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Employment Agreement - MGM Grand Inc. and J. Terrence Lanni

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April 13, 1995

Mr. J. Terrence Lanni
c/o Troy & Gould
1801 Century Park East
16th Floor
Los Angeles, CA 90067

Dear Terry:

This letter will memorialize the agreement between yourself and MGM Grand, Inc. 

1.  Commencement Date:

    As soon as practicable, but not later than June 1, 1995.

2.  Positions/Titles:

    A.  President and Chief Executive Officer

    B.  Member of the Board of Directors

    C.  Member of the Executive Committee

3.  Compensation

    A.  Base: $1,000,000 per year, subject to possible increase following annual
        review on the employment anniversary date at the sole discretion of 
        MGMG's Compensation Committee.

    B.  Stock Options: 1,000,000 shares of MGMG common stock and subject to the 
        following vesting schedule:

        End of Employment            Percentage of
               Year                 Options Vesting
        -----------------           ---------------

                1                           0
                2                           0
                3                          20
                4                          20
                5                          20
                6                          40

Mr. J. Terrence Lanni
April 13, 1995
Page 2

          The options will be granted pursuant to an amendment to MGMG's 
          existing Nonqualified Stock Option Plan or pursuant to a new
          Nonqualified Stock Option Plan, and will be subject to stockholder

     C.   Acceleration of Stock Options: If there is a change in control of MGMG
          as the result of stockholders disposing of their shares through sale 
          or exchange to a third party or cash merger (as distinguished from a
          change of control resulting from the issuance of treasury shares or
          from any other transaction) before the stock options are fully vested,
          all unvested stock options shall become fully vested as of the date of
          such sale, exchange or cash merger.

4.   Duties and Responsibilities: Those consistent with Positions/Titles.

5.   Exclusivity: You agree to devote your full business time to MGMG and to
     render your services solely and exclusively for MGMG, provided that the
     Executive Committee may in its sole discretion grant exceptions to such
     exclusivity, which exceptions may be withdrawn in the sole discretion of
     such Committee. Subject to the above-referenced discretion of the Executive
     Committee, it is understood that you will continue to serve as Chairman of
     the Board of Trustees of Loyola Marymount University and as a director of
     Santa Anita Operating Company and of Santa Anita Realty Enterprises.

6.   Representations and Warranties: You represent and warrant that:

     A.   You can and will be unconditionally licensed by all applicable Gaming 
          Authorities, and other authorities, including authorities to which
          MGMG may become subject in the future. Notwithstanding the foregoing,
          this provision shall not be deemed to have been violated if the sole
          reason you are not licensed by any future authority is your failure to
          comply with any licensing requirement that you become a resident of
          such jurisdiction.

     B.   There are no currently existing conditions which may impair your 
          ability to perform your duties hereunder.

     C.   You have the full right to enter into this agreement, and your 
          entering into this agreement will not violate or conflict with any
          arrangements you have with anyone.

Mr. J. Terrence Lanni
April 13, 1995
Page 3

7.  Termination Right: Except as otherwise provided in Paragraph 8 below, 
    either party shall have the right to terminate this agreement and your 
    employment hereunder on thirty (30) days notice without any further 
    obligations to each other, including without limitation any obligations 
    under Paragraph 3 above.

8.  Termination Without Cause: If your employment is terminated without cause at
    any time during the first five years of the agreement:

    A.  You shall be entitled to continue receiving your base compensation set 
        forth in Paragraph 3A on a monthly basis for the number of months shown 
        in the following schedule, less any earned income and employee 
        benefits received by you by virtue of your employment elsewhere during 
        such payout period:

        If Termination Without        Number of Months Base
        Cause Occurs in Year:            Compensation
        ----------------------          (payout period)

                1                        18 months
                2                        18 months
                3                        12 months
                4                         6 months
                5                         6 months

    B.  For purposes of this agreement, the term "cause" shall mean:

        (1)  Misconduct or negligence in the performance of your material 
             duties hereunder, or refusal to perform such duties;

        (2)  Any breach of your representations, warranties and covenants 
             contained in this agreement;

        (3)  Failure by you to promptly obtain or retain any permits, licenses, 
             or approvals which shall be required by any State or local 
             authorities for the conduct of any business activities of MGMG, 
             provided however that "cause" shall not be deemed to exist if the 
             sole reason you fail to obtain or retain any such permits, 
             licenses or approvals is your non-residence in a jurisdiction 
             other than Nevada;

Mr. J. Terrence Lanni
April 13, 1995
Page 4

        (4)  Your death, or your disability for a consecutive period of six (6) 

        (5)  Your indictment for or conviction of a crime, except for minor 
             traffic violations and similar matters, it being acknowledged 
             that inasmuch as the activities of MGMG and its subsidiaries are 
             subject to a high degree of regulation and require MGMG to 
             maintain the highest standards of integrity, any such indictments 
             or convictions would be material and adverse to the interests 
             of MGMG; or

        (6)  The Board of Directors shall, after reasonable inquiry, have 
             reasonably concluded that you have engaged in conduct which is
             materially adverse to MGMG or its business reputation.

9.  Employee Benefits: You shall be entitled to all employee benefits that are 
    in place as of the Commencement Date of this agreement, subject to change 
    from time to time at the discretion of the Executive Committee or 
    Compensation Committee. It is understood and acknowledged that MGMG is not 
    committing to maintain any particular level of benefits or benefits 
    program, provided however, that your level of participation in such 
    programs shall be at the same level as those afforded to the group of 
    senior executives of MGMG.

10. Relocation Expenses: MGMG will pay the cost of your relocation from Los 
    Angeles to Las Vegas in accordance with MGMG's standard "Los Angeles/Las 
    Vegas Relocation Policy - Officers", of which you have been supplied a copy.

11. Confidentiality: The terms of this agreement shall be kept confidential, 
    subject to MGMG's compliance with applicable federal and state laws and 
    regulations which may require public disclosure of the agreement or its 

Mr. J. Terrence Lanni
April 13, 1995
Page 5

12. Public Announcement: MGMG shall have the right to issue a press release 
    concerning your engagement by MGMG, provided the text of such press release 
    shall be subject to your approval, not to be unreasonably withheld. You 
    and MGMG each covenant not to, or to permit your respective agents or 
    representative to, leak word of this agreement prior to issuance of the 
    press release.


                                        MGM Grand, Inc.

                                        By: /s/ Robert R. Maxey
                                               Robert R. Maxey,


/s/     J. TERRENCE LANNI                     April 14, 1995
-----------------------------------          ----------------
        J. Terrence Lanni                      Date

/s/      ALEX YEMENIDJIAN                     April 14, 1995
-----------------------------------          ----------------
         Alex Yemenidjian                      Date