the Specified Term hereof for good cause. Upon any such termination, Employer shall have no further liability or
obligations whatsoever to Employee hereunder except as provided under subparagraphs 10(a)(i)[a] and 10(a)(i)[b] and except that (x) if
termination is pursuant to subparagraphs 10(a)(ii) or (iii), Employee shall be entitled to receive (I) so much of the stock from the Executive Stock Option Plan as had vested pursuant to
unexercised stock options which were vested as of the date of termination, upon compliance by the Employee with all the terms and conditions required to exercise such options, and (II) such
stock as has vested pursuant to the grant of restricted stock to Employee under the Restricted Stock Plan without regard to any deferred vesting arising out of Executive's senior employment status
with the Employer and (y) if termination is pursuant to subparagraphs 10(a)(i)[a] or 10(a)(i)[b], Employee (or his beneficiary if the termination
is pursuant to subparagraph 10(a)(i)[a]) shall be entitled to receive (I) so much of the stock from the Executive Stock Option Plan pursuant to unexercised stock options
which would have been vested as of the first anniversary of the date of termination, upon compliance by Employee (or his beneficiary) with all of the terms and conditions required to exercise such
options, and (II) all of the restricted stock pursuant to the grant of restricted stock to Employee under the Restricted Stock Plan without regard to any deferred vesting arising out of
Employee's senior employment status with Employer. Good cause shall be defined as:

	(i)
	Employee's
death or disability, which is hereby defined to include incapacity for medical reasons certified to by a licensed physician selected by
Employer ("Employer's Physician") which precludes the Employee from performing the essential functions of Employee's duties hereunder for a substantially consecutive period of six (6) months or
more. (In the event Employee disagrees with the conclusions of Employer's Physician, Employee (or Employee's representative) shall designate a physician ("Employee's Physician"), and Employer's
Physician and Employee's Physician shall jointly select a third physician, who shall make the determination);

	[a]
	In
the event of Employee's death during the term of this Agreement, Employee's beneficiary (as designated by Employee on the Employer's benefit records) shall
be entitled to receive (x) Employee's salary through Employee's death (to the extent not previously paid) and for a twelve (12) month period following Employee's death, such amount to be
paid at regular payroll intervals, (y) any Bonus attributable to the most recently completed fiscal year of Employer to the extent not previously paid (determined through application of the
Bonus formula with respect to such year on a 

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non-discretionary
basis), and (z) an additional amount equal to what Employee's Bonus would have been for the fiscal year in which Employee's death occurs (determined through
application of the Bonus formula with respect to such year on a non-discretionary basis), pro rated through the date of Employee's death. Such Bonuses shall be paid to Employee's
beneficiary at such time as Employer pays Bonuses to its other senior executives with respect to such fiscal year (but not later than March 31 following the end of the applicable fiscal year). 

	[b]
	In
the event that this Agreement is terminated by Employer due to Employee's disability, as provided under subparagraph 10(a)(i), Employer shall pay to
Employee or his beneficiary in the event of Employee's death during the period in which payments are being made) (x) Employee's salary through the date of termination (to the extent not
previously paid), and for an additional twelve (12) month period following the date of termination, such amount to be paid at regular payroll intervals, net of payments received by Employee
from any short term disability policy which is either self-insured by Employer or the premiums of which were paid by Employer, (y) any Bonus attributable to the most recently
completed fiscal year of Employer to the extent not previously paid (determined through application of the Bonus formula with respect to such year on a non-discretionary basis), and
(z) an additional amount equal to what Employee's Bonus would have been for the fiscal year in which Employee's termination occurs (determined through application of the Bonus formula with
respect to such year on a non-discretionary basis), pro rated through the date of termination. Such Bonuses shall be paid at such time as Employer pays Bonuses to its other senior
executives with respect to the fiscal year in which Employee's termination occurs (but not later than March 31 following the end of the applicable fiscal year). 

	(ii)
	Employee's
failure to abide by Employer's policies and procedures, misconduct, insubordination, inattention to Employer's business, failure to perform
the duties required of Employee up to the standards established by the Employer's Board of Directors, or other material breach of this Agreement, after being provided with written notice of such
matters and a reasonable opportunity to cure (if curable); or

	(iii)
	Employee's
failure or inability to satisfy the requirements stated in Paragraph 6 above. 

	(b)
	This
Agreement may be terminated by Employer at any time during the Specified Term hereof without cause upon written notice to Employee. Upon such termination, Employer shall treat
Employee as an inactive employee and, as its sole liability to Employee arising from such termination, Employer shall provide Employee (or his beneficiary in the event of Employee's death during the
Specified Term) with the following compensation and benefits ("Termination Benefits"):

	(i)
	Employer
shall continue to pay Employee's salary and continue to provide Employee's benefits (excluding eligibility for flex time and new stock option
and restricted stock grants, but including the continued vesting of previously granted stock options and restricted stock, if any, and continued Employer contributions to, and vesting of benefits in,
the Supplemental Executive Retirement Plan ("SERP") and Deferred Compensation Plan ("DCP"))through the period remaining in the Specified Term;

	(ii)
	Employee
shall be entitled to receive so much stock from the Executive Stock Option Plan pursuant to unexercised stock options and so much restricted
stock under the Restricted Stock Plan as are or subsequently become vested through the period remaining in the Specified Term, upon compliance by the Employee, in the case of stock options, with all
the terms and conditions required to exercise such options; and 

5

 

	(iii)
	Employer
shall pay Employee (y) any Bonus attributable to the most recently completed fiscal year of Employer to the extent not already paid,
determined through application of the Bonus formula with respect to such year on a non-discretionary basis (except to the extent all participants in the Bonus Plan are treated in an
identical fashion with respect to their Bonuses), and (z) an additional amount equal to what Employee's Bonus would have been for the Fiscal year in which Employee's termination occurs,
determined through application of the Bonus formula with respect to such year on a non-discretionary basis (except to the extent all participants in the Bonus Plan are treated in an
identical fashion with respect to their Bonuses), pro-rated through the date of termination. Such Bonuses shall be paid at such time as Bonuses are paid to other senior executives of the
Employer with respect to such fiscal year or years (but not later than March 31 following the end of the applicable fiscal year). In the event termination pursuant to Paragraph 10(b)
occurs following a Change of Control (as defined), Bonuses shall not be subject to reduction through operation of the parentheticals to clauses (y) and (z) above. 

Notwithstanding
anything herein to the contrary but subject to Paragraph 8(a),while Employee is in an inactive status, Employee may be employed by or provide consultation services to any person
or entity, provided that Employer shall be entitled to offset the salary provided for in subparagraph 10(b)(i) being paid by Employer during the Specified Term by the compensation and/or
consultant's fee being paid to Employee by any such person or entity, and provided further, that Employer shall not be required to continue to provide benefits from and after the time and to the
extent that Employee is entitled to
receive such benefits from any such person or entity. Employee shall promptly notify Employer of his employment or agreement to provide consulting services during the Specified Term. 

