Employment Agreement - MGM Grand Inc. and Gary N. Jacobs
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is entered into as of June 1, 2000,
by and between MGM GRAND, INC., a Delaware corporation ("Employer"), and Gary N.
Jacobs, ("Employee").
1. Employment. Employer hereby employs Employee, and Employee hereby accepts
----------
employment by Employer, as Executive Vice President and General Counsel
(which titles may be changed (but not to a lower status) by Employer in its
sole discretion) 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. Employer
represents and warrants to Employee that its Board of Directors has elected
Employee to serve as a member of Employee's Board of Directors, effective
as of the Commencement Date (as hereinafter defined). 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. During the Specified Term, Employee shall
report directly to the Chairman of the Board of Directors of Employer and
shall be invited to attend all meetings of the Executive Committee.
2. Term. This Agreement shall commence on June 1, 2000 (the "Commencement
----
Date"), and continue through and including June 1, 2004 (the "Specified
Term").
3. Compensation. Employee shall receive a minimum annual salary of $500,000,
------------
commencing on the Commencement Date. 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 Employer 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 and/or promotion by Employer in
its sole and absolute discretion. Commencing with the Employer's fiscal
year ending on December 31, 2000, 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. Employee shall also be eligible to
receive additional bonuses as determined by Employer in its sole and
absolute discretion. For the calendar year ending December 31, 2000,
Employee shall receive a Bonus of not less than $500,000.
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
1
<PAGE>
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
D 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 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, South Africa, 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. If Employee
fails to satisfy such requirement, or if Employer is directed to cease
business with Employee by any such authority, 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 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).
7. Additional Consideration. Employee has received as consideration for this
------------------------
Agreement, in addition to the Compensation stated in Paragraph 3 above, the
sum of $30,000 (the "Additional Compensation"). Employee represents and
warrants that such consideration is reasonable, adequate and sufficient for
Employee's agreement to the terms contained herein, including but not
limited to the undertakings stated in Paragraphs 4, 6 and 8.
2
<PAGE>
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 and
Additional Consideration 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 "Restricted 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 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 Restricted Period is operating or has
applied for a gaming license ("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,
3
<PAGE>
without the prior written consent of the Employer, such consent
to be within Employee'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 Employee. Employee agrees to notify Employer immediately of
------------------
any employers for whom Employee works during the Specified Term or
within the Restricted Period. Employee further agrees to promptly
notify Employer, during Employee's employment with Employer, of any
contacts made by non-restricted gaming licensees which concern or
relate to an offer of future employment (or consulting services) to
Employee.
4
<PAGE>
(e) The covenants contained in this Paragraph 8 shall survive the
termination of this Agreement.
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 and 7 hereof, are 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 such 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 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 shall be
entitled to a pro rata refund of the payment made to Employee pursuant to
Paragraph 7, and 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 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 (y) if
termination is pursuant to subparagraphs 10(a)(i)[a] or
5
<PAGE>
10(a)(i)[b], Employee (or his beneficiary if the termination is pursuant to
subparagraph 10(a)(i)[a]) shall be entitled to receive 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. 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
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;
[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), and (z) an additional amount equal to what Employee's
Bonus would have been for the fiscal year in which Employee's
death occurs, pro rated through the date of Employee's death,
which additional amount 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 such 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), and (z) an additional amount equal to what Employee's
Bonus would have been for the fiscal year in which Employee's
termination occurs, pro rated through the date of termination,
which additional amount shall be paid at such time as Employer
pays bonuses to its other senior executives with respect to the
6
<PAGE>
fiscal year in which Employee's termination occurs (but not
later than March 31 following the end of such 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 Chairman of the
Board of Directors of Employer applicable to senior management
of Employer, 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 grants, but including the continued vesting
of previously granted stock options, if any), 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 as are or subsequently become vested through the period
remaining in the Specified Term upon compliance by the Employee
with all the terms and conditions required to exercise such
options; and
(iii) Employer shall pay Employee an additional amount equal to what
Employee's Bonus would have been for the fiscal year in which
Employee's termination occurs, pro rated through the date of
termination. Such additional amount 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 such fiscal year).
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
7
<PAGE>
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.
