Exhibit 10.1
HARRAH'S ENTERTAINMENT, INC. RESTATED
ANNUAL MANAGEMENT BONUS PLAN (FEBRUARY 2000)
Introduction
As a member of management, you can have a major impact on the overall
performance of your property and of Harrah's Entertainment, Inc. (the
Company). The Harrah's Entertainment, Inc. Annual Management Bonus Plan
(Plan) is designed to reward you for meeting your personal performance
objectives in years when your Operating Unit meets its performance
objectives.
The Plan provides a method of developing uniform bonus calculation
procedures with specific objectives for each Operating Unit as well as
overall objectives for the company. This means that although there is
one plan, covering all properties, divisions, and corporate, your
specific bonus award is tied to your individual performance and your
Operating Unit's performance, and can also have a relationship to the
performance of the entire Company.
The purposes of the Plan are to reward you for superior work and
motivate you toward delivering better customer service and achieving
better business results, to tie your goals and interests into those of
the Company and its stockholders, and to attract and retain top
managers.
This document describes eligibility, personal performance objectives
that are directly tied to the performance planning and evaluation
process, Operating Unit performance objectives, assignment of bonus
points, the bonus pool, the payment of bonus awards and administrative
matters.
1. Personal Eligibility
1.1 To be eligible, you must be a full-time employee of an
Operating Unit in a salary grade 18 or above, with the Chief
Executive Officer having discretion to make exceptions
regarding the eligibility of positions within grades 18 and
19. An Operating Unit is a business unit identified for
participation in the Plan by the Chief Executive Officer.
Unless an exception is approved by the Chief Executive Officer
or his designee, you may not be a participant in any other
bonus plan of the Company or its subsidiaries. You must have
been employed in an eligible position before October 1 of the
Plan year, have at least a "Successful"
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performance rating, and be actively working at the time
bonuses are distributed to receive your bonus award. The
requirement to be actively working on the bonus payment date
may be waived by the Chief Executive Officer or his designee.
See also Section 9.1 below.
2. Prorations/Transfers
2.1 If an eligible employee is promoted during the year, pro-rata
bonus awards are calculated based on his or her earnings,
individual performance and grade in each position.
2.2 If, however, an employee is promoted into an eligible position
under this Plan or transferred from another bonus plan in the
Company to this Plan, the promotion or transfer must take
place before October 1 for the employee to be eligible for a
prorated payment under this Plan.
2.3 In cases of promotions and/or transfers between Operating
Units, pro-rata bonus awards for eligible participants are
calculated based on the employee's earnings, individual
performance, operating unit bonus points and grade in each
Operating Unit. The calculation of prorata bonus awards is
generally made following completion of the Plan year and the
calculation is determined in a manner determined by the
Compensation Department.
2.4 Notwithstanding the above, for transfers of a bonus eligible
employee after March 31 and before October 1 during any Plan
year, the bonus will be pro rated as provided above but will
not be less than the bonus that would have been earned if the
employee had stayed at the first Operating Unit. For transfers
during the last three months of a Plan year, the bonus will be
equal to the bonus that would have been earned if the employee
had stayed at the first Operating Unit.
2.5 The Chief Executive Officer will have authority to interpret
and make exceptions to the bonus provisions concerning
transferred and new employees.
3. Individual Performance Objectives
3.1 At the beginning of each year, your supervisor should develop
specific performance objectives for you to achieve. Your
supervisor may look to you for assistance in developing these
objectives. The objectives should be recorded on your
performance appraisal document under the appropriate
performance standard. One hundred bonus points or another
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measurement standard are then assigned by your supervisor to
these personal bonus objectives. Your objectives and bonus
points or another measurement standard will be approved and
retained by your supervisor. The objectives should be easy to
quantify and verify. Performance objectives can be modified
during the year if business conditions dictate.
If circumstances are such that specific personal objectives
are not developed for a particular year, then the job
performance expected by your supervisor or by your Operating
Unit's senior manager, as determined by them, will be your
target objectives.
4. Operating Unit Performance Objectives
4.1 Operating Unit bonus objectives are established for each Plan
year. These may consist of a combination of measurements
related to the objectives of the Company and each of its
Operating Units on items such as operating income, pre-tax
earnings, earnings per share, return on sales and/or customer
satisfaction ratings. The objectives may change annually to
support the business mission of the Company. The objectives
are assigned target points or another standard of measurement
(referred to as points in this Plan).
4.2 The objectives and assigned target points for each Operating
Unit are recommended by the Chief Executive Officer to the
Human Resources Committee for approval. Total target points
for each Operating Unit is 100. Additional stretch points may
be awarded according to specific parameters that may be set
each year.
5. Meeting Operating Unit Objectives Assignment of Bonus Points
5.1 After the end of each Plan year, earned bonus points will be
assigned to each Operating Unit based upon achievement of Plan
objectives. The Operating Unit bonus points may be combined or
tied with the points earned by the Company. The final point
total will be used to create the Operating Unit's bonus pool.
6. Meeting Operating Unit Objectives - The Bonus Pool
6.1 A bonus pool for each Operating Unit will be established
according to the unit's bonus point total as follows: The
bonus pool is calculated by multiplying all eligible
participants' eligible earnings by the appropriate bonus
percentage as shown on the applicable Bonus Matrix. The
appropriate bonus percentage is determined by both the
participants'
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salary grades and bonus points earned by the Operating Unit.