	(c)
	Employee
may terminate this Agreement for good cause. For purposes of this Paragraph 10(c), good cause shall mean:

	(i)
	the
failure of Employer to pay Employee any compensation when due, save and except a "Disputed Claim" to compensation;

	(ii)
	a
material reduction in the scope of duties, responsibilities or authority of Employee, any change in Employee's line of reporting, any reduction in
Employee's salary, or any treatment of Employee under the Bonus Plan which is materially adverse and discriminatory to Employee as compared to the treatment afforded to other senior executive officers
of the Employer; or

	(iii)
	a
purported termination by Employer of Employee pursuant to Paragraph 10(a) and it is subsequently determined pursuant to the procedures set
forth in Paragraph 11 that grounds for termination pursuant to Paragraph 10(a) were not present at the time of Employer's termination of Employee. 

For
any termination under this Paragraph 10(c), Employee shall give Employer thirty (30) days advance written notice specifying the facts and circumstances of Employer's breach. During
such thirty (30) day period, Employer may cure the breach, if curable, in which event the termination pursuant to this Paragraph 10(c) shall be ineffective and this Agreement shall
remain in full force and effect. In the event during such thirty (30) day period Employer declares in writing that it disputes the existence of a breach or Employee declares in writing that the
cure of such breach by Employer is insufficient, this Agreement shall continue in full force until the dispute is resolved in accordance with Paragraph 11. As a result of any termination under
this Paragraph 10(c), Employee shall be entitled to receive the Termination Benefits. Employee shall have no further claim against Employer arising out of such breach. 

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	(d)
	Employee
shall also have the right to terminate Employee's employment without cause upon thirty (30) days advance written notice to Employer. Upon any such termination Employer
shall have no further liability or obligations whatsoever to Employee hereunder, except that Employee shall be entitled to receive:

	(i)
	so
much of the stock from the Executive Stock Option Plan pursuant to unexercised stock options as had been vested as of the date of termination, upon
compliance by the Employee with all the terms and conditions required to exercise such option and so much of the stock from the Restricted Stock Plan as has vested as of the date of termination
without regard to any deferred vesting arising out of executive's senior employment status with the Employer;

	(ii)
	all
salary through and including the date of termination; and

	(iii)
	any
Bonus attributable to the most recently completed fiscal year of Employer to the extent not previously paid (determined in accordance with the
Plan, including the exercise of discretion by the committee administering such Plan which may reduce or eliminate such Bonus). 

	(e)
	As
used herein the term "Change of Control" shall mean the first to occur of any of the following events:

	(1)
	Any
"person" or "group" of persons (as such terms are used in §13 and 14(d)(2) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")), other than the
Company's principal stockholder as reflected in the Company's Proxy Statement dated March 29, 2002 (the "Principal Stockholder"), the Principal Stockholder's sole shareholder, members of the
immediate family, as well as the heirs and legatees, of the Principal Stockholder's sole shareholder and trusts or other entities for the benefit of such persons or affiliates of such persons (as such
term "affiliates" is defined in the rules promulgated by the Securities and Exchange Commission) (the "Principal Stockholder Group"), becomes the beneficial owner (as that term is used in
§13(d) of the Exchange Act), directly or indirectly, of fifty percent (50%) or more of the Company's capital stock entitled to vote generally in the election of directors. (For the
avoidance of doubt, as of the date hereof, the Principal Stockholder Group is the beneficial owner of fifty percent (50%) or more of the Company's capital stock);

	(2)
	At
any time, individuals who, at the date of the adoption of the Plan, constitute the Board, and any new director whose election by the Board or nomination for election by the
Company's stockholders was approved by a vote of in excess of seventy five percent (75%) either (1) the directors then still in office who either were directors at the beginning of the period
or whose election or nomination for election was previously so approved, or (2) the members of the Company's Executive Committee then still in office who either were members at the beginning of
the period or whose election or nomination for election to the Executive Committee was previously so approved by the directors or the Executive Committee, cease for any reason to constitute at least a
majority of the Board;

	(3)
	Any
consolidation or merger of the Company, other than a consolidation or merger of the Company in which the holders of the Stock immediately prior to the consolidation or merger hold
more than fifty percent (50%) of the Stock of the surviving corporation immediately after the consolidation or merger;

	(4)
	Any
liquidation or dissolution of the Company; or 

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	(5)
	The
sale or transfer of all or substantially all of the assets of the Company to parties that are not within a "controlled group of corporations" (as defined in Code
§1563) in which the Company is a member. 

In
the event there is a Change in Control of Employer, then upon the effective date of the Change of Control ("Effective Date"): 

	(i)
	All
of Employee's unvested stock options and restricted stock shall become fully vested (without regard to any deferral of vesting arising out of
Executive's status as a senior employee of Employer).

	(ii)
	If
the Change of Control results from an exchange of outstanding common stock as a result of which the common stock of Employer is no longer publicly
held, then from and after the Effective Date, upon exercise of such stock options, Employee (or his beneficiary in the event of his death subsequent to the Effective Date) shall be entitled to receive
the per share consideration (cash, stock or otherwise) which the holders of Employer common stock received in such exchange. For example, if immediately prior to the Effective Date, Employee has
options to acquire 5,000 shares of Employer's common stock and the exchange of stock is one share of common stock of Employer for two shares of common stock of the acquiring entity, then Employee's
options shall be converted into options to acquire, upon payment of the exercise price, 10,000 shares of the acquiring entity's common stock.

	(iii)
	If
the Change of Control results from a sale of Employer's outstanding common stock for cash with the result that Employer's common stock is no longer
publicly held, then from and after the Effective Date, upon exercise of such stock options, Employee (or his beneficiary in the event of his death subsequent to the Effective Date) shall be entitled
to receive cash equal to the difference between the price per share of common stock paid by the acquiring entity for Employer's shares of common ("Purchase Price") and the price per share at which the
options were granted ("Strike Price"). For example, if immediately prior to the Effective Date, Employee has options to acquire 2,000 shares of Employer common stock at a Strike Price of $35, and the
Purchase Price was $40, then Employee would be entitled to receive $10,000 in full satisfaction of such options (2,000 shares times $5 per share).

	(iv)
	Employee's
rights and remedies under (w) any agreements whereby Employer was granted stock options or restricted stock, (x) the SERP,
(y) the DCP (z) and all other benefit plans shall remain in full force and effect. Employee shall be entitled to receive Bonuses which shall not be less than the amounts determined
pursuant to Paragraph 10 (b)(iii) and which shall be paid not later than the times specified in Paragraph 10(b)(ii). 

	(f)
	No
termination of this Agreement shall extinguish such rights as Employee may have (i) under applicable law or Employer's incorporation documents or bylaws to be indemnified in
his capacity as an officer or director of Employer or (ii) to receive benefits under the SERP, DCP, or any other plan, subject to the terms and conditions of such plan.