(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,
8
<PAGE>
upon compliance by the Employee with all the terms and
conditions required to exercise such option;
(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).
(e) In the event there is a change in control of Employer, if such change
of control is a result of a sale or exchange of outstanding common
stock of Employer to a third party, and as a result thereof the
ownership by Kirk Kerkorian, Tracinda Corporation and/or their
affiliates of the voting stock of the acquiring or surviving entity
(after completion of the transactions set forth in the sale or
exchange agreement documents, including without limitation, subsequent
stock buybacks contemplated in such transactions), represents in the
aggregate less than twenty percent (20%) of the voting power of the
voting stock of such entity, as distinguished from a change in control
resulting from the issuance of Treasury shares or from any other
transaction ("Change of Control"), then upon the effective date of the
Change of Control ("Effective Date"):
(i) All of Employee's unvested stock options shall become fully
vested, provided that Employee shall have the right to
elect (by notifying the Employer in writing as set forth on
Exhibit C) that all or any portion of Employee's unvested
stock options shall not become fully vested upon a Change
of Control.
(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
9
<PAGE>
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).
(f) No termination of this Agreement shall extinguish such rights as
Employee may have under applicable law or Employer's incorporation
documents or bylaws to be indemnified in his capacity as an officer or
director of Employer.
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 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).
10
<PAGE>
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 Expenses. Employer shall provide Employee with relocation
-------------------
benefits and/or reimburse Employer for relocation expenses consistent with
Employer's policies applicable to senior executives.
14. Travel and Related Matters. During the Specified Term, it is anticipated
--------------------------
that Executive 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).
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 Chairman of the Board
of Directors 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 Chairman of the Board of Directors. 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.
----------
11
<PAGE>
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.
IN WITNESS WHEREOF, Employer and Employee have entered into this Agreement
in Las Vegas, Nevada on June 1, 2000.
EMPLOYEE: EMPLOYER - MGM GRAND, INC.
/s/ Gary N. Jacobs /s/ J. Terrence Lanni
------------------------- By:
------------------------------------
GARY N. JACOBS Title: J. TERRENCE LANNI,
CHAIRMAN OF THE BOARD
OF DIRECTORS
12
<PAGE>
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
<PAGE>
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
14
<PAGE>
EXHIBIT "C"
Gary N. Jacobs June 1, 2000
Dear Gary:
This letter will supplement the employment agreement, dated June 1, 2000,
between you and MGM Grand, Inc. (the "Agreement"). Notwithstanding anything
contained in the Agreement to the contrary, if you so elect, all or any portion
of your unvested stock options shall not become fully vested upon a Change of
Control (as defined in the Agreement) of MGM Grand, Inc. Any such election shall
be effective upon written notice to MGM Grand, Inc. at or prior to the Effective
Date (as defined in the Agreement) of any such Change of Control.
Except as specifically modified hereby, the terms and conditions of the
Agreement shall remain in full force and effect.
Sincerely,
MGM GRAND, INC.
By: /s/ J. Terrence Lanni
--------------------------------
J. Terrence Lanni,
Chairman of the Board
of Directors
AGREED TO AND ACKNOWLEDGED
/s/ Gary N. Jacobs
----------------------------- Dated: June 1, 2000
Gary N. Jacobs
15
<PAGE>
EXHIBIT "D"
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 of The InterGroup
Corporation (NASDAQ - NSM).
3. Presently, Secretary, Youbet.com, Inc. (NASDAQ - NMS). I anticipate
resigning from that position by not later than June 30, 2000.
4. Member, Board of Directors (including Executive Committee) of
PharmaDetailing.com, Inc., a privately held company.
5. Member, Advisory Board, Stonegate Partners, L.L.C., Boston, Massachusetts,
an investment banking firm involved in raising private equity.
6. Member, Board of Directors of Lasers for Construction, Inc., a privately
held company.
7. Member, Board of Trustees of Natural History Museum of Los Angeles
Foundation (including various committee assignments).
8. Member, Board of Overseers, Brandeis University Graduate School of
International Economics and Finance (including various committee
assignments).
9. Executive Board Member, The American Jewish Committee, Los Angeles Chapter.