6.2 An Operating Unit's total bonus pool is calculated by summing
all appropriate bonus percentages of the Operating Unit's
eligible participants.
6.3 The Chief Executive Officer shall have discretion to approve
and modify the bonus matrices for employees in grades 18
through 29. The Human Resources Committee will approve the
matrices for grades 30 and above.
7. Meeting Individual Objectives
7.1 After the end of the Plan year, your supervisor will determine
your individual performance against your objectives. This
assessment determines how many of your personal 100 assigned
objective points have been met.
7.2 The supervisor will then recommend a bonus award for you and
other eligible employees reporting to him or her, in relation
to the individual performance bonus points earned. The
supervisor must keep in mind that the total bonus pool for the
Operating Unit must not be exceeded. When an Operating Unit's
performance rises above the "100" point target, the available
bonus dollars contributed to the pool will increase; this is
called "stretch bonus."
7.3 When an Operating Unit is in stretch, individual awards should
not automatically rise above the "100" point line. Only those
eligible participants whose performance contributed to the
achievement of stretch bonus should be considered for stretch
awards. Calculation is up to the discretion of your supervisor
and the Operating Unit's senior managers.
7.4 When Operating Unit performance falls short of objectives, the
Bonus Pool will be accordingly reduced. Individual awards
should be scaled back to reflect the available pool dollars.
8. Approval and Payment of Annual Bonus Plan Awards
8.1 Each supervisor will submit bonus award recommendations to the
Compensation Department with two levels of approval (unless
the next level of supervision is a Corporate Senior Vice
President or a Division President; in these cases, no further
approvals are required). The Compensation Department will
accumulate overall bonus recommendations and submit them for
appropriate approvals.
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8.2 The Chief Executive Officer reviews and approves bonus
recommendations and recommends Operating Unit bonus points to
the Human Resources Committee. The Human Resources Committee
approves total bonus points achieved for performance against
Operating Unit objectives and the individual bonus awards of
management members of the Board of Directors.
8.3 Bonus awards are generally distributed to employees by March
15 of the year following the Plan year dependent on the
eligibility of both the Operating Unit and the employee.
Approved bonus awards may be distributed earlier with the
approval of the Chief Executive Officer.
8.4 The Chief Executive Officer shall have discretion to resolve
and approve exceptions and adjustments to objectives and bonus
points and other bonus plan issues that have their source or
basis at operating properties, which decisions will also roll
up to Division bonus calculations. The Human Resources
Committee may establish guidelines for these exceptions.
8.5 Exceptions that impact the bonus points of Corporate require
the approval of the Human Resources Committee as to their
impact on Corporate bonuses.
9. Miscellaneous
9.1 For grades 30 and above, the Human Resources Committee may
approve a discretionary pro-rata bonus if active employment
was terminated during the Plan year by death, disability,
retirement (age 55 with 10 or more years of service), or in
other special circumstances. For grades below 30, the Chief
Executive Officer or his designee may give this approval.
9.2 Employees who have been on Leave of Absence are eligible to
participate in the Plan if their Operating Unit qualifies.
Employees who are on Leave of Absence at the time of bonus
payments are eligible to receive their award, if any, when
they return to active employment. If they do not return to
active employment within one year after the bonus payment
date, their payment is forfeited.
9.3 The eligible earnings used in bonus calculations is base
salary paid to the employee without regard to deferrals and
excludes imputed income and previous bonuses. It also excludes
PTO sellback.
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9.4 Eligibility for this Plan does not provide anyone a right to
continued employment.
10. Administrative Matters
10.1 The Plan is completely discretionary. No legal rights or
obligations are created by the Plan. Accordingly, the Company
may terminate the Plan or amend its provisions at any time,
and no interest is created that can be assigned, encumbered,
or transferred by an employee. No rights in any specific funds
or assets will exist by reason of this Plan.
10.2 The Compensation Department administers the Plan and has full
power to adopt and enforce administrative rules and procedures
to make administrative interpretations.
10.3 The Human Resources Committee has full power to decide
substantive issues, to make amendments to the Plan and to
terminate the Plan. The Human Resources Committee may adjust
any objectives or bonus points if it determines such
adjustment is necessary or appropriate. The Chief Executive
Officer also has certain discretion in this regard as
previously described in this Plan.
10.4 Administrative amendments that do not involve significant
additional expense and that do not increase an officer's bonus
may be approved by the Company's Senior Vice President for
Human Resources. Amendments and decisions can be made as to
individuals or groups and there is no guarantee of uniform
application.
10.5 No member of the Compensation Department or the Human
Resources Committee, nor any other person, including any
officer or employee, involved in administering this Plan or
making decisions concerning bonuses will have any personal
liability to any employee or to any other person by reason of
any decisions or actions taken under this Plan.
10.6 Bonuses payable under this Plan will be paid by the
appropriate Company subsidiary that employs the eligible
employee. The Company may cause bonus liability to be
allocated among divisions or subsidiaries as it deems
appropriate in regard to transferred employees.
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