	(g)
	The
parties acknowledge that the provisions contained herein with respect to stock options granted prior to the date of this Agreement are in all material respects identical to the
provisions applicable to such stock options immediately prior to the date of this Agreement. 

	11.
	Disputed Claim/Arbitration. A "Disputed Claim" occurs when Employee maintains pursuant to Paragraph 10(c) that Employer has
breached its obligations to Employee (or failed to timely cure such breach) and Employer has denied such breach (or claimed to have effected a cure thereof). In such event, the Disputed Claim shall be
resolved by arbitration administered by the American 

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Arbitration
Association under its National Rules for the Resolution of Employment Disputes. Any arbitration under this paragraph shall take place in Las Vegas, Nevada. Until the arbitration process
is finally resolved in the Employee's favor and Employer fails to satisfy such award within thirty (30) days of its entry, no "for good cause" termination within the meaning of
Paragraph 10(c) exists with respect to the Disputed Claim. Nothing herein shall preclude or prohibit Employer or Employee from invoking the provisions of Paragraph 10(b) or Employee
invoking the provisions of Paragraph 10(d), or of either party seeking or obtaining injunctive or other equitable relief. In the event of a purported termination of Employee by Employer
pursuant to Paragraph 10(a) which is disputed by Employee pursuant to Paragraph 10(c), if Employee prevails in the arbitration, Employee shall not be entitled to reinstatement, but shall
be entitled to the Termination Benefits. To the extent Employer shall not have paid Termination Benefits during the period of such dispute and Employee is the prevailing party in such arbitration, in
addition to any other award, Employee shall be entitled to interest at nine percent (9%) per annum on such unpaid Termination Benefits. 

	12.
	Severability. If any provision hereof is unenforceable, illegal, or invalid for any reason whatsoever, such fact shall not affect the
remaining provisions hereof, except in the event a law or court decision, whether on application for declaration, or preliminary injunction or upon final judgment, declares one or more of the
provisions of this Agreement that impose restrictions on Employee unenforceable or invalid because of the geographic scope or time duration of such restriction. In such event, Employer shall have the
option:

	(a)
	To
deem the invalidated restrictions retroactively modified to provide for the maximum geographic scope and time duration which would make such provisions enforceable and valid; or

	(b)
	To
terminate this Agreement pursuant to Paragraph 10(b). 

Exercise
of any of these options shall not affect Employer's right to seek damages or such additional relief as may be allowed by law in respect to any breach by Employee of the enforceable provisions
of this Agreement. 

	13.
	Travel and Related Matters. During the Specified Term, it is anticipated that Employee will be required to travel extensively on behalf
of the Employer. Such travel, if by air, may be on Employer provided aircraft (if authorized by the Chief Executive Officer), or if commercial airlines are used, on a first-class basis (or best
available basis, if first class is not available).

	14.
	Attorneys' Fees. In the event suit is brought to enforce, or to recover damages suffered as a result of breach of this Agreement, or
there is an arbitration pursuant to Paragraph 11, the prevailing party shall be entitled to recover its reasonable attorneys' fees and costs of suit.

	15.
	No Waiver of Breach or Remedies. No failure or delay on the part of Employer or Employee in exercising any right, power or remedy
hereunder shall operate as a waiver thereof nor shall any single or partial exercise of any such right, power or remedy preclude any other or further exercise thereof or the exercise of any other
right, power or remedy hereunder. The remedies herein provided are cumulative and not exclusive of any remedies provided by law.

	16.
	Amendment or Modification. No amendment, modification, termination or waiver of any provision of this Agreement shall be effective
unless the same shall be in writing and signed by the Employer's officer duly designated by its Board of Directors or Employee Committee for such purposes (the "Designated Officer"), and Employee, nor
consent to any departure by the Employee from any of the terms of this Agreement shall be effective unless the same is signed by such Designated Officer. Any such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given. 

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	17.
	Governing Law. The laws of the State of Nevada shall govern the validity, construction and interpretation of this Agreement, and except
for Disputed Claims, the courts of the State of Nevada shall have exclusive jurisdiction over any claim with respect to this Agreement.

	18.
	Number and Gender. Where the context of this Agreement requires the singular shall mean the plural and vice versa and references to
males shall apply equally to females and vice versa.

	19.
	Headings. The headings in this Agreement have been included solely for convenience of reference and shall not be considered in the
interpretation or construction of this Agreement.

	20.
	Assignment. This Agreement is personal to Employee and may not be assigned.

	21.
	Successors and Assigns. This Agreement shall be binding upon the successors and assigns of Employer.

	22.
	Prior Agreements. This Agreement shall supersede and replace any and all other employment agreements which may have been entered into
by and between the parties.

	23.
	Non-Involvement of Tracinda. The parties acknowledge that neither Kirk Kerkorian nor Tracinda Corporation, individually or
collectively, is a party to this Agreement or any agreement provided for herein. Accordingly, the parties hereby agree that in the event (i) there is any alleged breach or default by any party
under this Agreement or any agreement provided for herein, or (ii) any party has any claim arising from or relating to any such agreement, no party, nor any party claiming through such party,
shall commence any proceedings or otherwise seek to impose any liability whatsoever against Kirk Kerkorian or Tracinda Corporation by reason of such alleged breach, default or claim. 

        IN
WITNESS WHEREOF, Employer and Employee have entered into this Agreement in Las Vegas, Nevada as of June 1, 2002 

	EMPLOYEE:	 	EMPLOYER—MGM MIRAGE
	

/s/ Gary N. Jacobs
GARY N. JACOBS	
 	

By:	
 	

/s/ J. Terrence Lanni
J. TERRENCE LANNI
	

 	
 	

Title:	
 	
Chairman and Chief Executive Officer

10

  

 
 

EXHIBIT "A"    
  

        Trade secret means information, including a formula, pattern, compilation, program, device, method, technique or process, that derives economic value, present or
potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain any economic value from its disclosure or use. 

11

 
 
 

EXHIBIT "B"    
  

	Name of Report
 
	 	Generated By

	Including, but not limited to:	 	 
	

Baccarat Pit Discrepancy Report	
 	

Casino Marketing Analyst
	Commission Summary Report	 	Casino Marketing Analyst
	Customer W/L Discrepancy Report	 	Casino Marketing Analyst
	Int'l Marketing Detailed Budget Summaries	 	Casino Marketing Analyst
	Arrival Report	 	International Marketing
	Departure Report	 	International Marketing
	Daily Game Report	 	Casino Audit
	Department Financial Statement	 	Finance
	$10K Over High Action Play Report	 	Customer Analysis Dept.
	$50K Over High Action Play Report	 	Customer Analysis Dept.
	International Market Segment Report	 	Customer Analysis Dept.
	Collection Aging Report(s)	 	Collection Department
	Accounts Receivable Aging	 	Finance
	Marketing Report	 	Finance
	Daily Player Action Report	 	Casino Operations

12

 
 
 

EXHIBIT "C"
  
    PERMITTED OUTSIDE ACTIVITIES    
  

	1.
	Employee
may remain "Of Counsel" to his law firm, Christensen, Miller, Fink, Jacobs, Glaser, Weil & Shapiro, LLP, and provide certain legal and consulting services to such firm
so long as such services do not interfere with Employee's performance of his obligations to Employer. Employee's name may remain in the name of the firm, and Employee may retain an office at such
firm.

