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EXHIBIT 10.1  

 
 

EMPLOYMENT AGREEMENT    
  

        This Employment Agreement ("Agreement") is entered into as of June 1, 2002, by and between MGM MIRAGE, a
Delaware corporation ("Employer"), and J. Terrence Lanni ("Employee") and replaces in all respects the prior employment agreement dated as of
February 21, 2000 between Employer and Employee (the "Prior Agreement"). 

	1.
	Employment. Employer hereby employs Employee, and Employee hereby accepts employment by Employer, as Chairman of the Board of Directors
and Chief Executive Officer 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 Chairman of the Board of Directors and Chairman of the Executive Committee. During the Specified Term, all employees of Employer,
including its subsidiaries and other entities which it controls, shall report directly or indirectly (as specified by Employee) to Employee.

	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 $2,000,000 commencing on the Commencement Date. Employee shall also be
eligible to receive fringe benefits commensurate with Employer's other employees in the most 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 

1

 

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, 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. 

2

 

	(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) 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 

3

 

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. 

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, 

4

 

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 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 

5

 

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 

	(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 

6

 

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. 

	(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; 

7

 

	(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 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 therein. 

	(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). 

8

 

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 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.
	Relocation of Employee. Because of the increased demands placed upon Employee, Employee may find it necessary to relocate to Las Vegas,
Nevada. Should Employee effect such relocation (which Employer acknowledges would be in the best interests of Employer), Employer shall reimburse Employee (on a "grossed-up" basis) for his
reasonable costs thereby incurred in accordance with Employer's policies. Pending such relocation, the Company shall continue its existing practices with respect to Employee as reflected in the Prior
Agreement.

	14.
	Travel and Related Matters.

	(a)
	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, shall be on Employer provided
aircraft, or if commercial airlines are used, on a first-class basis (or best available basis, if first class is not available).

	(b)
	From
time to time Employee may request the use of Employer-owned aircraft for personal use to fly between Las Vegas, Nevada and California. The Company will, subject to availability,
make such aircraft available to Employee for such purposes on reasonable notice. In the event such aircraft is not available, Employer will, at Employee's request, provide a charter aircraft for such
purpose. Employer will report as compensation to Employee the lowest value allowable pursuant to applicable law and will "gross up" Employee's compensation to provide additional compensation to enable
him to pay the applicable tax (including tax on the "grossed up" amounts). 

9

 

	15.
	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.

	16.
	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.

	17.
	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.

	18.
	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.

	19.
	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.

	20.
	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.

	21.
	Assignment. This Agreement is personal to Employee and may not be assigned.

	22.
	Successors and Assigns. This Agreement shall be binding upon the successors and assigns of Employer.

	23.
	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.

	24.
	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. 

10

 

        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/  J. TERRENCE LANNI      	
 	

By:	
 	

/s/  GARY N. JACOBS      
	
J. TERRENCE LANNI	 	 	 	
GARY N. JACOBS
	

 	
 	

Title:	
 	
Executive Vice President, General

Counsel & Secretary

11

  

 
 

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. 

12

 
 
 

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

13

 
 
 

EXHIBIT "C"    
    
    PERMITTED OUTSIDE ACTIVITIES    
  

Trustee,
Ronald Reagan Presidential Foundation. 

Regent,
Loyola High School, Los Angeles. 

Trustee,
Keck School of Medicine, University of Southern California. 

Member,
Board of Directors, Magna Entertainment Corporation. 

Member,
Board of Directors, Santa Anita, Inc. 

Member,
Board of Directors, American Gaming Association 

Member
Board of Directors, Del Mar Thoroughbred Club 

14

QuickLinks

EMPLOYMENT AGREEMENT

EXHIBIT "A"

EXHIBIT "B"

EXHIBIT "C" PERMITTED OUTSIDE ACTIVITIESQuickLinks
 -- Click here to rapidly navigate through this document
  

EXHIBIT 10.2  

 
 

EMPLOYMENT AGREEMENT    
  

        This Employment Agreement ("Agreement") is entered into as of June 1, 2002, by and between MGM MIRAGE, a
Delaware corporation ("Employer"), and James J. Murren ("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. 

	1.
	Employment. Employer hereby employs Employee, and Employee hereby accepts employment by Employer, as President, Chief Financial Officer
and Treasurer 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 $1,200,000 commencing on the Commencement Date. Employee shall also be
eligible to receive fringe benefits commensurate with Employer's other employees in the comparable 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 

1

 

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. 

2

 

	(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; 

3

 

	(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 

4

 

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. 

6

 

	(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 

7

 

	(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 therein. 

	(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 to (ii) 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 Arbitration Association under its National Rules for the Resolution of Employment Disputes. Any 

8

 

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. 

9

 
	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. 

10

 

        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/ JAMES J. MURREN
JAMES J. MURREN	
 	

By:	

/s/ J. TERRENCE LANNI
J. TERRENCE LANNI
	 	 	Title:	Chairman and Chief Executive Officer

11

  

 
 

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. 

12

 
 
 

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

13

 
 
 

EXHIBIT "C"
  
    PERMITTED OUTSIDE ACTIVITIES    
  

	1.
	Director,
Nevada Cancer Institute

	2.
	Director,
Board of Fellows, Trinity College, Hartford, CT

	3.
	Trustee,
University of Nevada—Las Vegas Foundation

	4.
	Director,
Boy Scouts of America

	5.
	Member,
Young President's Organization

	6.
	Member,
Certified Financial Analyst 

14

QuickLinks

EMPLOYMENT AGREEMENT

EXHIBIT "A"

EXHIBIT "B"

EXHIBIT "C" PERMITTED OUTSIDE ACTIVITIES

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