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.

 

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