	2.
	Member,
Board of Directors and Executive Committee and Secretary of The InterGroup Corporation (NASDAQ—NSM).

	3.
	Member,
Advisory Board, Stonegate Partners, LLC, Boston, Massachusetts (an investment banking firm involved in raising private equity).

	4.
	Member,
Board of Overseers, Brandeis University Graduate School of International Economics and Finance.

	5.
	Member
National Board, The American Jewish Committee.

	6.
	Director,
Nevada Cancer Institute.

	7.
	Director,
Nevada Ballet Theater.

	8.
	Member,
Executive Committee, Nevada Performing Arts Foundation 

13

QuickLinks

EMPLOYMENT AGREEMENT

EXHIBIT "A"

EXHIBIT "B"

EXHIBIT "C" PERMITTED OUTSIDE ACTIVITIESEXHIBIT 10.6  

EMPLOYMENT AGREEMENT  

        This Employment Agreement ("Agreement") is entered into as of June 1, 2002 by and between MGM MIRAGE Development, Inc. ("Employer"), and Kenneth
Rosevear ("Employee"). 

	1.
	Employment.    Employer hereby employs Employee, and Employee hereby accepts employment by the Employer, as Employer's
President and Chief Operating Officer to perform such executive, managerial or administrative duties as Employer may specify from time to time, during the Specified Term. In construing the provisions
of this Agreement, Employer shall include all of Employer's subsidiary, parent and affiliated corporations and entities.

	2.
	Term.    This Agreement shall commence on June 1, 2002 and continue until it terminates on August 6, 2006
("Specified Term").

	3.
	Compensation.    Employee shall receive a minimum annual salary of $675,000 effective June 1, 2002. Employee shall also
be eligible to receive fringe benefits commensurate with Employer's other employees in comparable executive positions, and reimbursement for all reasonable business and travel expenses incurred by
Employee in performing the duties hereunder, payable in accordance with Employer's customary practices. Employee's performance may be reviewed periodically. Employee is eligible for consideration for
a discretionary raise, annual bonus (of up to 100% of annual salary) and/or promotion, in the sole and absolute discretion of Employer. In addition to the foregoing, to the extent Employee is
responsible for securing for Employer a significant development opportunity, Employer shall consider Employee for an additional bonus in Employer's sole and absolute discretion, as a result of
Employee's procurement of such opportunity.

	4.
	Extent of Services.    Subject to Paragraph 22(a) of this Agreement, the Employee agrees that the duties and services
to be performed by Employee shall be performed exclusively for Employer. Employee further agrees to perform such duties in an efficient, trustworthy and businesslike manner. The Employee agrees not to
render to others any service of any kind whether or not for compensation, or to engage in any other business activity whether or not for compensation, that is similar to or conflicts with the
performance of Employee's duties under this Agreement, without the approval of the Executive Committee of the Board of Directors of MGM MIRAGE.

	5.
	Policies and Procedures.    In addition to the terms herein, Employee agrees to be bound by Employer's policies and procedures
as they may be amended by Employer from time to time. In the event the terms in this Agreement conflict with Employer's policies and procedures, the terms herein shall take precedence. Employer
recognizes that it has a responsibility to see that its employees understand the adverse effects that problem gambling and underage gambling can have on individuals and the gaming industry as a whole.
Employee acknowledges having read Employer's policies, procedures and manuals and agrees to abide by the same, including but not limited to Employer's policy of prohibiting underage gaming and
supporting programs to treat compulsive gambling.

	6.
	Licensing Requirements.    Employee acknowledges that Employer is engaged in a business that is or may be subject to and
exists because of privileged licenses issued by governmental authorities in Nevada, Australia, New Jersey, Michigan, Mississippi and other jurisdictions in which Employer is engaged or has applied or
during the Specified Term may apply to engage in the gaming business. If requested to do so by Employer, Employee shall apply for and obtain any license, qualification, clearance or the like which
shall be requested or required of Employee by any regulatory authority having jurisdiction over Employer. 

1

 
	7.
	Failure to Satisfy Licensing Requirement.    If Employee fails to satisfy any licensing requirement referred to in
Paragraph 6 above, or if Employer is directed to cease business with Employee by any governmental authority referred to in Paragraph 6 above, or if Employer shall determine, in
Employer's sole and exclusive judgment, that Employee was, is or might be involved in, or is about to be involved in, any activity, relationship(s) or circumstance which could or does jeopardize
Employer's business, reputation or such licenses, or if any such license is threatened to be, or is, denied, curtailed, suspended or revoked, this Agreement may be terminated by Employer and the
parties' obligations and responsibilities shall be determined by the provisions of Paragraph 10(a).

	8.
	Restrictive Covenants

	a.
	Competition.    Employee acknowledges that, in the course of Employee's responsibilities hereunder, Employee will form
relationships and become acquainted with certain confidential and proprietary information as further defined in Paragraph 8 (b). Employee further acknowledges that such relationships and
information are valuable to the Employer and that the restrictions on future
employment, if any, are reasonably necessary in order for Employer to remain competitive in the gaming industry. In consideration for the Compensation hereunder, and in recognition of Employer's
heightened need for protection from abuse of relationships formed or information garnered before and during the Specified Term of the Employee's employment hereunder, Employee covenants and agrees
that, except as set forth in subparagraphs 10(b)(ii)[b], 10(e)(v)[ii] and Paragraph 10(c), in the event Employee is not employed by Employer for
the entire Specified Term, then for the twelve (12) month period immediately following separation from active employment, or for such shorter period remaining in the Specified Term should
Employee separate from active employment with less than twelve (12) months remaining in the Specified Term (the "Restrictive Period"), Employee shall not directly or indirectly be employed by,
provide consultation or other services to, engage in, participate in or otherwise be connected in any way with any firm, person, corporation or other entity which is either directly, indirectly or
through an affiliated company, engaged in gaming or proposes to engage in gaming in the State of Nevada, or in or within a 150 mile radius of any other jurisdiction in which Employer during the
Restrictive Period is engaged in gaming or proposes to engage in gaming ("Competitor"). The covenants under this Paragraph include but are not limited to Employee's covenant not to:

	i.
	Make
known to any third party the names and addresses of any of the customers of the Employer, or any other information pertaining to those customers.

	ii.
	Call
on, solicit and/or take away, or attempt to call on, solicit and/or take away, any of the customers of the Employer, either for Employee's own account or for any third party.

