Employment Agreement - MGM Grand Inc. and J. Terrence Lanni
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is entered into as of February 21,
2000, by and between MGM GRAND, INC., a Delaware corporation ("Employer"), and
J. Terrence Lanni ("Employee").
1. Employment. Employer hereby employs Employee, and Employee hereby accepts
----------
employment by Employer, as Chairman of the Board of Directors 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
member 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 February 21, 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
------------
$1,000,000, 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.
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
1
<PAGE>
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 $40,000 (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.
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
2
<PAGE>
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, 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
3
<PAGE>
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.
(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
4
<PAGE>
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
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:
5
<PAGE>
(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 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 Employer's Board
of Directors, or other material breach of this
6
<PAGE>
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 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.
7
<PAGE>
(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, 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
8
<PAGE>
(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 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
9
<PAGE>
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. Accommodations for Convenience of Employer. During the Specified Term,
------------------------------------------
Employee's duties will require him to spend a substantial portion of his
time outside of business hours and on weekends hosting and entertaining
customers of Employer and other persons with important business
relationships with Employer and meeting with persons doing business or
proposing to do business with Employer. In order for Employer to obtain
the benefit of such services, Employer has determined that the substantial
portion of such activities must be performed on premises owned by the
Employer or its subsidiaries. Accordingly, during the Specified Term
Employer will make available at no cost to Employee suitable
accommodations at The Bellagio, MGM Grand or Mirage, as requested by
Employee, for him to engage in such activities on behalf of Employer.
Employee shall accept such accommodations as a condition of his
employment. In the event such accommodations are deemed to constitute
taxable income to Employee, Employee's compensation shall be "grossed up"
to provide additional compensation sufficient to enable him to pay the
applicable tax (including tax on the "grossed up" amounts).
14. Travel and Related Matters.
--------------------------
(a) 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).
(b) From time to time Employee may request the use of Employer-owned
aircraft for personal use to fly between Las Vegas, Nevada and
Southern 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).
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
11
<PAGE>
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 Executive 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.
12
<PAGE>
IN WITNESS WHEREOF, Employer and Employee have entered into this Agreement
in Las Vegas, Nevada as of February 21, 2000.
EMPLOYEE: EMPLOYER - MGM GRAND, INC.
/s/ J. Terrence Lanni By: /s/ John Redmond
-------------------------- -----------------------------------
J. TERRENCE LANNI JOHN REDMOND
Title: CO-CHIEF EXECUTIVE OFFICER
13
<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.
14
<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
15
<PAGE>
EXHIBIT "C"
J. Terrence Lanni February 21, 2000
Dear Terry:
This letter will supplement the employment agreement, dated February 21,
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/ John Redmond
--------------------------------
John Redmond
Co-Chief Executive Officer
AGREED TO AND ACKNOWLEDGED
/s/ J. Terrence Lanni Dated: February 21, 2000
---------------------------
J. Terrence Lanni
16
<PAGE>
EXHIBIT "D"
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, Youbet.com, Inc. (NASDAQ-NMS) through June 30, 2000.
Member, Board of Directors, Magna Entertainment Corporation.
Member, Board of Directors, Santa Anita, Inc.
Member, Board of Directors, Purchase Pro.com (through the earlier of May 31,
2000 or such company's annual meeting).
Member, Board of Directors, American Gaming Association
17