	iii.
	Call
on, solicit and/or take away, any potential or prospective customer of the Employer, on whom the Employee called or with whom Employee became acquainted during employment
(either before or during the Specified Term) by the Employer, either for Employee's own account or for any third party.

	iv.
	Approach
or solicit any employee of the Employer with a view towards enticing such employee to leave the employ of the Employer to work for the Employee or for any third party, or
hire any employee of the Employer, without the prior written consent of the Employer, such consent to be within Employer's sole discretion. 

	b.
	Confidentiality.    Employee further covenants and agrees that Employee shall not at any time during the Specified Term or
thereafter, without Employer's prior written consent, disclose to any other person or business entities any trade secret (as that term is defined on Exhibit A attached hereto) proprietary or
other confidential information concerning Employer, including without limitation, Employer's customers and its casino, hotel and marketing practices, 

2

 

procedures,
management policies or any other information regarding the Employer which is not already and generally known to the public. Employee further covenants and agrees that Employee shall not
at any time during the Specified Term, or thereafter, without the Employer's prior written consent, utilize any such trade secrets, proprietary or confidential information in any way, including
communications
with or contact with any such customer other than in connection with employment hereunder. Not by way of limitation but by way of illustration, Employee agrees that such trade secrets, proprietary or
confidential information specifically include but are not limited to those documents and reports set forth on Exhibit B. 

	c.
	Employer's Property.    Employee hereby confirms that such trade secrets, proprietary or confidential information and all
information concerning customers who utilize the goods, services or facilities of any hotel and/or casino owned, operated or managed by Employer constitute Employer's exclusive property (regardless of
whether Employee possessed or claims to have possessed such information prior to the date hereof). Employee agrees that upon termination of active employment, Employee shall promptly return to the
Employer all notes, notebooks, memoranda, computer disks, and any other similar repositories of information (regardless of whether Employee possessed such information prior to the date hereof)
containing or relating in any way to the trade or business secrets or proprietary and confidential information of the Employer, including but not limited to the documents referred to in
Paragraph 8(b). Such repositories of information also include but are not limited to any so-called personal files or other personal data compilations in any form, which in any
manner contain any trade secrets or proprietary or confidential information of the Employer.

	d.
	Notice to Employer.    Employee agrees to notify Employer immediately of any employers for whom Employee works during the
Specified Term or within the Restrictive Period. Employee further agrees to promptly notify Employer, during Employee's employment with Employer, of any contacts made by any gaming licensee which
concern or relate to an offer of future employment (or consulting services) to Employee. 

	9.
	Representations.    Employee hereby represents, warrants and agrees with Employer that:

	a.
	The
covenants and agreements contained in Paragraphs 4 and 8 above are reasonable in their geographic scope, duration and content; the Employer's agreement to employ the Employee and a
portion of the compensation and consideration to be paid to Employee under Paragraphs 3 hereof, is in partial consideration for such covenants; the Employee shall not raise any issue of the
reasonableness of the geographic scope, duration or content of such covenants in any proceeding to enforce such covenants; and such covenants shall survive the termination of this Agreement, in
accordance with its terms;

	b.
	The
enforcement of any remedy under this Agreement will not prevent Employee from earning a livelihood, because Employee's past work history and abilities are such that Employee can
reasonably expect to find work in other areas and lines of business;

	c.
	The
covenants and undertakings stated in Paragraphs 4, 6, 7 and 8 above are essential for the Employer's reasonable protection; and

	d.
	Employer
has reasonably relied on these representations, warranties and agreements by Employee.

	e.
	Employee
has the full right to enter into this Agreement and by entering into and performance of this Agreement will not violate or conflict with any arrangements or agreements
Employee may have with any other entity. 

Additionally,
the Employee agrees that in the event of Employee's breach of any covenants set forth in Paragraphs 4 and 8 above, the Employer may seek to enforce such covenants through any 

3

 

equitable remedy, including specific performance or injunction, without waiving any claim for damages. In any such event, the Employee waives any claim that the Employer has an adequate remedy at
law. 

	10.
	Termination.

	a.
	This
Agreement may be terminated by Employer at any time during the Specified Term hereof for good cause. Upon any such termination, Employer shall have no further liability or
obligations whatsoever to Employee hereunder except as provided under 10(a)(i)[a] and 10(a)(i)[b]and except that Employee shall be entitled to receive
so much of the stock from the Executive Stock Option Plan as had been vested but unexercised as of the date of termination upon compliance by the Employee with all the terms and conditions required to
exercise such options. Good cause shall be defined as:

	i.
	Employee's
death or disability, which is hereby defined to include incapacity for medical reasons certified to by a licensed physician selected by Employer ("Employer's Physician")
which precludes the Employee from performing the essential functions of Employee's duties hereunder for a substantially consecutive period of six (6) months or more. (In the event Employee
disagrees with the conclusions of Employer's Physician, Employee (or Employee's representative) shall designate a physician ("Employee's Physician"), and Employer's Physician and Employee's Physician
shall jointly select a third physician, who shall make the determination);

	[a]
	In
the event of Employee's death during the term of this Agreement, Employee's beneficiary (as designated by Employee on the Employer's benefit records) shall
be entitled to receive Employee's salary for a three (3) month period following Employee's death, such amount to be paid at regular payroll intervals.

	[b]
	In
the event that this Agreement is terminated by Employer due to Employee's disability, as provided under subparagraph 10(a)(i), Employer shall pay to
Employee an amount equal to Employee's salary for an additional period of three (3) months such amount to be paid at regular payroll intervals, net of
payments received by Employee from any Short Term Disability Policy which is either self-insured by Employer or the premiums of which were paid by Employer. 

	ii.
	Employee's
failure to abide by Employer's policies and procedures, misconduct, insubordination, inattention to Employer's business, failure to perform the duties required of Employee
up to the standards established by the Employer's Senior Management, or other material breach of this Agreement; or

	iii.
	Employee's
failure or inability to satisfy the requirements stated in Paragraph 6 above. 

	b.
	Except
as set forth in subparagraph 10(e)(iv), this Agreement may be terminated by Employer at any time during the Specified Term hereof, for any or no cause deemed sufficient by
Employer upon written notice to Employee. Upon such termination, as its sole liability to Employee, Employer shall:

	i.
	Treat
Employee as an inactive employee and pay Employee's salary for the period remaining in the Specified Term, and maintain Employee as a participant in all health and insurance
programs in which Employee and Employee's dependents, if applicable, are then participating (as such programs may be changed by Employer from time to time for its employees in comparable positions and
subject to satisfying the eligibility requirements of such programs to the extent imposed by third party providers) through the first to occur of (x) the end of the Specified Term or
(y) the date on which Employee becomes eligible to receive health and/or insurance benefits, as applicable from a new employer. 

4

 

However,
Employee shall not be eligible for flex or vacation time, discretionary bonus and new stock option grants, but shall continue to vest previously granted stock options, if any, for a period
of up to twelve (12) months from the date Employee is placed in an inactive Employee status if Employee remains in inactive status for such periods; and 

	ii.
	Provide
for Employee to receive so much stock from the Executive Stock Option Plan as had been vested but unexercised as of the date of termination of Employee's inactive Employee
status upon compliance by the Employee with all the terms and conditions required to exercise such options. 

Employee
shall continue to be bound by the restrictions in Paragraph 8 above, as modified by subparagraph 10(f). 

Notwithstanding
anything herein to the contrary: 

	[a]
	While
Employee is in an inactive status Employee may be employed by or provide consultation services to a non-Competitor of Employer, provided that
Employer shall be entitled to offset the salary being paid by Employer during the Specified Term by the compensation and/or consultant's fee being paid to Employee by the non-Competitor of
Employer, and provided further, that Employer shall not be required to continue to provide benefits from and after the time that Employee is entitled to receive benefits from the
non-Competitor of Employer; and

	[b]
	At
any time after the end of the Restrictive Period, if the Employee is in an inactive status, Employee may notify Employer in writing that Employee desires to
terminate Employee's inactive status and immediately thereafter Employer shall have no further liability or obligations to Employee hereunder, except that Employee shall be entitled to receive so much
stock from the Executive Stock Option Plan as is vested but unexercised as of the date of termination of Employee's inactive status upon compliance by the Employee with all the terms and conditions
required to exercise such options. 

For
clarification, upon a Change of Control (as described in Paragraph 10(e), below), Employer may no longer terminate this Agreement pursuant to this Paragraph 10(b). 

	c.
	Employee
may terminate this Agreement for good cause. For purposes of this Paragraph 10(c), good cause shall mean:

	i
	the
failure of Employer to pay Employee any compensation when due, save and except a "Disputed Claim" to compensation; or

	ii.
	material
reduction in the scope of duties or responsibilities of Employee or any reduction in Employee's salary save and except a "Disputed Claim". 

For
any termination under this Paragraph 10(c), Employee shall give Employer thirty (30) days advance written notice specifying the facts and circumstances of Employer's breach. During
such thirty (30) day period, Employer may either cure the breach or declare that a dispute exists with the breach claimed, in either of which case this Agreement continues in full force until
the dispute is resolved in accordance with Paragraph 11. As a result of any termination under this Paragraph 10(c), Employee shall be entitled to receive so much of the stock from the
Executive Stock Option Plan as had been vested but unexercised as of the date of termination, upon compliance by the Employee with all the terms and conditions required to exercise such option.
Employee shall have no further claim against Employer arising out of such breach. 

5

 

	d.
	In
the event Employee terminates Employee's employment under the Agreement without cause, Employer shall have no further liability or obligations whatsoever to Employee hereunder,
except that Employee shall be entitled to receive so much of the stock from the Executive Stock Option Plan as had been vested but unexercised as of the date of termination, upon compliance by the
Employee with all the terms and conditions required to exercise such option, provided however, that Employer shall be entitled to all of its rights and remedies by reason of such termination,
including without limitation, its right to enforce the undertakings contained in Paragraph 8 and its right to recover damages.

	e.
	As
used herein the term "Change of Control" shall mean the first to occur of any of the following events:

	(1)
	Any
"person" or "group" of persons (as such terms are used in §13 and 14(d)(2) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")), other than the
Company's principal stockholder as reflected in the Company's Proxy Statement dated March 29, 2002 (the "Principal Stockholder"), the Principal Stockholder's sole shareholder, members of the
immediate family, as well as the heirs and legatees, of the Principal Stockholder's sole shareholder and trusts or other entities for the benefit of such persons or affiliates of such persons (as such
term "affiliates" is defined in the rules promulgated by the Securities and Exchange Commission) (the "Principal Stockholder Group"), becomes the beneficial owner (as that term is used in
§13(d) of the Exchange Act), directly or indirectly, of fifty percent (50%) or more of the Company's capital stock entitled to vote generally in the election of directors. (For the
avoidance of doubt, as of the date hereof, the Principal Stockholder Group is the beneficial owner of fifty percent (50%) or more of the Company's capital stock);

	(2)
	At
any time, individuals who, at the date of the adoption of the Plan, constitute the Board, and any new director whose election by the Board or nomination for election by the
Company's stockholders was approved by a vote of in excess of seventy five percent (75%) either (1) the directors then still in office who either were directors at the beginning of the period
or whose election or nomination for election was previously so approved, or (2) the members of the Company's Executive Committee then still in office who either were members at the beginning of
the period or whose election or nomination for election to the Executive Committee was previously so approved by the directors or the Executive Committee, cease for any reason to constitute at least a
majority of the Board;

	(3)
	Any
consolidation or merger of the Company, other than a consolidation or merger of the Company in which the holders of the Stock immediately prior to the consolidation or merger hold
more than fifty percent (50%) of the Stock of the surviving corporation immediately after the consolidation or merger;

	(4)
	Any
liquidation or dissolution of the Company; or

	(5)
	The
sale or transfer of all or substantially all of the assets of the Company to parties that are not within a "controlled group of corporations" (as defined in Code
§1563) in which the Company is a member. 

In
the event there is a Change in Control of Employer, then upon the effective date of the Change of Control ("Effective Date"): 

	i.
	All
of Employee's unvested stock options shall become fully vested.

	ii.
	If
the Change of Control results from an exchange of outstanding common stock as a result of which the Common Stock of Parent is no longer publicly held, then upon the 

6

 

Effective
Date of the Change of Control all options held by Employee to purchase common stock of Parent shall be exercisable at the time or times they would otherwise have been exercisable for the
consideration (cash, stock or otherwise) which the holders of Parent common stock received in such exchange. For example, if immediately prior to the Effective Date, Employee has options to acquire
5,000 shares of Parent's common stock and the exchange of stock is one share of common stock of Parent for two shares of common stock of the acquiring entity, then Employee's options shall be
converted into options to acquire, upon payment of the exercise price, 10,000 shares of the acquiring entity's common stock. 

	iii.
	If
the Change of Control results from a sale of Parent's outstanding common stock for cash with the result that Parent's common stock is no longer publicly held, then upon the
Effective Date all options held by Employee to purchase common stock of Parent shall be exercisable at the time or times they would otherwise have been exercisable for cash equal to the difference
between the price per share of common stock paid by the acquiring entity for Parent's shares of common stock ("Purchase Price") and the price per share at which the options were granted ("Strike
Price"). For example, if immediately prior to the Effective Date, Employee has options to acquire 2,000 shares of Parent common stock at a Strike Price of $35, and the Purchase Price was $40, then
upon the vesting of such options Employee would be entitled to receive $10,000 in full satisfaction of such options (2,000 shares times $5 per share).

	iv.
	Employer
may terminate the Agreement only for good cause pursuant to Paragraph 10(a) or pursuant to subparagraph 10(e)(v). Employee may terminate the Agreement only for good
cause pursuant to Paragraph 10(c).

	v.
	Employer
may terminate this Agreement for any or no cause upon written notice to Employee. In the event of a termination hereunder, as its sole liability to Employee, Employer shall:

	[a]
	Treat
Employee as an inactive employee, pay Employee's salary for the period remaining in the Specified Term, and maintain Employee as a participant in all
health and insurance programs in which Employee and Employee's dependents, if applicable, are then participating (as such programs may be
changed by Employer from time to time for its employees in comparable positions and subject to satisfying the eligibility requirements of such programs to the extent imposed by third party providers)
through the first to occur of (x) the end of the Specified Term or (y) the date on which Employee becomes eligible to receive health and/or insurance benefits, as applicable, from a new
employer. In addition, Employer shall comply with the provisions of subparagraphs 10(e)(ii) and 10(e)(iii) for the remainder of the Specified Term. However, Employee shall not be
eligible for flex or vacation time, discretionary bonus and new stock option grants. 

Employee
shall continue to be bound by the restrictions in Paragraph 8 above. 

Notwithstanding
anything herein to the contrary: 

	[i]
	While
Employee is in an inactive status Employee may be employed by or provide consultation services to a
non-Competitor of Employer, provided that Employer shall be entitled to offset the salary being paid by Employer during the Specified Term by the compensation and/or consultant's fee being
paid to Employee by the non-Competitor of Employer, and provided further, that Employer shall not be required to continue to provide benefits from and after 

7

 

the
time that Employee is entitled to receive benefits from the non-Competitor of Employer; and 

	[ii]
	At
any time after the end of the Restrictive Period, if the Employee is in an inactive status, Employee may be employed by or
provide consultation services to a Competitor of Employer, provided that Employer shall be entitled to offset the salary being paid by Employer during the Specified Term by the compensation and/or
consultant's fee being paid to Employee by the Competitor of Employer, and provided further, that Employer shall not be required to continue to provide benefits from and after the time that Employee
is entitled to receive benefits from the Competitor of Employer, and provided further that the obligations and restrictions on Employee which are set forth in Paragraphs 8(b) and (c) shall
still apply. 

	f.
	Notwithstanding
anything contained in this Agreement to the contrary, the undertakings contained in Paragraph 8 shall survive a termination of the Agreement or of the Employee's
employment, regardless of the reason for such termination, except where termination occurs pursuant to subparagraph 10(b)(ii)[b] or Paragraph 10(c). In the event the
Agreement is terminated pursuant to subparagraph 10(b)(ii)[b] the restriction stated in Paragraph 8(a) on Employee accepting employment elsewhere shall not apply;
however, the obligations and restrictions set forth in Paragraphs 8(b) and (c) shall still apply. For a termination under Paragraph 10(c), the restriction stated in Paragraph 8(a)
on Employee accepting employment elsewhere shall not apply except that the restrictions under subparagraphs 8(a)(i)—(iv) and Paragraphs 8(b)—(d) shall still apply.

	g.
	The
parties acknowledge that the stock options granted to Employee prior to the date of this Agreement ("Prior Options") contain provisions whereby unvested options would become fully
vested on a change of control, and accordingly the provisions of this Agreement regarding a change of control are applicable to the Prior Options. However, the other provisions of this Agreement
regarding stock options (e.g. pursuant to Paragraph 10(b)(i) and (ii)) would not apply to the Prior Options, and the provisions originally governing such stock options shall remain in
full force and effect and shall not be altered by this Agreement. 

8

  

	11.
	Disputed Claim/Arbitration    A "Disputed Claim" occurs when Employee maintains pursuant to Paragraph 10(c) that
Employer has breached its duty to Employee and Employer has denied such breach. In such event, the Disputed Claim shall be resolved by arbitration administered by the American Arbitration Association
under its National Rules for the Resolution of Employment Disputes. Any arbitration under this paragraph shall take place in Las Vegas, Nevada. Until the arbitration process is finally resolved in the
Employee's favor and Employer fails to satisfy such award within thirty (30) days of its entry, no "for good cause" termination within the meaning of Paragraph 10(c) exists with respect
to Employer's breach of a Disputed Claim. Nothing herein shall preclude or prohibit Employer or Employee from invoking the provisions of Paragraph 10(b), or of Employer seeking or obtaining
injunctive or other equitable relief, provided that upon a Change of Control (as described in Paragraph 10(e), above, Employer may no longer invoke the provisions of Paragraph 10(b), but
may invoke the provisions of subparagraph 10(e)(v).

	12.
	Severability.    If any provision hereof is unenforceable, illegal, or invalid for any reason whatsoever, such fact shall not
affect the remaining provisions hereof, except in the event a law or court decision, whether on application for declaration, or preliminary injunction or upon final judgment, declares one or more of
the provisions of this Agreement that impose restrictions on Employee unenforceable or invalid because of the geographic scope or time duration of such restriction. In such event, Employer shall have
the option:

	(A)
	To
deem the invalidated restrictions retroactively modified to provide for the maximum geographic scope and time duration which would make such provisions enforceable and valid; or

	(B)
	To
terminate this Agreement pursuant to Paragraph 10(b). 

Exercise
of any of these options shall not affect Employer's right to seek damages or such additional relief as may be allowed by law in respect to any breach by Employee of the enforceable provisions
of this Agreement. 

	13.
	Attorneys Fees.    In the event suit is brought to enforce, or to recover damages suffered as a result of breach of this
Agreement the prevailing party shall be entitled to recover its reasonable attorneys fees and costs of suit.

	14.
	No Waiver of Breach or Remedies.    No failure or delay on the part of Employer or Employee in exercising any right, power or
remedy hereunder shall operate as a waiver thereof nor shall any single or partial exercise of any such right, power or remedy preclude any other or further exercise thereof or the exercise of any
other right, power or remedy hereunder. The remedies herein provided are cumulative and not exclusive of any remedies provided by law.

	15.
	Amendment or Modification.    No amendment, modification, termination or waiver of any provision of this Agreement shall be
effective unless the same shall be in writing and signed by the Employer's President, and Employee, nor consent to any departure by the Employee from any of the terms of this Agreement shall be
effective unless the same is signed by the Employer's President. Any such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.

	16.
	Governing Law.    The laws of the State of Nevada shall govern the validity, construction and interpretation of this
Agreement, and except for Disputed Claims, the courts of the State of Nevada shall have exclusive jurisdiction over any claim with respect to this Agreement.

	17.
	Number and Gender.    Where the context of this Agreement requires the singular shall mean the plural and vice versa and
references to males shall apply equally to females and vice versa.

	18.
	Headings.    The headings in this Agreement have been included solely for convenience of reference and shall not be
considered in the interpretation or construction of this Agreement. 

9

 
	19.
	Assignment.    This Agreement is personal to Employee and may not be assigned.

	20.
	Successors and Assigns.    This Agreement shall be binding upon the successors and assigns of Employer.

	21.
	Additional Arrangements.    The following additional arrangements shall constitute a part of this agreement:

	a.
	Employee
and Employer acknowledge that Rosevear & Associates, LLC ("RAC"), which is owned by Employee and/or his affiliates, is a party to a Development Assistance and
Consulting Agreement dated October 26, 2001 (the "South Africa Agreement") with Tsogo Investment Holding Company
(Proprietary) Limited and Southern Sun Gaming Investments (Proprietary) Limited (collectively, the "South Africa Parties") which provides for RAC (acting through Employee) to provide consulting
services to the South Africa Parties for a four-year period with respect to certain gaming and related operations located in South Africa. With respect to the South Africa Agreement:

	i.
	Employee
may perform the South Africa Agreement for his own account and that of RAC, provided that such performance (v) shall not interfere with Employee's performance of
services under this Agreement, which shall take priority over Employee's performance of services under the South Africa Agreement, (w) shall not involve in excess of four (4) trips to
South Africa in any twelve (12) month period each of which visits will not be longer than five (5) working days, (x) shall not otherwise require more than ten (10) hours of services per
week, (y) shall be scheduled to coincide with Employee's vacation and other personal time permitted under this Agreement or at other times, subject to the prior approval of Employer, and
(z) shall not involve or use any facilities or property of Employer except with the prior approval of, and on reimbursement to, Employer.

	ii.
	Employer
shall have no claim to any compensation and benefits arising from the South Africa Agreement.

	iii.
	Employee
represents and warrants that Employee's entry into this Agreement, and performance of services hereunder, and compliance with the terms and conditions of this Agreement is
consistent with, and does not violate, the South Africa Agreement.

	iv.
	Inasmuch
as the South Africa Agreement is for the benefit of Employee and RAC, with Employer having no economic or other interest therein, and, as an accommodation to Employee,
Employer is permitting Employee to provide services under such agreement for the account and benefit of Employee and RAC, Employee acknowledges that Employer shall have no responsibility whatsoever
for the South Africa Agreement, the performance of services thereunder, or any costs or expenses of any kind associated with the South Africa Agreement.

	v.
	Employee
acknowledges and agrees that Paragraph 7 of this Agreement is applicable to Employee's performance of services under the South Africa Agreement, and accordingly
Employer has the right at any time to invoke Paragraph 7 and, in its sole and absolute discretion, to direct Employee to cease to perform services under the South Africa Agreement and to
terminate all dealings with the South Africa Parties and their affiliates. Employer shall have no liability to Employee, RAC or to the South Africa Parties if it invokes Paragraph 7 and directs
such cessation. Exercise of such right shall not preclude Employer from exercising any of its other rights and remedies under this Agreement, including without limitation under Paragraph 7. 

10

 

	b.
	Employee
has introduced to Employer an opportunity to enter into a consulting agreement (the "Consulting Agreement") with the Aqua Caliente Band of Cahuilla Indians (the
"Tribe"),which, consistent with his prior obligations to Employer, Employee had previously developed for his own account. Employer wishes to acquire that opportunity and all of Employee's right title
and interest therein, and Employee, on the terms and conditions set forth herein, is willing that Employer should do so. Accordingly, Employee and Employer agree as follows.

	i.
	Employer
acknowledges that but for Employee's entering into this Agreement, Employer would not have the ability to enter into the Consulting Agreement, since the availability of
Employee's services to the Tribe is a key element of the Consulting Agreement.

	ii.
	Employee
and Employer agree and acknowledge that Employer shall be under no obligation to enter into such a Consulting Agreement, and will do so only if Employer is able to negotiate
satisfactory terms, and determines to enter into such Agreement, in its sole and absolute discretion.

	iii.
	In
the event Employer does enter into the Consulting Agreement, it is anticipated that the services required thereunder shall be performed by Employer, utilizing the direct services
of Employee and/or persons acting under his direction.

	iv.
	Employer
hereby acquires all of Employee's right, title and interest in the Consulting Agreement, Employee agrees that neither he nor any of his affiliates will, during the term of
this Agreement, enter into any agreement with the Tribe without Employer's express written prior approval in its sole and absolute discretion. In consideration of the foregoing, Employer agrees to pay
Employee, from time to time, as received by Employer, an amount equal to fifty percent (50%) of the Fees (as defined) under the Consulting Agreement. As used herein, Fees means consulting fees paid by
the Tribe and actually received by Employer, reduced only by direct, third party expenses (if any) actually paid by Employer and not reimbursed by the Tribe. (For the avoidance of doubt, Employer and
Employee anticipate that such expenses, if any, would be minimal, but may include expenses paid by Employer which are reimbursable by the Tribe but which the Tribe fails to reimburse to Employer). The
consideration described in this Paragraph 21(b) shall be paid as promptly as practicable, net of all required withholdings. For avoidance of doubt, consideration received by Employee pursuant
to this Paragraph 21(b) shall not be taken into account for purpose of Employee's Participation in Employer's Supplemental Employee Retirement Plan or Employer matches in Employer's Deferred
Compensation Plan, to the extent such plans remain in effect. 

	22.
	Prior Agreements.    This Agreement shall supersede and replace any and all other employment agreements which may have been
entered into by and between the parties. Any such prior employment agreements shall be of no force and effect. 

11

 

        IN WITNESS WHEREOF, Employer and Employee have entered into this Agreement in Las Vegas, Nevada, as of June 1, 2002. 

	EMPLOYEE—KEN ROSEVEAR	 	 
	 	 	 	 	 
	

 	
 	

 	
 	

 
	
	 	 
	 	 	 	 	 
	

 	
 	

 	
 	

 
	EMPLOYER—MGM MIRAGE DEVELOPMENT, INC.	 	 
	 	 	 	 	 
	

 	
 	

 	
 	

 
	By:	 	 	 	 
	 	 	
	 	 

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   EXHIBIT A  

        Trade secret means information, including a formula, pattern, compilation, program, device, method, technique or process, that derives economic value, present or
potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain any economic value from its disclosure or use. 

13

   EXHIBIT B  

	Name of Report
	 	Generated By

	Including, but not limited to:	 	 
	

Arrival Report	
 	

Room Reservation
	Departure Report	 	Room Reservation
	Master Gaming Report	 	Casino Audit
	Department Financial Statement	 	Finance
	$5K Over High Action Play Report	 	Casino Marketing
	$50K Over High Action Play Report	 	Casino Marketing
	Collection Aging Report(s)	 	Collection Department
	Accounts Receivable Aging	 	Finance
	Marketing Reports	 	Marketing
	Daily Player Action Report	 	Casino Operations
	Daily Operating Report	 	Slot Department
	Database Marketing Reports	 	Database Marketing

14

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